Sitting of 10 June 1980

Preamble
The House met at half-past

Two o'clock

PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS

  YORKSHIRE WOOLLEN DISTRICT TRANSPORT BILL
  Orders for Third Reading read.
  To be read the Third time upon Thursday.

  FRIENDS MEETING HOUSE (REIGATE) BILL [Lords]
  Order for Second Reading read.
  Read a Second time and committed.

  SCOTTISH WIDOWS' FUND AND LIFE ASSURANCE SOCIETY BILL (By Order)

    STANDARD LIFE ASSURANCE COMPANY BILL (By Order)
    Orders for Third Reading read.
    To be read the Third time upon Thursday.

  SOUTH YORKSHIRE BILL [Lords] (By Order)
  Order for Second Reading read.
  Mr. Harrison: On a point of order, Mr. Speaker.
  Mr. Skinner: On a point of order, Mr. Speaker.
  Mr. Weish Mr. Weish rose——
  Mr. Speaker: Order. I will take points of order immediately after I have dealt
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  with the Bills, because I am bound to do so by the rules of the House.
  To be read a Second time upon Thursday.

  PIER AND HARBOUR PROVISIONAL ORDER (BRIGHTON WEST PIER) BILL
  Considered ; to be read the Third time upon Thursday.

  PIER AND HARBOUR PROVISIONAL ORDER (GREAT YARMOUTH WELLINGTON PIER) BILL
  Read a Second time and committed.
  Mr. Harrison: On a point of order, Mr. Speaker. Reverting to the South Yorkshire Bill, the Rev. Ian Paisley and Mr. Peter Robinson——
  Mr. Speaker: Order. Would the right hon. Gentleman name them by their constituencies, if he knows them?
  Mr. Harrison: I cannot, Mr. Speaker. I am talking about 10 per centers and their 10 per cent. Division record. Are they present? Is this their usual practice?
  Mr. Speaker: I would not know. I cannot see them. They may be on the premises. [Interruption.] I was asked only whether they were here.
  Mr. Skinner: Further to that point of order, Mr. Speaker. It is appreciated that one of the ways in which Bills are blocked is by the common usage of the blocking motion, which means that there has to be consideration of the matter, by the Chairman of Ways and Means regarding time for debate. The practice is generally accepted by most hon. Members, who are prepared to be here on many of the occasions on which blocking motions appear on the Order Paper. But most hon. Members on both sides of the House take great exception to someone putting down a blocking motion for many months, never being seen and having a Division record of about 10 per cent.
  Mr. Speaker: That is not a matter on which I can rule, but I have noted—and the House has noted—the expression of opinion.

ORAL ANSWERS TO QUESTIONS
  EDUCATION AND SCIENCE

    School Leavers
    Mr. Brintonasked the Secretary of State for Education and Science if he will take steps to establish, in addition to the normal public examinations, a documentary record of a school leaver's achievements.
    The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson): The Department is considering what action might usefully be taken centrally to encourage the introduction of such a documentary record.
    Mr. Brinton: Does my hon. Friend agree that if such a scheme were introduced, behaviour would come into achievement? If he were to introduce such a scheme, would he take the opportunity to mount a campaign to persuade teachers to take more notice of discipline and the behaviour of their pupils?
    Dr. Boyson: I entirely agree with my hon. Friend. Discipline is essential in the classroom if there is to be proper education. It would be necessary for lateness, punctuality, regular attendance, discipline and general attitude to be included in such a documentary record.
    Mr. John Evans: Does not the Minister feel that it is somewhat hypocritical of his hon. Friends, who are constantly calling for cutbacks in public expenditure, to suggest schemes of this nature which will vastly increase public expenditure? Does he accept that the greatest problem facing young people is not getting records of this nature, but getting jobs when they leave school.
    Dr. Boyson: It is not expensive to produce such a document when children leave school, and any reasonable school is already doing so. It is a matter of spreading an existing practice. That suggestion has come not only from my hon. Friend the Member for Gravesend (Mr. Brinton), but from educationists and many others throughout Britain. Pupils leaving school are more likely to find employment if employers can see a full record of their behaviour and achievements at school.

    Nursery Education
    Mr. Blackburnasked the Secretary of State for Education and Science whether surplus primary school accommodation can be converted to nursery education use ; and what allowance, if any, has been made in the building programme for this purpose.
    The Under-Secretary of State for Education and Science (Mr. Neil Macfarlane): Yes, Sir. This is common practice. Although no part of the nursery education building programme is earmarked for adaptation work, most local authorities use their allocations for that purpose.
    Mr. Blackburn: Will my hon. Friend consider making provision in 1981–82 for that purpose? Will he also consider supplementing funds raised by local people for that purpose?
    Mr. Macfarlane: On the latter question, my hon. Friend raises a parochial point. It is a matter for the local education authority and the school governors if local people have raised funds for that purpose. The adaptation work is part of an on-going programme. Over the past few months the Department has contributed to local authorities by providing some broad guidelines about how the adaptation can take place.
    Miss Boothroyd: Is the Minister aware that a week ago a Minister at the Department of Health and Social Security told the House that he did not accept the need for more places for the under-fives? Does the Minister accept that children who live in high-rise blocks tend to be disadvantaged because of the isolation and the environmental conditions in which they live? Does he agree that it should be the policy of the Government to provide further places for those children? When will his Department and the Department of Health and Social Security co-operate on policy matters that are vitally important to those young children?
    Mr. Macfarlane: The hon. Lady raises an important social issue. I hope that the local authorities who face such problems in their areas will take due note of the provision that is required. Co-operation between the Departments takes place not only nationally, but locally. The

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    Government have allocated a programme of £2·63 million for 1980–81 to 40 local education authorities. We know of only five other authorities that wish to build nursery education facilities if resources become available.
    Mr. John MacKay: Does my hon. Friend realise that surplus accommodation could be used by the playgroup movement? Will he ensure that he is not prevented from using the surplus accommodation in that way by an attempt on the part of the teachers' unions to institute a closed shop to keep the playgroup movement out of schools?
    Mr. Macfarlane: My hon. Friend's final point is not known to me. No doubt he will write to me if he wishes to highlight any further points that he has in mind. I hope that all local authorities, chief education officers and school governors will maintain a totally flexible option about what might happen where these facilities exist.
    Mr. Flannery: Is it not a fact that, far from utilising excess space to expand nursery education, the Government are cutting down nursery provision on a grand scale? Is the House aware that in an interview with the Minister some months ago he told me that the Government were considering charging for nursery education? He said that there was great pressure for that. Is not the reality that during the period of the previous Labour Administration the vast majority of Tory councils—more than 70 per cent.—did not claim their allocation for nursery education, let alone expand it?
    Mr. Macfarlane: I wish that the hon. Gentleman would listen to the points that have been made from the Dispatch Box by my right hon. and learned Friend the Secretary of State. The hon. Gentleman must understand that no part of the case that he has pronounced exists anywhere in Britain.

    Inner London Education Authority
    Mr. Peter Bottomleyasked the Secretary of State for Education and Science if any area outside inner London has an education authority similar to the Inner London Education Authority.
    The Secretary of State for Education and Science (Mr. Mark Carlisle): The
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    ILEA has the same powers and duties under the Education Acts as all English education authorities, but its constitution as defined in the London Government Act 1963 is peculiar to the authority.
    Mr. Bottomley: As it has been some time since there has been a serious review of the way in which ILEA is constituted and elected, will my right hon. and learned Friend assure the House that he will do his best to ensure either that education is devolved to local boroughs—who are as competent to deal with that as they are to deal with housing and social services—or that there is a move to direct election to ILEA, so that education issues are not simply subsumed within "Homes before Roads" and other GLC issues?
    Mr. Carlisle: As my hon. Friend knows, the Government are internally reviewing matters relating to the administration of education in inner London. Of course, the original intention of the London Government Act 1963 was that this should be reviewed after it had been in operation for a few years.
    Mr. Kinnock: Will the Secretary of State take this opportunity to disown the so-called Baker report? If he is unable to do so, will he say how the uproar and the expense of the break-up of ILEA, which has been proposed by some of his hon. Friends, will advance educational interests, or improve the facilities available for the education of the children of London?
    Mr. Carlisle: I am not prepared at this stage to disown any report in advance of the review being undertaken by the Government. The criticisms of ILEA are well known, and often expressed—such as accountability and matters of that nature. We are reviewing the administration of education in London to determine whether changes are needed to make it more appropriate to the education provided.
    Mr. William Shelton: May I tell my right hon. and learned Friend how much I welcome the review? When does he think it will report?
    Mr. Carlisle: I am unable to give my hon. Friend any date. It raises many complex issues. We shall bring on the

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    review as quickly as possible so that any uncertainty will be removed.
    Mr. Beith: Will the Secretary of State bear in mind that breaking up ILEA will not only be disruptive to the education of many children but will tend to increase the inequalities between different parts of London? Will he consider carefully the idea that ILEA might be directly elected and, if so, will he ensure that it is done by a fair system?
    Mr. Carlisle: I can only repeat my earlier remarks. We are considering many alternative solutions.

    School Meals
    Miss Joan Lestorasked the Secretary of State for Education and Science if he will hold an inquiry into the nutritional value of schools meals.
    Mr. Macfarlane: No.
    Miss Lestor: Is the Minister aware that the switch to the cafeteria system has, among other things, caused grave concern among teachers and parents alike about the nutritional value of school meals? Is he further aware that in some areas the overwhelming majority of children taking school meals are those eligible for free school meals because the parents who are asked to pay for them do not consider that the nutritional value of the meal is worth the increased price? Will he reconsider his reply, and agree to institute an inquiry into the nutritional content of school meals?
    Mr. Macfarlane: The hon. Lady said that the cafeteria type meal is unpopular and unacceptable in many schools. I do not believe that that is true.
    Miss Lestor: I said that it was nutritionally bad.
    Mr. Macfarlane: I do not believe that the nutritional aspect is bad. The cafeteria type meal has been present in many secondary schools for a long time. Most pupils like it, most teachers approve of it, and it is becoming popular in the ever-changing dietary scene in Britain. The hon. Lady touched upon the price of school meals. It is interesting to note that during the current school term 38 local authorities are charging only 35p, 32 are charging 40p, and 13 are charging 45p. That is the lion's share of the 105 local education authorities.
    Mr. David Atkinson: Is my hon. Friend satisfied with the fact that, out of the total average price of the school meal, only 18p goes towards the cost of the food itself?
    Mr. Macfarlane: My hon. Friend is absolutely right. That has often been a great problem with the school meals service. We believe that releasing local authorities to apply their own standards in each school will benefit the Exchequer.
    Mr. Whitehead: Will the Minister consider the nutritional consequences of the decision taken by many county councils, including Derby, to withdraw school milk from infant schools for children between 5 and 7 years of age? Does he realise that that is hitting the diet of growing children in a harmful way?
    Mr. Macfarlane: That is a matter for the Derbyshire education committee. It is the intention of my right hon. Friend the Secretary of State for Social Services to monitor, in due course, the nutritional effects of the new school meals and milk arrangements. It is a matter for the local authority, and not for the Secretary of State for Education and Science.
    Mr. Farr: Will my hon. Friend reconsider his reply? Is he aware that, with the economies being made by education authorities, there is a risk that they are using more and more soya bean as a substitute for meat? Is he further aware that the soya bean is not of great nutritional value, and could be damaging to the health of children?
    Mr. Macfarlane: On the contrary, I think that the soya bean is quite nutritional.

    Truancy
    Mr. Andrew F. Bennettasked the Secretary of State for Education and Science what information he has about the current levels of truancy in schools in England.
    Dr. Boyson: My Department does not monitor the incidence of absence from school on a national basis. A number of local education authorities do, however, carry out surveys as part of their efforts to deal with truancy in their own areas.
    Mr. Bennett: Can the Minister confirm or deny the comments which I am receiving from many teachers that, because of the extra cost of school meals, and the fact that far fewer children are now staying for school meals, truancy rates have gone up dramatically in many schools in the last six months?
    Dr. Boyson: The Department has received no evidence that what the hon. Gentleman says is true. Over the last few years, we have had a secondary schools survey as well as a survey of schools in Sheffield. In many cases they have shown an increase in truancy which is condoned by the parents. That is a new factor. In the Sheffield survey, practically all primary school absence was condoned by the parent, and at secondary school level five-sixths of absences were condoned by the parent. That shows how essential it is to involve the parents in schools rather than just punishing the children for their absence.
    Dr. Mawhinney: Is not my hon. Friend concerned that in many cases weeks pass before the parents are notified that their children are truants? Ought not steps to be taken to try to reduce that period to a minimum?
    Dr. Boyson: I entirely agree with my hon. Friend's view. It is essential that schools notify parents the day when children are absent so that they can take action immediately and so that the pattern of truancy does not build up until it almost becomes a habit. I trust that people outside the House as well as those inside will take note of what my hon. Friend has said.
    Mr. Marks: In response to the Government's request for education cuts are not some authorities cutting down the very services which would examine this matter and take the necessary action? Does not the Minister realise that it is the job of the Department and Education Ministers to ensure that Government funds—and a large amount of education spending is financed by Government funds—are properly spent and that adequate welfare services are provided?
    Dr. Boyson: My hon. Friend the Member for Peterborough (Dr. Mawhinney) referred to the importance of immediate notification of absence. That is something
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    which I believe a school can do immediately, either by letter or by telephone contact. Surely all schools have the telephone numbers of the parents' place of work.
    Mr. William Hamilton: They do not all have telephones.
    Dr. Boyson: The hon. Gentleman suggests that factories are not on the telephone. Any reasonable school knows where the parents are during the daytime, and it should contact them. Unlike Labour Members, we do not make excuses for absence ; we want it cured.

    Strathclyde University
    Mr. Foulkesasked the Secretary of State for Education and Science what representations he has received from Strathclyde university on overseas student fees and public expenditure cuts.
    Dr. Boyson: I have received representations from several hon. Members writing on behalf of the Strathclyde university branch of the AUT, the Strathclyde university students association and individual academics, and direct from the joint union committee of Strathclyde university, the local association of the Association of University Teachers, the Strathclyde university students association and a number of individual students and members of staff of the university.
    Mr. Foulkes: Is the Minister aware, in the light of that vast amount of representation, that Strathclyde university will have 100 fewer places for home students during the coming academic year? Is not that disgraceful at a time when demand for places is up and when the need for scientists and technologists is rising? Is it not about time that the Government came out from behind the skirts of the UGC and made the much-needed U-turn in their policy of cuts in education?
    Dr. Boyson: I am by no means aware that there is to be a cut of 100 places in Strathclyde next year. I would be astonished if that were the case and would wonder why it had happened. It is as well to inform the hon. Gentleman, if he will listen, that this year's increase in grant to Strathclyde from the UGC compared with last year is 18–8 per cent., which seems adequate to maintain the intake at last year's rate. I am also aware

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    of the percentage of overseas students there. We know what the applications are nationally. There does not seem to be any reason why Strathclyde should cut to that extent and why the Government should be blamed for it.
    Mr. Henderson: In the representations from Strathclyde university was my hon. Friend made aware of the fact that, while there was a pause in applications from overseas students at the beginning, in very recent weeks there has been a satisfactory increase in the number of applications, as is the case in many Scottish universities? Can he further say whether the representations from Strathclyde university asked his right hon. and learned Friend, at the meeting of Commonwealth Education Ministers in Sri Lanka later this year, to look at the problem of poorer students from the less developed countries of the Commonwealth?
    Dr. Boyson: I am sure that my right hon. and learned Friend will have noted my hon. Friend's second point. I am delighted by the information that he gave in his first point. Such information is coming in from various areas. I am sure that the hon. Member for South Ayrshire (Mr. Foulkes) will cheer up now that he realises that most of his worries are unnecessary, and will accordingly join us in celebrating a general advance.
    Mr. McQuarrie: Since the real impact of what may happen to overseas students will not be felt until October when the term starts, will the Minister be prepared to look at the situation again if it is found to be disadvantageous to overseas students?
    Dr. Boyson: I welcome my hon. Friend's observation. My right hon. and learned Friend and myself have regularly said that we shall monitor the situation. It will be November before the figures are known. On one day last week the press reported that the number of overseas students was increasing, but the following day, we discovered that it was declining. We would have St. Vitus' dance if we took a daily count. We shall certainly look at the figures in November and see what the situation is.

    Teachers (Pay and Conditions of Service)
    Mr. Thorntonasked the Secretary of State for Education and Science whether measures are to be taken to establish a
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    direct link between future negotiations on teachers' pay and the conditions and contracts of service of those teachers.
    Mr. Mark Carlisle: Discussions are proceeding between the local authority and teachers' associations on conditions of service, and my Department and the local authority associations are jointly reviewing the implications of the Remuneration of Teachers Act 1965, with particular reference to the negotiation of pay and of other conditions of service.
    Mr. Thornton: I am obliged to my right hon. and learned Friend for that reply. Is he aware that the local authorities are still reeling from the effects of Clegg mark I and mark II and are still anxiously awaiting the mark I Houghton teacher, which we were promised many years ago but which has never been realised? The negotiations that are taking place are badly overdue.
    Mr. Carlisle: I am fully aware that in its proposals the Clegg Commission said that it took account of the wide range of extra-curricular activities which teachers consider to be part of their normal life. I believe that it is compatible with the professional standing of teachers that there should be some greater clarity among them as to what that amounts to.
    Mr. Kinnock: Will the right hon. and learned Gentleman ensure that the local education authorities have sufficient funds to make payment under the Clegg award ? If not, will he ensure that any local authorities which are forced to supplement their rates in order to pay those bills are exempted from any Government action which may inhibit them in that course?
    Mr. Carlisle: From the many statements that have been made from this Dispatch Box, both by myself and by the Chancellor, the hon. Gentleman knows that the rate support grant took what we considered to be a realistic assessment of the likely effect of the Clegg Commission report, together with an additional 13 per cent. to allow for inflation in pay for the current year. We stick by those commitments.
    Mr. Greenway: Does not my right hon. and learned Friend agree that the pay and conditions of teachers will be substantially and strongly affected by falling rolls? In considering any future

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    section 13 notices, will he strongly bear in mind the need for diversity of provision in all types of schools so that we continue to have single-sex schools and denominational schools as well as coeducational schools?
    Mr. Carlisle: I am not quite sure whether my hon. Friend's question arises from my previous answer. However, in reviewing section 13 proposals, one of the matters that I try to take into account is the need to have a diversity of schools in an area so as to enable wider parental choice.
    Mr. Foulkcs: In considering future arrangements for negotiating teachers' pay, will the Secretary of State look at the possibility of setting up a standing review body, along the lines which exist for the police and other groups, which has the support of the teachers in Scotland?
    Mr. Carlisle: I would not have thought that was necessary. I repeat that we are in conversation with the local education authorities about the Remuneration of Teachers Act.

    Assisted Places Scheme
    Mr. Beithasked the Secretary of State for Education and Science how many schools have had their applications to take part in the assisted places scheme approved.
    Dr. Boyson: None, Sir. As my right hon. and learned Friend indicated in his reply to my hon. Friend the Member for Liverpool, Garston (Mr. Thornton) on 3 June, it was only last week that schools were invited to make formal application to participate in the scheme. I know that the hon. Gentleman has great faith in the speed with which the Government act, but we do not expect replies before 7 July.
    Mr. Beith: When the schools are eventually chosen, how can the Minister justify the fact that a family with an income of £90 a week will not have to pay a penny towards the cost of an assisted place whereas a family with an income of £56 a week will have to pay every penny of the cost of school meals?
    Dr. Boyson: I, too, have been looking at the scale of contributions. It is interesting,, in view of statements that are
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    made by Labour Members about this Government helping the rich, to note that a family with an income of £10,000 a year—which at present is only £2,000 more than the average family income——
    Mr. William Hamilton: "Only" !
    Dr. Boyson: Well, I know that innumeracy is rife on the Labour Benches, but a family with two children and with an income £10,000 will not get one penny of help, under the old direct grant system, with the fees that are being charged at present. This scale is to ensure that people on average or low incomes will be able to give their children that opportunity.

    University Financing
    Dr. Mawhinneyasked the Secretary of State for Education and Science when he last discussed with the chairman of the University Grants Committee the future financing of British universities.
    Mr. Mark Carlisle: On 18 February 1980. The chairman of the UGC was also present when I met representatives of the committee of vice-chancellors and principals of the universities of the United Kingdom on 22 May 1980.
    Dr. Mawhinney: I am grateful to my right hon. and learned Friend for that reply. Is he aware that there is a growing appreciation within the colleges of London university that it might be beneficial if those colleges were financed directly through the University Grants Committee, rather than through the agency of London university? Will he undertake to raise this matter with the University Grants Committee at the first opportunity?
    Mr. Carlisle: I shall certainly consider the points made by my hon. Friend.
    Mr. van Straubenzee: In discussing the future financing of universities will my right hon. and learned Friend confirm that it would be contrary to all that universities stand for if a fee system was initiated in respect of home students that differentiated according to the school at which the student was educated?
    Mr. Carlisle: Yes, I would. I find the posture of the hon. Member for Bedwellty (Mr. Kinnock) extraordinary. In one and the same week he advocates that a wealthy American whose child is educated in this

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    country should not be charged the full fees because to do so would apparently imply a policy which portrayed the morals of a scorpion—whatever that may mean—and that an Englishman who has paid both rates and taxes, but has chosen, in addition, to pay for his child's education, should be penalised by being required to pay full university fees.
    Mr. Beith: Will not these discussions on university financing have to take some account of the level of university teachers' pay? Is not the present uncertainty as difficult for the universities to contend with as it is for the university teachers?
    Mr. Carlisle: The hon. Gentleman will know that we announced a recurrent grant to the universities of £987 million for the current year. With regard to university teachers' pay, I shall be meeting the president of the AUT later this afternoon.
    Mr. Kinnock: Is the right hon. and learned Gentleman aware that he has just shown an incomprehension and misrepresentation of a level which I should not have thought was within his reach? Does he not agree that those people who consistently applaud the idea of purchasing secondary education should have that freedom and privilege extended to all levels of education if they wish to take advantage of it?
    Mr. Carlisle: I am fully aware that the proposition which the hon. Gentleman appears to be propounding is that in a free society, if a person, having paid his rates and taxes, nevertheless chooses, in addition, to pay for his child's education, he should, by some means, be penalised by being refused the services at any other stage in the child's education for which he has already paid. I should have thought that that proposition was so vindictive, vicious and literally stupid as to be beyond the belief, even of the hon. Gentleman.

    School Meals
    Mr. Gwilym Robertsasked the Secretary of State for Education and Science if he now has the figures for spring 1980 of the numbers of pupils in secondary schools which (a) have free school lunches, (b) pay for school lunches, and (c) bring packed lunches ; and if he will publish them in the Official Report.
    Mr. Macfarlane: This information is not available. The last census of school meals was held in October 1979, details of which are in the Library.
    Mr. Roberts: Does not the hon. Gentleman accept that in the aftermath of the Education Act, we shall have, in school meals, a cycle of rising prices and falling numbers? In those circumstances, will he ensure that all parents are aware of free meal entitlement? Will he also look at the important problem of the anonymity, in the school cafeteria system, of the child who receives free school meals?
    Mr. Macfarlane: Local education authorities must make every effort to ensure that pupils and parents are aware of entitlement to free school meals. We dealt with that in the Education Act 1980. We also enabled local education authorities to be free to adopt a higher level of entitlement to free school meals as part of that assessment. I believe that the anonymity of youngsters receiving free school meals is well understood by head teachers, and I endorse what the hon. Gentleman has said. It is of paramount importance that that aspect is observed.
    Mr. Gummer: What investigation has been carried out into the cost of providing school meals? Is my hon. Friend aware that in my constituency the un-subsidised school meal at a private school costs the same as the subsidised school meal in the public education system? At present, we are spending a great deal more money on the administration of the school meals service than we should be spending.
    Mr. Macfarlane: The cost of administration of the school meals service has always been excessive. My hon. Friend has provided some interesting information on the comparison of costs between the private sector and the maintained sector, and I am grateful to him. However, it is far too soon for the House to assess the effects of the local authorities policies' on the school meals service. The Department is aware of the fall-off which has occurred this summer in pupils taking advantage of the traditional school meal, but that is inevitable, and it happens during the corresponding period each summer. The Department is in touch

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    with local authorities, and it is monitoring the causes and developments of the trend.
    Mr. Hardy: Will the Under-Secretary ensure that a survey is carried out this autumn which considers not merely the number of pupils taking advantage of them and the price of school meals but the food value and the cost of those school meals? Is he aware that in Gloucestershire the charge for a school meal is 45p. and that the meal consists of food worth only 19p.? Should the Department of Education and Science sit idly by and watch that kind of profiteering?
    Mr. Macfarlane: We believe that the legislation that was passed earlier this year will reduce those statistics. I cannot give the assurance that the hon. Gentleman seeks about a future survey. I shall take note of what he has said, and I shall discuss with my officials whether it is necessary. The difficulty in carrying out any census is in trying to achieve realistic figures and ensuring that all the conditions for that census are effective.
    Mr. Peter Bottomley: While the Minister is doing that, will he try to find out the views of parents whose children receive free school meals? Will he find out whether they would prefer to have the money, so that they can feed their children more cheaply and keep the extra money, or are we supposed to believe that poor people are not as interested in feeding their children properly as those who are better off?
    Mr. Macfarlane: I understand my hon. Friend's point, but I cannot give any assurance to the House on the first part of his question. It is up to local authorities to monitor all those conditions to which my hon. Friend has referred.
    Mr Fosterasked the Secretary of State for Education and Science what representations he has had from the National Association of Head Teachers regarding the school meals service.
    Mr. Mark Carlisle: Representations have been received about midday supervision and, during the passage of the Education Bill, about the duty placed on authorities to provide facilities for pupils who bring their own food to school, and about the omission of certain provisions of the former statutory regulations.
    Mr. Foster: Are not the head teachers saying that the school meals service is bordering on chaos because of inadequate supervision, and that this Government's legislation and cuts have made matters immeasurably worse?
    Mr. Carlisle: I do not accept that. I accept that head teachers are worried about midday supervision. They have been worried about that for some time and their worries are certainly not related to the Government's proposals on school meals.

    Books and Equipment
    Mr. Sheermanasked the Secretary of State for Education and Science what evidence he has of difficulties currently being experienced by local authorities in financing the provision of books and equipment in schools.
    Mr. Mark Carlisle: We are aware that difficulties exist. It was in recognition of the problem that the Government's expenditure plans made provision for increased expenditure per pupil in this area.
    Mr. Sheerman: Is the Minister aware of widespread press reports of a situation in which children are having to hold raffles to decide who takes home the book for their homework? Is not this taking us back into the nineteenth century, in which there was one law for the charity pupil and another law for the better off?
    Mr. Carlisle: Yes, I am aware of the report. For the sake of greater clarity, I have a copy with me. It is a statement made by the hon. Member for Bedwellty (Mr. Kinnock) to which the hon. Gentleman refers, in which the hon. Member for Bedwellty is reported as saying :
    "We are seeing a system … where children draw lots to use books and equipment ".
    I ask the hon. Member for Bedwellty now whether he will get up at the Dispatch Box and name the schools where children are drawing lots to use books and equipment, so that I can inquire, as I should do, into his allegations.
    Mr. Kinnock——
    Sir John Eden: Whilst undoubtedly every sector of the service is capable of yielding economies, may I ask whether my right hon. and learned Friend agrees that cuts in the provision of school books should be the very last in the order of

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    priorities of any well managed and proper thinking education authority?
    Mr. Carlisle: I absolutely agree. That is why, in looking for savings—which, I repeat, are considerably less in proportion than the drop in the number of pupils in schools—we have consistently said that we believe that those savings should, whenever possible, be made in areas which do not affect the classroom.
    Mr. Kinnock: From the information available to the right hon. and learned Gentleman, will he deny that children are using school books on rotas——
    Mr. Budgen: Which schools?
    Mr. Kinnock: That sharing is extensive and that the use of worksheets is universal? Does he deny that? Does he consider, since he has already acknowledged that there is an immense shortage of school books in schools, that he—[Interruption.]
    Mr. Speaker: Order. I want to hear the question.
    Mr. Kinnock: Does the right hon. and learned Gentleman agree that he is presiding over a situation in which local education authorities are being forced by these cuts to break sections 8 and 61 of the 1944 Act? What will he do about that? Or is he content with a "books-from-bingo" system and with dodging answers by making references to my speeches instead of dealing with his own responsibilities as Secretary of State for Education and Science?
    Mr. Carlisle——
    Mr. Kinnock: When will the right hon. and learned Gentleman—[Interruption.]
    Mr. Speaker: Order. It is quite clear that I shall not be able to call anyone else for a supplementary question on this question. The hon. Member for Bed-wellty (Mr. Kinnock) is going on a long time.
    Mr. Carlisle——
    Mr. Kinnock: On a point of order, Mr. Speaker. There are millions of children in this country who are suffering from a shortage of books because of the actions of the right hon. and learned Gentleman.
    Mr. Carlisle: Of course I am aware, as the hon. Gentleman has said, that there
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    are probably many schools in this country in which books are from time to time shared, and I suspect that that has happened over many hundreds of years. What I am equally aware of is that, having specifically asked the hon. Gentleman to cite the schools at which he said, on Saturday,
    "children draw lots to use books and equipment ",
    he specifically failed to do so. The House must draw its own conclusion—that the hon. Gentleman is prepared to make any statement outside the House without regard to the facts. In future, those who read these things in newspapers would be wise not to believe a word that he says.
    I also say to the hon. Gentleman that, having listened to his remarks today, the House might be forgiven for not realising that the present Government—dealing with books, materials and equipment in schools for the current year, 1980–81—are providing for an increase both on that which was spent in the last year of the Labour Government—in 1978–79—in real terms and indeed, on that which was intended to be provided by the previous Government, in real terms, which had, in fact, remained constant during the period of the Labour Government. If the hon. Gentleman is saying that there are shortages of books and equipment in schools, in view of the record of his party when in office that is hypocrisy and humbug.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Foulkesasked the Prime Minister if she wll list her official engagements for Tuesday 10 June.
  The Prime Minister (Mrs. Margaret Thatcher): In addition to my duties in this House, I shall be having meetings with ministerial colleagues and others.
  Mr. Foulkes: Is the Prime Minister aware that the Secretary of State for Defence failed to satisfy the House yesterday—[HON. MEMBERS : "Nonsense."]—on the question of false nuclear alerts? What is she doing to ensure that we do not die through computer error? In the light of the state of the economy, will she check whether the Treasury model is on the same kind of computer?
  The Prime Minister: I read the exchanges in the House yesterday involving my right hon. Friend the Secretary of State for Defence. I thought that he dealt very satisfactorily with the questions asked. Of course, both he and I are concerned about these alerts. Naturally we would be, being responsible for nuclear activity here, and we take that responsibility extremely seriously. But as my right hon. Friend pointed out, the action taken was defensive and the mistake was discovered very quickly.
  Mr. Cyril D. Townsend: Now that the Camp David agreement has clearly run into the sands, and recalling a number of serious incidents on the West Bank, is it not a good time for the European Community to be putting forward a new approach to the problems of the Middle East that does not ignore the views of the PLO?
  The Prime Minister: As a result of a direction at Luxembourg, the Heads of Government and Prime Ministers will be discussing the situation in the Middle East when we meet this weekend in Venice. I am sure that our discussions will take fully into account the two things which are absolutely vital—the need to recognise Israel's right to exist behind secure boundaries, and the need also to recognise the legitimate aspirations of the Palestinian people. The difficulty has always been to get these two things reciprocal and in step. But we shall have our discussions, and if we come to any conclusions, doubtless a communique will be issued.
  Mr. Maxton: Has the Prime Minister found time to read the announcement last week to the effect that Weir Pumps, in my constituency, is declaring close to 1,000 people redundant? Does she agree that when a company which has a very good export record, which has invested millions of pounds in the last few years in the redevelopment of the company, and which is increasing productivity, blames the Government's record on inflation, the high level of the pound and high interest rates for its failings it is time that she changed her economic policies?
  The Prime Minister: If a company has, unfortunately, to declare redundancies, it is obviously because that company is unable to sell its products in the markets
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  of today. [Interruption.] I can only say that many companies are keeping up their export records very well indeed. [HON. MEMBERS : "Where?"] The figures show it. Forty-four per cent. of our exports go directly to the rest of the European Community, and our largest market is West Germany.
  Mr. Hugh Fraser: Referring to the Venice summit and appreciating the Government's dilemma in this matter, may I ask my right hon. Friend whether she will assure the House that neither will impediments be put in the way of the advance in the Camp David process nor will damage be done to Anglo-American relations?
  The Prime Minister: It is not our purpose in any way to put any impediments in the way of the Camp David process, in which we wholeheartedly believe and which we hope will succeed, nor to cause any problems between Europe and the United States. It is vital that we do not do so.

  GRUNTY FEN
  Mr. Freudasked the Prime Minister whether she will visit Grunty Fen.
  The Prime Minister: I have at present no plans to do so.
  Mr. Freud: Is the Prime Minister aware that that will come as a small blow to my constituents? Will the Prime Minister accept that the fear of Grunty Fenmen is that her Ministers have no idea of how, when or even whether the level of wage settlements will be lowered by her policy of monetarism and of restraining the growth of M3? Will she state how much damage will be done to the economy's productive capacity—[HON. MEMBERS : "Reading"]—before the policy's effect on wages becomes apparent?
  The Prime Minister: I am sorry to hear of the worries of the 97 people in Grunty Fen. I had understood that it was a very happy agricultural community, that it had a low rate of unemployment and that it was in many ways contented under a Conservative Government. As regards the hon. Gentleman's statement about monetary policy, if we are to squeeze inflation out of the economy it is vital

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  that we print less money. Our policy is directed towards that.

  WALES
  Mr. Wigleyasked the Prime Minister if she will state when she next intends to visit Wales.
  The Prime Minister: I hope to visit Wales next month.
  Mr. Wigley: Will the Prime Minister tell the people of Wales how many people will have to go to prison and on hunger protests—or worse—before her Government will carry out their election commitment, included in the Gracious Speech, to give a television channel to the Weish language?
  The Prime Minister: No one has to go on a hunger protest. Although there has been a certain threat, I hope that no one will do that. When the new channel comes into being there will be more programmes in Weish. Not all of those programmes will necessarily be on that channel. However, they will be either on that channel or another one.
  Mr. loan Evans: In view of the massive closures in the steel industry and the possible consequent closure of six to 12 pits, will she confirm—when she comes to Wales—that those areas that had special development area and development area status will have those titles restored? Is not she aware that as a result of the Government's policies there has been a massive increase in unemployment?
  The Prime Minister: We have tended to upgrade the status of an area from a development area to a special development area if that area has experienced a major steel closure. We have rightly obtained a good deal of money from the Exchequer in order to assist those areas. I believe that about £15 million has been found for Shotton and £48 million for South Wales.

  PRIME MINISTER (ENGAGEMENTS)
  Mr. Strawasked the Prime Minister if she will list her official engagements for 10 June.
  The Prime Minister: I refer the hon. Gentleman to the reply which I gave a few moments ago.
  Mr. Straw: Is the Prime Minister aware of the forecast made by the EEC Commission to the effect that Britain's economy will do worse this year than any of its European partners? Is she aware that it is forecast that our economy will decline by 2½ per cent., while the economies of every other European country—bar one—will increase? Is she further aware that that includes the Italian economy and that although its level of inflation is the same as ours, its economy will increase by 3½ per cent.? Does she think that our dismal performance has anything to do with her policies? If not, what will she use as her scapegoat of the month for explaining the failure of her economic policies?
  The Prime Minister: We have at least one forecast a day. The options are that we could tax the pay packet more, increase VAT, borrow more—and have even higher interest rates—or print more money. I reject all four of those options.
  Mr. Churchill: As thousands of Afghan patriots and civilian villagers are being murdered by the Soviet occupying forces, will my right hon. Friend explain once again to Sir Denis Follows and to the British Olympic Committee that in such circumstances it would be inappropriate for British athletes to go to Moscow to play games with the butchers of Kabul?
  The Prime Minister: I would have thought that the action of Soviet troops in Afghanistan speaks more loudly than my words or of those of my right hon. and noble Friend the Foreign Secretary. I sometimes wonder what more the Russians will have to do in Afghanistan by way of atrocities before they convince our Olympic athletes that they should not go to Moscow.
  Mr. Foster: When will the Prime Minister take seriously the problems of the long-term unemployed? Does not she realise that there may soon be half a million of such unemployed, and that many of them will be concentrated in areas—such as mine—in the Northern region? When will she bring in a programme that includes training and work experience in order to give those people hope?
  The Prime Minister: Of course we take seriously the problems of the long- and short-term unemployed. The hon. Gentleman will be fully aware that my right hon. Friend the Secretary of State for Employment runs many programmes. He will also be aware that there are many skill-centres and that some of them are not fully occupied. Sometimes people find it difficult to get a job as they are unable to move from one area to another due to housing problems. I hope that those problems will be substantially reduced when the Housing Bill is enacted.
  Sir John Eden: Has not my right hon. Friend often made clear that the desired changes and improvements in our economic performance cannot be achieved without causing some temporary difficulties and hardships? Will she therefore resist all blandishments and hold firm to her present policies until they have been seen through to success?
  The Prime Minister: I agree with my right hon. Friend. However, I would add that lower pay settlements now will mean lower rates of unemployment later.
  Mr. Sheennanasked the Prime Minister if she will list her official engagements for Tuesday 10 June.
  The Prime Minister: I refer the hon. Member to the reply which I gave earlier to the hon. Member for South Ayrshire (Mr. Foulkes).
  Mr. Sheennan: Will the Prime Minister spend some time today telling my constituents in Huddersfield and those who live in West Yorkshire what part of the magic formula they have missed? Is not she aware that my constituents and the people of West Yorkshire are hard working, highly skilled, have a history of accepting comparatively low wage rates and that they export most of their products? They do everything right. Why are factories closing and jobs disappearing under her Government? Why is there a hopeless feeling of dismay coming over that area?
  The Prime Minister: The hon. Gentleman has neglected one thing. If factories close it is because they are unable to compete with the goods that have been produced by other people who are similarly working in factories. The level of
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  productivity in Britain is way below that of other countries. The economic lesson that can be learnt from other countries is that those countries that have high wages and high productivity have done better than those with lower wages and lower productivity.
  Mr. Anthony Grant: Further to the supplementary question asked by my hon. Friend the Member for Stretford (Mr. Churchill) will my right hon. Friend ensure that every athlete who is so minded to undertake the unwise journey to Moscow is given full Government information about the appalling horrors that occur in Afghanistan every day?
  The Prime Minister: I doubt whether we could give that information to every athlete. I hope that all athletes are fully aware of what is going on, and of the consequences of going to Moscow. I hope that they recognise the boost that that would give to the morale of the Soviet Government.
  Mr. Strang: Will the Prime Minister take time today to reconsider her attitude to the sale by the NEB of its 50 per cent. stake in Ferranti? Is the right hon. Lady aware that the whole work force is united in its opposition to the sale? Is she further aware that the managing director has written to all Members of Parliament affected and that he has mentioned the threat to jobs? Does the right hon. Lady want this company to be acquired by GEC? Does she want to see its expansion plans for Scotland replaced by a programme of rationalisation and redundancy?
  The Prime Minister: The last time I answered questions in the House I believe that I dealt with a similar question. I shall give the same answer. The NEB and the previous Labour Government assisted Ferranti during a very difficult period. Ferranti no longer needs that assistance. The NEB wishes to sell the shares and to obtain the best possible price. It must be free to do that.
  Mr. Heddle: Will my right hon. Friend take time today to note that the number of homeless families has continued to increase since the Housing (Homeless Persons) Act was enacted by the previous Labour Government? Does not she agree that the Opposition's dogmatic opposition to the Government's shorthold provision

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  is a direct denial of the right of those homeless families to rent?
  The Prime Minister: I wholly agree with my hon. Friend. I believe that the shorthold provisions in the present Housing Bill will bring many vacant properties on to the market, and this will help thousands of people to find homes. Another significant provision will give council tenants the right to have lodgers. That will help many young people who are seeking jobs in different areas.
  Mr. Guy Barnett: Returning to the reply that the Prime Minister gave to my hon. Friend the Member for Huddersfield, East (Mr. Sheerman), does she really believe that the number of redundancies and closures that have taken place have nothing whatever to do with the bank rate?
  The Prime Minister: If the hon. Member believes that the bank rate has determined the number of redundancies and closures, I do not think that the facts will bear him out. We have had high interest rates and bank rates for nearly a year now. That is far too long to have high interest rates, and I want them to come down as soon as possible. However, the exports of this country have kept up extremely well. Many companies are fighting their way through and increasing productivity. Unless we get that increase in productivity we shall not have healthy industries which are the only basis for expansion.

  EUROPEAN COMMUNITY DOCUMENTS (DEBATES)
  Mr. Speaker: I have a brief statement to make. On 24 March, the last occasion on which EEC documents were debated, points of order were raised about the nonavailability of a certain document that had been referred to, although not actually quoted, by a Minister.
  I have given further consideration to this matter and now rule that a Minister is free to quote from an EEC document only if it has been made available in the Vote Office at least two hours before the beginning of the debate.

TENERIFE AIR CRASH
The Secretary of State for Trade (Mr. John Nott): With permission, Mr. Speaker, I should like to make a further statement on the Tenerife air crash.
As the House is aware, the accidents investigation branch of my Department has been actively participating in the Spanish investigation in accordance with established international procedures. These procedures place the formal responsibility for investigating an accident—and the relevant report—in the hands of the country where the tragedy took place.
The AIB team had two full days of meetings with the Spanish commission of investigation last week in Madrid. Following this I am now in a position to inform the House of the statement that has been agreed between the Spanish team and my accident investigation branch. The statement is technical, and I shall read it to the House as it was agreed.
"The Dan-Air accident at Tenerife on 25 April 1980—First radio contact with Tenerife Air Traffic Control was made by DA 1008 when it was 14 nautical miles from the VOR/ DME beacon TFN. The flight was then cleared to the FP (radio beacon) via TFN, flight level 110, expect runway 12, no delay. The flight up to this time had been without incident. Some three minutes later it was then instructed to descend and maintain flight level 60.
The crew reported overhead beacon TFN some 35 seconds after passing that facility. Air Traffic Control then informed them that the standard holding over FP beacon is inbound heading 150 deg., turn to the left. This indicates an anti-clockwise pattern. This procedure was not published and was not included in the appropriate radio facility charts carried on the aircraft. However, it was accepted by the pilot.
The aircraft did not pass over the FP but flew to the south of the beacon calling entering the hold and passing abeam about one minute after the previous transmission. About half a minute later it was cleared to descend to 5,000 feet.
Although he had expressed his intention of entering the holding pattern, the commander, for reasons which are not clear, turned the aircraft to the left towards the South-East, into an area of high ground where the sector minimum safe altitude is 14,500 feet.
During the descent to 5,000 feet, the ground proximity warning system operated and the

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crew immediately commenced an overshoot procedure. With high engine power being applied, the aircraft was put into a steep turn to the right, but it struck the mountainside before it had climbed above 5,500 feet.
The radio navigational facilities at Tenerife North airport were checked after the accident and were found to have been operating normally. The Spanish commission of inquiry is continuing the investigation into the causes of the accident and will, in due course, produce a report."
That is the end of the agreed statement.
The House will understand that the statement that I have read does not apportion blame, nor is it the object of an accident investigation so to do. Its sole task is to establish facts and to make such recommendations as it may think fit in order to improve safety.
Mr. John Smith: I thank the Secretary of State for making an interim report to the House, as he undertook to do. I think that he will appreciate that the agreed statement is full of technicalities, and I am sure that it will be as difficult for other Members, as it is for myself, fully to appreciate its meaning.
It appears that the standard holding pattern requires a turn to the left by the aircraft. At a later stage the statement said :
"The commander, for reasons which are not clear, turned the aircraft to the left."
Is it the case that the commander of the aircraft did not turn in accordance with the accepted holding pattern? Perhaps the Secretary of State would clarify that point.
A matter of greater concern is the fact that the statement says that this holding procedure was not published and was not included in the appropriate radio facility chart carried by the aircraft. Will the Secretary of State comment on that? Will he tell us what steps are being taken to ensure that these charts are carried on aircraft and are made known to the captains of aircraft opera ting in this area? In the light of the fact that many of thousands of British citizens will be travelling through this area in the next few months and indeed are travelling there now—can the Secretary of State say what action he, the Spanish authorities, or any other relevant authorities intend to take in order to ensure that this kind of difficulty does not arise again?
Mr. Nott: The right hon. Gentleman raised two pertinent points. This is a technical matter, and until the full invesigation report is published I must be very careful about what I say. I hope that the House will understand that.
The right hon. Gentleman is right—the aircraft turned to the left towards the South-East when it should have gone on a North-West heading. It did not turn in the correct direction.
Secondly, the right hon. Gentleman asked about the published data. The information that is required to be provvided by air traffic control either must be provided by publication or by radio telephone transmission. There are a number of items that must be provided in either of these ways. In this case the information was provided by radio telephone. International agreement does not require that this information should be published, but it is true that there is a convention that it is normally so published.
Mr. Smith: I am sorry to press the Secretary of State, but I asked him what steps were being taken to ensure that this kind of difficulty did not arise again? Did I understand him to say that he was prepared to rely on the convention that these things might be published? Would it not be wiser for him to take steps to ensure that these matters are understood?
Mr. Nott: I understand the right hon. Gentleman's point, but the requirements here are set by international agreement. I have taken his point fully, but at this juncture I can inform him only that the international agreement requires either that the information should be published or that it should be made available to an aircraft by radio telephone, which is what happened in this case. However, I emphasise that I understand his point and have taken full note of it.
Mr. Churchill: Can my right hon. Friend confirm that no surveillance radar was available to the air traffic control authorities at Tenerife airport? If that is so, does he agree that that is a grave deficiency in an airport that is used by countless thousands of British and other holidaymakers during the year and that is plagued not only by bad weather but by surrounding high terrain? Does my right hon. Friend further agree that had such surveillance radar been operating

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the accident could have been avoided, even if the initial instructions from air traffic control had not been properly complied with by the pilot?
Mr. Nott: I repeat the answer that I gave my hon. Friend on 28 April, when I made my first statement. I said then :
"There were radio navigation aids at the airport, including a main VHF beacon, and three medium frequency beacons of low power, together with an instrument landing system. There is surveillance radar at Las Palmas covering the whole island, but there is no local radar at the northern airfield. This is not dissimilar to the situation in many airports throughout the world which take scheduled passengers."—[Official Report, 28 April 1980 ; Vol. 983, c. 985.]
My hon. Friend asked whether the accident could have been avoided had there been local radar. At this juncture it is impossible to say. My hon. Friend and the House will have to await the full report for such information.
Mr. Marks: Is the Minister satisfied that aircraft leaving this country from Manchester, London, Luton or elsewhere, whether privately owned, scheduled or chartered, will have charts for the airports that they are flying to over the next months—charts that this aircraft obviously did not have?
Mr. Nott: I believe that I have already answered that question. There is a set of international rules, which I have already described to the House. In the short term there is no way that this Government or any other can change those international rules. I have noted the point made by the hon. Gentleman and his right hon. Friend. I assure them that I shall study the matter and bring it to the attention of those responsible for air safety throughout the world.
Mr. Wilkinson: Can my right hon. Friend confirm whether the press reports that there is a discrepancy between the Jeppesen manual and the International Air Radio Limited publication "Aerad" with regard to this airport are true? The 727 was carrying only one of those manuals—I do not know which—but can my right hon. Friend confirm that the pilot would in any case have had the correct terminal approach for the runway?
Mr. Nott: I do not pretend to have the technical information required to answer that question. If it is possible
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and right that I should answer it, I shall let my hon. Friend have an answer in writing.
Mr. Speaker: Order. I propose to call those hon. Members who have been rising, because I know that they all have an interest.
Mr. Charles R. Morris: Does the Secretary of State accept that his statement poses the possibility of pilot error? May I therefore return to the point made by my hon. Friend the Member for Manchester, Gorton (Mr. Marks) about the absence of directional radar at Los Rodeos? As the Spanish inquiry into the tragedy proceeds, can the Secretary of State assure us that the safety and interests of British holidaymakers will be put above the interests of charter airlines and travel agencies, and the susceptibilities of the Spanish aviation authorities? Can the right hon. Gentleman give a categorical assurance that Los Rodeos airport is safe for charter flights?
Mr. Nott: Of course it is right that the safety of air passengers is paramount. I understand the strong feelings concerning what I describe as the local radar, but this is an approved airport. It is approved to take British charter and scheduled passengers. There is no local radar at many approved airports in the world that take passengers. I understand the concern, but if we changed the arrangements and denied access to airports, throughout the world, that do not have local radar, there would be a dramatic change in the number of airports that British aircraft could visit.
Mr. Alan Clark: Will my right hon. Friend accept that from the statement it is plain that the pilot, having been given a completely unfamiliar holding pattern, did the exact opposite and went into the normal holding pattern? Does he agree that the statement said that that was accepted by the pilot? Is that fact recorded? There is no record of that acceptance in the statement? Does my right hon. Friend further agree that such a deviation would have been immediately apparent on a radar screen, had there been local radar? As Los Rodeos has the highest casualty figures of any airport in the world, would it not be advisable for my right lion. Friend to discriminate between that airport, with those particularly

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dangerous features, and other airports that he rightly tells the House do not have radar surveillance?
Mr. Nott: The pilot was told to go into the normal holding pattern for that airport. The airport was not unfamiliar to him. He had flown into it very many times before. It is not my job to apportion blame ; that is a question for the courts and I do not intend to go into that. The pilot was instructed to go into the normal holding pattern. He went into a different heading from the one that is normal. Hon. Members must form their own views. As I told the right hon. Member for Lanarkshire, North (Mr. Smith) when I made my previous statement, I understand that Los Rodeos is a difficult airport. The casualty figures include the tragic accident that took place on the ground, of which everyone is aware. I cannot confirm to my hon. Friend that if that accident on the ground is excluded the casualty figures are as he states. I hope that I have answered his question.
Mr. Sheerman: I accept the difficulties that the Minister now faces, but will he try to put himself into the position of the average constituent, going on holiday with a family? Will he accept that there is a need for speedy assurance now, and not in October, that action is being taken to tighten up any laxity that may exist? For example, will he ask all British operators whether they have severe reservations about any destinations to which they fly? Does he agree that in the short term, informally, through various channels and without too much publicity, he could make sure that standards on the ground are tightened up? Does he agree that that would help to assure people that we shall not have a further disaster this summer, when people would have to ask the House why no action was taken?
Mr. Nott: I assure the hon. Gentleman that I shall bring his comments and those of other hon. Members to the attention of the Civil Aviation Authority, which is expressly required to take care of these highly technical and difficult matters. They cannot be left to politicians. All that I can tell the hon. Gentleman at the moment is that the airport at Tenerife North has the standard facilities of many
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holiday airports throughout the world. It is an approved airport.
Mr. Adley: We understand my right hon. Friend's difficulties and do not want to make them worse. In his answer to the right hon. Member for Manchester Openshaw (Mr. Morris) he seemed to indicate that there was a price on safety because the cost of installing safety equipment was too great. If that is so, should not civilised nations consider that it is too high a price to pay? My right hon. Friend referred to changed procedures, which were not published and not available in the cockpit. Does he know why the procedures were changed on this occasion? Does it happen frequently? Will he ascertain whether any particular airports or countries are more prone to changing procedures, particularly at busy airports at the height of the holiday season?
Mr. Nott: I do not think that I mentioned price or cost in relation to local radar. It is for the individual country to decide whether there should be local radar. I shall ensure that the CAA, which has responsibility for safety, is fully aware of the concern that, under-derstandably, has been expressed in the House today.
The arrangements were available in the cockpit under one of the procedures—radio-telephone. They were given to the pilot. He was given clear instructions, which he acknowledged. My hon. Friend believes that they should have been published. I have noted his view and that of other hon. Members who have said the same. I do not think that I can go beyond that at present. My hon. Friend is asking for a change in international procedures. I understand that point, but I cannot give an assurance just like that.
Mr. Stephen Ross: Can the Secretary of State confirm that his statement contains all the relevant recorded conversations that took place during the run-in to the airport? Will he ensure that copies of the report—short as it is—go to all pilots who operate on the route, since that might be worth while?
Mr. Nott: I made an interim statement today because I wanted to help the House with any additional information that became available and because of the great

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tragedy and the great anxiety felt, understandably, in the Manchester area. However, I cannot bypass the correct investigation procedures. It is for the Spanish authorities to publish the formal report. Normally, such a report is not published in less than about a year. As soon as the report is available I am sure that the Spanish authorities will agree to its full publication. They have always done so in the past. At that time the matter will be debated in full.
Mr. Onslow: Will my right hon. Friend confirm a non-technical point? It seems unfair that the House should press him on technical matters. Is he satisfied that no technical or other information available to the British or Spanish authorities is being withheld or suppressed, or has not been made available to the inquiry? Is he satisfied that the purpose of the inquiry—to find out why the accident happened and to prevent similar accidents in the future—will be fulfilled? Is he satisfied that all the preliminary conclusions that can reasonably be drawn from the available evidence are being drawn, and that everything possible is being done to ensure safe operations in future?
Mr. Nott: I know of no information that is being withheld. So far as I am able, I can give my hon. Friend the assurances for which he asks. The full report will contain additional information. We must await it. I am aware of no information that could be available at this stage which is being withheld by the Spanish authorities.
Mr. Stott: Is the right hon. Gentleman aware that three of my constituents, two of whom were personally known to me, died in the tragedy? I am grateful to him for making an interim statement. He indicated that the Spanish authorities are continuing to investigate the accident and that they will eventually produce a report. When that report is published, will the right hon. Gentleman ensure that we can question him in the House on its contents?
The Secretary of State referred to radio facility charts which were not carried on the aircraft. May I press him further? Surely it is not beyond his powers to insist that all British carriers flying into Tenerife have the appropriate frequency charts on board instead of having to rely on radio transmissions
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from the airport. Will he insist that aircraft carry all appropriate charts?
Mr. Nott: I have noted what the hon. Gentleman says. I shall make some inquiries. If the documents are not published, I shall have to see what can be done. The final report of any aircraft accident, be it international or domestic, entails much painstaking work and is seldom completed in under 12 months. In the past the Spanish authorities have agreed to an English language version of reports being published in the United Kingdom. I believe that that practice will be followed.
The hon. Gentleman asked whether I would make a statement in the House when the final report was available. I do not wish to give a commitment in the form for which the hon. Gentleman asks. Of course the report will be made available to him, his constituents and all who are interested in it. However, it is not normal for every accident investigation report to be made the subject of an oral statement in the House. That would create difficulties. Perhaps we can consider that matter nearer the time. It will be many months before the report is made available, but I understand the hon. Gentleman's point.
Mr. Lennox-Boyd: For the benefit of the relatives of the unfortunate dead, amongst whom were several of my constituents, can my right hon. Friend confirm that the British accident investigators will continue to keep in the closest possible touch with the Spanish authorities so that they may come to an independent conclusion which might go beyond the facts published in any Spanish statement? Will he further confirm that any conclusions that British investigators may form will be made available to the public?
Mr. Nott: The gentlemen in the accidents investigation branch of my Department have been working closely with the Spanish authorities. We did the technical work on the flight data recorder and the cockpit voice recorder. It is a complicated process. My officials visited Madrid to work with the Spanish authorities. They will remain in close touch with the investigation. I must make it clear that ultimately the formal responsibility for the report lies with the

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Spanish authorities. That is the manner in which we have all agreed that the processes should be handled.
Dr. M. S. Miller: We accept that the right hon. Gentleman is making an interim report and not apportioning blame, but his statement contains at least one disturbing factor. Does he accept that we are talking of an airport with high mountains near it which does not have surveillance from the ground? Does he agree that when a pilot is not familiar with an airport, or even, as in this case, when an experienced pilot is familiar with it, mistakes can occur? Does he also agree that in such circumstances, when radar cover from the ground is technically possible, it should be made available so that errors can be corrected? Should not a survey be made so that no landings of British aircraft take place at such airports until the matter is resolved?
Mr. Nott: Several hon. Members have made the point that they feel that there should have been local surveillance radar at this airport. The consequences for this country of unilaterally deciding not to use any airport where there was not local radar would be substantial. There would be consequences for British scheduled operators and for British tourists. I accept the hon. Gentleman's point ; it is taken on board. I understand his concern—and it is no use my hon. Friends muttering from the Back Benches. I am not an accident investigator, nor would I claim to be a technical expert. This matter is in the hands of technical experts and the Civil Aviation Authority who are charged with safety matters in this country. If the House ever wanted to change that procedure it could do so.
Mr. Michael McNair-Wilson: What evidence has my right hon. Friend that instructions issued by air traffic control are often at variance with the published procedures? Will he be more specific and say whether this is a common feature of this airport's air traffic control system or whether what happened to this aircraft was exceptional?
Mr. Nott: I shall let the hon. Gentleman know whether changes had earlier been made to the holding procedures at this airport. I shall make some inquiries about the matter. I shall inform my hon. Friend whether, to our knowledge, any changes were made. I can only say that in
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this accident the aircraft was warned and was instructed to go into the standing holding pattern, and, evidently, it did not follow the instructions it was given. That is a factual statement. I do not wish to become involved in opinions on this matter. There are substantial questions of civil liability and other matters involved.
Mr. Robert Atkins: I congratulate my right hon. Friend on making a good fist of a technical interim statement. As one of the many hon. Members on both sides of the House who lost constituents in the accident, I am grateful to my right hon. Friend. He has referred to the expression "an approved airport". What does he mean by it? Who approves it?
Mr. Nott: The expression is that given to any airfield which our own safety authorities have agreed is adequate and properly used by scheduled and charter aircraft.
Mr. Clinton Davis: The Secretary of State will be aware that the House has expressed great concern about the possible deficiencies in the application of the international rules and of the appropriate procedures. Can he say whether, since the accident, there has been any change in such procedures, noting the fact that he intends to make representations to the appropriate quarters following any investigation that he undertakes?
Will the right hon. Gentleman comment on the attribution of blame that appears to have been reported in the press on the part of some people in Spain who appear to be in positions of authority? Will he make representations to ensure that the same degree of equity that he has offered to the House today is followed elsewhere before the final report is published?
On the question of the standard facilities at holiday airports, is the right hon. Gentleman aware that many hon. Members on both sides of the House have expressed concern about such standard facilities and that pilots, both in this country and internationally, expressed such concern a long time ago? Does not the right hon. Gentleman think that there is an overwhelming case for examining, at international level, the adequacy of such standard facilities if only to give reassurance to the many thousands of people who travel to such airports?

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On the question of a statement, will the right hon. Gentleman recognise that this is not just any accident? This was a major accident. It justifies, in my submission, his coming to the House to make a full statement when the report has been published.
Mr. Nott: I am not aware of any changes in international procedures made since the accident. I will check on the matter. If that is not the correct answer, I shall let the hon. Gentleman know. I do not have any responsibility for, or indeed very much control over, statements made in the press.
There has been considerable concern expressed in the House today about the adequacy of the standard facilities. I have already undertaken to draw it to the attention of the safety authorities in the United Kingdom, and I appreciate fully the points that have been made. I will ensure that that is done.
I note the hon. Gentleman's request that, because the accident was a great tragedy for many hundreds of families, the Government should make an oral statement at the time the full report becomes available. I shall consider that matter nearer the time and let the House know, either by oral or written statement, what we intend to do.
Mr. Speaker: Order. I have received notice of two applications under Standing Order No. 9. I shall call them in the order in which they were made. Mr. Patrick Cormack.

AFGHANISTAN
Mr. Cormack: 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 deteriorating situation in Afghanistan and the need for Her Majesty's Government to take further steps to express British abhorrence of the actions of the Soviet invaders of that country."
I shall not detain the House for long. I believe that the accounts in this morning's press have shocked and horrified hon. Members in all parts of the House. What started as an unprovoked and beastly act of aggression has now become an act of brutal suppression against a people who are fiercely determined to assert their own independence. At such a time, especially when our athletes are preparing to be the guests of the murderous regime in Moscow, it is essential that the House should have an opportunity further to express the fiercest possible denunciation of these latest horrific and barbarous acts.
I suggest that this submission meets the criteria of the Standing Order. I suggest, respectfully, that the business before the House today and tomorrow cannot rank in importance with this grave international crisis. I hope, Mr. Speaker, that you will feel able to grant my request.
Mr. Speaker: The hon. Member for Staffordshire, South-West (Mr. Cormack) asks 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 deteriorating situation in Afghanistan and the need for Her Majesty's Government to take further steps to express British abhorrence of the actions of the Soviet invaders of that country "
I listened with deep concern and care to what the hon. Gentleman said. As the House knows, I do not decide whether this matter shall be debated. My discretion is limited to whether it is granted as an emergency debate tonight or tomorrow. The House has instructed me to give no reasons for my decision. I know the concern of the House about the matters that the hon. Gentleman has raised, but

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I have to rule that his submission does not fall within the provisions of the Standing Order. I cannot, therefore, submit his application to the House.

FOOTWEAR INDUSTRY
Mr. Fry: 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 crisis facing the British footwear industry."
I take this step because an industry that has already suffered 2,000 redundancies in recent months was shocked late yesterday to discover that another 400 redundancies were declared, particularly in the county of Northamptonshire.
The workers in this industry are not marked for being too highly paid. It is not an industry that has been rent by industrial action. Relations between the trade unions and employers in the industry have always been excellent.
Yet one of our traditional industries is on the verge of severe collapse. Import penetration in a smaller home market has gone up by 5 per cent. in the last 12 months. The industry is being subjected to a degree of unfair competition, particularly from Eastern European imports, which is severely undermining the welfare, jobs and stability of many in this country.
I can do no better than to quote from a telegram that I received at lunch time from a constituent who runs a shoe firm :
"Front page Daily Telegraph Tuesday. The potato imports banned. Six more footwear factories closed. Can the Minister explain difference in treament? "
The industry, which has given good service to this country and is facing a severe crisis, is entitled to ask such questions and to receive a reply from the Government.
On behalf of many hard-working, loyal citizens of this country, I put it to you. Mr. Speaker, that it is time that their problems were debated in the House.
Mr. Speaker: The hon. Member for Wellingborough (Mr. Fry) asks leave to move the Adjournment of the House for the purpose of discussing a specific and
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important matter that he thinks should have urgent consideration, namely,
"the crisis facing the British footwear industry ".
I listened with concern to the hon. Gentleman. He has submitted that the industry is entitled to a debate and to hear the voice of the Government. As the House knows, that is not a matter for me. My only discretion is whether there should be an emergency debate tonight or tomorrow.
I listened carefully to what the hon. Gentleman said, but I must rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.

NORTHERN IRELAND
The following motion stood upon the Order Paper in the name of Mr. Stanbrook :
That leave be given to bring in a Bill to create a Commission to examine the divergencies between the law in Northern Ireland and in England and Wales and to recommend to what extent and by what means it is expedient that those divergencies be eliminated.
Mr. Speaker: Mr. Ivor Stanbrook, Ten-Minute Bill.
4.13 pm
Mr. Ivor Stanbrook (Orpington): The motion standing on the Order Paper in my name represents a modest and useful contribution to the constitutional development of Northern Ireland. It calls for the identification of the specific respects in which Northern Ireland is treated differently from other parts of the United Kingdom.
However, it would not be right for a measure affecting the constitutional position of Northern Ireland to be brought before the House without the expectation of, as far as possible, the full support of hon. Members.
It was therefore with some surprise and dismay that I was informed yesterday that one of my hon. Friends intended to oppose my application. For that reason, and because I do not want there to be any misrepresentation or misunderstanding—features which are only too common in Northern Ireland—I do not seek to ask leave to introduce my Bill today.

ORDERS OF THE DAY
  TENANTS' RIGHTS, ETC. (SCOTLAND) BILL
  As amended (in the standing Committee), considered.
  TENANTS' RIGHTS, ETC. (SCOTLAND) BILL
    New Clause 1

      REPEAL OF PROVISIONS RELATING TO INCREASE OF RECOVERABLE RENT ON ACCOUNT OF IMPROVEMENTS
      '(1) Subject to subsection (2) below, sections 24, 29 and 30 of the 1971 Act, all of which relate to increase of recoverable rent on account of improvements, shall cease to have effect.

      (2) Where a notice of increase has been served by the landlord under subsection (2) of the said section 24 before the commencement of this section, the said sections 24, 29 and 30 shall continue to apply in relation to the rent increase to which the notice relates as they applied before the said commencement.'.—[Mr. Rifkind.]

      Brought up, and read the First time.
      4.14 pm
      The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this, we may take Government amendments Nos. 216 and 217.
      Mr. Rifkind: Section 24 of the 1971 Act enables a landlord to increase the rent for a regulated tenancy, for which there is no fair rent registered, by 12J per cent. of the cost of certain improvements that have been made. Little use has been made of the provisions, and they fit somewhat uneasily with the other two ways in which rents can be increased.
      The effect of the new clause will be that in future the only ways in which rent can be increased to take into account improvements or for any other reason will be by rent agreements between the landlord and the tenant, or by the matter being referred to the rent machinery in order that a new fair rent can be registered. That seems a much more straightforward system, rather than continuing with the power that has rarely been used in the past. The amendments are consequential on the new clause and I recommend them to the House.
      Mr. Bruce Millan (Glasgow, Craigton): I preface my remarks by saying that it was with considerable dismay that we saw the large number of amendments and new clauses tabled by the Government. Many were tabled at the last minute, and we even had a starred new clause for consideration.
      That is an abuse of the procedures of the House. In some cases, the amendments arise out of discussions in Committee and it is proper for the Government to table appropriate amendments on Report in those circumstances. Some amendments arise out of matters raised by the Opposition and I have no complaint about them, either. However, many of the new clauses, including new clause 1, do not fall into that category. They raise separate issues that do not arise out of debates in Committee or on Second Reading. That is an unsatisfactory way to proceed.
      No doubt the Minister will say that many of the new clauses, including new clause 1, are basically technical, but it is not a matter of the House accepting the hon. Gentleman's word for that. We ought to be able to make our own inquiries about the effects of the new clauses. When they are tabled at the last minute, and often in complicated or obscure terms—as amendments to previous pieces of legislation that turn out to have been amended subsequently, anyway—it is difficult for us to know what the Government are doing.
      The Under-Secretary has kindly supplied me with notes on the new clauses. That is helpful, and nothing that I say is meant to be grudging in that respect. However, while that is a courtesy to me, which I appreciate, other hon. Members are equally entitled to know what the Government are doing.
      There are so many new clauses that they almost represent a new Bill. That is an unsatisfactory way of legislating. I hope that the Government will take that point on board, because none of us has had time for consultation with outside interests on the new clauses, some of which could significantly affect the interests of large numbers of people outside. That is undesirable, particularly in housing legislation, where whatever we do has a considerable impact outside.

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      I do not intend to do more than raise one or two points on the new clauses, mainly in the interests of clarification. However, I hope that the Under-Secretary will not take that to mean that I consider the new clauses to be unimportant.
      It may be that certain points will have to be raised in another place. I should like to see amendments made to a number of new clauses. If we were dealing with the Bill in different circumstances and did not have a substantial amount of additional business to get through today and tomorrow I would have tabled amendments, despite all the difficulties with which we have been faced.
      I hope that in another place the Government will take account of the fact that there will have been no substantive discussion of the new clauses in this House. I do not wish to delay the House unnecessarily, because we have some important issues to deal with later. On this new clause I simply say that if the Minister tells the House that the provisions relating to increases in rent and rates to take account of the cost of improvements have been little used, I accept that there is a case for abandoning those provisions.
      The provisions affect the interests of landlords and tenants, and I suspect that most hon. Members have not had an opportunity of making inquiries to see whether these amendments are acceptable. In this case we take the Minister's word on trust. I am willing to do that on this new clause, but before the Bill goes to another place it may be that, following inquiries, we shall wish to have matters raised in the other place that are not easily raised in the House today. I hope that the Minister will take my remarks in the spirit in which they are intended. I do not object to new clause 1.
      Mr. Gordon Wilson (Dundee, East): I wish to comment briefly on new clause 1. Among the new clauses and amendments discussed in Committee was one that I presented to give additional powers to rent assessment committees to impose obligations for repairs to be carried out. It seems that new clause I suggests that rent can be increased after repairs have been carried out. That is the obverse of what was discussed in Committee.
      Will the Minister offer any comment on that and say particularly why, on reconsideration,
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      he has found it difficult to accept that rent assessment committees should have the power to restrict rent increases where landlords fail to carry out repairs to those properties that are deficient?
      I share the concern of the right hon. Member for Glasgow, Craigton (Mr. Millan) about the flood of Government amendments. Those of us who served on the Standing Committee were always delighted to see Government amendments flowing from the amendments that we had tabled, or at least from points that arose during the course of debate.
      Will the Minister explain what has gone wrong with the parliamentary draftsman who has changed the Bill in this fashion at this late stage? Would it not have been more satisfactory if these technical changes had been incorporated in the original version of the Bill, so that they could have been discussed in Committee, where more time is available? I respect any Government who come forward with changes, but perhaps the Minister has become over-enthusiastic in his treatment of the House this afternoon.
      Mr. Rifkind: I say in reply to the right hon. Member for Glasgow, Craigton (Mr. Millan) and the hon. Member for Dundee, East (Mr. Wilson) that I regret there are a substantial number of Government amendments. I believe that it will be helpful to the House to know how those amendments are constituted.
      There are 156 Government amendments. Of these, 27 are in specific response to undertakings given in Committee. A further 90 are drafting or technical amendments mainly consequential on Opposition amendments accepted in Committee and as a result of undertakings given. That is a total of 117 amendments.
      Of the remainder, 23 are repeals of various provisions in the schedules and are in no way new material. Sixteen only of the grand total of 156 introduce any significant element of new policy, as does new clause 1. The House will, therefore, see that over 90 per cent. of the provisions arise either directly as a result of deliberations in Committee when Opposition amendments were accepted or where undertakings were given to consider them.

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      In responding specifically to the question from the hon. Member for Dundee, East about rent assessment committees I can say that when such a committee presently considers an application for a rent increase it will normally consider whether such an increase is appropriate or not, given the existing condition of the property. It would be quite inappropriate for a rent assessment committee, or a rent officer for that matter, to say that the condition of a property justified an increase but that an increase would not be granted unless a landlord made further improvements.
      The new clause provides that where improvements have taken place, instead of using the somewhat archaic system of the 12½ per cent. procedure it is more appropriate to reach either a new fair rent registered in the normal way or, where landlord and tenant are agreed, to use a voluntary rent agreement. That is a more sensible way of recognising improvements that have already taken place. That is the concern of the new clause.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      MODIFICATIONS OF SECTION 5A OF THE 1971 ACT
      '(1) Section 5A of the 1971 Act (no protected tenancy where landlord's interest belongs to resident landlord) shall, in relation to a tenancy granted before or after the commencement of this section, be amended as follows—

      (a) in subsection 3(a) for "14" there shall be substituted "28" ;

      (b) in subsection 3(e) for "12" there shall be substituted "24" ; and

      (c) in subsection (4), after "3" there shall be inserted "(a) or (b)".'.—[Mr. Rifkind.]

      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it will be convenient to discuss new clause 10—Resident Landlords.
      Mr. Rifkind: New clause 2 modifies the provisions of the 1971 Act relating to the status of a tenant of a resident landlord following either the death of the landlord or the sale of the property. The
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      clause extends from 14 days to 28 days the period within which an incoming resident landlord must either move in or notify the tenant of his intention to move in within six months.
      The clause extends from one year to two years the time in which the executors are allowed to wind up the estate. It also allows the executors of a deceased resident landlord to recover possession from the tenant under the same procedure as applies for a resident landlord. Experience has shown that the existing time periods are too short, and I think that the House will agree that it is more sensible that a longer period be permitted.
      New clause 10 is concerned with the letting of parts of flats in purpose-built blocks. The combined effect of the provisions of the Rent (Scotland) Act 1971 ensured that any letting by a landlord of part of the house in which he resided would be subject to the limited jurisdiction of part VII of that Act. This provision, however, was included to prevent a landlord occupying one flat in a tenement block of flats and claiming the resident landlord exemption for any other flats in the tenement that he rented.
      However, as drafted the provisions of the 1971 Act gave full Rent Act protection to tenants of landlords who rent off part of their flat in a tenement block. That was never the intention. As I have already explained, purpose-built blocks of flats were specifically excluded in order to prevent tenancies of all separate flats in the block from being part VII contracts simply because the owner happened to live in one of them.
      As a result of the new clause, letting off part of a flat in a tenement block by a resident landlord will be a part VII contract in the same way as if the landlord were living in any kind of house other than a tenement flat. The position of existing tenants is unaffected. They will continue to have full security of tenure.
      I recommend the new clauses to the House.
      Mr. Millan: I do not have any particular point to make on new clause 10 except to say that this is an extremely complicated area of the law. It is difficult to get the legislation to do exactly what one wishes it to do and not to do other things as a side effect. But, as far as I can judge, new clause 10 is all right.

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      I am not completely happy about subsection (1)(c) of new clause 2 concerning a deceased resident landlord. The effect of the new clause will be to make it easier to recover possession from a tenant of a deceased landlord than it is now. I accept that in the circumstances of the death of a landlord one must take account of the interests of the executors. However, one must also take account of the interests of the tenant who is, presumably, not responsible for the death of the landlord but who, nevertheless, may find himself losing his home. I am not sure that we have got the balance right here.
      I raised a similar point in Committee, though in a slightly different context, on clause 52 in relation to a regulated tenancy. I do not wish to pursue the point now. I simply say that, while I agree with paragraphs (a) and (b) of subsection (1) of new clause 2, I am doubtful about paragraph (c). Though we do not press the matter at the moment, I would certainly like to look at it before the Bill goes to another place.
      4.30 pm
      Mr. Rifkind: The purpose of the provision is that the tenant should neither benefit nor lose out as a result of the death of a resident landlord. The purpose is to give the executors of the resident landlord exactly the same rights as the resident landlord would have had if he were still alive. That seems to be a reasonably fair approach.
      Mr. Millan: In these circumstances, the resident landlord is no longer alive and the situation is different. It does not follow logically that the tenant should be treated in exactly the same way as if the resident landlord were still alive. This is a matter that I wish to consider before the Bill goes to another place.
      Question put and agreed to.
      Clause read a Second time, and added the Bill.

    New Clause 3

      AMENDMENT OF SECTION 21(2)(b) OF THE 1971 ACT
      'Section 21(2)(b) of the 1971 Act shall be amended by substituting for the words "section 7 of the Housing Rents and Subsidies (Scotland) Act 1975 "the words" section 36 of the
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      Tenants' Rights, Etc. (Scotland) Act 1980 "and by adding after the words" the date "the words" (which may be any date during a rental period)".'.—[Mr Rifkind.]
      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      The effect of the clause is to enable increases of rent to be recovered for parts of statutory rental periods. The wording of the existing phasing rules in the Housing Rents and Subsidies (Scotland) Act 1975 is based on what was at that time the commonly held view that a notice of increase could take effect only from the beginning of a rental period. That view has been held to be incorrect in a subsequent court of judgment in the case of Avenue Properties (St. John's Wood Ltd.) v. Aisinzon in 1976, which held that a rent increase could take place during a rental period. Although there has not been a specific Scottish judicial decision on this issue, there is some doubt arising out of the English decision in an identical situation. It seems sensible to adapt the legislation to reflect the judgment of the court.
      Mr. Millan: This is an area of the law in which there has been difficulty. The English decision has caused a certain amount of uncertainty. I am not clear on the exact definition of a rental period. That is not defined in the new clause. What does it mean? Does it mean the period over which rent is paid, which would mean that if the rent is paid weekly the rental period is a week, if it is paid monthly it is a month and if it is paid quarterly it is a quarter of the year?
      The definition will make a substantial difference in some instances. If the tenant is paying a weekly rent it will not matter very much whether an increase takes place at the beginning or during the middle of the rental period. However, it will make a substantial difference if the rental period is as long as a year. There is no definition in the clause. Presumably rental period is defined elsewhere. I hope that the Minister will help us and tell us where the definition is to be found.
      Mr. Rifkind: I cannot tell the right hon. Gentleman exactly where it is defined, if it is defined anywhere. I suspect

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      that a definition is to be found. Much depends on the agreement that has been reached between the tenant and the landlord. It can be weeks or months depending on the agreement that is reached between the parties when the lease is determined.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 4

      CONSENT OF TENANT TO CARRYING OUT OF WORKS
      'Section SO of the 1971 Act shall be amended as follows—

      (a) in subsection (2) the words "(whether a controlled or a regulated tenancy)" shall cease to have effect;

      (b) at the end there shall be added the following subsection—"

      "(5) For the purposes of this section a dwelling-house satisfies the qualifying conditions if it is provided with all the standard amenities, it is in good repair having regard to its age, character and locality and disregarding internal decorative repair, and it meets the tolerable standards.".'.—[Mr. Rifkind.]
      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss Government amendment No. 218.
      Mr. Rifkind: The purpose of the new clause is to make minor technical amendments to section 80 of the 1971 Act. That section enables a landlord whose tenant refuses to grant his consent to the carrying out of works which will enable the dwelling house to satisfy the qualifying conditions to apply to the courts for an order authorising him to enter and carry out the works. The repeal by paragraph (a) of the words "(whether a controlled or regulated tenancy)" is in consequence of the abolition of controlled tenancies. The purpose of paragraph (b) is to insert in section 80 a definition of the qualifying conditions.
      Amendment No. 218 is a consequential amendment following the abolition of controlled tenancies.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 5

      AMENDMENT OF DEFINITION OF ' PRESCRIBED ' IN HOUSING (SCOTLAND) ACT 1974
      ' The definition of "prescribed" in section 49(3) of the Housing (Scotland) Act 1974 shall be amended by inserting before "in relation to" the words "means prescribed by the Secretary of State and".'.—[Mr. Rifkind.]
      Brought up, and read the First Time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time. The new clause clarifies the definition of the word "prescribed" in the Housing, (Scotland) Act 1974 by specifying who shall have the authority to prescribe. No change in the existing powers or arrangements will result.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 6

      CANCELLATION OF ENTRIES IN REGISTER RELATING TO PART VII CONTRACTS AT INSTANCE OF LANDLORD
      'After section 91 of the 1971 Act there shall be inserted the following section—
      91A.—(1) Where a rent has been registered under section 89 of this Act but the dwelling-house has ceased to be subject to a Part VII Contract, an application to a rent assessment committee may be made by the landlord in accordance with this section for the cancellation of the registration.
      (2) An application under this section shall not be enterlained before the expiry of three years from the date when the registration of the rent takes effect in accordance with section 89 of this Act.
      (3) On an application under subsection (1) above the rent assessment committee shall, where subsections (1) and (2) above are complied with, cancel the registration, and shall make an entry in the register noting the cancellation and the date from which the cancellation takes effect.
      (4) The president of the panel set up under Schedule 5 to this Act may, if he thinks fit direct that in considering applications made under subsection (1) above, the chairman sitting alone may exercise the functions of a rent assessment committee.
      (5) An application under this section shall be in the prescribed form and contain the prescribed particulars.
      (6) The rent assessment committee shall notify the applicant of its decision to grant or to refuse any application under this section and, where it grants the application, of the date from which the cancellation takes effect.".'.—[Mr. Rifkind.]
      Brought up, and read the First Time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      The purpose of the clause is to enable rents fixed more than three years ago for dwellings subject to part VII contracts to be cancelled provided that at the time application for cancellation is made the dwelling is not then subject to a part VII contract. The principle behind the clause has already been established by clause 42, which permits fair rents to be cancelled subject to the same conditions. It seems sensible that the same rules should apply for part VII contracts.
      Mr. Millan: The Minister has said that the principle has already been established by clause 42 and that the new clause is applying the same principle to part VII contracts. The hon. Gentleman will remember that not all of my hon. Friends were happy about the principle in clause 42.
      I am not convinced that the division that the new clause provides is necessary. I am not sure what benefit it is to anyone for these cancellations to take place. If this were purely a technical matter with there being no benefit or disbenefit to anyone, it would be far better for there to be an automatic cancellation of a registration after a certain period. For the cancellation to be made on the application of the landlord suggests to me—I think that it is suggested to some of my hon. Friends—that it will be done because there will be some advantage to the landlord. I suspect that that is so.
      I do not suggest that we oppose the new clause, but I should not like the Minister to think that we consider the clause to be necessary or that we accept the principle in clause 42. I do not think that we do, and I do not think that a convincing reason was given for the clause in Committee.
      Mr. Rifkind: We are dealing with a situation in which there is no longer a resident tenant—a lodger—living in the property. There may not have been such a presence for many years. The property may be sold to a new owner and there is an artificial situation in which technically a rent exists for a property which may not be used for the purpose for which the rent was established. It seems sensible to allow that provision to be removed. The right hon. Gentleman suggests that that might be done automatically,
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      but that is another matter. If the provision has been removed and it is considered appropriate in future to have a tenant again, the appropriate rent at that time would become a live issue. I accept that the right hon. Gentleman may wish to give further thought to the precise way in which this is done.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 7

      AMENDMENT CF SECTIONS 17 AND 145 OF HOUSING (SCOTLAND) ACT 1966
      ' The Housing (Scotland) Act 1966 shall be amended as follows—

      (a) in section 17 (power to make closing orders with respect to underground rooms), in subsections (2)(b) and (3), the words "with the consent of the Secretary of State" shall cease to have effect ;

      (b) in section 145 (powers of dealing with land etc.), in subsection (7)—

      (i) for the words "section 168 of the Local Government (Scotland) Act 1947" there shall be substituted the words "section 74 of the Local Government (Scotland) Act 1973" ;

      (ii) for the words from "Act of 1947" to the words "that Act" there shall be substituted the words "Act of 1973 in the exercise of any power under Part VI of that Act" ;

      (iii) for the words "said section 168" there shall be substituted the words "said section 74".'.—[Mr. Rifkind.]

      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to discuss new clause 8—Duty of local authority to have regard to amenities of locality etc.—and Government amendments Nos. 211 and 213.
      Mr. Rifkind: The new clause deals with two separate amendments to the Housing (Scotland) Act 1966. The first amendment is a relaxation of central Government control over local government. It removes the requirement on local authorities to obtain the Secretary of State's consent to any regulations governing their area which they make concerning ventilation, lighting and a number of other matters.
      The second effect of the new clause is to update a provision which should

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      have been updated by the Local Government (Scotland) Act 1973 but which was overlooked. That measure provides that where the Secretary of State has given consent under subsection (6) to the sale of houses on certain terms the normal restriction on all disposals by a local authority—namely, that they cannot be sold at less than the best price without the Secretary of State's consent—does not apply. That should have been repealed by an earlier provision, but that was not done as a result of an oversight some years ago. It is appropriate that the oversight has now been remedied.
      New clause 8 is an addition to the series of Government amendments made in Committee relaxing controls over local authorities. It relates to section 177 of the 1966 Act, which empowers the Secretary of State to give directions to local authorities in respect of artistic or amenity considerations, to require local authorities to appoint local advisory committees, to be furnished with any copies of recommendations, and to do various other matters in respect of these particular areas of housing policy. It seems appropriate that these should not be continuing powers imposed by, or available to, the Secretary of State. This, therefore, gives local authorities full discretion in this field.
      The other amendments being taken with this are merely consequential on these particular matters.
      Mr. Millan: I do not want to comment on new clause 7, but I should not like new clause 8 to go by without at least making one comment about it. I must confess that it was news to me that there was any power in the housing Acts for local authorities to appoint local advisory committees to advise them on artistic and amenity considerations when they build local authority houses. I am not aware of any of them having done that. The evidence of their not having done that is, unfortunately, all too famliiar to us in many parts of Scotland.
      I make a serious point here. As I say, I had not realised that the provision apparently appeared in a piece of Labour Government legislation. It is a great pity that these local committees were not appointed. The power to appoint them, as I understand it, still rests with the local authorities. I make that as a perfectly serious point. I do not think that there is
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      any purpose now in the Secretary of State directing the authorities to appoint these committees, particularly as the housing programme is, in any case, grinding to a halt and they will have nothing to advise about.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 8

      DUTY OF LOCAL AUTHORITY TO HAVE REGARD TO AMENITIES OF LOCALITY ETC.
      'In fulfilling the duty imposed on it by section 177 of the Housing (Scotland) Act 1966 a local authority shall no longer require to have regard to directions made by the Secretary of State and accordingly, in the said section 177—

      (a) in subsection (1), the words from "artistic interest" to the end are repealed ; and

      (b) in subsection (2) the words", and if required by the Secretary shall, "and the words from", and the authority"to the end are repealed.'.—[Mr. Rifkind.]

      Brought up, read the First and Second time, and added to the Bill.

    New Clause 9

      BOARD EXCLUDED IN CALCULATING RENT ALLOWANCES
      'Section 21(1)(b) of the 1972 Act shall be amended by inserting after the word "relates" the words "or for board".'.—[Mr. Rifkind.]
      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Existing legislation already provides that payments made in respect of furniture and services should be excluded from eligible rent when calculating rent allowances. The term "services" is not defined in the Act, but in the Government's view it should include payments in respect of board. However, to remove any doubt as to the treatment of the board element, the new clause adds specific reference to that.
      I commend the clause.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 10

      RESIDENT LANDLORDS
      ' In relation to tenancies granted after the commencement of this section section 5A(1) of the 1971 Act (no protected tenancy where landlord's interest belongs to resident landlord) shall have effect subject to the substitution for paragraphs (a) to (c) of the following paragraphs—

      "(a) the dwelling-house (not being a whole flat in a purpose built block of flats) forms part only of a building ; and

      (b) subject to subsection (2) below, the tenancy was granted by a person who, at the time when he granted it, occupied as his residence another dwelling-house which also forms part of the building ; and

      (c) subject to subsection (3) below, at all times since the tenancy was granted the interest of the landlord under the tenancy has belonged to a person who, at the time he owned that interest, occupied as his residence another dwelling-house which also formed part of the building.".'—[Mr. Rifkind.]

      Brought up, read the First and Second time, and added to the Bill.

    New Clause 11

      INCREASES IN PENALTIES FOR OFFENCES RELATING TO HOUSES IN MULTIPLE OCCUPATION
      '(1) The Housing (Scotland) Act 1966 shall be amended as follows—

      (a) in section 100(3) for "ten pounds" substitute "fifty pounds" ;

      (b) in section 102(3) for "ten pounds "substitute" fifty pounds" ;

      (c) in section 103(4) for paragraphs (a) and (b) substitute "to a fine not exceeding £200" ;

      (d) in section 110(1)(b) leave out the words from the second "or" to the end of the paragraph ;

      (e) in section 111(5) for paragraphs (a) and (b) substitute "to a fine not exceeding five hundred pounds" ;

      (f) in section 112(5) for "twenty pounds" substitute "fifty pounds" ;

      (g) in section 185(2)—

      (i) after "shall" insert "be liable on summary conviction to a fine not exceeding £200" ; and

      (ii) for "twenty pounds" substitute "five hundred pounds".

      (2) Schedule 7C to the Criminal Procedure (Scotland) Act 1975 shall be amended by deleting from the first column of the entry relating to the Housing (Scotland) Act 1966 the words from "where" to the end of the column.'.—[Mr. Rifkind.]
      Brought up, and read the First time.
      Mr. Rifkind Mr. Rifkind I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 232.
      Mr. Rifkind: This clause provides for updating the penalties provided for in the Housing (Scotland) Act 1966 relating to houses in multiple occupation. The revised penalty structure increases monetary penalties and also favours fewer different levels of fine.
      The new structure removes imprisonment for certain offences, in line with the general view that imprisonment is appropriate only for the most serious offences in this area.
      The amendment taken with this is consequential on this new clause.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.
      4.45 pm

    New Clause 12

      AMENDMENT OF ENACTMENTS RELATING TO HOUSING ASSOCIATIONS
      ' (1) Section 5 of the Rent (Scotland) Act 1971 shall be amended as follows—

      (a) in subsection (4) the words from the beginning to "fulfilled," are repealed ; and

      (b) subsection (5) is repealed.

      (2) Sections 64 and 65 of the Housing (Financial Provisions) (Scotland) Act 1972 are repealed.
      (3) Section 66 of the said Act of 1972 shall be amended by substituting for the words "to (4) "the words", (2) and (4) ".
      (4) Section 18 of the Housing Act 1974 shall be amended as follows—

      (a) in subsection (2) the words "in such form as may be prescribed "are repealed ; and

      (b) subsection (5) is repealed.'.—[Mr. Rifkind.]

      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, that the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 214, 226 and 227.
      Mr. Rifkind: This clause provides for a number of minor amendments and repeals to housing association rent provisions.

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      Subsection (1) removes the financial conditions limiting the exclusion from Rent Act protection of registered housing association tenancies and the tenancies of co-ownership societies. All such tenancies should be so excluded regardless of the financial arrangements under which the houses were provided. Therefore, all housing associations would thereby obtain proper security.
      Subsection (2) repeals section 64 of the Housing (Financial Provisions) (Scotland) Act 1972 which empowers the Secretary of State to fix a special rent limit when the previous rent limit exceeds a first registered rent and section 65 which lays down the procedures to be followed. The power has only been used once and is no longer necessary since revenue deficit grant is now available to meet any loss on rent income.
      Subsection (3) removes the obligation on a registered housing association as regards tenancies which are not secure tenancies to include in a notice of rent increase reference to the tenants' right to terminate the tenancy.
      Subsection (4) removes the obligation placed on housing associations, when a tenancy is converted into a regulated tenancy, to give notice in a prescribed form.
      These provisions are no longer relevant, given the security of tenure that is now provided to tenants of registered housing associations under part II of the Bill.
      Mr. Millan: The Minister said that in another part of the Bill security of tenure was given to housing association tenants. However, the provisions of the new clause act in the opposite direction as to the interests of tenants, by removing certain protections that they have at present in relation to rents. As I understand it, subsection (1) means that they no longer have the protection of the Rent Acts at all.
      Subsections (3) and (4) also give rather less protection to tenants, in both cases, in relation to the notice that should be given to housing association tenants by the housing association itself.
      I understand that the relationship between a housing association and its tenants is not the same as that between a private landlord and his tenants Nevertheless,
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      these amendments may not be as minor as the Minister suggested.
      Were these provisions subject to consultation with the housing association movement in Scotland? What other consultations were there and what were the results of them?
      Mr. Rifkind: The right hon. Gentle-man slightly misunderstood subsection (1). Its effect is to remove the financial conditions limiting the exclusion from Rent (Scotland) Act protection. Therefore, as a result of this deletion, all housing association tenancies will have protection rather than have it removed from them.
      Under subsection (3), where there has been a notice of a rent increase, it is surely no longer necessary specifically to remind the tenant of his right to terminate the tenancy. That is a clear right which the tenant has, given the new rights of housing association tenants under the Bill. They, being members of a registered housing association, thereby have the protection with which the Bill provides them. Therefore, further provision is not necessary for these tenants.
      Mr. Mullan: I am sorry to disagree with the Minister. As I understand it, subsection (1) does exactly the opposite of what he said. It does exactly what I said earlier. It excludes all the tenancies that we are talking about under this clause from Rent (Scotland) Act protection. That is what the Minister's notes on the clause say. He has misinterpreted the clause. I hope that he has given accurate accounts of some of the other clauses. As this is a removal of protection from tenants—whether it is important at the minute or not—has there been any discussion about it?
      Mr. Rifkind: The point that I wished to make was that from now on, as a result of the Bill, those who occupy property belonging to a registered housing association will not need the protection of the Rent Acts, because they have the protection of this Bill. Under part II, tenants of a registered housing association will have full security of tenure and other rights that go with i and those rights will in future be available to council tenants as well. Only tenants of a non-registered housing association will need the continued protection of the

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      Rent Acts, and they are not affected by subsection (1).
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 13

      EFFECT OF REGISTRATION OF RENT
      '(1) For section 44 of the 1971 Act (effect of registration of rent) there shall be substituted the following section—
      44.—(1) Subject to subsection (2) below, the registration of a rent for a dwelling-house takes effect, if the rent was determined by the rent officer, from the date when it was registered.

      (2) If (by virtue of section 40(3A) of this Act) an application for registration of rent is made before the expiry of the period of 3 years referred to in subsection (3) of that section, the registration of a rent for the dwelling-house does not take effect before the end of that period.

      (3) If, on application for the registration of a different rent, the rent officer confirms the rent for the time being registered, the confirmation or that rent takes effect from the date when it is noted in the register.

      (4) If the rent for a dwelling-house is determined by a rent assessment committee, the registration of that rent takes effect from the date when the committee make their decision.

      (5) The date from which the registration or confirmation of a rent takes effect shall be entered in the register.

      (6) As from the date on which the registration of a rent takes effect any previous registration of a rent for the dweling-house ceases to have effect.

      (7) Where a valid notice of increase under any provision of Part III of this Act has been served on a tenant and, in consequence of the registration of a rent, part but not whole of the increase specified in the notice becomes irrecoverable from the tenant, the registration shall not invalidate the notice, but the notice shall, as from the date from which the registration takes effect, have effect as if it specified such part only of the increase as has not become irrecoverable.".

      (2) In section 21(3) of the 1971 Act (limit of rent during statutory periods) for the words "on which the rent was registered" there shall be substituted the words "from which the registration of the rent took effect".
      (3) For section 40(4) of the 1971 Act (meaning of a "relevant date" in relation to applications for registration of rent) there shall be substituted the following subsections—

      "(4) In this section and section 41 of this Act, "relevant date", in relation to a rent which has been registered under this Part of this Act, means the date from which the registration took effect or, in the case of a registered rent which
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      has been confirmed by the rent officer, the date from which the confirmation (or, where there have been two or more confirmations, the last of them) took effect.

      (4A) For the purposes of subsection (4) above, where a rent is registered as a result of a decision of a rent assessment committee the date from which that registration took effect shall be taken to be the date on which the rent determined by the rent officer was registered or, as the case may be, the confirmation of the registered rent by the rent officer was noted.".

      (4) In paragraph 9(2) of Schedule 6 of the 1971 Act (procedure on application for registration of rent), for the word "accordingly" there shall be substituted the words "of their decision and, in the case of the determination of a rent, of the date on which their decision was made.".'.—[Mr. Rifkind.]
      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 162.
      Mr. Rifkind: The purpose of the clause is to amend the provisions in the Rent (Scotland) Act 1971 which fix the date from which the registration of a fair rent takes effect. The clause provides a simplification of these rules. It provides that both increases and deductions in rent will take effect from the date that the rent officer registers the rent or, where there is an objection to his figure, the date when the rent assessment committee gives its decision. Similarly, it provides for the three-year registration period to be calculated from the date on which the rent officer registers the rent that he has fixed.
      With that explanation, I commend the new clause to the House.
      Mr. Millan: This is a long and complicated new clause which makes some important changes in the procedures for determining when a new rent shall take effect. I understand that one effect will be that in certain cases the rent may be increased earlier than under existing legislation if we pass the clause. Even under existing legislation, when a rent officer determines a new rent, that rent cannot take effect until there has been a notice from the landlord to the tenants concerned. I do not think that this is a better provision.

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      I am not happy about a provision which allows the rent to be increased from the date of the rent officer's determination without a further notice from the landlord. I have some outstanding cases of disputed rents in my constituency and I am not happy about the procedures for dealing with them.
      I was dealing with one case in my constituency only yesterday. The rents were registered from 4 January this year. The tenants concerned had notice from the rent assessment committee only at the end of May and the beginning of June that there were to be hearings regarding these rents.
      I understand that under the new clause, as under existing legislation, if the rent assessment committee comes to a subsequent determination of a different rent, then, if it is an increase, the new rent will not be payable until the date of the determination by the rent assessment committee. In that respect—I hope that I have got the law right—my constituents are protected.
      The point that I want to draw to the Minister's attention is that there was a delay of three months before the rent assessment committee followed the standard procedures by telling the tenants that there had been an objection and that there would have to be a hearing. There was a delay of three months with no satisfactory reason for it.
      In cases of rent registration where there may ultimately be an appeal to the rent assessment committee, it is difficult for tenants to know exactly how they stand in relation to rents at any particular time. One advantage of the present provision, even if the rent assessment committee is not involved, is that it provides a procedure which makes the landlord send a notice to the tenant concerned. The tenant, having got the appropriate notice, may then see the date from which the new rent is payable. If we make it automatic, then, unless the procedures are such that the tenant is informed in some way very quickly after the new rent has been registered, he may find himself innocently accumulating arrears, because there is no obligation on the landlord to demand the new rent immediately. If the landlord does not demand the new rent immediately, arrears may accumulate in a
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      wholly unsatisfactory way. The existing provision prevents that from happening.
      I am not convinced that we should change the procedures to allow the new rent to be exigible immediately it is registered. If there were no delays and so on, that would be reasonable. However, I suggest, from some experience of these matters in my constituency, that tenants can easily become confused. It is unsatisfactory that they should innocently get into rent arrears by not understanding what their rent is or, for that matter, not having proper notice of it.
      I ask the Minister to look into these procedures. I understand that when the matter goes to the rent assessment committee there is protection in that any further increase cannot be asked for by the landlord until the committee has made its determination. However, I should like to be assured that when the rent assessment committee has made its determination the tenants are informed right away and that it does not take several weeks to send out the notices. If it does—sometimes increases can be substantial for individual tenants—arrears can accumulate. That is highly unsatisfactory. If we are to make the changes proposed in the new clause, we must be sure that the procedures will work speedily so that tenants are not innocently disadvantaged and put in financial difficulty.
      Mr. Rifkind: I assure the right hon. Gentleman that there is no change as a result of the new clause in the amount of notice required to be given to the tenant of a rent increase. Whatever else the new clause does, it does not affect the notice which has to be given to the tenant. I shall certainly consider the points made by the right hon. Gentleman to see whether any further changes may be required as a result of the new clause.
      I should have referred earlier to amendment No. 162. The amendment brings housing associations into line with landlords generally in the private rented sector in the event of an application being made for re-registration of a fair rent within the last three months of the period of three years from the effective date of the previous registration. In such circumstances, the amendment prevents the new registration from taking effect before the expiry of the three-year period from the

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      effective date of the previous registration. This clearly is a desirable protection for tenants and I am sure that it will have the support of the House as a whole.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 14

      EXTENSION OF RENT ALLOWANCES
      ' Part II of the Housing (Financial Provisions) (Scotland) Act 1972 (Rent rebates and allowances) shall be amended as follows—

      (a) in subsection (4) of section 16 (rent allowances) by inserting at the beginning of paragraph (a) the words "a regional council,";

      (b) in section 16 by adding after subsection 7 the following subsections—

      "(8) Subsection (1) above and, in so far as they relate to rent allowances, sections 17 to 22 below shall, with any necessary modifications, apply in relation to a tenant to whom those previsions apply.

      (9) A person shall not be precluded from receiving an allowance under an allowance scheme by reason only that he does not have exclusive occupation of the house which he occupies." :

      (c) in section 22 (1) by inserting in the appropriate place the following definition—

      "hostel "means a building in which is provided, for persons generally or for any class or classes of persons, residential accommodation (otherwise than in houses) and either board or common facilities for the preparation of food adequate to the needs of those persons, or both.".'.—[Mr. Rifkind.]
      Brought up, and read the First time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take new clause 15—Extension of rent allowance scheme.
      Mr. Rifkind: In Scotland at present eligibility for rent allowance towards housing costs, with few exceptions, rests heavily on the Rent Acts. This dependence on the terms of existing Rent Act legislation has the effect of excluding certain forms of tenancy from entitlement to rent allowances. Therefore, some persons are denied assistance with their rent.
      The main area of concern surrounds people who do not enjoy Rent Act protection because they do not have exclusive occupation of their accommodation. This category comprises mainly hostel dwellers who may occupy no more than a bed space in a dormitory. Therefore,
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      because they do not have the protection of the Rent Acts, their eligibility for rent allowance cannot be considered. The effect of the new clause will be to rectify this anomaly which, in principle, has excluded tenants of unfurnished houses, for example, owned by regional councils. This is another example of the anomalies which exist. Therefore, it is thought appropriate not to have, as it were, the specific criteria which have to be met, but to enable all those who may have problems in meeting their rent to consider whether their income justifies an application for a rent allowance.
      As regards new clause 15, the current definition of "housing associations" was deliberately framed so as to exclude co-ownership societies from the rent allowance scheme, because houses owned by such associations are in the nature of owner-occupied houses rather than tenanted houses since an outgoing member qualifies for premium payments related to the increase in the value of the property during his term of occupation. However, the definition also has the effect, which was never intended, of excluding par value fully mutual registered co-operative housing associations where no premium payment related to the increase in the value of the house is paid to outgoing members. Those who are in that form of cooperative housing are more in the position of tenants than of potential owner-occupiers. It seems unfair that they should be excluded from the possibility of applying for a rent allowance or for the other protections available to tenants. New clause 15 seeks to correct that problem.
      5 pm
      Mr. Gordon Wilson: I welcome the two new clauses. I was a critic of the Minister earlier in the proceedings in relation to the avalanche of new clauses and amendments tabled by the Government. I wish to say immediately that new clauses 14 and 15 are two examples that I welcome because they fill a gap. The Minister is to be congratulated on putting them forward.
      Mr. Robin F. Cook: I welcome the two new clauses. In the course of the past few minutes we have passed a number of new clauses that bring into effect the commitments made by the Minister in Committee, and which,

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      in some cases, are in response to points raised in Committee, especially the new clause that removes the grounds for evading the Rent Acts by the provision of a spurious element of board. The Minister will recall that I raised that point in Committee.
      One of the problems in the private rented sector with which we are familiar is the difficulty of advising tenants of their rights and their entitlement to allowances. It is especially difficult to get that across in the context of piecemeal reforms such as those that we are considering tonight. Will the Minister consider, with his officials, what appropriate publicity could be given to the new rights? A number of tenants in Scotland are caught by evasion of the Rent Acts under the spurious provision of board. They are unlikely to read the Hansard report of the debate, and, unless other steps are taken, the rights that we are conferring may turn out to be nugatory.
      Mr. Rifkind: I acknowledge the force of the remarks made by the hon. Member for Edinburgh, Central (Mr. Cook), and thank him and the hon. Member for Dundee, East (Mr. Wilson) for welcoming the provisions. I shall consider the ways that might be appropriate to ensure that rights under these provisions are known by those who might benefit from them.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 15

      EXTENSION OF RENT ALLOWANCE SCHEME
      ' In the definition of "housing association" in section 78 (interpretation) of the Housing (Financial Provisions) (Scotland) Act 1972 there shall be added at the end the words—
      "where under the terms of the tenancy agreement or of the agreement by which the tenant became a member of the association or otherwise he (or his personal representatives) will be entitled, on his ceasing to be a member and subject to any conditions stated in either agreement, to a sum calculated by reference directly or indirectly to the value of the house.".'.—[Mr. Rifkind]
      Brought up, read the First and Second time, and added to the Bill.

    New Clause 28

      SPECIAL PROVISION FOR HOUSING ASSOCIATIONS
      ( ).—In this section—
      "registered association "means a registered housing association within the meaning of the Housing Act 1974; and
      "registered society" means a housing association which is a registered society within the meaning of section 74 of the Industrial and Provident Societies Act 1965 and whose rules restrict membership to persons who are tenants or prospective tenants of the association and preclude the granting or assigning of tenancies to persons other than members.—[Mr. Rifkind.]
      Brought up, and read the first time.
      Mr. Rifkind: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this, it will be convenient to discuss Government amendments Nos. 97 and 192.
      Mr. Rifkind: Tenancies of co-ownership housing associations registered with the Housing Corporation are excluded from part II of the Bill by paragraph 9 of schedule 1. That is for the reason that I mentioned earlier, namely, that a person in that position does not require that form of protection. However, there are also an unknown number of unregistered co-ownership associations. The new clause replaces paragraph 9 of schedule I with a more comprehensive set of provisions to clarify the position of that group of associations. In addition to the provisions for registered co-ownerships currently contained in the Bill, it provides that the security of tenure provisions of part II of the Bill shall apply to unregistered co-ownerships, and provides also that any registered co-ownership association which for some reason ceases to be registered must inform its tenants within 21 days that they have become secure tenants. In addition, it excludes from security of tenure fully mutual co-operative housing associations—that is, co-operatives whose members are all tenants, and all of whose tenants are members. Clearly the nature of such a co-operative does not require that form of provision.
      The other amendments taken with the new clause are consequential. I commend the new clause to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 16

      DISPOSAL OF DWELLING-HOUSES IN RURAL AREAS
      '.—(1) Notwithstanding section 4 of this Act, where a dwelling-house purchased by exercise of a right under Part I of this Act is situated in an area legislated by order of the Secretary of State as a rural area, the landlord may impose a limitation on the freedom of the purchaser to dispose of the dwelling-house m the manner specified below.
      (2) The limitation is, subject to subsection (4), that, until such time (if any) as may be notified in writing to the landlord there will be no disposal without the written consent of the landlord ; but that consent shall not be withheld if the disposal is to a person satisfying the condition stated in subsection (3) below.
      (3) The condition is that the person to whom the disposal is made (or, if it is made to more than one person, at least one of them) has, throughout the period of three years immediately preceding the application for consent, either—

      (a) had his place of work, in the rural area ; or

      (b) had his only or principal home in such an area.

      (4) If the Secretary of State consents, the limitation specified in subsection (2) above may be replaced by the following limitation, that is to say, that until the end of the period of ten years beginning with the purchase of the dwelling-house there will be no disposal unless—

      (a) the purchaser has offered to reconvey the dwelling-house to the landlord for a consideration equal to the amount agreed between the parties or determined by the district valuer as being the amount which is to be taken as the value of the dwelling-house at the time the offer is made (subject to the recovery or discount on early re-sale under section 6 of this Act) ; and

      (b) the landlord has refused the offer or has failed to accept it within one month after it was made.

      (5) Nothing in this section shall prevent a court from making an order transferring the dwelling-house or part thereof to the spouse of the purchaser, or a successor from inheriting the title to the dwelling-house.'.— [Mr. Cook.]
      Brought up, and read the First time.
      Mr. Cook: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this, it will be convenient to take the following amendments :
      No. 66, in clause 4, page 9, leave out lines 10 to 30.
      Government amendment No. 68, page 9, line 15, after ' instrument ', insert
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      ' subject to annulment in pursuance of a resolution of either House of Parliament'
      No. 9, in page 9, line 16, leave out subsection (7)
      No. 69, in page 9, line 17, leave out paragraph (a).
      No. 70, in page 9, line 17, leave out ' one-third ' and
      No. 71, in page 9, line 21, leave out paragraph (b).
      No. 72, in page 9, line 24, at end insert :
      ' or the Secretary of State is satisfied that there is an unsatisfied local demand for houses.
      255, in page 9, line 24, at end insert :
      ' and

      (c) the housing authority is satisfied that further sales will unduly disturb the balance of housing set out in the housing plan submitted to the Secretary of State (subject to the Secretary of State's considering such a submission to be reasonable) '

      Mr. Cook: I hope that the House will not think me discourteous if I have to leave the Chamber during the course of this debate. Both I and my hon. Friend the Member for Clackmannan and East Stirlingshire (Mr. O'Neill) are in the embarrassing position that we are also members of the Finance Bill Committee. I am speaking with one eye trained on the television Annunciator in the Chamber, so that I can see from the position from which I am speaking what is happening in that Committee.
      It is fortunate that we are having an opportunity to debate the position of council house sales in rural areas at an early stage of our deliberations on Report. Unfortunately, when we considered the matter in Committee, we had time only for a rather cramped and confined debate. That may help to explain why, at the end of the day, we arrived at an amendment that is, frankly, pointless and meaningless in the effect that it will have in protecting the needs of those in rural areas who are seeking a house to rent rather than a house to own.
      Looking at the text of the amendment that the Committee, perhaps ill-advisedly, accepted late at night, I find it difficult to see it as anything other than an exercise in whimsy. It turns on three separate tests. Local authorities in rural areas will be able to apply a pre-emption right to the

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      future sale of council houses if, first, one-third of their council houses have already been sold. The clause is activated only at a point when a dangerous reduction has already been achieved in the level of council houses within their areas.
      Secondly, not only are the local authorities required to lose one-third of their housing stock, but there must be evidence that an unreasonable number of those houses have become second homes. There is no definition in the Bill, or any indication during the course of the debate, of what the Minister regards as an unreasonable proportion. Would it be one-half of the one-third that have been sold, one-quarter, or 10 per cent.? We do not know. The ignorance under which we labour is worrying. The pre-emption rights do not automatically come into action if those two tests are met. They come into action only if, having considered those two criteria, the Secretary of State graciously assents to a petition from the local authority to the effect that it may have a pre-emption right.
      I regard that solution as profoundly unsatisfactory, especially because it turns on the threat to local housing from the second home market. There is a danger that houses sold under the Bill will become second homes. Some hon. Members may have seen the circular issued by Shelter, in which it quotes a letter from the Western Isles which refers to 10 timber chalet houses on the Island of Vatersay, and states :
      "Immediately adjacent to perhaps one of the most beautiful and sheltered beaches in the whole country."
      Such houses would naturally represent a real attraction to anybody seeking a second home in Scotland. I do not think that the House should lightly disregard the real concern of the Western Isles council that those houses might become second homes.
      It is not sufficient to say to the Western Isles council "After you have sold one-third of your housing stock, and after half of the houses sold have become second homes, we will consider giving you a pre-emption right". Although that threat exists, the fact remains that possibly, during the course of the debate on the rural areas, undue weight was attached to the threat of council houses disappearing into second homes. One of the ironies of the debate in Committee was that the
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      very hon. Members who urged us to accept the amendment said that the threat from second homes had been exaggerated. I observe that the hon. Members who participated in that debate are unable to join us tonight. I am sure that we shall have a full debate on the issue——
      Mr. Rifkind: I should point out that the hon. Members to whom the hon. Gentleman is referring are serving on the Criminal Justice (Scotland) Bill, and are unable to be here at this time.
      Mr. Cook: I am tempted to suggest that we should welcome an adjournment of the Criminal Justice (Scotland) Bill Committee in order that those hon. Members could attend this debate.
      Mr. Rifkind: The Government were willing to adjourn the Committee, but the Opposition requested that the Committee sit this afternoon.
      Mr. Cook: I am afraid that we have had a glimpse into the internal workings of the Opposition, which are clearly getting a little rusty.
      I had better return to my speech. As I was saying, Conservative Members, who unfortunately are unable to be with us, for the reasons given by the Minister, explained that they regarded the threat from second homes as exaggerated, yet in the Bill they have created a protection for the rural areas that is triggered off only if there is a substantial demand for second homes. In other words, on their own definition that not many council houses will become second homes, these subsections will remain dead for the life of this statute, which I hope will not be too long.
      Moreover, there is some force in their argument. I believe that the threat to the rural area housing stock from the effects of the Bill rests on two other arguments. It rests first, on the argument about the balance of the housing stock between houses available for letting and those available for owner-occupation. It is a delicate and sensitive task in any housing stock to strike a balance between the two. But in a rural area, where there will be only a few houses in any one settlement, the sale of the few council houses in a village can wholly alter the balance and transform such a village into an entirely owner-occupied community, which will not leave available for letting houses for

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      those young families who want to go on living and working in the community, but who cannot afford to buy a house in it.
      That is particularly marked, as such council houses as there are in the rural areas are frequently concentrated in the borough areas. Until local government reform in 1974 there was a reticence on the part of the landward areas to build council houses. In Orkney, not one council house was built outside the boroughs until 1974. Even to this day, half of all the council houses in the Western Isles are in Stornoway. Plainly, a small number of sales from the very small stock of council houses outside those boroughs will drastically reduce the number of houses available for letting.
      One can only remind the Minister of the report that has been submitted to him by his officials. It is a study of five rural areas, in which they say :
      "Many people are not able to command incomes sufficient to meet their basic housing needs in the private sector and reliance on the local authority as a major force in adequate housing provision will continue and probably increase "
      The tragedy is that at the very time when officials in the SDD conclude that reliance on the local authority will probably increase, we are passing a Bill that provides no protection against a reduction in the stock of local authority housing, on which greater reliance is expected to be placed in future years.
      The other reason why we should worry about the effects of this legislation on the rural areas relates to the threat not from the purchase of houses to be used as second homes, but from what I believe to be a real threat that council houses in rural areas adjacent to our central belt will be acquired by commuters. Not every rural area is north of the Highland fault line or safely tucked away on an island from which one cannot commute to Glasgow or Edinburgh. A large number of rural areas are within ready motoring or railway distance of those two main centres. Over the last two decades we have seen the spread of commuters to owner-occupied estates in many of those rural areas. What we now face is the real danger that those commuters will appear on the council estates, taking over some of the most attractive council houses in some of the most attractive villages.
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      I automatically think of East Lothian, and I am pleased to see my hon. Friend the Member for Berwick and East Lothian (Mr. Home Robertson) with us. The East Lothian district council has properly recorded its anxiety that it may lose every house in Gifford, which would be an attractive investment for any tenant who wished to buy his council house. There is no doubt that any tenant acquiring a house in Gifford would find a lucrative market among the commuters who are already spreading around that corner of the county.
      5.15 pm
      Two weeks ago I took a train to Newcastle, where I addressed a meeting. During the journey the train drew up at Drem village. I looked out of the window and noticed that immediately adjacent to the village there are four council houses, with extensive gardens. They are immediately adjacent to a station to which there are frequent commuter trains. If one were seeking a speculative sale a few years hence, I cannot think of a better investment for a commuter seeking a house in the country with easy access to the city. I believe that there will be a real threat to houses in the rural areas if they are removed from the local housing stock for use in that way.
      The Bill will not provide a shred of protection to East Lothian district council if that threat materialises, because it will be unable to say that those houses are being used as second homes. Those houses will remain in use as principal homes. Therefore, the mechanisms providing for their protection will not come into play. It is appropriate, therefore, to look afresh at the deliberations in Committee, and at the result of those deliberations, to see how we can improve them in order to provide greater strength and protection to the rural areas.
      Some of my hon. Friends have tabled amendments, to which they will no doubt speak, in which they seek to amend the amendment that was carried in Committee. In my perhaps rather more extremist fashion I have proposed a total deletion of what was accepted in Committee and the substitution of another new clause. However, my new clause is not the product of fanatics beavering away in the National Executive Committee of the Labour Party or any other place from

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      where a bold Socialist programme may emerge. My new clause was drafted in the Department of the Environment and was promoted by the Minister for Housing and Construction during proceedings on the Housing Bill. As this is a new clause that was promoted by him in that legislation, one can take it that there is no division of principle between my modest new clause and the Government's. Indeed, were there a major issue of principle, I presume that a Minister would not have promoted a parallel new clause in the parallel Housing Bill for England and Wales.
      My new clause provides a pre-emption right to local authorities in designating rural areas. For those hon. Members who have been following the text as printed by the compositor, I should perhaps clarify that it should refer to rural areas "designated" by the Secretary of State, and not "legislated", Draconian though the Government may be, they have not as yet given the Secretary of State powers to legislate without reference to Parliament.
      I believe that there will be a wide degree of support among the rural areas for my new clause. After all, it is worth recalling that there has been a wide degree of anxiety among the rural authorities over the provisions of the Bill and the lack of protection to them. When we met in Committee we had available the results of a circular sent by Shelter to the rural district councils, which received 10 respondents, only one of which indicated that it was not opposed to the Bill. Nine of them indicated that they were strongly opposed to the way in which the Bill would affect their areas.
      I challenge the Minister to say whether any rural district council or islands council has withdrawn its reservations about the Bill in the light of the protection that was provided in Committee. I am not aware of any local authority that has reviewed and dropped its anxities about the effect of the Bill on its area as a result of the feeble protection that the Committee saw fit to confer.
      There is a certain irony in the Opposition seeking to protect the rural areas. It is predominantly Conservative Members who represent the areas that will be worst affected by their failure to protect those areas from the consequences of this
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      legislation. I hope that the Minister will not let that irony stand in the way of his looking seriously and favourably at the new clause. After all, the Government have run into some difficulty in the upper House over their policy in regard to rural areas. As we are about to send the Bill on its way to the House of Lords, I should not want the Minister to lose any sleep or his appetite over anxiety that the Duke of Norfolk might lead a rebellion on council house sales in the rural areas of Scotland.
      That is not something that I would wish on the Minister, but I warn him that unless he accepts one of the amendments and strengthens the provisions to protect the rural areas he will fail to carry out his party's manifesto commitment that the circumstances of the rural areas would be taken into account. He will also be laying in store for himself and his Government a real degree of anger and outrage when young couples discover that there is no way in which they can rent a house without moving into the cities of Scotland.
      Mr. David Steel: I strongly support the new clause moved by the hon. Member for Edinburgh, Central (Mr. Cook). He was correct in his arguments. Even if at the end of the day the Under-Secretary of State cannot accept this new clause, I hope that he will undertake to reconsider the effectiveness of what the Government have accepted in the Bill. I believe that the provision that they have made in response to the representations from the rural areas will not work. Therefore, there is no point in passing legislation that will prove ineffective, even for the purpose that the Government have sought to implement.
      If we turn from the theory of the legislation to its practice on the ground, the Government are saying that they may be able to agree to local authorities putting some restriction on sales if they have already sold one-third of their stock. Before we can protect the rural areas—the villages and the valleys—in the Ettrick and Lauderdale district in my constituency from being denuded of their council stock, one-third of the houses in Galashiels will have to be sold. But that will not happen. The most attractive houses are in the valleys and in the rural

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      areas, and they will be swallowed up first. With the passage of time, the present tenants, having exercised their rights to buy, may then sell their houses to other tenants coming into the area, whether as holiday homes or second homes.
      There is a housing scheme in my home village, Ettrick Bridge, consisting of four houses. That is a drop in the bucket compared with the total housing stock of the district council. I have no objection to those houses being sold to sitting tenants if they wish to exercise their right to buy, so long as the local authority has a right to repurchase on disposal.
      In the rural areas—I do not think this is understood by hon. Members representing urban areas—there is a real problem for people who have lived all their lives in tied cottages on farms. When they retire, they have to move, or when they pass on and their widows are left with tied cottages, their widows have to move. As the hon. Member for Edinburgh, Central said, in the old days, before the reform of local government, there were enormous difficulties in the rural areas because of the low level of housing stock, and often the housing authorities in the towns were insufficiently flexible in taking people on to their waiting lists. There was a gulf between the landward area and the burgh. Fortunately, that problem is no longer with us. But there is now the new problem of people who have lived all their lives in the countryside and who suddenly find that, when they wish to retire and to move into a local authority house, they have to move into the burgh way of life because there is no housing stock left in the rural areas. That is a serious social problem, and I do not think that this legislation, which no doubt has honourable intentions, and the amendments that were accepted in Committee, meet the problem in any way.
      Like the hon. Member for Edinburgh, Central, I agree that the danger is not entirely from the second home threat—although it is a real threat. There is also a threat from the growing strength of the commuter lobby. At Tweeddale, for example, there are some attractive areas within travelling distance of the city of Edinburgh where, if houses were sold
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      on the open market, they would go to people who would make them their primary homes, but eventually the local community and local authority would be deprived of housing stock. I have received strong representations on the matter from local authorities in my constituency, and I hope that the Government will consider it sympathetically.
      My hon. Friend the Member for Inverness (Mr. Johnston) has also drawn my attention to the fact that the cutback in expenditure by the Government is already having a deleterious effect on the housing stock and the house building programme in rural areas. For example, Skye and Lochalsh was planning to build 65 new houses this year, but as a result of the cuts it will be able to build only 10. In Badenock and Strathspey, the housing plan indicated a need to build 300 more council houses in the next five years. The Government cuts have reduced that number to 32. As a result of other Government policy there is already real difficulty in the rural areas in expanding the housing programmes. If, on top of that, they find that their existing housing stock is eroded because of this legislation there will be even more difficulty.
      In addition to this new clause, I have tabled amendment No. 255, which seeks to tackle the matter in a wider manner. It allows exemption from the provisions of the Bill where the
      "housing authority is satisfied that further sales will unduly disturb the balance of housing set out in the housing plan submitted to the Secretary of State (subject to the Secretary of State's considering such a submission to be reasonable)."
      That goes wider than merely having an effect on rural areas.
      The right of the individual to purchase his council house is difficult to lay down from the centre. What may be good for Glasgow may not be good for Ettrick Valley, and vice versa. That is why there should be a wider, more flexible measure in the Bill. Whether or not the Minister accepts the new clause, or my amendment, it is essential that when the Bill goes to the other place there is more satisfactory provision to protect the interest of rural housing stock.
      Mr. John Home Robertson: I am grateful to my hon. Friend the Member for Edinburgh Central, (Mr. Cook) for the way in which he moved the new clause and for his kind

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      references to my constituency, where the provisions of the Bill are likely to cause severe problems and create acute pressures on the limited housing stock that is at present available to let.
      I spoke on this matter on Second Reading. I was not fortunate enough to be a member of the Committee, although my hon. Friends who spent 70 hours discussing the Bill in Committee may not agree that "fortunate" is the right word. On Second Reading I emphasised the need for sufficient houses to be available at reasonable rents throughout Scotland, particularly in rural Scotland, where there are not nearly enough council houses available—as the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) pointed out. I said then that the Government should not sell houses under such circumstances, and I cited my experience as a district councillor representing a rural ward in Berwick district.
      During my brief tenure of office as a district councillor there were three council houses in the village of Burnmouth—an attractive fishing village—standing empty. They were pre-war houses that were in need of modernisation. The district council was not prepared to spend the money on modernising them, and it claimed that it could not find tenants for them. In due course, they were sold off. Having had a good deal of money spent on them, they are now being used as holiday homes. That is very nice for the people who have them, but it is a bit galling for those of my constituents in that part of Berwickshire who are living in overcrowded accommodation and who would dearly like to have had the opportunity to rent those houses.
      5.30 pm
      In another little village in my ward, the district council sold a house to a sitting tenant. I have no quarrel with that. Why should a sitting tenant not buy his house? What was unfortunate was that the council decided not to apply any pre-emption clause in the circumstances. A couple of years later the chap who owned the house decided to sell it, because he wanted to move elsewhere. It was sold on the open market because the district council did not use its option to buy it back. It is now standing partially occupied. That is in a village
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      in which there are only 12 council houses. My hon. Friend the Member for Edinburgh, Central has already indicated the far-reaching effects that the loss of a very small proportion of the available housing stock in an area such as that can have on the amount of housing that is available to let.
      This is one of the most important areas of the Bill. I was a little surprised that of the 70-odd hours of debate in Committee, it appears that only half an hour was spent on this issue. The amendment in the name of the hon. Member for Galloway (Mr. Lang), which was accepted by the Government, was not even debated. The amendment was to allow district and island councils to impose 10-year pre-emption conditions on houses in areas where one-third of the council houses had already been sold and where, in the view of the Secretary of State, an unreasonable proportion of those sold had become second homes.
      We have been over that issue. My hon. Friend the Member for Edinburgh, Central and the right hon. Member for Roxburgh, Selkirk and Peebles are quite right to indicate that if the clause is applied as it stands it is simply a question of the Secretary of State's having the option of shutting the stable door long after far too many council houses have been disposed of. As it stands, the Bill is not helpful. It is worse than useless.
      The key concern over sales of council houses in rural areas is not necessarily the problem of second homes, it is the severe lack of council housing in rural Scotland. According to the Scottish Office report "Housing in Rural Scotland"—which is not officially published ; it fell off the back of a lorry, I understand, but the Minister was kind enough to let me have a copy some months ago—in urban Scotland 58 per cent. of householders live in council housing, as compared with 38 per cent. in rural Scotland. The same report identified the need for more council houses in rural areas. I quote :
      "Many people are not able to command incomes sufficient to meet their basic housing needs in the private sector and reliance on the local authority as a major force in adequate housing provision will continue and probably increase."
      There are 15,000 families on Scotland's rural housing waiting lists whom local

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      authorities classify as homeless, overcrowded or living in substandard accommodation. That figure does not take account of the large number of workers in tied accommodation, both in the public sector and on farms, who regularly need to be rehoused because of their inherent insecurity, which I think most of us on the Opposition Benches deplore.
      When, under the previous Government, my hon. Friend the Member for Edinburgh, East (Mr. Strang) was piloting through the House legislation that abolished agricultural tied housing in England, local authorities, farmers and farm workers stated that they felt that the abolition of tied housing in Scotland was not necessary. Perhaps it would be useful to give the Minister fair warning that many people—not only Opposition Members and members of the Labour Party but the NFU and Mr. Henry Crawford, the secretary of the agriculture and forestry section of the Transport and General Workers Union in Scotland—are having second thoughts about this question, precisely because of the effect that the Bill will have on the availability of rented homes in rural areas of Scotland. All sorts of interests in the agriculture industry are now aware that the fact that there is likely to be a loss of a large number of council houses in rural Scotland will lead to a new campaign for the abolition of tied housing in Scotland, as has been done in England.
      There is no doubt that the sale of council houses to sitting tenants in rural areas is in direct conflict with the acknowledged need for an expanding public areas is in direct conflict with the ackmajority of Scotland's rural local authorities, of all parties. The Minister ought to take that point on board.
      The Government should be prepared to rethink the type of safeguards that need to be applied in rural areas. At the very least, they should consider accepting an amendment such as that which is before the House, which is based on what the Secretary of State for the Environment has already accepted for England. It is clear that this is a reasonable amendment, and that it ought to be accepted. Many housing authorities, and pressure groups such as Shelter, have indicated their concern
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      about the effect of council house sales and this part of the Bill. That applies not only to Labour authorities. The right hon. Member for Roxburgh, Selkirk and Peebles has already cited the fact that Ettrick and Lauderdale district council is very unhappy about what the Government are doing. Ettrick and Lauderdale overlaps into my constituency, incidentally. Also, East Lothian district council has made it abundantly clear that rather than perform the Minister's role as a cut-price estate agent, it will do everything within the law to avoid selling any of its housing stock, whether it be in rural areas or elsewhere, because of its overriding responsibility to act as a housing authority.
      Mr. Barry Henderson (Fife, East): A moment or two ago I heard the hon. Member say that if someone wanted to buy his house he ought to be allowed to do so. What he is now saying appears to be in contradiction to that.
      Mr. Home Robertson: No, that was not the point that I was making. I accept the sale of council houses where there is sufficient housing stock available to let. Where that is not so, it is unreasonable and irresponsible to be flogging them off. What is more, there is ample evidence that the point of view that I have just stated is accepted by the people of Scotland. The Minister will recall the district council elections only last month. In the East Lothian district the Labour majority was increased, in spite of the fact that there was a strident Conservative campaign to bribe tenants with offers of the sale of their council houses to them on the cheap.
      It is clear that tenants are not fooled by these bogus deals that are being offered. They are not fooled by an offer that could lead only to longer housing lists, particularly in rural Scotland. I sincerely hope that the Minister and the House will accept the new clause.
      Mr. Gordon Wilson: I rise to support the hon. Member for Edinburgh, Central (Mr. Cook) and the new clause. I think that most members of the Standing Committee on the Bill left it with considerable reservations about the effects of the Government's proposals in relation to rural housing. There was a great deal of opposition to the sale of council houses in urban areas, but it was recognised in

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      Committee that a fair number of the local authorities in rural areas also had profound reservations about the effects of the Government's intention to go ahead with the sale of houses in areas in which there had been a shortage of houses for letting.
      The point has been readily made by the hon. Member for Edinburgh, Central that in rural areas there is an entirely different pattern of housing tenure from that of urban areas. It would be difficult to find a fixed pattern in the rural areas of Scotland. We know only that the housing pattern is considerably different. The Government's arrangements provide very little control over sales. As a result, even fewer houses will be available to those who cannot afford to buy their own homes. If people cannot find houses, they may be forced to leave the district.
      We must consider the problem of rural depopulation. Young people who do not have any capital and who wish to set up house in the locality will find that they cannot do so. They may be driven out. That factor has not been stressed sufficiently. My right hon. Friend the Member for Western Isles (Mr. Stewart) has been detained in the Standing Committee on the Criminal Justice (Scotland) Bill. However, he specifically wished me to refer to the Western Isles district council's opposition to the proposal. My right hon. Friend strongly supports that opposition. If there is no change in the Bill, it will lead to a shortage of houses and to rural depopulation. Age levels in rural areas will rise. There may be insufficient local authority housing for key workers and for incoming workers. One could spell out a variety of situations.
      The Government do not see any difficulty about holiday homes or second homes. Dr. W. M. Mclntyre, of Edinburgh, sent me a copy of a letter dated 22 January 1980. It was sent by the Under-Secretary of State for Scotland. The Under-Secretary of State referred to the findings of the Darlington amenity research trust. Apparently, the trust reported on second homes in Scotland in 1977. The report showed that there had been no overall growth in the number of holiday homes since 1973. We do not have any information about the pattern of holiday homes between 1977 and 1980. However, more and more commuters are moving out of cities and into rural areas. They have an effect on housing stocks.
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      Such commuters can probably get a high price for their homes in city centres. They can command access to houses in rural areas. As a result, house prices in rural areas have increased and local people—particularly the young, who have been unable to get a council house but who wish to leave home—find that they are deprived of access to the market.
      I should like to quote the last sentence of the answer from the Scottish Office. It refers to council houses. The Under-Secretary wrote :
      "If more are needed, it will be for the housing authority to make provision by allocating capital to new building programmes."
      I admit that that letter was written a few months ago, before the Government's latest changes in housing finance. As every hon. Member will know, the amount of money available for new housing in Scotland has been slashed to the bone. As a result, no funds will be available for the provision of new houses to meet the shortage that the Government have admitted might result from the sale of existing housing stock.
      5.45 pm
      We appreciate that we cannot browbeat the Government, but the other place may be able to do that when they consider the Bill. The Government should bear in mind that local authorities, those who live in rural areas, and those who have studied the effects of the proposed changes are worried. The Government should consider some of the amendments that have been suggested this afternoon. I cannot speak with any authority about rural areas, as I do not represent one. However, I understand that the high cost and shortage of public transport, the closures of garages by the big petroleum companies and the restrictions on shopping mean that rural commuities are under considerable pressure. The sale of council houses may have a domino effect. A chain reaction may occur with serious consequences for local communities.
      I support the new clause and the amendment standing in the name of the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel). However, I believe that the Government should also consider amendments Nos. 69 and 72, which stand in my name. They relate to the amendment that the

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      Government accepted in Committee. At the time, I felt that that amendment was almost cosmetic, because it sought to deal with the considerable criticism that had come from local authorities. It tried to disarm that criticism. However, it had no effect on the Government's basic intention to dispose of houses in rural areas. If the Government have accepted the amendment moved by the hon. Member for Galloway (Mr. Lang) they must accept that there is worry and concern about the impact of sales.
      Perhaps I could suggest a further step. If the Government accept amendment No. 69, and if paragraph (a) is deleted—it lays down a restriction on the right to control sales through pre-emption to the standard of one-third of the dwelling houses sold—an artificial barrier will be removed. The figure of one-third is unnecessary and rigid. There is no reason why one-third should be the standard.
      Amendment No. 72 would give the Secretary of State some discretion in relation to the arguments and reasons propounded by local authorities. There may be an unsatisfied demand for local council houses. It might be thought that pre-emption rights should apply earlier than the Government have proposed. If the Government accept amendment No. 72, the paragraph will read
      "An order under subsection (6) above should be made when … the Secretary of State is satisfied that an unreasonable proportion of the houses sold have been resold, and are not being used as the only or principal home of the owner, or the Secretary of State is satisfied there is an unsatisfied local demand for houses."
      Where there is an unsatisfied local demand, it is essential that the local authority should have the right to apply for an order allowing it to build the right of pre-emption into the sales. That would allow local authorities to claw back houses to deal with local needs. The Government are depriving them of the opportunity to build alternative housing stocks and to replace those sold.
      Mr. Russell Johnston: I would not argue with the hon. Member for Dundee, East (Mr. Wilson) on the general issue, but I wonder what he means by the phrase "unsatisfied local demand". It is somewhat vague. One could easily have a situation in which
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      there was no problem in the burghs but there was in the landward areas.
      Mr. Wilson: That is a reasonable point. It would be covered by the terms in which the amendment is phrased. That would lead effectively to the right of the Secretary of State to use his judgment in the light of the arguments put forward. He would have to satisfy himself that there was an unsatisfied local demand. The Secretary of State would judge the meaning of the word "local", and there should be no difficulty in reaching such a judgment, especially as lawyers and parliamentarians are so fond of that word. The amendment would allow the Secretary of State the opportunity to consider the question. At present he is deprived of that opportunity.
      Mr. Martin J. O'Neill: I am very pleased to follow the speech of the hon. Member for Dundee, East (Mr. Wilson). I am grateful for his support and only wish that he had been present on the night that we debated this matter in Committee. Then he would have been able to vote along the lines that he has just argued.
      The new clause of my hon. Friend the Member for Edinburgh, Central (Mr. Cook) would meet many of the misgivings expressed in Committee, when the Government accepted only a figleaf amendment. I use the expression "figleaf", because it covered very little. On the other hand, the nature of the so-called revolt was such that there was precious little to cover in the first place.
      If we reached the stage at which one-third of the housing was sold it would be too late to act. Hon. Members have pointed out that the house letting systems, the queueing systems and the waiting lists of local authorities vary across the country. It is quite possible that in some very small hamlets there would be a gross distortion of the ownership of the housing stock in a short time. In that case the legislation might well be far too insensitive.
      It is fair to say that we need a greater assurance about "unreasonableness" in relation to second homes. I do not have a constituency interest in second homes, but I have among my constituents an ever-increasing number who seek to buy houses in relatively remote but very attractive and centrally-located parts of

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      central Scotland. I refer to villages such as Standburn and Limerig which are fairly accessible to the motorways running through central Scotland. In the county of Clackmannan there are villages such as Forest Mill, in which there are only about 20 houses. In that case all the houses but one are owned by the local authority. The people who live in these places usually work in the villages or on the farms around them. Therefore, these problems are not peculiar to the nether reaches of the country. All of us with constituencies outside the urban areas can claim to have them. We can all realistically point to parts of our constituencies where these problems could arise.
      The real difficulty is that the members of the work force in these areas do not receive particularly high wages. Therefore, the opportunities for young people with families to purchase houses outside the public sector are very limited. It is certainly fair to say that the quality of housing available outside the public sector, which such people could afford to buy, would be of such a nature that it would not be an economic proposition. I refer particularly to ruined cottages, which would need considerable work and renovation. Most young people with whom I am concerned have neither the time nor the money to buy such properties and bring them up to a tolerable standard.
      We have seen the Scottish Development Department's report, which claims that there is a greater and increasing reliance on public sector housing in rural areas. In this instance it appears that the Department of the Environment has accepted the Scottish Development Department's report, although the Under-Secretary has chosen to ignore it for the ideological, doctrinaire reasons which were the hallmark of the manner in which he pushed through the Bill in the Standing Committee upstairs. I hope that the milder, more moderate counsel of the Secretary of State will secure a change of heart in the Government. However, I despair of that, because I know that at present the Scottish Office is just a puppet of the Whitehall machine and we can expect precious little in that respect.
      The proposition that was put forward by the Department of the Environment for
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      England and Wales would, in this instance, be acceptable in Scotland. I am not prepared to extend tins argument to other parts of the legislation, but in this case the Department seems to have got it right. I am surprised about that, because it seems to have got everything else wrong. However, in this case it has shown a greater appreciation of the needs of rural areas. I hope that by accepting the new clause we can go some way towards allaying the fears of those who live in rural areas.
      Mr. Russell Johnston: I wish to make only one brief point to supplement the comments of my right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel). He referred to the problem caused by the cuts in the House building programme and the way in which this will exacerbate the difficulties in rural areas. This will not occur only in purely rural areas, or in areas where the majority of local authority housing stock has been built by the local authority. For example, in Inverness, which has a very long housing waiting list—to which I have drawn attention previously—the effect of the Government's cutback is that the Scottish special housing programme, which had planned about 305 houses in the burgh, is likely to be cut in half. That is an example of pressure of demand but it will be even more difficult to meet, particularly if stock is being sold off in an unrestrained and uncontrolled fashion.
      The problem in Scotland is that the availability of local authority housing stock is uneven. It is not the same in the North and East as it is in the West. Therefore, it does not respond readily to an across-the-board treatment. The Government should earnestly consider some way of making allowances for the rural problem, which has been well emphasised tonight, and equally, for the problem faced by quite large burghs which lack the necessary stock to meet the demand that clearly exists.
      Mr. Gavin Strang: Due to another commitment, I was unable to hear my hon. Friend the Member for Edinburgh, Central (Mr. Cook) move the new clause, and I hesitate to participate in the debate. However, this is an important matter, and one of the areas in which the Government are most vulnerable in this legislation.

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      6 pm
      There is considerable opposition among Government supporters to the effects that the Bill will have on rural housing. The attitude taken by Scottish Ministers should be compared with the attitude of English Ministers in regard to rural housing. There is an overwhelming case for reversing the Government's approach to disposing of council houses in rural areas. That is why the Government are vulnerable.
      I shall confine myself to one issue—the position of farm workers and their families in rural areas. In Committee, my hon. Friend the Member for Glasgow, Provan (Mr. Brown) drew attention to the important difference between English and Scottish farm workers. The previous Labour Government introduced the Rent (Agriculture) Act, which gave English and Weish farm workers and their families security of tenure. That legislation put a specific obligation on housing authorities in England and Wales to provide alternative accommodation for ex-farm workers, where a case could be made that the farmer required the house for an incoming worker. It eliminated the legislative right of a farmer to get rid of a farm worker in a tied cottage on the grounds of agricultural need.
      The only basis on which a farm worker can be asked to leave a tied cottage in England and Wales is that the local authority has provided suitable alternative housing. There is agreement that the Labour Party will implement that policy in Scotland, and I do not doubt that the next Labour Government will do just that. There is a strong case for the provision of council housing in England and Wales for farm workers who move to alternative employment, who are unable to work on the farm or who retire.
      In England and Wales a farm worker can refuse to move from his tenanted cottage. That is not so in Scotland. In Scotland, a fanner can still evict a farm worker and his family on the basis of agricultural need. A farm worker is still dependent on the good will of his employer, a position which is intolerable. Pressure can be put on a farm worker in a tied agricultural cottage. The need for alternative council housing in Scotland is therefore much greater than in England and Wales. The Government's policy is outrageous and damaging.
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      I support the new clause. My hon. Friend will be the first to admit that it will not eliminate the dangers in the Bill for farm workers and their families. The only way to do that would be to eliminate council house sales in rural areas and to build more council houses in villages. However, diminishing the rate of loss of council houses in rural areas will at least help to mitigate the damage.
      We should not forget that we are discussing workers who serve their country well and who, under successive Governments have been underpaid for decades. Their aspirations to move to a council house in a village or rural area, especially when they retire, will now be shattered. Some of these rural council houses are among the most desirable housing and are likely to be snapped up quickly. It is callous for Scottish Ministers to pursue this policy, which is more extreme than that in England and Wales, and more extreme than even that advocated by Right-wingers such as the Secretary of State for the Environment.
      I hope that the Government will show some concern for the plight of the farm worker who is about to retire, who wants to move to alternative housing, or who simply wants no longer to live in a tied agricultural cottage.
      Mr. George Robertson: The debate has been interesting and wide-ranging. It has not been joined by Conservative Members representing rural Scottish constituencies, who are not all tied up with the Finance Bill or the Criminal Justice (Scotland) Bill. Even if they were, provision could have been made for them.
      Mr. Henderson: The reason is simple. We believe that the Government's concessions to rural areas are adequate to meet any problems that may exist. Many of the issues raised by Labour Members are not relevant to the real problems.
      Mr. Robertson: In Committee, when the hon. Gentleman occasionally rose, ostensibly to support the Minister, he usually provided a diversion. It would have been preferable to have a response to the points raised in the debate instead of a glib expression of support for the Government.
      Genuine concern has been expressed by district councils in Scotland about

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      how this feeble protection will work. It is only a short time since the election, when the Conservative Party managed, sometimes only narrowly, to regain certain rural constituencies from the nationalist foe. The Government are now blatantly ignoring the genuine concern expressed by locally elected representatives.
      We have raised simple and practical points about the operation of this part of the Bill, but it is unlikely that we shall have much satisfaction from the Minister. We have heard nothing from Conservative Members who represent rural areas to suggest that they are satisfied with the Government's solutions.
      As my hon. Friend the Member for Edinburgh, Central (Mr. Cook) said, there is a clear and unequivocal manifesto commitment by the Conservatives to look after the interests of rural areas. The manifesto stated that
      "We shall therefore give council and new town tenants the legal right to buy their homes, while recognising the special circumstances of rural areas and sheltered housing for the elderly."
      That commitment has been carried forward in the Housing Bill, now in another place. However feeble the protection, it has at least been afforded. Even that feeble solution brooks no comparison with that foisted on us in Committee a few weeks ago. Hon. Members have pointed out the serious defects in that proposed solution.
      Why was the one-third figure chosen as the limit beyond which a crisis is to be assumed to have developed? By the time one-third of the houses have been sold the crisis clearly will have arrived. A council taking its case to St. Andrew's House will simply be locking the stable door after the horse has bolted. There has been no genuine defence of the one-third figure. It was plucked out of the air to give some credence to or technical justification for the Government's proposed solution.
      The definition of a second home creates a real problem. The fail-safe device relates only to houses sold as second homes. It ignores the problem identied by my hon. Friend the Member for Berwick and East Lothian (Mr. Home Roberston) and the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) of a growing influx of
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      commuters who could seriously affect the balance in rural communities. That will cause difficulties in the social mix and affect the genuine needs of local people for houses for rent.
      A blanket solution is to be applied throughout Scotland, irrespective of the urban/rural mix in some district and island authorities. The practicalities have not been examined seriously. Amendment No. 9 would delete clause 4(7) and remove the absurd Government restrictions on applications that the island and district councils might make. Under the amendment the Secretary of State will be able to make a decision without the contraints in that part of the Bill. That will give flexibility to district councils which might be in a better position to judge whether a crisis has developed. It will give flexibility to the Secretary of State to judge whether a council's anxiety is valid. Clause 4(7) is full of holes, and will cause enormous problems to the Secretary of State and local councils. It would be a gesture to local democracy if the Government accepted the amendment
      In opposition, the Conservative Party believes in local government and local decisions. How many times did we hear speeches from the Opposition Front Bench in the last Parliament on the Education Bill and after the Education Bill when members of the Tory Party proclaimed their faith in local democracy? They insisted that local communities should be able to decide, irrespective of national circumstances, on their own education systems. Now we are talking about the Government tightening controls on local authorities. Clause 4(7) is yet another illustration of the way in which the Government are trying to ham-string local authorities.
      Our anxiety is not only about the resale of council houses for second homes, although, of course, that is a serious problem for a number of communities. The prospect of holiday homes becoming the rule rather than the exception in rural areas is causing widespread anxiety. Our concern is for the basic housing needs of people who live in rural communities. Government statistics contained in the document on housing in rural Scotland show that in the urban areas 58 per cent. of housing stock is in the public sector and that

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      in the rural areas only 38 per cent is provided by the public sector. People on low incomes who are starting out in life must turn to the public sector for their first homes. Any move that reduces such housing stock in rural areas is likely to exacerbate the problems.
      6.15 pm
      This is not a political debate, in spite of the silence from the Government Benches, the unanimity of view on the Opposition Benches and the apparent neglect of the rural areas by most Conservative Members. Local authorities have one voice. Almost all local authorities in the rural areas of Scotland have a genuine and deep anxiety about the sale of council houses. Even before the gains by the Labour Party in May, the Convention of Scottish Local Authorities, in its submission to hon. Members, stated :
      "Considerable concern has been expressed by authorities about the probable effects of a right to purchase our houses in rural areas."
      The National Farmers Union, which is not within the orbit of a revolutionary movement, in one of its toughest statements, said of the English Housing Bill :
      "The potential of the Housing Bill's sale proposals to reduce the public rented stock in such areas over a relatively short period of time could, the Union considers, result in the exacerbation of already difficult circumstances."
      The NFU sees serious problems, even with the feeble protection that the Secretary of State for the Environment has included in the English Housing Bill. How much more valid is that criticism in Scotland, where the protection is even more defective and feeble! Rural communities in Scotland have genuine worries about the impact of the Bill and its sale provisions. The Government are demonstrating irresponsible blindness to the problems.
      Far from helping to solve the chronic housing shortage in many rural areas in Scotland the Bill will denude even further the rented housing stock. It shows the contempt of the Government for the genuine democratic voice of Scotland's local areas. The Government's range of amendments strengthen their proposals.
      Mr. Rifkind Mr. Rifkind I have listened carefully to the speeches that have been made. I
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      fully acknowledge the seriousness with which the topic is regarded. The Government do not seek to suggest that the sale of council houses in rural areas is not important. It is as important as the sale of council houses elsewhere. We see no reason to apologise for the proposition that it is right that council tenants who happen to live in rural areas should have the same basic statutory rights as council tenants in urban areas. I am glad to see that the Liberal Bench at least agrees with that proposition. It would be wrong if a new fundamental right that was being given to council tenants in Scotland—the right to buy their home—and presented as a general right for the people of Scotland, was available only to those who happened to live in urban areas. There would have been strong protests if rural areas had been exempted from a basic fundamental right that a tenants' rights Bill provides.
      Opposition Members have indicated surprise that provisions contained in the Housing Bill for England and Wales do not exist in the Scottish Bill. There are many differences between the two Bills. Labour Members would have been the first to criticise if we had sought to follow slavishly a Bill for England and Wales and had not sought to take account of circumstances in Scotland. Second homes are a serious problem, at least in certain parts of England and Wales. That is not a proposition that can be put forward with any confidence today. Nor was any evidence produced in Committee on this matter. There has been reference to the report of the Dartington amenity research trust, which was published two or three years ago. There is no evidence to suggest that circumstances have changed materially since the report was published.
      Mr. John Home Robertson: That report referred specifically to holiday homes rather than to second homes. There is a difference.
      Mr. Rifkind: If there is a distinction, it is a distinction without a difference. The report looked at the whole question of second homes in Scotland.
      Mr. Home Robertson: The hon. Gentleman should read it.
      Mr. Rifkind: I have read it. It concludes that there has been no significant

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      increase over the years in the number of second homes in Scotland. Whatever distinction the hon. Member for Berwick and East Lothian (Mr. Home Robertson) wishes to make, any explosion in the number of holiday or second homes would come within the category of second homes and would be reflected in the statistics.
      The inquiry and the report—the basic evidence available—indicated no significant increase over the last few years in the number of second homes in Scotland. It was pointed out that about 50 per cent. of the second homes that exist are not houses or cottages, but caravans or other forms of mobile accommodation. Even the global figures available are misleading in this debate.
      The report pointed out that the overwhelming number of people who seek second homes or purchase them are not interested in modern council houses that exist in many rural areas in Scotland. They are concerned with the rundown cottage that can be bought relatively cheaply and perhaps improved with basic amenities to provide the limited requirements of a second home, a weekend cottage and an establishment that will be used for only a relatively short time. The last thing that the vast majority of people interested in holiday and second homes want is a block of council houses in a small village in rural areas. That was the evidence on which the Dartington amenity research trust—not a Government or a political body—reached its conclusions.
      Mr. Gordon Wilson: What other studies have been carried out since the trust reported in 1977? Have the Government taken account of the drift of commuters out of the cities into rural areas surrounding cities? We are talking not about second homes but about the purchase of primary houses for occupation that may deprive local residents of the opportunity of living in the area where they were born and brought up.
      Mr. Rifkind: When people move to an area, the mere fact that they commute to work should not exclude them from having the same rights as other local people in that area. Many of those who commute have always lived in the area but have started commuting because of the non-availability of work.
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      One of the most interesting conclusions of the research trust document was that 18 per cent. of second homes in Scotland are owned by council tenants. That is not a fact that one would have automatically guessed, but that was the conclusion reached as a result of the study. Some of the assumptions made about the ability of council tenants in Scotland to make provision for themselves should be considered in that light.
      I agree that over half of the second homes in Scotland are caravans and mobile homes. The Government are entitled to take that fact into account when considering whether any specific legislative provision is required.
      Comments, not particularly favourable, have been made by Opposition Members about the amendment moved by my hon. Friend the Member for Galloway (Mr. Lang) and accepted in Committee. It has been suggested that the amendment does not go far enough. The Opposition have also criticised the fact that the amendment will not apply immediately, but only if there seemed to be a significant problem. I make no apology. There is no evidence to suggest that there will be a significant problem, but the Government considered it reasonable to say that if, as matters develop, they were shown to be wrong, there should be provision in the legislation to respond to that need.
      The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) was wrong in his reading of the amendment that was agreed in Committee. He suggested in his amendment that to enable particularly secluded rural areas to be protected there would have to be the sale of one-third of the council houses in the area of the district council concerned. If he looks at the provision in the clause he will see that that is not the case. Clause 4 (6) states :
      "Subsection (4) above shall not apply to dwelling-houses in an area which is designated a rural area by the islands or district council within whose area it is situated "
      There is no requirement that an area designated as a rural area has to cover the whole area of the district council. In the example that the right hon. Gentleman gave, it is unlikely that Galashiels could be considered part of a rural area, given the size of that small town. It will be at the discretion of a district or islands

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      council to designate what it believes to be a rural area. If one-third of the council houses are sold within that rural area and it is seen that a substantial proportion are ending up as second homes, the Secretary of State will be able to impose restrictions under this provision. I agree with the right hon. Gentleman. It would have been unfair and unrealistic to expect one-third of the total council house stock in Ettrick, Lauderdale, or any other district, to be sold. That is not what the amendment said, nor is that what is contained in the Bill.
      Mr. David Steel: I am grateful to the hon. Gentleman for correcting my impression on that point. Why does he tie his caveat to the going of these houses for holiday homes? I do not understand. In my example of four houses in my village, if two go, it means that two are left for the entire community, whether or not the other two have gone for holiday homes.
      Mr. Rifkind: It is wrong to talk about two homes going as if they disappear and are not available for the local community. They would not be available to the local community if they were bought as second homes. That is why the amendment that was accepted deals with the problem. We are talking about houses that are sold to the sitting tenant. A person who has bought the house and is living in it, especially in a rural area, is unlikely to sell that house if there is no other house available in the same area. It is not like the situation in a city, where a person may sell a house and there are 1,001 other houses to purchase. Within a small community, unless the individual has chosen to leave that community and that rural area, which is rarer in those areas than it would be in a suburb, he will dispose of the house only if other accommodation is available.
      The problem that was put by the local authorities and by others, although without any real evidence, was that of second homes and the belief that houses, once bought, would be sold to outsiders and would not be available. It was therefore right to have an amendment to deal with the matter. The right hon. Gentleman's amendment seeks to link the matter with housing plans. Housing plans and whether the objectives of a plan are endangered
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      are subjective matters. It would be possible for those who sought to frustrate the whole purpose of the Bill in rural areas to seek to use the housing plan, sometimes genuinely, but in other cases in a way that would not be acceptable.
      Government amendment No. 68 is included in this group of amendments. If the Secretary of State uses his discretion under the clause, it is right that Parliament should have the opportunity to consider the matter. The amendment proposes that any order should be subject to the negative resolution procedure.
      The Government were willing to accept that there are genuine fears, although no significant evidence has been presented in support of those fears. It is because we recognised the fears that we were prepared to accept the amendment in the name of my hon. Friend the Member for Galloway. If those fears are seen to be justified, not in the whole area of a district council, but in a particular rural area that it has designated, it will be possible to take preventive action. That seems to be a reasonable compromise. The objective evidence of the Dartington amenity research trust does not suggest that second homes or problems relating to them are of great significance in Scotland. We should acknowledge that.
      I accept that Opposition Members have been expressing fears about what they believe may happen, but we have to act on the available evidence. The clause deals with the situation that will arise if the Government's view of the evidence turns out to be incorrect. That is a reasonable way to deal with the matter.
      6.30 pm
      Mr. David Steel: Will the Under-Secretary deal with the point that I raised about retired people in tied cottages wishing to remain in the rural areas? They are not likely to be able to get mortgages and will be dependent on the availability of some rented housing stock in rural areas. Whether that stock goes for holiday homes, to local people or to outsiders, when it is reduced to a tiny proportion the local authority may be unable to meet the housing demands of retired people in tied cottages.
      Mr. Rifkind: There is no question of selling houses on the open market.
      Mr. Steel: What about afterwards?
      Mr. Rifkind: Afterwards is a very long time. The evidence available is that the vast majority of those who have exercised their right to buy council houses are in their forties and early fifties, and not in their seventies or eighties, with only a few years to live in those homes. In both rural and urban areas, we are talking in the vast majority of cases of houses being sold to sitting tenants who have every intention of continuing to live in the house for many years, as do their spouses and children.
      The right hon. Gentleman will know that, particularly in rural areas, when a tenant dies his wife has an automatic right to become a successor tenant, and often a son or daughter has a right thereafter. In many cases it is years after the original tenant has died before the house is, even in theory, available for those on the waiting list for council accommodation.
      Mr. Strang: The hon. Gentleman has made great play of the fact that in the past those acquiring council houses have been in their forties or fifties. Does he not appreciate that one of the consequences of the substantial concessions in the Bill, which we believe will mean that viable public assets will be sold at knockdown prices, will be that young people will encourage their parents, and sometimes help them financially, to acquire their houses, with a view to making a financial killing in a few years' time?
      Mr. Rifkind: I have heard that claim made before, but I have not seen any evidence in support of it. If anyone other than the tenant wishes to be a joint purchaser, the Bill provides that, whether in an urban or a rural area, he will have to have lived in the house for at least six months. The hon. Gentleman is making a speculative case on which no evidence was presented in Committee, and none has become available since then.
      Mr. Cook: When I moved the new clause, I referred to the irony of the fact that protection for the rural areas was being provided by Labour Members when most of the areas, concerned are represented by Conservative Members.
      It is extraordinary that we can have had a one and a half hour debate without one Conservative Member being prepared to make a speech from the Back
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      Benches on a night when the House is on a three-line Whip. There has not even been a Conservative Back Bench speech to defend the paltry amendment that Conservative Members pressed on their Front Bench in Committee.
      We can only assume that the silence of hon. Members who are unwilling to come to the Chamber to defend the protection that they inserted into the Bill in Committee speaks volumes for their embarrassment about the meagre, mugatory nature of the protection provided for the rural areas.
      In default of any support from his colleagues, the Minister made a brave attempt at defending an untenable position. I repeat the question that I asked at the outset. Has a single district council in a rural area withdrawn its reservations about the Bill since the amendment was carried in Committee? Has a single council in a rural area heaved a sigh of relief and said "At last we are protected. We need not worry."? Of course, none has. The overwhelming preponderance of councils in rural areas remain as anxious about the effect of the Bill on them as they were before the amendment was carried.
      The Under-Secretary made great play of the second home argument and referred to the Dartington amenity research trust report. I remind him that although the trust said that it believed that the demand for second homes had stabilised over recent years, it added a rider.
      Mr. William Hamilton: On a point of order, Mr. Speaker. May I ask you to appeal to hon. Members who are beyond the Bar, and therefore beyond your control, to go outside if they wish to talk while the debate is going on. That would enable hon. Members to hear what is being said.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): I could hear quite well what the hon. Member for Edinburgh, Central (Mr. Cook) was saying.
      Mr. Hamilton: Further to that point of order, Mr. Deputy Speaker, it is not a joke. I am in the Chamber to listen to the debate. If other hon. Members are not prepared to listen they should get out.
      Mr. Cook: I see from the annunciators that I ought to be in the Finance Bill

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      Committee, but we shall have to concede that the Government are about to win a Division in that Committee.
      I am grateful for your assurance that you can hear me, Mr. Deputy Speaker. That encourages me to go back to the point that I was making. The Dartington report said that the demand for second homes in Scotland had stabilised, but it added the rider that if economic growth were resumed it would expect that the demand for second homes would grow again. I presume that we can discount the pcsibility of economic growth under the present Government. The Minister clearly does not expect that there will be a resumed demand for second homes.
      I must tell the hon. Gentleman that there is nothing surprising about the fact that 18 per cent. of second homes in Scotland are owned by council tenants. They make up 55 per cent. of the population in Scotland and if there is anything striking about the statistics, it is the difference between the two figures.
      The essential point about the debate is that, when the Government constantly emphasise that there is not a substantial threat from second homes they demolish the amendment, carried in Committee, that is supposed to provide protection for rural areas, because that protection will come into play only if there is a material threat from second homes. If the demand for second homes does not materialise, there is no protection under the amendment carried in Committee.
      Mr. Rifkind Mr. Rifkind indicated assent.
      Mr. Cook: I am glad that the Under-Secretary agrees. He is confirming that the alleged protection is a dead letter. It will do nothing to protect the special circumstances of rural areas, which the Conservative Party said in its manifesto that it would protect. Having heard the
      Minister's reply, I am moved to wonder what the Tory Party thought were the special circumstances of rural areas when it put that commitment in its manifesto. It seems from the Minister's reply that there are no special circumstances. Under the Bill, rural areas are to be treated in the same way as urban areas.
      There are special circumstances. Already, there are fewer houses available for letting in rural areas than there are in the cities. The Minister says that when the houses are sold they will not disappear and he argues that they will remain with the same family for two or three decades. I am again struck by the contrast between the Government's argument that we must sell council houses in order to encourage mobility and their fixed faith that the person who buys a council house will stay rooted to the spot for 20 or 30 years.
      In regard to the Under-Secretary's reply to the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel), however long "afterwards" may be, the fact remains that in future access to these houses will be by purchase rather than by renting. Those young families who are unable to purchase houses in rural areas will have their choice substantially reduced by the effect of this Bill which fails to provide any protection to rural areas.
      There are indeed special circumstances in the rural areas. They are recognised by virtually every council representative in the Scottish rural areas who has pressed for protection. I believe that those special circumstances should be recognised by the House and I urge the House to support the new clause.
      Question put, That the clause be read a Second time :—
      The House divided : Ayes 219. Noes 262.

      Division No. 350]

      AYES

      [6.40 pm

      Abse, Leo

      Beith, A. J

      Cant, R. B.

      Adams, Allen

      Bennett, Andrew (Stockport N)

      Carter-Jones, Lewis

      Allaun, Frank

      Bidwell, Sydney

      Cartwright, John

      Alton, David

      Booth, Rt Hon Albert

      Clark, Or David (South Shields)

      Anderson, Donald

      Bottomley, Rt Hon Arthur (M'brough)

      Cocks, Rt Hon Michael (Bristol S)

      Archer, Rt Hon Peter

      Bradley, Tom

      Cohen, Stanley

      Armstrong, Rt Hon Ernest

      Bray, Dr Jeremy

      Coleman, Donald

      Ashley, Rt Hon Jack

      Brown, Hugh D. (Provan)

      Concannon, Rt Hon J. D.

      Ashton, Joe

      Brown, Ron (Edinburgh, Leith)

      Conian, Bernard

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

      Buchan, Norman

      Cook, Robin F.

      Bagler, Gordon A. T.

      Callaghan, Jim (Middleton & P)

      Cowans, Harry

      Barnett, Guy (Greenwich)

      Campbell, Ian

      Cox, Tom (Wandsworth, Tooting)

      Barnett, Rt Hon Joel (Heywood)

      Campbell-Savours, Dale

      Crowther, J. S.

      Cryer, Bob

      Hughes, Roy (Newport)

      Roberts, Gwilym (Cannock)

      Cunliffe, Lawrence

      Janner, Hon Greville

      Robertson, Georg

      Cunningham, George (lslington S)

      Jay, Rt Hon Douglas

      Robinson, Petar (Belfast East)

      Cunningham, Dr John (Whitehaven)

      John, Brynmor

      Rodgers, Rt Hon Wllliam

      Dalyell, Tam

      Johnson, James (Hull West)

      Rooker, J. W.

      Davidson, Arthur

      Johnson, Walter (Derby South)

      Ross, Ernest (Dundee West)

      Davies, Rt Hon Denzil (Llanelli)

      Johnston, Russell (Inverness)

      Ross, Stephen (Isle of Wight)

      Davies, Ifor (Gower)

      Jones, Rt Hon Alec (Rhondda)

      Rowlands, Ted

      Davis, Clinton (Hackney Central)

      Jones, Barry (East Flint)

      Ryman, John

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

      Jones, Dan (Burnley)

      Sandelson, Neville

      Dean, Joseph (Leeds West)

      Kaufman, Rt Hon Gerald

      Sever, John

      Dewar, Donald

      Kerr, Russell

      Sheerman, Barry

      Dixon, Donald

      Kilroy-Sllk, Robert

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

      Dobson, Frank

      Lamble, David

      Shore, Rt Hon Peter (Step and Pop)

      Dormand, Jack

      Lamborn, Harry

      Short, Mrs Renée

      Douglas, Dick

      Lamond, James

      Silkin, Rt Hon John (Deptford)

      Douglas-Man", Bruce

      Leadbitter, Ted

      Silkin, Rt Hon S. C. (Dulwlch)

      Dubs, Alfred

      Lestor, Miss Joan (Eton & Slough)

      Silverman, Julius

      Duffy, A. E. P.

      Lewis, Ron (Carlisle)

      Skinner, Dennis

      Dunn, James A. (Liverpool, Kirkdale)

      Lofthouse, Geoffrey

      Smith, Rt Hon J. (North Lanarkshire)

      Dunnett, Jack

      Lyon, Alexander (York)

      Snape, Peter

      Dunwoody, Mrs Gwyneth

      Lyons, Edward (Bradford West)

      Soley, Clive

      Eastham, Ken

      Mabon, Rt Hon Dr J. Dickson

      Spearing, Nigel

      Ellis, Raymond (NE Derbyshire)

      McCartney, Hugh

      Sprlggs, Leslie

      English, Michael

      McDonald, Dr Oonagh

      Steel, Rt Hon David

      Evans, loan (Aberdare)

      McKay, Allen (Penistone)

      Stewart, Rt Hon Donald (W Isles)

      Evans, John (Newton)

      McKelvey, William

      Stott, Roger

      Ewing, Harry

      Maclennan, Robert

      Strang, Gavin

      Field, Frank

      Magee, Bryan

      Straw, Jack

      Fitch, Alan

      Marks, Kenneth

      Summerskill, Hon Dr Shirley

      Flannery, Martin

      Marshall, Jim (Leicester South)

      Taylor, Mrs Ann (Bolton West)

      Fletcher, Ted (Darlington)

      Mason, Rt Hon Roy

      Thomas, Jeffrey (Abertillery)

      Foot, Rt Hon Michael

      Maxton, John

      Thomas, Mike (Newcastle East)

      Forrester, John

      Maynard, Miss Joan

      Thomas, Dr Roger (Carmarthen)

      Foster, Derek

      Meacher, Michael

      Thorne, Stan (Preston South)

      Foulkea, George

      Mellish, Rt Hon Robert

      Tilley, John

      Fraser, John (Lambeth. Norwood)

      Millan, Rt Hon Bruce

      Torney, Tom

      Garrett, John (Norwich S)

      Miller, Dr M. S. (East Kilbride)

      Wainwright, Richard (Colne Valley)

      George, Bruce

      Mitchell, Austin (Grimsby)

      Walker, Rt Hon Harold (Doncaster)

      Gilbert, Rt Hon Dr John

      Mitchell, R. C. (Soton, ltchen)

      Watkins, David

      Ginsburg, David

      Morris, Rt Hon Charles (Openshaw)

      Weetch, Ken

      Graham, Ted

      Morris, Rt Hon John (Aberavon)

      Wellbeloved, James

      Grant, George (Morpeth)

      Moyle, Rt Hon Roland

      Weish, Michael

      Grant, John (Islington C)

      Newens, Stanley

      White, Frank R. (Bury & Radcliffe)

      Grimond, Rt Hon J.

      Oakes, Rt Hon Gordon

      White, James (Glasgow, Pollok)

      Hamilton, James (Bothwell)

      O'Halloran, Michael

      Whitehead, Phillip

      Hamilton, W. W. (Central Fife)

      O'Neill, Martin

      Whitlock, William

      Hardy, Peter

      Orme, Rt Hon Stanley

      Wigley, Dafydd

      Harrison, Rt Hon Walter

      Owen, Rt Hon Dr David

      Willey, Rt Hon Frederick

      Hart, Rt Hon Dame Judith

      Palmer, Arthur

      Williams, Rt Hon Alan (Swansea W)

      Haynes, Frank

      Park, George

      Wilson, Gordon (Dundee East)

      Healey, Rt Hon Denis

      Parker, John

      Wilson, William (Coventry SE)

      Hogg, Norman (E Dunbartonshire)

      Pavitt, Laurie

      Winnick, David

      Holland, Stuart (L'beth, Vauxhalt)

      Pendry, Tom

      Woodall, Alec

      Home Robertson, John

      Penhaligon, David

      Woolmer, Kenneth

      Homewood, William

      Powell, Raymond (Ogmore)

      Wrigglesworth, Ian

      Hooley, Frank

      Prescott, John

      Young, David (Bolton East)

      Horam, John

      Radice, Giles

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

      Rees, Rt Hon Merlyn (Leeds South)

      TELLERS FOR THE AYES :

      Howells, Geraint

      Roberts, Allan (Bootle)

      Mr. James Tinn and

      Hughes, Mark (Durham)

      Roberts, Ernest (Hackney North)

      Mr. George Morion.

      Hughes, Robert (Aberdeen North)

      NOES

      Adley, Robert

      Boscawen, Hon Robert

      Cadbury, Jocelyn

      Aitken, Jonathan

      Bottomley, Peter (Woolwich West)

      Carlisle, John (Luton West)

      Alexander, Richard

      Bowden, Andrew

      Carlisle, Kenneth (Lincoln)

      Arnold, Tom

      Boyson, Dr Rhodes

      Carlisle, Rt Hon Mark (Runcorn)

      Aspinwall, Jack

      Braine, Sir Bernard

      Chalker, Mrs. Lynda

      Atkins, Rt Hon H. (Spelthorne)

      Bright, Graham

      Channon, Paul

      Atkins, Robert (Preston North)

      Brinton, Tim

      Chapman, Sydney

      Atkinson, David (B'mouth, East)

      Brittan, Leon

      Churchill, W. S.

      Baker, Nicholas (North Dorset)

      Brocklebank-Fowler, Christopher

      Clark, Hon Alan (Plymouth, Sutton)

      Banks, Robert

      Brooke, Hon Peter

      Clark, Sir William (Croydon South)

      Bell, Sir Ronald

      Brown, Michael (Brigg & Sc'thorpe)

      Clarke, Kenneth (Rushcliffe)

      Bendall, Vivian

      Browne, John (Winchester)

      Colvin, Michael

      Benyon, Thomas (Abingdon)

      Bruce-Gardyna, John

      Cormack, Patrick

      Beat, Keith

      Bryan, Sir Paul

      Corrie, John

      Bevan, David Gilroy

      Buck, Antony

      Costain, A. P.

      Biffen, Rt Hon John

      Budgen, Nick

      Cranborne, Viscount

      Biggs-Davison, John

      Bulmer, Esmond

      Critchley, Julian

      Blackburn, John

      Burden, F. A.

      Dean, Paul (North Somerset)

      Body, Richard

      Butcher, John

      Dickens, Geoffrey

      Bonsor, Sir Nicholas

      Butler, Hon Adam

      Dorrell, Stephen

      378

      379

      Douglas-Hamilton, Lord James

      Langford-Holt, Sir John

      Rees-Davies, W. R.

      Dover, Denshore

      Latham, Michael

      Renton, Tim

      du Cann, Rt Hon Edward

      Lawrence, Ivan

      Rhodes James, Robert

      Dunn, Robert (Dartford)

      Lawson, Nigel

      Ridley, Hon Nicholas

      Eden, Rt Hon Sir John

      Lee, John

      Ridsdale, Julian

      Edward", Rt Hon N. (Pembroke)

      Lennox-Boyd, Hon Mark

      Rifkind, Malcolm

      Eggar, Timothy

      Lewis, Kenneth (Rutland)

      Roberts, Michael (Cardiff NW)

      Emery, Peter

      Lloyd, Peter (Fareham)

      Roberts, Wyn (Conway)

      Falrbairn, Nicholas

      Loveridge, John

      Rossi, Hugh

      Fairgrleve, Russell

      Lyell, Nicholas

      Sainsbury, Hon Timothy

      Faith, Mrs Sheila

      McCrindie, Robert

      St. John-Stevas, Rt Hon Norman

      Farr, John

      Macfarlane, Neil

      Scott, Nicholas

      Fenner, Mrs Peggy

      MacGregor, John

      Shaw, Giles (Pudsey)

      Finsberg, Geoffrey

      MacKay, John (Argyll)

      Shaw, Michael (Scarborough)

      Fisher, Sir Nigel

      Macmillan, Rt Hon M. (Farnham)

      Shelton, William (Streatham)

      Fletcher, Alexander (Edinburgh N)

      McNair-Wilson, Michael (Newbury)

      Shepherd, Colin (Hereford)

      Fletcher-Cooke, Charles

      McNair-Wilson, Patrick (New Forest)

      Shepherd, Richard (Aldridge-Br'hllls)

      Fookes, Miss Janet

      McQuarrie, Albert

      Silvester, Fred

      Fowler, Rt Hon Norman

      Madel, David

      Sims, Roger

      Fox, Marcus

      Major, John

      Skeet, T. H. H.

      Fraser, Rt Hon H. (Stafford & St)

      Marland, Paul

      Smith, Dudley (War. and Leam'ton)

      Fraser, Peter (South Angus)

      Marlow, Tony

      Speller, Tony

      Fry, Peter

      Marten, Neil (Banbury)

      Spence, John

      Garel-Jones, Tristan

      Mates, Michael

      Spicer, Michael (S Worcestershire)

      Glyn, Dr Alan

      Mather, Carol

      Stanley, John

      Goodhew, Victor

      Maude, Rt Hon Angus

      Steen, Anthony

      Gow, lan

      Mawby, Ray

      Stevens, Martin

      Gower, Sir Raymond

      Mawhinney, Dr Brian

      Stewart, lan (Hitchin)

      Grant, Anthony (Harrow C)

      Maxwell-Hyslop, Robin

      Stewart, John (East Renfrewshire)

      Gray, Hamish

      Mayhew, Patrick

      Stokes, John

      Greenway, Harry

      Mellor, David

      Stradling Thomas, J.

      Griffiths, Eldon (Bury St Edmunds)

      Meyer, Sir Anthony

      Tapsell, Peter

      Griffiths, Peter (Portsmouth N)

      Miller, Hal (Bromsgrove & Redditch)

      Taylor, Teddy (Southend East)

      Grist, lan

      Mills, lain (Meriden)

      Tebbit, Norman

      Grylls, Michael

      Miscampbeil, Norman

      Thatcher, Rt Hon Mrs Margaret

      Gummer, John Selwyn

      Moate", Roger

      Thomas, Rt Hon Peter (Hendon S)

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

      Monro, Hector

      Thompson, Donald

      Hamilton, Michael (Salisbury)

      Montgomery, Fergus

      Thornton, Malcolm

      Hampson, Dr Keith

      Morris, Michael (Northampton, Sth)

      Townsend, Cyril D. (Bexleyheath)

      Hannam, John

      Morrison, Hon Charles (Devizes)

      Trippier, David

      Haselhurst, Alan

      Morrison, Hon Peter (City of Chester)

      Trotter, Neville

      Hastings, Stephen

      Mudd, David

      van Straubenzee, W. R.

      Havers, Rt Hon Sir Michael

      Murphy, Christopher

      Vaughan, Dr Gerard

      Hawkins, Paul

      Myles, David

      Viggers, Peter

      Hayhoe, Barney

      Neale, Gerrard

      Waddington, David

      Heddle, John

      Needham, Richard

      Wakeham, John

      Henderson, Barry

      Nelson, Anthony

      Waldegrave, Hon William

      Heseltine, Rt Hon Michael

      Neubert, Michael

      Walker, Bill (Perth & E Perthshire)

      Hogg, Hon Douglas (Grantham)

      Newton, Tony

      Walker-Smith, Rt Hon Sir Derek

      Holland, Philip (Carlton)

      Nott, Rt Hon John

      Waller, Gary

      Hooson, Tom

      Onslow, Cranley

      Walters, Dennis

      Hordern, Peter

      Page, Rt Hon Sir R. Graham

      Ward, John

      Howell, Rt Hon David (Guildford)

      Page, Richard (SW Hertfordshire)

      Wells, John (Maidstone)

      Howell, Ralph (North Norfolk)

      Parris, Matthew

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

      Hunt, David (Wirral)

      Patten, Christopher (Bath)

      Wheeler, John

      Hunt, John (Ravensbourne)

      Patten, John (Oxford)

      Whitney, Raymond

      Irving, Charles (Cheltenham)

      Pattie, Geoffrey

      Wickenden, Keith

      Jenkln, Rt Hon Patrick

      Pawsey, James

      Wiggin, Jerry

      Johnson Smith, Geoffrey

      Pink, R. Bonner

      Wilkinson, John

      Jopling, Rt Hon Michael

      Pollock, Alexander

      Williams, Delwyn (Montgomery)

      Kaberry, Sir Donald

      Porter, George

      Winterton, Nicholas

      Kershaw, Anthony

      Prentice, Rt Hon Reg

      Wolfson, Mark

      Kimball, Marcus

      Price, David (Eastleigh)

      Young, Sir George (Acton)

      King, Rt Hon Tom

      Prior, Rt Hon James

      Younger, Rt Hon George

      Kitson, Sir Timothy

      Proctor, K. Harvey

      Knight, Mrs Jill

      Pym, Rt Hon Francis

      TELLERS FOR THE NOES :

      Knox, David

      Raison, Timothy

      Mr. Spencer Le Marchant and

      Lamont, Norman

      Rathbone, Tim

      Mr. Anthony Berry.

      Lang, lan

      Rees, Peter (Dover and Deal)

      Question accordingly negatived.

    New Clause 17

      REPEAL OF PROVISIONS OF RENT (SCOTLAND) ACT 1971
      'In the Rent (Scotland) Act 1971, section 2(1)(bbb), and section 85(4) shall cease to have effect.'.—[Air. Maxton.]
      Brought up, and read the First time.
      Mr. John Maxton: I beg to move, That the clause be read a Second time.
      First, may I apologise to the House for walking into the Chamber and moving the clause without having been present for the earlier part of the debate. The Minister will be aware that I have been debating another Scottish Bill in Committee for the past two and a half hours.

      381
      The purpose of the clause is to repeal two sections of the Rent (Scotland) Act 1971. The two sections deal with absolving from the regulated rent sector and controlled rents houses that are let for holiday purposes.
      In 1971, and again in 1974 when there was amending legislation, it seemed the correct procedure that someone in a holiday resort, or in an area in the country or by the seaside that others like to visit when on holiday, who let his house for holiday purposes should not have holiday-makers claiming residence and arguing that they were tenants in the normal sense of the word.
      Unscrupulous landlords have used the absolving provisions for their own devious purposes. There are certain landlords in Glasgow and Edinburgh—I accept that there are not very many of them—who let their houses or flats on what may turn out to be a holiday let when it is no such thing. These houses or flats are often let to students who want to rent for a full year. They are let on a holiday basis, which absolves the landlord from the controls to which he would have been subject if he had let under other terms and removes the protection that the person paying the rent would otherwise have.
      That is unscrupulous and vicious. It often leads to the tenant suffering a great deal of harm that should not befall him.
      There are other abuses, including the rent and board arrangement. There are landlords in Glasgow who offer bed and breakfast facilities when the breakfast can be taken only three miles away in another block of flats. There is an hour's hike in the morning to get breakfast if the tenant wishes to take advantage of the arrangement. The fact that breakfast is available in the terms of the lease gets the landlord round the Rent Acts and allows him to have tenants who are essentially unprotected by the Rent Acts and other legislation.
      The Minister may argue that if we remove the two sections from the Rent (Scotland) Act 1971 the person who genuinely offers his house for holiday lets will have no protection. In my view, and in that of my hon. Friends, that is not so. Holiday lets have always been excluded from the Rent Acts. Judicial decisions have consistently accepted that
      382
      exclusion. Therefore, the person who is genuinely letting his house for a holiday will not be affected by the clause.
      The clause will get rid of landlords who abuse every piece of housing legislation for their own pecuniary benefit and for profit and profit only, and who exploit their tenants in whatever way they can. It will be those landlords whom the clause will hit, and not those who genuinely let their house to holidaymakers.
      Mr. Rifkind: I listened carefully to what the hon. Member for Glasgow, Cathcart (Mr. Maxton) said. I acknowledge that there have been one or two instances where unscrupulous landlords have abused the existing provisions in the manner that the hon. Gentleman has indicated. There is no evidence that the abuse to which he has referred is at all widespread.
      The basic problem with the hon. Gentleman's clause is that if it were accepted by the House it would dry up completely the supply of holiday homes. That is because the protection that is presently provided for a person offering his holiday home for rent would no longer be available.
      I cannot accept the suggestion on which the hon. Gentleman did not expand and for which he provided no evidence-namely, that the removal of the protection would make no difference to the genuine holiday home. The two sections at which the clause is aimed protect the person who is genuinely seeking to provide a holiday home and nothing more. If we remove that protection, we are losing the beneficial consequences as well as the harmful ones which the hon. Gentleman has described.
      There is a remedy available to a tenant on whom a landlord is seeking to apply an order of eviction on the ground of a spurious holiday let. Under section 122 of the Rent (Scotland) Act 1971, it is open to either the landlord or the tenant to apply to the court for a determination of whether the tenancy comes within the appropriate part of the Act. If, notwithstanding the formal words that have been used, the tenant disputes the reality of the let when the landlord seeks to evict him, and if, despite the words that may have been used in the original agreement, it is obvious to the court that what was arranged was not intended to be a holiday

      383
      let, the court already has power under the Act to take action.
      There is a good prospect that with the short tenancies provided elsewhere in the Bill there will be no need for a landlord to abuse the existing provisions as he has described. It will be possible for the first time for persons considering making property available to specify a period that is acceptable to both parties.
      There is provision for a tenant who believes that his rights are being abused by his landlord to use section 122 of the 1971 Act to allow the court to investigate the matter. The courts are used to looking behind the formal words used and to the reality of a situation. Therefore, this power exists in theory and could be used by a tenant who might otherwise suffer as a consequence of abuse by the landlord in question.
      7 pm
      Mr. George Robertson: I had not intended to take part in this short debate—indeed, dialogue—until I heard the Minister explaining that this abuse might become a precedent or a past circumstance the moment the short tenancies came in. There might be some validity in what the Minister said. One might agree with him. Later we shall come to the subject of the short tenancies.
      What the Minister said fulfilled some of the prophecies made by the Opposition in Committee, that short tenancies would start to be the norm. The Government are about to institutionalise the loopholes and abuses that are possible under the existing law. By making this new form of tenure the commonest form, the prospect of insecurity for all tenants—never mind the small, persecuted minority who are already on holiday lets—will be a reality, and not simply an hypothesis.
      I hope, even in this short debate, that Government supporters, who poured scorn on our words, will listen carefully to the Minister. The fact is that he has now put clothes on the skeleton of the worries that existed in the minds of the Opposition when we debated the matter in Committee.
      Mr. Maxton: My hon. Friend the Member for Hamilton (Mr. Robertson) dealt adequately with a point that I should have raised.
      384
      The Minister referred to the legal recourse there already is under section 122 of the 1971 Act. That may well be true. I accept his word. However, we are all aware that for many people—especially students, the young and inexperienced—recourse to the law is not an easy process. They find it difficult. Therefore, they tend to be exploited simply because they are not capable of handling the legal procedures.
      The second major point was that there would be a drying up of holiday lets. I should be very much against that as I let a house in the summer months for my holiday—and a genuine holiday let it is. [HON. MEMBERS : "Which way?"] I rent the house. I took a holiday let. Let me be quite clear on that. I rent a house for the summer. I should not like to see that source drying up, as I should not be able to take my holiday.
      At the same time, I am still concerned that abuse will take place—and is taking place. I should like time in which to consider what the Minister said and see whether perhaps there is some other manner in which this loophole can be closed against landlords who exploit tenants in this way. Therefore, I am happy to seek to withdraw the clause at this point. I shall perhaps ask my noble Friends in another place to consider whether another recourse is open to us.
      I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 19

      AMENDMENT TO SECTION 1(6) OF THE HOUSING (FINANCIAL PROVISIONS) (SCOTLAND) ACT 1978.
      ' In section 1(6) of the Housing (Financial Provisions) (Scotland) Act 1978 after the word "considerations", there shall be inserted the words "including the estimates used in subsection (3)(b) above".'.—[Mr. George Robertson.]
      Brought up, and read the First time.
      Mr. George Robertson: I beg to move. That the clause be read a Second time.
      Mr. Deputy Speaker: With this it will be convenient to take new clause 27—Amendment of Housing (Financial Provisions) (Scotland) Act 1978.
      Mr. Robertson: This is an amendment to section 1(6) of the Housing (Financial Provisions) (Scotland) Act 1978.
      New clauses 19 and 27 have virtually the same effect. One is a slight refinement of the other. Their intention is to add to the provisions that already exist within the Housing (Financial Provisions) (Scotland) Act 1978 in relation to the determination of the housing support grant. Each year it is now incumbent upon the Secretary of State for Scotland to bring before the House an order relating to the housing support grant for the following year. It is incumbent upon him to do so under the legislation that we are discussing.
      It might be said that for the average person, whether inside or outside the House, the degree of explanation that the explanatory memorandum gives is open to debate. However, according to the memorandum, it is the responsibility of the Government to bring forward such information along with the order itself.
      The order provides for the financing of local government expenditure on housing programmes for the following year. The intention of our new clause is to substantiate the already existing provisions so that the Government estimates—which they must use as part and parcel of determining the housing support grant—will also be included in the explanatory memorandum.
      Of course there is a reason for bringing forward this new clause at this time. Needless to say, it relates to the housing support grant order for 1980. Although in previous years when the housing support grant order came before the House, the Government adhered to the spirit of the 1978 legislation, and ensured that the Government's role in determining the level of financial provision for local authorities was such as to secure that the level of rents did not rise higher than the level of earnings in Scotland, a major and serious exception to that rule occurred this year.
      It is the strong feeling of the Opposition that the Government should be obliged to show the estimates that they have made of earnings, prices, interest rates and the rate increases that may be necessary if the so-called figures put forward
      386
      by the Government are taken in isolation.
      This year, the Government's figures, which were before the House without the benefit of the estimates on which they were made, would, if they had been imposed by every local authority in Scotland, have led to a 37 per cent. increase in the level of council house rents. That would have been the effect of the Government's imposed increase. The figure that they gave the House was lower than that. The figure of £1·40 was given by the Minister at the press conference and in the debate. However, my right hon. Friend the Member for Glasgow, Craig-ton (Mr. Millan), in a letter to the Secretary of State only a few days later, showed that the basic arithmetic adopted by the Government was erroneous and that the real increase that would be necessary, without an increase in rates to cover the cutback in the housing support grant, would have led to an actual increase in council house rents of no less than 37 per cent.
      The historical precedent of council house rents in this country is on record. The Government produced in Committee, when the Bill was discussed, figures of increases in rents, prices and earnings over a number of years. The figure for the years between 1974 and 1979, during the period of the previous Labour Government, showed that earnings rose in that period by 15·9 per cent. and that rent increases were 13·2 per cent. Those figures were produced by the Government to illustrate another feature of their own arithmetical shenanigans.
      The previous Government made that a point of principle. It was established in Committee on the Housing (Financial Provisions) (Scotland) Bill that there should be a link between the increase that working people, council house tenants, should be expected to bear in council house rent increases and the level of increases in earnings. This year, unless the Government were estimating an increase in earnings during the future year of 37 per cent., they broke that spirit and understanding. They quite clearly injected into the system a massive amount of inflationary pressure. A 37 per cent. increase in rents during a year when the figure for an out turn on wages was 18 per cent. and that for inflation was 17 per

      387
      cent, is, perhaps, allowing the shadow to become the substance.
      If the Government are heading for an inflation rate of 37 per cent. and see average earnings rising to that level, there is nothing wrong with the formula as it stands, but people are not likely to be conned by that sort of statistical exercise.
      It is necessary for people in Scotland, especially those in council houses, to know how the Government are determining the financial provisions for local authorities. Local authorities should not have to do the Government's dirty work for them. If provision is being made for local authorities in the coming year, the Government should be obliged to publish the detailed estimates that they clearly must have before coming to the House with the housing support grant order.
      There is no doubt in our minds that council house tenants and people in the private mortgage sector are bearing the brunt of the Government's obsession with monetarism. The Government should at least publish the inconsistency between the estimates that they have made on inflation, pay, prices, rates increases and interest rates and the figures that they have calculated for in the housing support grant to determine the level of council house rent increases.
      We are not making an unreasonable request. The new clause would provide a strengthening of the democratic accountability of the Government. I hope that for the future of the housing programme and its explanation the Government will see fit to accept the new clause.
      Mr. Robert Hughes: It is important for many reasons that the Government should accept the new clause and publish the estimates on which they are proposing to calculate the housing support grant.
      My hon. Friend the Member for Hamilton (Mr. Robertson) mentioned what would happen to interest rates and the influence that that will have over the Government's calculations on local authority rents. Many tenants resent a kind of mechanistic approach to rent levels. Irrespective of the kind of service provided, the rent automatically seems to go up because of conditions outwith their control.
      388
      The Government should give an estimate of the money to be channelled into the rehabilitation or upgrading of older houses. We should know about this, factor when the Government are pre-paring their estimates and giving us some ideas.
      It is probably a truism that one of the major influences on the quality of life is people's housing. None the less, it is valid to say that. The kind of house one lives in can affect one's health, the educaition of one's children and one's marital stability. No one can be in any doubt that greatly improved housing conditions, as a result of massive new house building, by local authorities has meant a great deal to the quality of people's lives.
      The quality of life of many people in our cities and country areas will be severely curtailed and impaired by the slowing up of new house building. Notwithstanding that, even if local authority new house building were to proceed at the kind of pace that I wish to see, there is a strong need to upgrade houses which were built some years ago. Building standards since the war have not taken into account when the first local authority houses were built. Standards of building, of accommodation and even of people's aspirations have consistently increased year by year. Compared with 30 or 40 years ago, there have been tremendous advances. But as the years pass there is an urgent need to provide for the aspirations of tenants in older houses. There are substantial practical reasons why we should go in for a great deal of house improvement in the local authority sector.
      People may wish for many reasons to be mobile within the public authority housing sector. They may wish to change from the area in which they live. A family may wish to move because the breadwinner has changed his job. People may want to move to be near elderly parents who require some degree of care ard attention, but not so much that they have to go into hospital.
      7.15 pm
      These of us who deal with housing problems from day to day in our constituencies know that it is difficult to effect transfers and exchanges. Pressure on housing is growing and there will be a greater need for mobility. I do not

      389
      make any criticism of local authorities generally regarding their exchange or transfer policies, but I think that more needs to be done to effect changes and transfers.
      Many tenants live in sub-standard accommodation. A great amount of the accommodation built many years ago by local authorities can now be classed as sub-standard. It may not be strictly technically sub-standard in relation to grants and so forth, but I think that it can be classed as sub-standard. People in such accommodation suffer in two ways. First, they have to live in houses which have many defects. Secondly, because of those defects, their mobility is very much impaired.
      If I was not aware of this problem before—I would claim that I was—the issue was sharply brought to my attention two weeks ago by a deputation of tenants from an area in my constituency known as South Middlefield. That deputation represented an organisation called the South Middlefield action group. Those tenants were incensed that year by year their rents were being put up because of Government pressure on the money being made available to the local authorities. Rents are being forced ever upwards and improvements are not being carried out on their houses. They are incensed because the programmes are being pushed even further back.
      The number of houses involved is 424. Some of those houses were built in 1939 and others were built in 1947. I am speaking of houses which are between 33 and 41 years old. The tenants are angry because the programme for rehabilitating their houses has been pushed back. They will not now be improved for a further period of three to four years. The reason for the postponement is the reduction in the housing support grant.
      I had the difficult task of trying to explain how the housing support grant was calculated. I had to say that I did not know how it was calculated because I had no idea what estimates the Government had made in arriving at their calculations. In those circumstances it is impossible to explain rationally, even if one agrees or disagrees with the policy, the estimates on which the Government base their calculations.
      390
      Some people may think that in terms of renovating or upgrading, one is concerned with simple cosmetic matters. That is not so. The South Middlefield action group surveyed 129 houses to ascertain their state of repair. They found that 94 houses—72 per cent.—suffered from dampness and our age-old friend, condensation. Of the tenants living in those houses, 43—or 45 per cent.—felt that the conditions of those houses were affecting their health. There were also complaints about excessive fuel costs, the poor state of repairs and things had not been done. They were told by the local authority that essential repairs, such as repairs to electrical wiring, had been postponed because their houses would be completely renovated and upgraded, and that it would hold until then and do the whole job at once.
      I do not have time to discuss all the relevant factors that affect people in that area, but it is not surprising that 82 per cent. of tenants are not satisfied with the condition of their houses, and that 83 per cent. do not think that their rents are fair, and that they are not getting value for money.
      I do not complain about the action of the district housing authority which has ha to postpone its programmes. Given the priorities that it has to face, it is an understandable action. It is in great difficulties in discharging its duty to tenants. The responsibility for the deteriorating standards, and the delays in arresting that deterioration, rests with the Government, who control the rate of progress through the housing support grant. Locai authorities are in some difficulty because they do not know, with any degree of clarity, the make-up of the housing support grant, how much extra money they are receiving for home improvements, and the Government's calculations.
      I know that the housing support grant is not subject to the same rigid cash limits as other sectors. Nevertheless, the Government cannot control the finance available, fail to control and take into account interest rates, fail to take more than an accountant's approach to the question of housing, and then expect district housing authorities to respond to tenants needs.
      How will local authorities be able to come to the Government at the end of

      391
      the day, when they are faced with the reality of the outrun of their housing accounts, to argue that they need more money, if they do not know the basis upon which the calculations are made? How can hon. Members protect the interests of local authority tenants, and argue a case with the Government for a greater amount of money to be made available at the end of the year to a local authority that has overspent, if they do not know the basis of the calculations? I do not think that anyone in the Government had any idea, when they took office, that within a short space of time interest rates would rocket to an all-time high, and would remain at that level for such a lengthy period. Anyone with even a modicum of knowledge of housing policy knows the effect of high interest rates on the budgets of local authorities. The way in which the system operates is that as long as there are high interest rates there will be pressure for increased rents for tenants.
      I hope that the Government will accept the amendment. It is necessary for better democracy and the better handling by district housing authorities of the various priorities that they have to choose to meet the tenants' needs, and it will be of practical help to the authorities. Above all, it will enable those tenants who feel that they are not getting a square deal in return for the rent that they pay to receive some consideration and improvement of housing conditions that are not good enough in the prescent day and age.
      Mr. Hugh D. Brown: I am not sure whether it is wise for me to speak before my hon. Friend the Member for Central Ayrshire (Mr. Lambie). It may remind him and some other colleagues that he was always having a go at me, even when the order was put through. I hope that I can persuade him to direct his attack at the proper quarter, namely, the Minister. In the context of the new policies that the Government are pursuing, we are entitled to ask what effect the policy of selling council houses will have on the calculations. That is the purpose that lies behind the two new clauses. They relate to section 1 of the 1978 Act.
      As the House and the Minister know, we are talking in terms of two parts of an
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      equation—eligible expenditure and relevant income. I confess that I shall be interested to hear the Minister's remarks when he replies. I could write his reply, because I know that the stock answer will be "We cannot say. We are talking about an aggregate income. The local authority must determine how much will be included in rent increases and how much in rate increases". I am sure that that standby will be included in the brief. It is used when a Minister does not wish to make any commitment. I accept that, because I have used it regularly.
      The Minister must hazard a guess, on the basis of the figures within the financial memorandum to the Bill, about the effect of the provisions—both in the short term and in the longer term—on the income and expenditure prospects of the authorities concerned. We are of the opinion that in the short term selling council houses could be a bonus for local authorities—but not in the long term.
      The Minister and the Department must have made some calculation about the effect of the policy in, for example, three years. All sorts of permutations were made and a document was issued relating to the Bill for England and Wales, but it did not add up to very much. I am concerned about the effect that the provisions will have, in a few years' time on the increase in rents. There will not be increases in rents or in the local contribution, in line with earnings, as we argued we would expect. I am satisfied that the calculations are no longer valid in the light of the additional costs that fall on the housing authorities as a result of the policies being pursued by the Government.
      The new clauses are relevant in the new circumstances. They are an extension of the basic principle, on which we are all agreed, that the maximum amount of information should be made available. I see no reason why they should not be accepted in one form or another.
      Mr. David Lambie: I rise to support the new clause tabled by my hon. Friend the Member for Hamilton (Mr. Robertson), which demands that the Government should provide more information to all groups, including councillors and Members of Parliament, about the calculations upon which the order is based. I am one of

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      the few Members of Parliament who have consistently voted against rate support grant orders and housing support grant orders, irrespective of the Government in office at the time. That is why my hon. Friend the Member for Glasgow, Provan (Mr. Brown) said that he hoped that I would not criticise the previous Labour Administration but would direct my attack at the present Government. I suggest that there is some criticism to be made. I hope that we will learn from the mistakes made by the previous Labour Administration.
      When we discussed the housing support grant during the previous Labour Administration, we said that we were providing a Trojan horse for a future Conservative Government. My right hon. and hon. Friends said that we should not worry while there was a Labour Government in power and a Labour Secretary of State at the Scottish Office. I was able to accept that. But we have now reached the stage where we have in power the most reactionary Conservative Government ever, and a Tory Secretary of State for Scotland at the Scottish Office. We assumed that the next Secretary of State for Scotland would be the then hon. Member for Glasgow, Cath-cart, who is now the hon. Member for Southend, East (Mr. Taylor). I can remember making many speeches about the dire consequences which would result for Scottish tenants once that diehard Tory had control of the Scottish Office as well as control of Scottish tenants and their rents.
      Mr. Robert Hughes: My hon. Friend made such effective speeches that the then hon. Member for Glasgow, Cath-cart lost his seat.
      Mr. Lambie: That may be so. I do not think that there was a transfer fee, but the hon. Gentleman has transferred to the South of England.
      Mr. Hughes: The Secretary of State paid the transfer fee.
      7.30 pm
      Mr. Lambie: Although we were afraid of the personality and policies of the hon. Member for Southend, East, we still have a Secretary of State for Scotland who is one of the old nobility and, therefore, a decent type of Tory.
      Mr. Hughes: There is no such thing.
      Mr. Lambie: In spite of that, the right hon. Gentleman has been given a framework that allows him to carry out the Government's policy and to attack council tenants in Scotland, and he is doing so. Irrespective of whether the right hon. Member for Ayr (Mr. Younger) or the hon. Member for Southend, East is in control, the Secretary of State has been given a framework by the previous Labour Government that allows him to attack council tenants.
      During the period of the Conservative Government from 1970–1974, there were many debates in Committee and elsewhere on the Rent Act. We argued the case that the Tory Government were completely changing the system of local government finance and were reneging on commitments that successive Governments had made to local councils since 1919. They reneged on agreements which had been signed for 40 years or 60 years, depending on the Housing Act which one takes. At that stage they began to change the whole concept of local authority housing finance.
      When the Labour Government came into power they added to that by introducing the concept of the housing support grant. Certainly, the Labour Government did not apply it in the way in which the present Government have applied it and will apply it in the future, but they provided the framework that the Tory Government can now use to attack the standards of council tenants in Scotland. Irrespective of which Government have been in power, we find that housing policies have been similar. They may differ in emphasis and attack, but the theory behind them is the same.
      In my opinion, civil servants in the Scottish Office and the Treasury have had more say in housing policy since 1970 than politicians and Members of Parliament like myself. In spite of the fact that between 65 per cent. and 70 per cent. of Scottish people live in public sector housing or tenanted property, very few representatives of the tenants are here tonight—not only from the Conservative and Labour Benches but from civil servants.
      Since 1970 an attack on council housing has been carried out by people who are owner-occupiers and who have the philosophy of owner-occupiers. That

      395
      philosophy is that they are subsidising council tenants and that it is not right to make them subsidise council tenants. There has been a gradual attack on the right to be a tenant, which is the traditional right of the Scot. We have gradually reached the stage at which people in Scotland—it has been the case in England and Wales for a number of years—are ashamed to say that they are tenants because they feel that they are being subsidised by the owner-occupier. We are now seeing the final attack on tenants in Scotland by the actions of the Government.
      Irrespective of cuts in Government expenditure, the owner-occupier maintains his privileged place with regard to taxation. No Tory Government would ever dare to reintroduce schedule D tax but schedule D tax should be reintroduced, because the owner-occupier, by having his money in bricks and mortar, is escaping inflation. People who bought houses two or three years ago for £15,000 or £16,000 now find that the value of those houses is £30,000, £40,000 or £50,000. There has been an increase in the value of their property, yet they pay no income tax on that increase. That means that they are in a privileged position simply because the majority of hon. Members and the whole of the Civil Service are owner-occupiers.
      I hope that as a result of the new clause we shall receive more information from the Government on how they estimate the final figures for housing support grant. I hope that the new clause will represent a start by Labour Members towards the defence of the council tenant and his rights.
      In the past, I have tried to obtain the information that the new clause seeks. I have asked successive Secretaries of State to provide me with the information on which both the rate support grant and housing support grant settlements are made. I have never been able to obtain that information. In fact, a few months ago I asked the Scottish Office for this year's final rate support grant settlement for the two district councils in my area—the rate support grant settlement on which the rates in May were based. I am still waiting for information about how much money Cunninghame district council and
      396
      Kyle and Carrick district council have received in rate support grant settlements. The rates were fixed on the basis that the councils would receive a certain amount of money. When one asks the Secretary of State to provide that information, he says "I cannot do it until I get the facts". But in order to get the facts he fixes a figure. I suggest that the reason why successive Governments have been unwilling to give information to Members of Parliament or local authorities is that there is no formula for arriving at the rate support grant or housing support grant settlements.
      The Minster can deny it if he likes, but in my opinion the Government decide during the year, before the negotiations begin, how much money they will allocate. After doing so, they devise a formula to ensure that they achieve that result. I believe that that is what happens. Over a period of months I have asked the Minister to tell me what the local authorities in my area are receiving in rate support grant and he still has not given an answer. Yet rates were fixed by the two district councils in May, on the basis that they would receive a certain amount of money from the rate support grant and housing support grant.
      There is a lot of kidology in local government finance. In fact, I think that we could cut the number of people working in New St. Andrew's House if we came clean in respect of these negotiations, because many of the jobs involve working out a formula in order to arrive at the result that the Government want.
      This year, I asked the Secretary of State for Scotland to involve Members of Parliament in the rate support grant and the housing support grant settlement. We should be involved in those negotiations. At present, the Government, or the various working parties of civil servants, meet representatives of the Convention of Scottish Local Authorities—COSLA—and discuss Scottish issues. When the councillors are asked what they have been discussing, they do not know, and whenever Ministers are asked what they have been discussing, they do not know. But someone knows, because they achieve results. I asked the Secretary of State for Scotland to involve Members of Parliament when meetings take place with COSLA. I did so on the basis that I was the hon. Member, along with the

      397
      other 634 hon. Members, who finally decided and voted on both the rate support grant and the housing support grant settlements. Unless we knew how those figures were arrived at we would have been voting in the dark, after a short debate lasting only one and a half hours, which sometimes took place during the early hours of the morning.
      That is why I support the amendment of my hon. Friend the Member for Hamilton as a step forward. I hope that once we are in power—the Labour Party will be in power again—we shall be able to look after our friends and supporters who are still council house tenants in Scotland, and that we shall not listen to civil servants and put forward their policies in order to solve the problem of housing finance. We shall act as politicians, and as politicians we shall take positions that will be for the betterment of our constituents living in council property.
      Mr. O'Neill: I rise with some trepidation, as I am a prospective house owner with a mortgage. I am a passionate defender of the rights of council house tenants. Indeed, I am a council house tenant. Having said that, I must say that I share some of the misgivings of my hon. Friend the Member for Central Ayrshire (Mr. Lambie) about the rate support grant. It has been suggested that the rate support grant legislation is understood by three people only, one of whom has forgotten about it, another is mad, and the other is dead. If those three people exist, they probably exist in New St. Andrew's House and are not allowed out very often. Certainly they have not been able to explain the workings of either the housing support grant or the rate support grant to the Secretary of State and his henchmen.
      Mr. Russell Johnston: Is the hon. Gentleman aware that it has been demonstrated that there is one person who understands those matters? He is the right hon. Member for Glasgow, Craigton (Mr. Millan). I wonder into which classification he is to be fitted.
      Mr. O'Neill: If my hon. Friend the Member for Central Ayrshire is to be believed, my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) may
      398
      be the person who wishes to forget what he did.
      We must remember that if we are to have a serious debate on the level of rent increases and local government finance, we must have this information. I was a member of the Select Committee, and I was fortunate enough to have the opportunity to take evidence from senior civil servants in the Scottish Office, who were briefed by the former Secretary of State for Scotland, my right hon. Friend the Member for Craigton. Having obtained a glimmer of understanding about how the system may work. I found it a singularly unedifying experience to listen to the civil servants who were most reluctant to be specific about interest levels, levels of assumptions or levels of inflation in the year ahead. Perhaps in December of last year they were not to know that the Government's policy would be as disastrous as it has turned out to be, and that inflation would be running at 22 per cent.
      If we are to have a serious debate on the major factors relating to the income and expenditure of our people, we need an adequate and clear exposition of the basis upon which the financing of housing is calculated and the basis upon which rents will have to rise in the coming year. We know that under this Government local government is becoming less and less local and that local authorities are having to follow the diktats of Ministers rather than use their own initiatives to raise funds and revenue. When they raise revenue through traditional methods of rates, and when they seek to defend services by increasing rates, they are subject to what is tantamount to abuse from Conservative Members. We have seen that happen with authorities that do not have responsibility for housing, but progressive authorities, such as that in the Lothian region, have been pilloried and excoriated by Conservative Members.
      Mr. Albert McQuarrie: Rubbish.
      7.45 pm
      Mr. O'Neill: I had not realised that any Conservatives were alive. I was beginning to wonder whether they were simply part of the decoration. I am glad to know that they are present, and I hope that after they have the opportunity to explain to their people how the rate

      399
      support and housing support grants operate, and to explain the level of rate rises in East Aberdeenshire, East Fife or North Fife they will win the support of those people in the forthcoming election. I am sure that they will need that support, but I do not think that they will get it, because the intransigence of the Government in explaining local Government finance, and the process of obfuscation that has continued since they took office, have made the job of local authorities even more difficult than it used to be.
      We want to know the assumptions upon which the rent levels will be based in the years ahead, and we want local authorities to have the opportunity to plan sensibly. We are concerned about the beggaring of local authorities in respect of housing. The beggaring process is an attempt to make local authorities force up rents so that people will say "If these are the level of rent rises, perhaps it would be better to try to buy a council house". However, when they make the calculations and find that it is even more expensive to buy a house, they decide to continue to rent at the excessive rents that the Government's policies require, and which have been levied without any clear indication of the reasoning behind them or of any worthwhile information upon which longer-term projections can be made.
      Mr. Rifkind: From the unexpected, uncomplimentary remarks that hon. Gentlemen made about civil servants, it would seem that we shall have some unexpected support in our efforts to reduce the size of the Civil Service, which they clearly feel is unnecessarily large.
      The hon. Member for Hamilton (Mr. Robertson) put forward many interesting arguments in favour of this new clause. However, he did not give any indication on the point that obviously concerned his hon. Friend the Member for Central Ayrshire (Mr. Lambie) as to why his Government constantly refused to provide the sort of information that he is now passionately demanding. I appreciate that he was not a member of that Government, and that he may be anxiously looking to his hon. Friend the Member for Glasgow, Provan (Mr. Brown) to provide the answer. But, clearly, that is a matter that
      400
      he overlooked and that is entirely relevant to the situation. The situation is quite simple.
      Mr. George Robertson: Will the Minister tell the House precisely how many orders the previous Government brought forward under the Housing (Financial Provisions) (Scotland) Act 1978?
      Mr. Rifkind: The hon. Gentleman must realise that when that Act which produced this system was discussed the suggestion was put to the previous Government that information of this kind should be provided and the previous Government resisted it very strongly for reasons that are exactly the same as those which apply under the present Government. It is exactly this : what local authorities are concerned about first is the total size of their housing support grant. That is the information that the order provides. Secondly, the various assumptions to which the hon. Gentleman has referred are simply assumptions some of which have turned out to be correct and some of which will not turn out to be correct, irrespective of the Government who are putting them forward.
      Indeed, if one ends up with a single average figure, it is likely to be a very un-revealmg piece of information. It will be simply an arbitrary and mechanical figure worked out by averaging a number of other figures, which will be of little help to local authorities.
      In the housing support grant order, what we are concerned with is not, as the hon. Member for Aberdeen, North (Mr. Hughes) seemed to be suggesting, giving advice to local authorities, but providing them with the size of their housing support grant so that they can take that into account when determining their expenditure and the income that they are to receive from rents and rate contributions.
      The hon. Member for Aberdeen, North also made some comments which were rather wide of the new clause in dealing with the question of mobility. When he considers the Bill, and in particular clause 25, I am sure that he will recognise that the present Government have done more to ensure and encourage mobility in Scotland and the removal of unnecessary residential qualifications than in any other

      401
      legislation that the House has ever considered.
      The hon. Member for Provan raised the question of sales of council houses and the effect of that on local authorities' income. He will be aware that, certainly in the short term, a local authority that sold council houses would obviously have an income which would enable it to finance its housing expenditure far more cheaply than would otherwise have been available to it.
      Mr. Robert Hughes: Before the Minister gets too far away from his reply to my comments, may I ask whether he is really saying that in the calculation of the housing support grant, the Government take no account of the direction in which they seek to influence local authorities in relation to the balance between new house building and the rehabilitation of older property, whether it be for local authority houses or assistance towards private landlords who wish to rehabilitate their older privately tenanted houses?
      Mr. Rifkind: The hon. Gentleman is becoming a bit confused between the housing support grant, which is what we are concerned with here, and the capital allocations to housing authorities, either on the housing revenue account or on the non-housing revenue account, when we certainly look at the details of the housing plan of the local authority and are able to make an allocation to individual local authorities based on their needs as shown by their housing plans. It is exactly in that area that successive Governments have acknowledged the very relevant factors to which the hon. Gentleman has drawn attention.
      In conclusion, I simply say that in this matter we are following the previous Government's practice. Nothing has changed to justify any change from that practice. The arguments which convinced Opposition Members that a provision of this kind was undesirable are exactly the arguments which equally convince my right hon. Friend and myself and, I am sure, will convince the House.
      Mr. George Robertson: The Minister was quite correct in saying that I was not a member of the previous Government. But the corollary of that is that he, until his sudden demise from the Opposition
      402
      Front Bench, was actually a party to the accusations that were made to my right hon. and hon. Friends in the previous Government about not providing information. Now we have the revealing gesture by the Minister that, although he confesses that under the previous Government certain information was demanded, the present Government will now retreat behind exactly the same smokescreen which they attacked during the previous Administration and they will use exactly the same arguments. The Minister openly says that they will use the same arguments in justification for not providing the information.
      When the present Government took power, they had a number of press conferences. They told the press then that this would be a new Government, a Government of access, that open government would be the order of the day, and that they would make available as much information to the press and to the public as was humanly possible. I was approached by one of the journalists at one of those press conferences who told me about this. He said that he had been convinced by it. I expressed some doubt. I said that time would tell whether the bold protestations of the new Ministers would come true.
      Now we hear this evening this pathetic justification for keeping back the basic information. The justifications are that the local authorities do not want to know it anyway, because all that they want to know is the size of the housing support grant, and not the breakdown. We are told that these are simply assumptions, and that some of them will be correct and some will not be correct. The Government can abandon assumptions overnight, but local authorities in Scotland and elsewhere must live with the amounts of money paid out by the Government at the beginning of the year. The present Government, far more than any previous Government, have said that they will not move at all from cash limits or from rate support grant orders other than by reducing them during the following year. COSLA has already protested that local authorities are suffering real cuts in the amount allocated by the Government in the RSG and in the housing support grant, both through the cash limits and in real reductions exhorted upon them by Ministers.

      403
      Therefore, of course the local authorities would want to know the basic assumptions on which the figures are garnered. They would obviously want to know which of these were correct and which were proved by history and experience not to be correct. The Minister says that these are simple aggregates and averages of the figures that are identified in section 1(3) of the Housing (Financial Provisions) (Scotland) Act and that they would be unrevealing aggregates and unrevealing statistics But we are talking here of the Government's estimates of the level of interest rates, remuneration, costs and prices which, in the opinion of the Secretary of State, would affect the amount of eligible expenditure for that year. In addition, we are talking about the latest information available as to changes in the general level of earnings which would affect the amount of relevant income which could reasonably be expected for that year.
      These are the statistics and figures that are being churned out by the Government day in and day out and on which the Secretary of State is making decisions which will affect the level of rates paid by every householder in Scotland and the level of expenditure that every local authority will have to live with during the coming year. But we are told that local authorities do not want to know about it, that they are simply assumptions and that they would be unrevealing if they were to be given to the House.
      I do not wish to go into the arguments adduced, not for the first time, by my hon. Friend the Member for Central Ayrshire (Mr. Lambie), but the matter still goes back to the point that there is a need for information, if only to explain the extraordinary housing support grant order this year, an order which, on the
      basis of the Government's calculations, would have led to an increase in council house rents in Scotland of 37 per cent.—a clear 17 per cent. higher than the existing rate of inflation, which is in itself 3 per cent. or 4 per cent. higher than the rate of inflation that applied when the housing support grant order was brought before the House.
      We need to know the assumptions that were made—the clearly erroneous assumptions—which allowed the Government to come forward with a housing support grant order which would have increased council house rents by as much as 37 per cent.
      The House needs more information. It is entitled to more information. The Government should be more forthcoming. It is not good enough for the Minister to say that the previous Government, at times, resisted giving some of this information. That is not an argument at all, especially when the Conservatives spent a lot of time under the previous Administration saying that such information was necessary. The new clause states our belief that the information should be published. We believe that there is good reason for saying so and that, if any evidence for saying so is necessary, it is this year's housing support grant order in Scotland.
      The Government have given a pathetic explanation of why that information is not to be provided. It is completely unacceptable. On that basis we shall divide the House in order that the Conservatives' emtpy gestures under the previous Administration are shown up for what they were.
      Question put, That the clause be read a Second time :—
      The House divided : Ayes 208, Noes 263.

      Division No. 351]

      AYES

      [8.00 pm

      Abse, Leo

      Bradley, Tom

      Conlan, Bernard

      Adams, Allen

      Bray, Dr Jeremy

      Cook, Robin F.

      Alton, David

      Brown, Hugh D. (Provan)

      Cowans, Harry

      Anderson, Donald

      Brown, Ron (Edinburgh, Leith)

      Cox, Tom (Wandsworth, Tooting)

      Archer, Rt Hon Peter

      Buchan, Norman

      Crowther, J. S.

      Armstrong, Rt Hon Ernest

      Callaghan, Jim (Middleton & P)

      Cryer, Bob

      Ashley, Rt Hon Jack

      Campbell, Ian

      Cunliffe, Lawrence

      Ashton, Joe

      Campbell-Savours, Dale

      Cunningham, George (Islington S)

      Bagier, Gordon A. T.

      Cant, R. B.

      Cunningham, Dr John (Whitehaven)

      Barnett, Guy (Greenwich)

      Carter-Jones, Lewis

      Dalyell, Tarn

      Barnett, Rt Hon Joel (Heywood)

      Cartwright, John

      Davidson, Arthur

      Beith, A. J.

      Clark, Dr David (South Shields)

      Davies, Ifor (Gower)

      Bennett, Andrew (Stockport N)

      Cocks, Rt Hon Michael (Bristol S)

      Davit, Clinton, (Hackney Central)

      Bidwell, Sydney

      Cohen, Stanley

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

      Booth, Rt Hon Albert

      Coleman, Donald

      Deakins, Eric

      Bottomley, Rt Hon Arthur (M'brough)

      Concannon, Rt Hon J. D.

      Dewar, Donald

      Dixon, Donald

      Johnston, Russell (Inverness)

      Roberts, Gwilym (Cannock)

      Dobson, Frank

      Jones, Rt Hon Alec (Rhondda)

      Robertson, George

      Dormand, Jack

      Jones, Barry (East Flint)

      Robinson, Peter (Belfast East)

      Douglas, Dick

      Jones, Dan (Burnley)

      Rooker, J. W.

      Douglas-Mann, Bruce

      Kaufman, Rt Hon Gerald

      Ross, Ernest (Dundee West)

      Dubs, Alfred

      Kilfedder, James A.

      Ross, Stephen (Isle of Wight)

      Duffy, A. E. P.

      Kilroy-Silk, Robert

      Rowlands, Ted

      Dunn, James A. (Liverpool, Kirkdale)

      Lamble, David

      Ryman, John

      Dunnett, Jack

      Lamborn, Harry

      Sandelson, Neville

      Dunwoody, Mrs Gwyneth

      Leadbitter, Ted

      Sever, John

      Eastham, Ken

      Lestor, Miss Joan (Eton & Slough)

      Sheerman, Barry

      Ellis, Raymond (NE Derbyshire)

      Lewis, Ron ( Carlisle)

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

      English, Michael

      Lofthouse, Geoffrey

      Shore, Rt Hon Peter (Step and Pop)

      Evans, loan (Aberdare)

      Lyon, Alexander (York)

      Silkin, Rt Hon John (Deptford)

      Evans, John (Newton)

      Lyons, Edward (Bradford West)

      Silkin, Rt Hon S. C. (Dulwlch)

      Ewing, Harry

      McCartney, Hugh

      Silverman, Julius

      Field, Frank

      McDonald, Dr Oonagh

      Skinner, Dennis

      Filch, Alan

      McKay, Allen (Penistone)

      Smith, Rt Hon J. (North Lanarkshire)

      Fiannery, Martin

      McKelvey, William

      Soley, Clive

      Fletcher, Ted (Darlington)

      Maclennan, Robert

      Spearing, Nigel

      Foot, Rt Hon Michael

      McNally, Thomas

      Spriggs, Leslie

      Forrester, John

      Magee, Bryan

      Stewart, Rt Hon Donald (W Isles)

      Foster, Derek

      Mark", Kenneth

      Stott, Roger

      Foulkes, Georga

      Marshall, Jim (Leicester South)

      Strang, Gavin

      Fraser, John (Lambeth, Norwood)

      Mason, Rt Hon Roy

      Straw, Jack

      Garrett, John (Norwich S)

      Maxton, John

      Summerskill, Hon Dr Shirley

      George, Bruce

      Maynard, Miss Joan

      Taylor, Mrs Ann (Bolton West)

      Gilbert, Rt Hon Dr John

      Meacher, Michael

      Thomas, Jeffrey (Abertillery)

      Ginsburg, David

      Mellish, Rt Hon Robert

      Thomas, Mike (Newcastle East)

      Graham, Ted

      Millan, Rt Hon Bruce

      Thorne, Stan (Preston South)

      Grant, George (Morpeth)

      Miller, Dr M. S. (East Kilbride)

      Torn ay, Tom

      Grant, John (Islington C)

      Mitchell, R. C. (Solon, Itchen)

      Wainwright, Richard (Colne Valley)

      Hamilton, James (Bothwell)

      Morris, Rt Hon Alfred (Wythenshawe)

      Walker, Rt Hon Harold (Doncaster)

      Hamilton, W. W. (Central Fife)

      Morris, Rt Hon Charles (Openshaw)

      Watkins, David

      Hardy, Peter

      Morris, Rt Hon John (Aberavon)

      Weetch, Ken

      Harrison, Rt Hon Walter

      Morton, George

      Wellfoeioved, James

      Hart, Rt Hon Dame Judith

      Moyle, Rt Hon Roland

      Weish, Michael

      Hattersley, Rt Hon Roy

      Newens, Stanley

      White, Frank Fl. (Bury & Radcliffe)

      Haynes, Frank

      Oakes, Rt Hon Gordon

      White, James (Glasgow, Pollok)

      Healey, Rt Hon Denis

      Ogden, Eric

      Whitehead, Phillip

      Hogg, Norman (E Dunbartonshire)

      O'Halloran, Michael

      Whillock, William

      Holland, Stuart (L'beth, Vauxhall)

      O'Neill, Martin

      Wigley, Dafydd

      Home Robertson, John

      Owen, Rt Hon Dr David

      Willey, Rt Hon Frederick

      Homewood, William

      Palmer, Arthur

      Williams, Rt Hon Alan (Swansea W)

      Hooley, Frank

      Park, George

      Wilson, Gordon (Dundee East)

      Horam, John

      Parker, John

      Wilson, William (Coventry SE)

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

      Parry, Robert

      Winnick, David

      Howelfs, Geraint

      Pavitt, Laurie

      Woodall, Alec

      Hughes, Mark (Durham)

      Penhaligon, David

      Woolmer, Kenneth

      Hughes, Robert (Aberdeen North)

      Powell, Raymond (Ogmore)

      Young, David (Bolton East)

      Hughes, Roy (Newport)

      Preacott, John

      Janner, Hon Greville

      Race, Reg

      TELLERS FOR THE AYES :

      John, Brynmor

      Radice, Giles

      Mr. Joseph Dean and

      Johnson, James (Hull West)

      Rees, Rt Hon Merlyn (Leeds South)

      Mr. James Tinn.

      Johnson, Walter (Derby South)

      Roberts, Allan (Bootle)

      NOES

      Adley, Robert

      Brittan, Leon

      Corrie, John

      Aitken, Jonathan

      Brocklebank-Fowler, Christopher

      Costain, A. P.

      Alexander, Richard

      Brooke, Hon Peter

      Cranborne, Viscount

      Amery, Rt Hon Julian

      Brown, Michael (Brigg & Sc'thorpe)

      Critchley, Julian

      Arnold, Tom

      Browne, John (Winchester)

      Dean, Paul (North Somerset)

      Aspinwall, Jack

      Bruce-Gardyne, John

      Dickens, Geoffrey

      Atkins, Rt Hon H. (Spelthorne)

      Buck, Antony

      Dorrell, Stephen

      Atkins, Robert (Preston North)

      Budgen, Nick

      Douglas-Hamilton, Lord James

      Atkinson, David (B'mouth, East)

      Bulmer, Esmond

      Dover, Denshore

      Baker, Nicholas (North Dorset)

      Burden, F. A.

      du Cann, Rt Hon Edward

      Banks, Robert

      Butler, Hon Adam

      Dunn, Robert (Dartford)

      Bell, Sir Ronald

      Cadbury, Jocelyn

      Durant, Tony

      Benyon, Thomas (Abingdon)

      Carlisle, John (Luton West)

      Eden, Rt Hon Sir John

      Best, Keith

      Carlisle, Kenneth (Lincoln)

      Edwards, Rt Hon N. (Pembroke)

      Bevan, David Gilroy

      Carlisle, Rt Hon Mark (Runcorn)

      Eggar, Timothy

      Bitten, Rt Hon John

      Chalker, Mrs. Lynda

      Elliott, Sir William

      Biggs-Davison, John

      Channon, Paul

      Emery, Peter

      Blackburn, John

      Chapman, Sydney

      Falrbairn, Nicholas

      Body, Richard

      Churchill, W. S.

      Fairgrieve, Russell

      Bonsor, Sir Nicholas

      Clark, Hon Alan (Plymouth, Sutton)

      Faith, Mrs Sheila

      Boscawen, Hon Robert

      Clark, Sir William (Croydon South)

      Farr, John

      Bottomley, Peter (Woolwich West)

      Clarke, Kenneth (Rushcliffe)

      Fenner, Mrs Peggy

      Bowden, Andrew

      Clegg, Sir Walter

      Finsberg, Geoffrey

      Boyson, Dr Rhodes

      Cockeram, Eric

      Fisher, Sir Nigel

      Braine, Sir Bernard

      Colvin, Michael

      Fletcher, Alexander (Edinburgh N)

      Bright, Graham

      Cope, John

      Fletcher-Cooke, Charles

      Brinton, Tim

      Cormack, Patrick

      Fookes, Miss Janet

      406

      407

      Fowler, Rt Hon Norman

      Macfarlane, Neil

      Rifkind, Malcolm

      Fox, Marcus

      MacKay, John (Argyll)

      Roberts, Michael (Cardiff NW)

      Fraser, Peter (South Angus)

      Macmillan, Rt Hon M. (Farnham)

      Roberts, Wyn (Conway)

      Fry, Peter

      McNair-Wilsor", Michael (Newbury)

      Rossi, Hugh

      Gardner, Edward (South Fylde)

      McNair-Wilson, Patrick (New Forest)

      Sainsbury, Hon Timothy

      Garel-Jones, Tristan

      McQuarrie, Albert

      Scott, Nicholas

      Glyn, Dr Alan

      Madel, David

      Shaw, Giles (Pudsey)

      Goodhew, Victor

      Major, John

      Shaw, Michael (Scarborough)

      Goodlad, Alastalr

      Mariand, Paul

      Shelton, William (Streatham)

      Gow, Ian

      Marten, Neil (Banbury)

      Shepherd, Colin (Hereford)

      Gower, Sir Raymond

      Mates, Michael

      Shepherd, Richard (Aldridge-Br'hills)

      Grant, Anthony (Harrow C)

      Mather, Carol

      Silvester Fred

      Gray, Hamish

      Maude, Rt Hon Angus

      Sims, Roger

      Greenway, Harry

      Mawby, Ray

      Skeet, T. H. H.

      Griffiths, Eldon (Bury St Edmunds)

      Mawhinney, Dr Brian

      Smith, Dudley (War. and Leam'ton)

      Griffiths, Peter (Portsmouth N)

      Maxwell-Hyslop, Robin

      Speller, Tony

      Grist, Ian

      Mayhew, Patrick

      Spicer, Michael (S Worcestershire)

      Grylis, Michael

      Mellor, David

      Squire, Robin

      Gummer, John Selwyn

      Meyer, Sir Anthony

      Stanbrook, Ivor

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

      Miller, Hal (Bromsgrove & Redditch)

      Stanley, John

      Hamilton, Michael (Salisbury)

      Mills, lain (Mariden)

      Steen, Anthony

      Hampson, Dr Keith

      Mills, Peter (West Devon)

      Stevens, Martin

      Hannam, John

      Miscampbell, Norman

      Stewart, Ian (Hitchin)

      Haselhurst, Alan

      Moate, Roger

      Stewart, John (East Renfrewshire)

      Hastings, Stephen

      Monro, Hector

      Stokes, John

      Havers, Rt Hon Sir Michael

      Montgomery, Fergus

      Stradling Thomas, J.

      Hawkins, Paul

      Morris, Michael (Northampton, Sth)

      Tapsell, Peter

      Hawksley, Warren

      Morrison, Hon Charles (Devizes)

      Taylor, Teddy (Southend East)

      Heddle, John

      Morrison, Hon Peter (City of Chester)

      Temple-Morris, Peter

      Henderson, Barry

      Mudd, David

      Thatcher, Rt Hon Mrs Margaret

      Heseltine, Rt Hon Michael

      Murphy, Christopher

      Thomas, Rt Hon Peter (Hendon S)

      Hogg, Hon Douglas (Grantham)

      Myles, David

      Thompson, Donald

      Holland, Philip (Carlton)

      Neale, Gerrard

      Thornton, Malcolm

      Hooson, Tom

      Nelson, Anthony

      Townsend, Cyril D. (Bexleyheath)

      Hordern, Peter

      Neubert, Michael

      Trippier, David

      Howell, Rt Hon David (Guildford)

      Newton, Tony

      Trotter, Neville

      Howell, Ralph (North Norfolk)

      Nott, Rt Hon John

      van Straubenzee, W. R.

      Hunt, David (Wirral)

      Onslow, Cranley

      Vaughan, Dr Gerard

      Hunt, John (Ravensbourne)

      Page, Rt Hon Sir R. Graham

      Waddington, David

      Hurd, Hon Douglas

      Page, Richard (SW Hertfordshire)

      Wakeham, John

      Irving, Charles (Cheltenham)

      Parkinson, Cecil

      Waldegrave, Hon William

      Jenkin, Rt Hon Patrick

      Parris, Mathew

      Walker, Bill (Perth & Perthshire)

      Johnson Smith, Geoffrey

      Patten, Christopher (Bath)

      Walker-Smith, Rt Hon Sir Derek

      Jopling, Rt Hon Michael

      Patten, John (Oxford)

      Waller, Gary

      Kershaw, Anthony

      Pattle, Geoffrey

      Walters, Dennis

      Kimball, Marcus

      Pawsey, James

      Ward, John

      King, Rt Hon Tom

      Peyton, Rt Hon John

      Wells, John (Maidstone)

      Knight, Mrs Jill

      Pink, R. Bonner

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

      Knox, David

      Pollock, Alexander

      Whitney, Raymond

      Lamont, Norman

      Porter, George

      Wickenden, Keith

      Lang, Ian

      Prentice. Rt Hon Reg

      Wlggln, Jerry

      Langford-Holt, Sir John

      Price, David (Eastleigh)

      Wilkinson, John

      Latham, Michael

      Prior, Rt Hon James

      Williams, Delwyn (Montgomery)

      Lawrence, Ivan

      Proctor, K. Harvey

      Winterton, Nicholas

      Lawson, Nigel

      Pym, Rt Hon Francis

      Wolfson, Mark

      Lee, John

      Raison, Timothy

      Young, Sir George (Acton)

      Lennox-Boyd, Hon Mark

      Rathbone, Tim

      Younger, Rt Hon George

      Lewis, Kenneth (Rutland)

      Rees-Davies, W. R.

      Lloyd, Peter (Fareham)

      Ronton, Tim

      Loveridge, John

      Rhodes James, Robert

      TELLERS FOR THE NOES :

      Lyell, Nicholas

      Ridley, Hon Nicholas

      Mr. Spencer Le Marchant and

      McCrindle, Robert

      Ridsdale, Julian

      Mr. Anthony Berry.

      Question accordingly negatived.

    New Clause 20

      RESTRICTION ON RIGHT TO BUY IN DISTRICTS WITH INSUFFICIENT HOUSING STARTS
      ' The tenant's right to purchase under section 1 of this Act shall not apply where a dwelling-house is in the area of a district or islands council where the Secretary of State, on the application of the islands or district council concerned certifies that the number of housing starts of that housing authority is twenty-five per cent. less than the number identified as necessary in the housing plan which it has
      408
      submitted to the Secretary of State.'.—[Mr. Millan.]
      Brought up, and read the First time.
      Mr. Millan: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: With this we may take new clause 24—Exemption Powers of Secretary of State—Government amendment No. 34, and the following amendments :
      No. 38, in clause 1, page 4, line 21, at end insert ' or
      (b) where a dwellinghouse is part of a multistoreyed block except where all tenants have exercised their right to buy.'

      409
      No. 39, in page 4, line 21, at end insert—
      ' (9A) This section shall not apply to dwelling-houses in an area which is designated a reserved area by the islands or district council within whose area it is situated where the Secretary of State, on the application of the islands or district council concerned, makes an order, which shall be made by statutory instrument, to that effect
      (9B) An order under subsection (9A) above may be applied for where in the opinion of the islands or district council concerned further sales in the reserved area would be unduly detrimental to the interests of applicants on its housing list or of tenants of the council who are seeking transfer to other houses belonging to the council or would upset the balance of housing stock belonging to the council '
      No. 251, in page 4, line 21 at end insert—
      ' (9A) This section shall not apply to dwelling houses :

      (a) which have been listed under the Town and Country Planning (Scotland) Act 1972 as being of special architectural or historic interest and

      (b) which are in a Conservation Area designated under the Town and Country Planning (Scotland) Act 1972.

      Mr. Millan: New clause 20 imposes a restriction on the right to buy in districts with insufficient housing starts. These clauses, and the amendments taken with them, bring us to the heart of the Bill—the sale of council houses in Scotland. I restate briefly our implacable objection to what the Government are doing here. I shall not speak at length, because we had extensive debates on this subject upstairs in Committee and on Second Reading, but I wish to put on the record our objection in principle to the Government's policy.
      The Government are imposing a rigidity that is unjustified by the circumstances and that will do tremendous damage to council housing in Scotland. It will prejudice the interests of existing tenants as well as those on waiting lists and those awaiting transfer to better accommodation. The Government are imposing their will on the local authorities in a completely dictatorial way, regardless of the wishes of those authorities or the circumstances in particular areas. They take no account of the effect that these compulsory sales will have on housing lists and waiting lists in these areas.
      The discounts being offered are completely unjustified. They are a waste of
      410
      public money and an extravagant use of public resources. To add insult to injury, the provision in clause 5 compels local authorities, against their wishes, to give loans in certain circumstances where building societies, presumably for good reasons, have turned down applicants for building society loans. We are opposed to these matters in principle.
      8.15 pm
      What is more, we do not believe that the Government have a mandate for this policy in Scotland. They did not have a mandate after the general election in Scotland, and the issue was ventilated again at the district council elections last month. We all know the results of those. It is no use saying that the district elections were about other matters. Of course they were, but they were also about the sale of council houses. In the Daily Record the Conservatives inserted a full-page advertisement exhorting council house tenants to stop paying rents, vote Conservative and buy their own homes, thus investing in a growing asset. That advertisement was inserted on 1 May, the eve of the poll. The Conservatives introduced the matter quite dramatically into the district election campaign and we all know the result—a massive and shattering defeat for the Tories.
      There is a legitimate area of interest for the Government in this matter. I took that view when we were in office, and I still maintain it. However, there must be a balance between the rights of central and local government. In the Bill the rights of local government—and after all, local councillors are democratically elected by the people and they have a legitimate right to govern in their own areas—are completely set aside. Local authorities are being compelled to follow policies that they consider politically distasteful and detrimental to the interests of the people whom they represent and who voted for them. The next Labour Government will repeal these provisions.
      We are well aware that there is not the slightest prospect—in view of their arrogant mood—of the Government's accepting any proposition to remove these provisions from the Bill. That is why our amendments do not go that far. They put forward a number of ways in which the Government, if they are sensible, can grasp the opportunity to avoid a confrontation with district authorities in

      411
      Scotland that is otherwise inevitable. There are a number of ways in which that can be done, and I shall describe them. Our amendments are directed at reducing the worst effects of the Government's legislation rather than eliminating them altogether. They are designed to offset the worst effects of the Bill in areas where it will do the most damage—areas of acute housing shortage, where there is tremendous demand for council housing.
      It is obvious that if the Bill goes through as it stands the most desirable houses in the most desirable areas will sell first and to the greatest extent. The Government once tried to deny that by claiming that if the prices were right houses would sell in all areas, however undesirable and unpopular they might be. That is absolute nonsense. It is against all experience, reasoning and common sense. It is against the knowledge that those of us who represent large council house areas have of the wishes and feelings of the people in those areas. There can be no doubt that if the Bill goes through in its present form the houses in the best areas will sell quickly, to the detriment of other council house tenants and those on the waiting lists.
      The new clause would apply a restriction in an area where there was a deficiency in housing starts compared with what had been agreed not just by the local authority but by the Secretary of State in the housing plan submitted by the local authority concerned. Under the new clause the Secretary of State would have a role to play. The new clause would not operate unless he gave his permission. In principle that is undesirable, but this is a modest new clause and in the circumstances we are willing to make that concession. This is one way of eliminating some of the damage that would otherwise be done by the Bill.
      When we discussed the problems of rural areas earlier today, we again experienced the arrogance and the dogmatism of the Government. There are other considerations than those of rural areas. We believe that there should not be compulsory sales of council houses where insufficient new housing is being built. The new clause would not prevent local authorities voluntarily selling council houses where they felt it necessary,
      412
      but it would eliminate compulsion to sell against the wishes of local authorities and the inhabitants of the area.
      New clause 24, in the name of the Scottish National Party, deals with the problem in a different way. It provides exemptions for areas or categories where specific housing is in short supply, and again provides a role for the Secretary of State. It is one way to limit the damage that the Bill will do. It will introduce a necessary element of flexibility to enable land authorities to exercise discretion and and judgment in the light of local circumstances. I have no objection to that new clause.
      Amendment No. 39 tackles the problem in a general way. It is my preferred amendment. I drafted it. It would be the most effective instrument to tackle the problem, but I do not disparage the two new clauses, which are perfectly acceptable. We must introduce an element of flexibility in the Bill, which can be done in different ways. Without that flexibility, the situation will be disastrous for some areas. Our major plea is for the Government to introduce that flexibility. We shall be pleased to consider any effective amendment that they put forward.
      Under amendment No. 39 the local authority could designate certain areas as reserve areas, where no further sales would be permitted, at least under clause 1. The Secretary of State would again have to give permission, but the amendment would allow the local authority to take the view that further sales in an area would be unduly detrimental to the interests of applicants on the housing list or council tenants seeking transfer to other council houses or would upset the balance of council housing.
      Local authorities would be able to say that they had applied the provisions of the Bill, whether they liked it or not, but that it had been demonstrated that in certain highly desirable and popular areas large numbers of houses were being sold, which was detrimental to tenants or those on waiting lists. They would be able to apply to the Secretary of State for a ban in those areas where sales had gone too far, and they would hope to persuade even this Secretary of State of that. That is an important element of flexibility. It would allow discretion and judgment to be exercised by local authorities, with the approval of the Secretary of State. If the

      413
      Government were sincere in wanting to meet, to even a small extent, the wishes of local democracy, they would accept such an amendment. The Government would be wise to accept the flexibility offered in all the options, which is very much in the interests of local authorities and their tenants.
      There is then a Government amendment, which I shall not deal with. Amendment No. 251 is a Liberal amendment, which deals with the problems of areas of special architectural interest. I have considerable sympathy with it.
      Amendment No. 38 is in my name. It deals with the problems of multi-storey blocks, and would prevent sales. Another amendment dealing with the problem was tabled in Committee, but was not debated. Some hon. Members have considerable experience of multi-storey blocks in their constituencies. Let me first deal with the background. First, there is the myth that they came about during the Labour Government, because of the enthusiasm of Labour authorities. The opposite is true. Encouragement for multi-storey building in Scotland occurred during a Conservative Government. I do not argue that the Government were completely wrong. Encouragement occurred over only a short period. Many of these blocks cause considerable social and housing problems.
      Secondly, again contrary to popular myth, not all multi-storey blocks are undesirable. I have some extremely good ones in my constituency. Many of these blocks provide a standard of council accommodation as good as that in other more generally recognised popular areas. They are not slums. Some of these blocks are problematic, but others are extremely desirable.
      Anyone who knows anything about multi-storey blocks or the old tenement blocks in Scotland knows that multi-ownership will cause immense problems. Maintenance of good accommodation and environmental standards, and keeping the property in good repair, which can sometimes be expensive, depends on having a single owner and a coherent approach to maintenance and repair. In good, popular and well-maintained multi-storey blocks, which will be attractive to buy, it will be disastrous to have multi-ownership. It will cause immense problems with repairs and maintenance, particularly when, as
      414
      can happen in the best constructed blocks, occupants are faced with major and expensive repairs.
      8.30 pm
      It is difficult to get agreement between eight owner-occupiers in a tenement block. The problem will be even worse in a multi-storey block, with 50 or 60 different interests to take into account If the Government want to push ahead with their dogmatic approach to council house sales they will make a profound mistake if they proceed with sales of multi-storey accommodation. I hope that the Minister will not say that there will be missives, leases and understandings. Legally, one can provide for all eventualities, but making agreements work in practice is a different matter. Anybody who knows anything about the problems will be appalled at the prospect of multistorey blocks being sold compulsorily in bits, against the wishes of a local authority.
      There must be flexibility. With a general flexibility it will be possible to encompass the problems created by multistorey blocks because of the provision to apply for exemption. A general flexibility must be written into the legislation. That is what the two new clauses and amendment No. 39 provide. There must be exclusions, and multi-storey blocks should be excluded.
      If the Government do not change course or modify their position they will be set on a collision course with many local authorities in Scotland. Let there be no mistake about that. I have never encouraged a local authority to break the law. I shall not do that under any circumstances, because that is not the way in which elected Members should behave. However, the Secretary of State will make a grave mistake if he believes that all that is at issue is a political argument that will blow away in a few months, and that he will then achieve the co-operation of local authorities. That will not happen. This is not a temporary problem. Deep-seated feelings and emotions are aroused by the Government's attitude. The Government do not have the support of the electors in Scotland. They certainly do not have the support of the district councils. Almost without exception, Labour-controlled councils are violently opposed to the Bill.
      The Government are experiencing many other confrontations. They forced the highest rate increases for many years. They have problems with local authority manpower and budgets, as well as unemployment problems and other industrial difficulties. Yet the Government are deliberately taking on another series of problems which will lead to critical clashes between central Government and local Government in Scotland. The clashes will do no good to Scotland, or to people living in council houses.
      There is still time for the Secretary of State to draw back a little. I do not expect him to abandon the provisions, although I wish he would. He should introduce some flexibility into the legislation. That would give it a chance to work and to take into account some of the local interests. That is the argument in favour of the amendments.
      Mr. Cook: I am pleased to speak in support of new clause 20, standing in my name and that of my right hon. Friend, which my right hon. Friend has moved so ably and so eloquently. The new clause provides that a local authority shall be exempt from the provisions of this section of the Act if it is unable to build the houses that it has estimated are necessary in the course of the preparation of its housing plan.
      I believe firmly that if a local authority is unable to build the houses that it believes are necessary to meet housing need in the area, because the Government have not made the necessary capital allocation, it would be grotesque if the authority was also obliged by the Government to sell off those houses it already possesses which would otherwise become available for re-letting to meet a portion of the housing it has identified.
      One of the most severe challenges that will be posed to responsible housing authorities as a result of the Bill is the arbitrary element that will be injected into their forward planning. As the result of an initiative by my hon. Friend the Member for Glasgow, Provan (Mr. Brown), when he was in charge of housing policy at the SDD, there is now an obligation on local authorities to prepare an annual statement of the need in their area for the next five years and an annual statement of how they propose to match
      416
      that need. There is no point in expecting a local authority to go through a sensitive and sophisticated calculation of how many houses it will need during the next five years, or how many houses it proposes to build, if the unknown quantity of how many tenants will choose to exercise their rights is suddenly injected into the calculation.
      A local authority will have no discretion and cannot possibly plan for that event. It will have no control over the rate at which its housing stock diminishes, although it will be held responsible for the rate at which the housing stock increases. Faced with the challenge that will be posed to housing authorities, the logical response by Government would be to scrap the housing plan system so that they are not faced with the embarrassing details of the housing need that remains to be satisfied after five years.
      I was intrigued to notice that the Government wrote to COSLA in January saying that they would like to streamline the housing plan system. That apparently consisted of reducing the housing plans from an annual event to an event that occurred every four years. The next housing plan would not be required for another four years, which would conveniently take the calculation of housing need in a local auhority area beyond the span of the public expenditure White Paper, which makes plain that no local authority will get the capital allocation it needs to match the housing need that it identifies in its housing plan at present.
      I ask the Secretary of State to take note of the reply sent by COSLA before the May election at a time when those in charge of the housing committee of COSLA were not dominated by the colour of the Opposition side of this Chamber. The reply was that the local authorities were satisfied with the housing plan system and that they did not want to give it up. They wished, however, that the Secretary of State would pay more attention to the capital allocation consequences of the estimate of housing need that they were preparing on his behalf.
      There is scant sign that the Secretary of State will pay much attention to the estimate of housing need being prepared. What he proposes can be seen from the public expenditure White Paper. A

      417
      study of the table of figures shows that, in the four years covered by the White Paper, expenditure on housing in Scotland will fall from £702 million to £410 million, a drop of 42 per cent.—nearly half. That is by far the largest cut in any of the budget programmes contained in the White Paper.
      It is a clear and deliberate attempt to pile the maximum amout of public expenditure cuts on to housing provision. The White Paper is different from previous White Papers. It does not set out how money in future years shall be spent. We do not know how much of the saving will come out of rent subsidy. The Secretary of State intends, perhaps, that all the saving should come from rent subsidy. In that case, it will be necessary for rents to be increased three times in real terms over the next five years. It is difficult to believe that is what the Secretary of State intends.
      Some of the cuts presumably will come from capital expenditure on housing. They cannot come entirely from capital expenditure because the amount the right hon. Gentleman proposes to save is greater than capital expenditure on housing in Scotland. Even if he stopped building or modernising all houses, he would not achieve the saving that he proposes.
      Plainly, a large element of the saving will come out of the capital allocation, at a time when we cannot afford to be complacent about the present level of housing provision in Scotland. One in 10 of the householders in Scotland still lives at an overcrowded level, by the bedroom standard. That is three times the average for England and Wales. One in 15 of householders in Scotland still lives in houses that are identified as being below a tolerable standard. If we add those figures together, we are talking about ½ million householders in Scotland who are living in conditions that are, by any definition, inadequate and which will be remedied only if there is additional building.
      It is already clear from the evidence that hon. Members are getting from their constituencies and local councillors that there is unlikely to be much additional building. Some major housing authorities are in great difficulty over their house building programmes. I understand that
      418
      Aberdeen is having to choose between continuing with the houses under construction, and running out of land next year, and abandoning the houses under construction in order to have some capital to purchase land on which to build next year. Either way, there may well be an annual hiatus in the building programmes.
      It is not just the large, urban, Labour-controlled authorities which are in difficulty. There are also considerable protests from the rural areas, where the councillors in charge are concerned not for doctrinaire or dogmatic reasons, but because they see the consequences for their areas and the people whom they represent.
      The hon. Member for Inverness (Mr. Johnston) referred earlier to the case of Badenock and Strathspey. That authority has had a bid for 300 houses in its programme cut to 130 houses and has written to the Secretary of State to point out that more than 130 of the families for which it was building live in caravans and will have to continue to do so, because the council is not being given the money with which to build the houses that those people need.
      Badenock and Strathspey councillors are not, as far as I am aware, paid-up members of the Tribune group or subscribers to Militant, but they were so outraged that they sent a circular to every housing authority in Scotland containing thoughts that I offer to the Secretary of State to take to the Cabinet, since they are couched in a way that may carry some influence even there. The circular said :
      "Councillors here take the view that the provision of housing is paramount and an essential source of stability in the country, equivalent in importance to "—
      I ask my hon. Friends who have taken time off from considering the Criminal Justice (Scotland) Bill in Committee to note this passage—
      "and of assistance to the maintenance of law and order."
      That is correct. If councils are left with inadequate, unsatisfactory housing conditions, we shall store up not only housing problems, but other social problems that will flow from that housing stress.
      Another dimension of the effects of the cuts in capital expenditure came to my attention only recently. Documents are

      419
      coming out from the SSHA about the effect on its forward programme of the cuts in its capital allocation. Those documents were successfully concealed from hon. Members until after our recent debate on the SSHA order. It is clear from those documents that the consequence of the sharp reduction in the capital allocation to the SSHA is that there will be virtually no building by the SSHA outside Glasgow before 1984–85.
      One of the many ironies in this situation is that the local authority that will be most affected by the postponement of its building programme is the authority that includes the constituency of the Minister responsible for housing. Edinburgh will suffer most as the result of the postponement of its capital allocation by one of the city's Members of Parliament. The main reason why Edinburgh will suffer most is that for the past six years we have had in charge of housing policy in the city Conservative councillors who have deliberately run down the building programme to a level at which in the past year the authority started a mere 30 houses in a city of ½ million. Those Tory councillors justify the reduction in local authority house building on the basis that they have a bold and expanding SSHA programme which will take up the slack.
      8.45 pm
      Unfortunately, as a result of the capital cuts introduced by the Government there will be no SSHA building in Edinburgh before 1985. Some sites that have been standing empty for a decade will continue to grow weeds and have scrap and other objects dumped on to them. That will happen in my constituency over the next five years without a sod being turned to provide the houses so desperately needed in that housing stress area.
      Looking ahead, even beyond 1985 it is plain also that even after that period, in which there will be a virtual cessation of new building by the SSHA outside Glasgow, any future programme may be modest. We are seeking a choking off of an agency which has provided an essential source of local authority housing in many areas of Scotland. We shall now be unable even to help it fulfil its role in support of economic expansion.
      420
      As hon. Members are aware, I am no great supporter of the proposal to build a nuclear power station at Torness. I think that I can claim to speak with complete impartiality when I say that a matter which should concern the House is the fact that among the projects specifically named as requiring postponement is the provision of houses in support of the construction of the Torness nuclear power station.
      We have the absurd situation in which the Government are pressing ahead with the construction of that power station when their policy is to refuse to make available the necessary expenditure to meet the housing consequences that go with economic expansion.
      I was horrified at the weekend—and I hope that hon. Members will share my shock—to discover that a young couple in Dumbarton setting up home together for the first time, are being obliged to set up that home in a single furnished room for which they are paying £30 per week. That is the result of the competition from construction workers in the area for whom no additional housing is being provided. There will be many more such cases in future as a result of the squeeze that will be applied to our housing stock by simultaneously selling off houses com-pulsorily, and imposing cuts in the capital allocation of the order and magnitude that I have described.
      The Government cannot have it both ways. They can either say that the sale of council houses is all right and that they will make the money available to replace them. That would be an extremely expensive way of proceeding, though it would avoid the social consequences arising from present policies. Or, alternatively, they can say that it is unnecessary to replace council houses because there is already such a large stock in the public sector, and that that stock will survive for a considerable time to come.
      The Government cannot say that they will not replace council houses and deny local authorities the money to build additional new houses while they oblige those same local authorities to sell off houses to whichever tenant takes it into his head to buy irrespective of the need for additional houses for letting in that local authority area. That is downright

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      irresponsible and will undoubtedly give rise to much pain and suffering in our country over the next five to 10 years as young couples find it much more difficult to obtain the housing to let that they require.
      They may not see that coming now. There may be very few people in Scotland at present who perceive how the Bill will affect them and reduce their chances of a decent home. But I assure the Secretary of State that as they become more numerous and as they ask why they cannot have the chance of a decent home we will lose no opportunity to tell them who is to blame for that situation.
      Mr. Russell Johnston: In opening the debate the right hon. Member for Glasgow, Craigton (Mr. Millan) used quite strong language. He is not given to the use of excessive rhetoric, but on this occasion he was entirely justified in what he said. The way in which he condemned the Government for setting aside the rights of local government to determine local issues was valid. I cannot accept that previous Labour Governments have always been blameless, but there is no doubt in my mind that the Government rightly stand condemned for a policy that is far too rigid and inflexible. It is the intention of my right hon. and hon. Friends to support the clause if and when a Division takes place.
      In some respects the clause is not different from amendment No. 255, the Liberal amendment. As the right hon. Member for Craigton said, various hon. Members from the Opposition Benches have been considering a variety of ways by which to introduce into the Bill the degree of flexibility that we consider it lacks.
      My principal purpose is not to repeat all the arguments, but to draw attention to amendment No. 251, which confines itself to a fairly narrow issue. I understand that we are not to have a separate vote on that amendment. Nevertheless, I hope that a brief rehearsal of the arguments will influence the Government and that they will consider the possibility of tabling amendments in another place in due time.
      The amendment seeks to widen the exemptions in the Bill that are presently confined to sheltered housing. The issue is concisely summarised in a letter that
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      my right hon. Friend the Member for Roxburgh, Selkirk and Peebles (Mr. Steel) received from the director of administrative and legal services of the Roxburgh district council in January. My righ hon. Friend is fulfilling a longstanding engagement, but he will return to the Chamber for the vote.
      The letter states :
      "Roxburgh District Council has recently been considering various provisions of the … Bill "—
      that is the Tenants Rights, Etc. (Scotland) Bill—
      "and in particular the likely exclusions from those types of properties that it will become a local authority tenants' right to purchase. At the present time, no reference is made in the Bill to houses in listed buildings and conservation areas, many of which are being or have been reconstructed with great care and in most cases at extremely high cost. Such is the case with the houses which have already been provided in the central area of Jedburgh. This development has now received a Civic Trust Award, a Saltire Award and more recently a Europa Nostra Award, the only scheme of reconstruction in Britain to do so, and one of only five in Europe … A town centre reconstruction, such as has been done in Jedburgh, is primarily in the interests of the national heritage and the District Council is extremely concerned that deterioration in its appearance and structural condition may occur should any of the property be sold to individuals ".
      Incidentally, I am told that in April the district valuer estimated that the housing units in Jedburgh would sell at between £11,000 and £14,500, although they cost between £23,000 and £27,000 to construct. That is an argument of some substance. There are reconstructions of a similar character in Edinburgh and Aberdeen. I have in mind the Wallace Tower development in Aberdeen. I have no doubt that many hon. Members could refer to other examples elsewhere. There is a case, on grounds of public expenditure and the protection of historic buildings, for the Government to reconsider their position.
      I conclude by referring to the general issue. In all district authority areas in my constituency there are considerable housing waiting lists. That is not the case in all constituencies in the kingdom. However, it is certainly the case in Inver-nesshire and in other parts of the Highlands. Whenever I make myself available for constituency clinics, as Members of Parliament do, I find long lists of people coming to me to ask for houses.

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      That is true in Inverness burgh, in Aviemore, which is in the district council area of Badenoch and Strathspey, to which reference was made by my right hon. Friend the Member for Roxburgh, Selkirk and Peebles and the hon. Member for Edinburgh, Central (Mr. Cook). It is interesting to observe that in Aviemore there is a residential caravan site that houses above 100 people. It is currently under threat from the Earl of Seafield. These people are staying there for the simple reason that they have nowhere else to stay. They have no houses to go to. They live in this caravan site in a place called Edenkillie. They do not do so from choice. They do it because they just do not have any alternative. It is shameful that the Earl of Seafield, who owns vast acres, should cause distress and worry in this little patch in a great land holding. I am glad to have had an assurance that if there is any question of eviction, the Highland region will compulsorily purchase the land.
      However, that is not the answer. There is a lack of local government housing. As was explained, in the case of this local authority, in the first place many units of its existing stock are highly attractive to people wanting to buy. In the second place, the cutbacks in public expenditure mean that the local authority can in no way meet the demand that is laid upon it. Therefore, it is caught from two sides. The Government should most carefully re-examine the situation.
      I make one final quotation, referring to the fact that even where the Government have made exemptions and allowed the possibility of pre-emption, the Skye and Lochalsh district council, again within my constituency, has also been highly critical of this legislation and its inflexibility.
      The chief executive remarks to me in a letter dated 14 March :
      "The effectiveness of a right of pre-emption depends on the District Council having available sufficient consent to incur capital expenses under section 94 of the Local Government (Scotland) Act 1973. In a situation where the capital allocation for a year is largely taken up by liabilities on contracts incurred before the beginning of the financial year, exercise of the right of pre-emption co "Id well be ruled out."
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      Even where the Government have accepted amendments to their legislation, it may well be that that kind of amendment will be futile and ineffective.
      I plead with the Government to take seriously what was said by the right hon. Member for Craigtown and others and to insert into the legislation a great deal more flexibility than they have so far allowed.
      Mr. Donald Dewar: I was not one of those who were fortunate enough—I use the term loosely—to be members of the Committee that debated the Bill. I have not had an opportunity prior to this to pass comment on the general principles that we are debating in these amendments. I echo the words used by my right hon. Friend the Shadow Secretary of State in terms of the spirit of deep anxiety that exists among local authority representatives at the moment. The point has been well and truly made that we find this feeling in unexpected places. It is not just the unique sign of a Labour-controlled council. If I may say so about West-Central Scotland, which is the area in which I have most of my contacts, I have no doubt that, unless we can build an element of flexibility into the system—and the Government may be grateful for that element in the months, and perhaps the years, ahead—we shall head for a situation of the utmost seriousness in terms of relationships between central and local government. That is bad for the system. It is bad not just for the Government, but for all in politics, whether in district councils or in central Government.
      9 pm
      It is perhaps now a vain hope, but there is a strong case for urging the Government, even at this last minute, to accept one of the various models that have been presented to them to allow them not necessarily to give concessions immediately but the option of giving concessions within the established statutory framework. They might wish to use such a model if some of the more unfortunate consequences of the selling of council houses were to take place, as we certainly expect Such flexibility would mitigate some of the worst effects and might allow the proper management of

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      the housing stock by individual district authorities.
      My interest is simple. I represent a constituency in which about 96 per cent. of the electorate live in public sector housing. It is an area with extremes of council housing. We have some of the most popular residential areas in Glasgow. Unfortunately, there are some areas, where people voted largely with their feet, where there is a public perception that they are not good places in which to live, where there is the gravest difficulty in letting property on any terms and where the prospect that it may one day sell is a mad illusion.
      In the less fortunate, less favoured, areas in my constituency there is a great deal of anxiety about the impact of this Bill. For example, Drumchapel is receiving about 25 per cent. of all people rehoused in the city of Glasgow under the Housing (Homeless Persons) Act. Enormous numbers of people in that area are just waiting to move out. Conversely, anyone who wishes to move to Knightswood on a transfer will need to have had a local authority tenancy dating back to the early 1940s. Therefore, I have in my constituency a desired area and an area from which 60 per cent. or 70 per cent. of tenants are actively seeking a move.
      I readily concede to the Secretary of State, who is nodding, that in areas such as Knightswood he can do all sorts of clever things. In Knightswood, there is a tendency for tenants to sit still, so there is a small turnover. I concede that movement into the area from the less favoured parts of my constituency is a slow and gradual process.
      The point is self-evident and it is perhaps a cliche, but if at the end of the day we allow desirable houses to be sold out of the public sector stock, we destroy hope. When hope goes, in its wake comes a great deal of bitterness, confusion and division. I am genuinely scared that there will be significant numbers of sales—not as many as the Government visualise—in very small localised areas which are particularly important in terms of the public's perception of housing prospects and aspirations. That will create social tensions and bitterness of a kind that we have not seen for a very long time.
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      This is not a suitable arena for confesssions. However, I was a good deal more open minded three or four years ago about the prospect of selling council house than I am now. The reason was that at that stage I did not represent a constituency made up almost entirely of council house tenants. I hope that it will not be misinterpreted if I say that I have recanted to some extent. I deal daily with the problems of the Glasgow transfer list, and my view is that these provisions are a disastrous recipe for distress and social confusion. The Government must try to build in the element of flexibility that is represented in the various new clauses under discussion.
      Both in my constituency and in the peripheral schemes throughout Western Scotland, the vast majority of those in less fortunate areas will see themselves as doubly disadvantaged. They were not fortunate in the initial allocation, and because of that they are being given no chance to benefit to some extent—and I use the words "to some extent" in inverted commas—from the opportunity to buy their council houses. I say it in inverted commas because I accept that many people, when they do their arithmetic and consider the cost of a mortgage and house maintenance, may find that it is a bargain that they cannot take, cannot afford, and that it is beyond their reach.
      A double fraud is involved. The system will create the tensions to which I have referred. Even those who should benefit from the opportunity will find that it is snatched away from them. One reason for that is that in the areas that I have been discussing, such as Knightswood in my constituency, Moss Park in Glasgow, a large number of tenants are of pensionable age. They would find it extremely difficult to obtain a mortgage, even if they wished to do so. But that is a subsidiary plot, although a serious one. The main point is that those who have been unfortunate in the queue will see themselves as being doubly victimised in the way that I have described. They will resent it very deeply.
      We should have an element of flexibility, even if it is in terms of a reserve area. I accept that if there is a reserved area within a city, or a district council geographical area, where the right to buy has been withdrawn, the Secretary of State

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      and his cohorts will argue that that in itself is unfair, and creates two different tenancies. I do not think that that is absolutely right. I have always thought that the Conservative Government stand for a free market. No doubt they would like to see a free market in the area of housing. The essential characteristic of a free market is that not only is there a willing buyer but there is a willing seller.
      It is right that we should have some sort of mechanism that will allow the Government and district councils to come together and say that the whole management of the housing stock has been distorted, is out of synchronisation, and is being tilted in a way that is socially damaging. The options that are being taken up are being taken up on an unsatisfactory, localised basis. That is common sense.
      We have a position of compulsory purchase in reverse. That should be anathema to those who preach about free market economies. There may be a willing buyer, but there is not a willing seller. He is selling under duress and compulsion. An escape clause from that position, if the distortions become obvious, is something for which the Government may be grateful in the months that lie ahead.
      Many Labour Members have expressed their reservations and their considerable anxiety about the future in the area of housing. I do not wish to speak at great length on that point. I regard the whole matter as a deeply misconceived and misguided exercise, and one that we shall rue as time goes on. It is clearly an attempt to move away from housing policy dictated by social needs to a position where housing allocation will be dictated by the ability to pay. That is an inevitable concomitant, and an essential characteristic of the scheme that the Government are foisting on the people of Scotland.
      If—I console myself with the thought that the "if" is a substantial one—we get council house sales in the way that I have described in the areas of high demand, on the scale which Conservative Members expect, I very much fear that we shall damage for ever the public's perception of public sector housing. Inevitably,
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      more and more public sector housing will be seen as a safety net provision. It will be a sort of supplementary benefit in housing terms, where people who are suffering misfortune or who have been unable to get a more advantageous holding in the housing market are taken on by the public sector. Naturally, in such situations, they will be given treatment which will be seen—perhaps wrongly—as second best.
      I do not believe that anyone who operates in public sector housing, or who represents a council house constituency, is blind to the appalling dangers, even now, of the ghetto which builds itself within the public sector. The great fear among Labour Members is that the policies which are now being presented to us as a shining opportunity for social advance will turn a situation under which we get an occasional ghetto developing into one in which the public will see all public sector housing as one large ghetto or area of social failure.
      I hope that those fears are exaggerated. However, in essence I believe that they are real. We are pleading with the Government to recognise how real those fears are, not just among politicians, who perhaps have a vested interest, but also among those who live in those areas. They should recognise that at this stage it is only simple common sense to build in the escape routes so that if at some future date those fears are justified, we can put our heads together and try to undo the damage which may well be done over the next three or four years.
      It is all very well for Labour Members to say that we shall take steps when we return to power. But Parliaments can seem to last a long time when the social distortions which flow from this kind of policy are allowed to go unchecked. I very much hope that even now the Government will be prepared to listen.
      Mr. Gordon Wilson: The hon. Member for Glasgow, Garscadden (Mr. Dewar) said a great deal of what Opposition Members wish to say in relation to this matter. However, at the outset, I put it to the Minister that in the new clauses and amendments under discussion there is no frontal assault on the question of home ownership or, indeed, the sale of council houses. That battle was fought in Committee. What we are

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      now dealing with are ways by which some kind of discretion will be given to either the local authorities or the Secretary of State, or will be available to both the local authorities and the Secretary of State, to prevent some of the difficulties that have been mentioned.
      I do not know what is the most difficult to criticise—the damage that the Government's plans will do to local democracy or the damage that will be done to the balance in the public housing stock. It is difficult to pick the one to which one might take the strongest opposition, but in relation to local democracy it undoubtedly means that the district councils, which have been given the function of dealing with council housing, will have no say in what will happen to the stock that has been built up over the years.
      They have a duty to house the people living in their locality. They have a duty, which has been reinforced in recent years by the Housing (Homeless Persons) Act, to take care of those who have no home at all, but we are now finding that the stock of houses available to them may not be sufficient to deal with their statutory functions and their moral reponsibility.
      Most hon. Members accept that local government should have the maximum amount of control over the functions given to it. Of course, financial restrictions have prevented local authorities from having complete freedom. On occasion, there have been pressures and policies to build certain types of houses—pressures that perhaps are now bitterly regretted by both central Government and local authorities. Here, the Government have made substantial inroads into local democracy, and I do not think that their excuse that they are giving back rights to individuals will wash, compared with the difficulty, distortion and damage that they will do.
      9.15 pm
      Hon. Members who represent urban constituencies are aware that in many areas the balance in housing is not good at present. There are differences between one area and another. Areas such as Drumchapel, to which the hon. Member for Garscadden referred, are not popular. People go there largely because they have no option. Houses are available there,
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      and if people do not take them they do not have a house, but once they move into such areas they find it extremely difficult to get out again. Some areas are good and popular, and there is a tremendous pressure to move from areas that are not perceived to be good into those that are.
      One of the faults in our housing policy over the last 20 years has been that we have failed to build the sort of houses that make life easier for people. There are too few semi-detached and terraced houses, and too little housing with sensible living space. Instead, we have built battery-type housing, where people have to live close together, and if there are one or two anti-social families in a neighbourhood, life can be made hell for the other families there. Against that background, the Government's proposals will lead us into considerable difficulty.
      I have mentioned the difference between areas, the fact that certain houses are more popular than others, and the fact that walk-ups are probably the least popular of all houses. My right hon. Friend the Member for Glasgow, Craig-ton (Mr. Millan) said that in his constituency there were multi-storey blocks of flats which provided a high quality of housing.
      If there is a disparity between area and between class of house, there is also a disparity in respect of the size of houses. Often, families wish to move from three rooms to five rooms, or, in cases where families have grown up, the parents—or a widow or widower—wish to move from five rooms to three rooms. But they run into the problem of lack of availability of housing stock. There are too few smaller houses. Our population is getting older, and family sizes are smaller than they used to be. There is now an imbalance that has developed through birth trends or through the natural ageing process of the population, and it is causing trouble.
      There is also the problem of houses that are in high demand—for example, ground-floor flats. That type of accommodation is wanted by older people who do not want sheltered accommodation but also do not want to have to climb stairs. Those houses are competed for by people with medical priorities, because they cannot climb stairs. Because of the cutback in housing finance—the grim background

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      against which all these discussions are taking place—houses may be sold which will not then be available for people who otherwise want them.
      My main criticism of the Bill is that it will cause anarchy—if I may use that term—in the public housing sector. It will cause trouble, pain and anxiety for individuals. We should state clearly that although there are many good reasons why people should own their own homes, there is nothing wrong with people living in rented accommodation. That system has operated in Scotland for many years. It is perfectly respectable, and it has not been classified as social housing. There is a danger that if we begin to distort the situation—as may happen under this Bill—without the precautions that we wish to provide through the new clauses and amendments, we shall end up with welfare housing that is available only for those in the poorest circumstances and that has led to the creation of ghettos in countries such as the United States.
      Last Friday I received a delegation from the Midcraigie and Liniathen housing estate community association. It is an estate that does not have a community council, but now, thankfully, it has an active and growing community association. The delegation handed me the massive petition that I am holding, which is addressed to the city of Dundee district council. It contains a very impressive list of names, on about 150 sheets of paper, from a wide range of addresses. The significant thing about this petition, which comes from people who hope to move from those areas into areas that they deem to be better, and who wish to have a choice in the rented sector, is that in the preface to the petition the signatories are not opposing the sale of council houses. But what they say—and this is very valid—is this :
      "We the undersigned object to the local authority selling off the best of the city's housing stock. We believe that whilst people in this city are living in low standard houses, the local authority's obligation is not to sell off the best stock, but to keep the best stock and improve the standard of the rest of the housing stock."
      Those who are perhaps seeing the possibilities of a move disappear under this legislation have taken the line that it is the best stock that will be sold, and in that they are perfectly right.
      Mr. O'Neill: Does the hon. Member concede that his rhetoric might sound a lot less empty if those of us who have had experience of Scottish nationalist-controlled local authorities did not know that they have been prepared to sell any kind of house—good, bad or indifferent—to anyone who was prepared to buy it, without qualification?
      Mr. Wilson: I do not accept that as a general rule. There was one local authority that was prepared to sell. Many others were willing to sell, but only under protections that they considered necessary. The hon. Gentleman's point comes from a rather poisoned source, he holding—temporarily, I hope—a seat that was taken from the SNP. I have always noticed that those who are most sensitive are those who are rather worried about their future—otherwise they would never rise to the bait.
      I have quoted the terms of the petition which was brought to me from the Midcraigie and Liniathen community association. That association has put before the House the problem that will arise under the Bill. The Government have failed to recognise that one man's right to buy can lead to a loss for other tenants under the system.
      Mr. Norman Buchan: Good man.
      Mr. Wilson: I have been patronised by the hon. Member for Renfrewshire, West (Mr. Buchan) in the past, and I presume that I shall be patronised again.
      Mr. Bill Walker: I am very interested in the hon. Gentleman's comments about the Midcraigie and Liniathen community association. Is he suggesting that no one in that area will buy any of the houses there? If he is suggesting that, I can assure him that he has got the matter wrong. I grew up in that area. I still have friends living there. There are some who are interested in buying their homes in that area. [Interruption.]
      Mr. Wilson: Some individuals may well buy. I am not sure whether it is the hon. Gentleman's parents who are willing to buy and whether he is contributing to the funds in the way suggested by others or whether he wants to make a quick profit or a quick killing. I do not know. I know that professional advisers

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      might well tell their clients to be very careful about buying houses that might not easily resell.
      I support the new clause and the amendments. However, I want to make some comments on new clause 24, standing in my name and that of my right hon. Friend the Member for Western Isles (Mr. Stewart), which reads as follows :
      "' Any landlord affected by Section I hereof may apply to the Secretary of State for exemption from sale to tenants of any dwelling house or dwelling houses or any size or class of dwelling house on the grounds of shortage and on receipt of such application, the Secretary of State shall conduct such enquiry as shall be necessary and if it appears to him reasonable so to do, he shall have powers to grant the application in whole or in part.'."
      The new clause gives local authorities the right to make representations to the Secretary of State if they experience housing shortages. If the Secretary of State agrees that there is a shortage of such houses, and that to sell them would cause serious problems, he will have the power to grant that application, wholly or in part. He will have discretion and will also have the final say. A local authority could put forward a case. If the Secretary of State agreed that it was valid, he could grant the application. That would take away some of the frustrations and dangers that may result from the Bill. I hope that the Secretary of State will indicate whether that proposal is acceptable.
      An obstinate refusal to make a small concession to local authorities will cause confrontation. That confrontation will undoubtedly build up. If the Secretary of State is wise, he will accept that some form of flexibility should be built into the Bill in order to avoid confrontation and hard feelings. Above all, he should allow for the provision of justice and fairness within the public housing sector.
      Mr. William McKelvey: I wish to pay tribute to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). He made an illuminating and far-reaching speech. He was prepared to confess that although he had never been blind to the problems of council tenants, he represents a constituency in which 92 per cent. of the population live in council houses. Week after week he has attended constituency surgeries, and council tenants have enlightened
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      him about the problems facing them. When Government's legislate, they legislate across the board, irrespective of conditions in different districts. Such legislation can hurt many people. At least my hon. Friend showed that he was aware of that.
      I am opposed to the sale of council houses. Housing deficiencies still exist in Scotland. We still suffer from an acute housing crisis. If the Government are concerned about council houses and about looking after those who dwell in them, or wish to do so, they should inject a massive amount of cash into house building. I noticed that the Secretary of State nodded when the hon. Member for Dundee, East (Mr. Wilson) said that not enough proper houses had been built. We should build hundreds of thousands more houses. In Scotland, 150,000 houses are below standard. I am sure that not one of those houses will be sold. About 160,000 families are living in overcrowded conditions. They desire a better way of life and better housing. There are 100,000 people waiting to live in council houses. Perhaps there are districts in which houses are so plentiful that they can be sold, but I have not heard of any.
      My experience is not limited to a constituency or group of constituencies. I have had the privilege—and it is a privilege in Scotland—of having been a council tenant for all my life, with the exception of a brief period when I was first married. I then went into the private sector and lived in a virtual warren. I paid an excessive rent for a small room, with a box room attached.
      I have known the advantages and privileges of being a council house tenant, but I understand why people—when given bargains—wish to buy their houses. They are told that it is an opportunity that should be grasped, but the details are not pointed out. When they are, potential buyers are ashamed that the plum houses will be taken from Scotland's housing stock.
      The Opposition and the Secretary of State may argue that houses do not disappear. Of course they do not disappear. Houses do not collapse because they are bought. However, I warn potential tenants that some houses might collapse. Scottish council houses are rapidly deteriorating because of a lack of funds with which to do the necessary repairs.

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      9.30 pm
      The Bill removes from the pool of houses the desirable residences that people who are encapsulated in multi-storey blocks would like to have. I have had experience of multi-storey blocks as a councillor representing a ward consisting entirely of six multi-storey blocks, and there is not one problem relating to such blocks with which I am not familiar. The main concern of people with young families living in such blocks is to get out as quickly as possible. Desirable as a multi-storey block may be—and certainly it is high living to some people with a 130 ft. drop below them—it is not the best place for young children. Families with young children living in tower blocks want to transfer to semidetached areas. My constituency clinics are packed with people who plead for the opportunity to move into these areas. Young people are unable to buy houses. They certainly do not have the tenancy qualifications to buy a house of that kind, and if those houses are taken out of the pool the hopes of these people will be destroyed.
      While such conditions prevail I am totally and utterly opposed to the sale of council houses, and I shall push against the idea as hard as I can in my area. My local council has already taken the decision to freeze any movement towards the sale of council houses, and I applaud it for doing so.
      The trade union and Labour movement throughout the length and breadth of Scotland should be mobilised to resist, at whatever cost, the Government's policy on council houses. I say that in the knowledge that on the occasion that we pursued a similar course at Clay Cross, those who so valiantly stood out against that type of of legislation were betrayed by the trade union and Labour movement.
      Mr. Alex Pollock: Given the thinness of the numbers on the Labour Benches tonight, how does the hon. Member hope to mobilise Labour opinion?
      Mr. McKelvey: Considering the thinness of numbers on the Government Benches, I can confidently state that we are in a three to one majority at present. If we can mobilise our forces in Scotland
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      to the same degree, we shall march right over the Tories and their legislation.
      The fact that the provision of houses has to be determined by market forces will rule out all those young people living in conditions from which they wish to escape. Their only hope of escape is a massive cash injection into house building, so that the proper type of houses can be built. Council house sales will diminish the number of council houses available for families on the waiting list, despite the protestations to the contrary by the Secretary of State.
      Only the best houses will be sold. As I said, I was a councillor for an area with six multi-storey blocks, and no one ever came to me and said that he wished to purchase a flat in a multi-storey block. I should not wish to do so either. The share of the lift maintenance alone would put me off. I should like to see the figures of all those in multi-storey blocks, high rise flats or tenements who have applied to buy their own homes. I have looked at the list in Kilmarnock, but I could have picked the houses that would go up for sale before I saw it. Those up for sale were the most desirable. Every week in my constituency I deal with people with housing problems who want to move from the "walk-ups" and maisonettes to more desirable properties. They are aware of the dangers.
      Mr. Allen Adams: Last night the Government attempted to draw a red herring across the trail by suggesting that the problems of the Health Service in Scotland could be solved by administrative tampering. They are suggesting tonight that Scotland's housing problems can be solved by selling council houses, plus a wee bit of administrative tampering. The problem tonight is similar to that of last night. We need more money for the Health Service and for public sector building in Scotland. Conservative local authorities have a poor record over the past five years. In my area only three houses have been started, which illustrates the need for a massive house building programme. In some districts there are as many as 4,000 people on the waiting list. The need is for more houses and not administrative tampering.
      Mr. McKelvey: I agree.

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      The vast majority of working people in Scotland see council house sales not as further tampering, but, much more dangerously, as part of the Tory master plan to devastate Scotland's social services. The Tory Government want to put the boot in, especially in Scotland, because of the election results.
      It is disgraceful not to see more Scottish Conservative Members in the Chamber, and none of them appears to have anything to say in support of the Bill. If they had, I suspect that they say it tongue in cheek.
      Unless the Government leave themselves a loophole in the legislation, the people and authorities in Scotland will unite to attempt to destroy the legislation by force. The next Labour Government will repeal the provision to sell council houses. I hope that they will also introduce legislation to repurchase the houses that have been sold.
      Mr. Maxton: I have a sense of déjà vu. Almost exactly 13 months ago I raised this topic in my maiden speech, when I opposed the sale of council houses. I spoke on the matter again on Second Reading, and spent many weeks in Committee. [Interruption.] Conservative Members are laughing. They know that in Committee I participated at length. In Committee and tonight we have won the arguments. Unfortunately, we are likely to lose the votes.
      The new clauses and amendments are an attempt—possibly not a sufficiently large attempt—to alleviate the worst effects of the disastrous policy of selling council houses. For the bulk of my constituents the Government's policy is disastrous. Many of them live in large housing estates, built to alleviate the disastrous housing schemes erected during the Industrial Revolution. Mistakes were made. Most people who live in such circumstances have no wish to buy property there.
      Two of my constituents wrote recently to the Secretary of State to the effect that they did not wish to buy their homes in Castlemilk but that they were seeking a transfer to a better area in Glasgow. They fear that if council houses are sold in the better areas they will lose the opportunity to move. Their objection to the Bill is that it is socially divisive and that it will create ghettos. As my hon.
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      Friend the Member for Glasgow, Garscadden (Mr. Dewar) said, such people will lose their homes.
      One of my constituents, an elderly lady, has lived at Castlemilk since it was built 25 years ago. She wants a house in a more pleasant part of Glasgow. She received a letter from the housing department saying that she would have to have had a tenancy in Glasgow since 1938 to obtain a transfer. That is wrong. There are few houses in Glasgow to which such people can go.
      However, people have hope. If we destroy that hope we shall create a social condition which can only cause trouble. People will be forced to use undemocratic means to oppose policies at local and national level. We must be worried about that, but that is what can happen if we create such social divisiveness.
      The Government's policies will lead to a destruction of local democracy. Housing, which is the major function of local councils, will be taken away from them. Local authorities will not be able to plan for housing needs. Glasgow is a large district with a large council house population. The local authority must be able to plan for the needs of its existing citizens and to attract employment to the city. At present local authorities can build and offer local authority housing to people who move in to work.
      The right to buy is not limited to sitting tenants. If a person is attracted to Glasgow because there is work there and he has had a council house tenancy in any other part of Great Britain for more than five years he can walk into a council house in Glasgow one day and make an application to buy it the following day. That destroys the ability of a local authority to plan its housing in a proper manner. It also makes the job of local authority planning at a micro level difficult.
      9.45 pm
      There is the problem of repairs in multi-storey properties. How does a local authority ensure that the outside of the property is painted if 10 out of 100 flats in a multi-storey block have been sold? The same problem applies to tenement blocks in Glasgow. The local authority may decide that the outside of seven out of 10 properties, the other three having been

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      sold, require painting. Are the three that have been sold to be left unpainted? Does the local authority insist that the three owners pay for the work? Is the painting left until the three private owners have paid their share of the cost? If the work is carried out before payment is received, there is a chance that the local authority will never see the money. Or does the authority arrange for seven properties to be painted and for three to be left unpainted?
      For these reasons, I oppose the legislation. I am left with a slight doubt, however, about whether the exercise is part of a massive political fraud. We have spent months debating the legislation. At the end of the day, the number of council houses sold could be so small that the exercise will not be worthwhile. Many people, when they examine carefully the cost of buying a house in a tenement block, will have reservations. A house costing £20,000, with 50 per cent relief, will be available for £10,000. Those qualifying for full relief will probably be aged 47 or 48 and will probably have to pay off the mortgage by the age of 65. They will not, therefore, be granted the normal 25 years in which to make repayments.
      It is unusual for a mortgage company to allow a person to extend the mortgage beyond the age of 65. A loan of £10,000, at present interest rates, will cost, with tax relief, £100 or more a month. If the amount has to be repaid in less than 25 years, the cost will be more than £100 a month. In addition, there will be the cost of rates, which are at present included in rents, repair bills and insurance. The cost will amount to £130 or £140 a month, as opposed to present levels of £35 to £40 including rent, rates, insurance and repairs.
      When people are confronted by that prospect, they may decide not to buy. At the same time, however, the Government are applying pressure for rents to rise so fast that it will become economic for people to buy. This measure is either one of the most divisive ever introduced in Scotland or it is such a gigantic fraud that it will never be worthwhile. The Government are merely appeasing their own political consciences by introducing the Bill.
      Mr. Buchan: I do not often speak in housing debates. I have not spoken on this Bill previously, for a variety of reasons. I consider that there is sufficient expertise on the Opposition Benches. I am compelled to speak, however, because the social concepts inherent in this part of the Bill are among the nastiest and most divisive introduced into Scotland for a long time. They represent an attempt to express the dogmatism of the Tory Party, and their subsidiary purpose is to help with the financing of that party. Their effect will be to create a ghetto society even among working people.
      The hon. Member for Dundee, East (Mr. Wilson) said that a group of tenants had complained to him that only the good houses were being sold. I hope that he said to them "But of course. It is certainly not the fault of the local authority."
      The third aspect that I find unpleasant and distasteful is the way in which the Government have produced policies affecting local authorities and have then attempted to shift the blame for the consequences on to the authorities. A group of tenants have complained to their local Member about the local authority selling only the better houses, but, given the nature of the Government's legislation, that is all that an authority can do.
      If it is exceptional for me to speak on housing, it is equally exceptional for the borough of Kingussie to be the seat of revolution, yet it is from Badenock and Strathspey that the call has gone out to all other local authorities in Scotland to combine to object to the Government's behaviour.
      The Government have succeeded in uniting Tory, Liberal, SNP and Labour councillors in opposition to their policies. They have a remarkable record—divisiveness among working people and among local authorities and the turning of people against local authorities because of the actions of the Government.
      If the Government's policy is dogmatic, it is also mean and vindictive. It is mean because it will stretch to the crack of doom the housing lists that we are already facing. The sale of council houses is an attempt to save on the public sector borrowing requirement. It is not done in the interests of a housing policy, because

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      it is done in combination with a cutback on housing. The problem arises because of the unfairness involved in the sale of council houses, the financial background to the proposal and the cuts in building programmes.
      We see in the Government's economic policies massive destructive long-term effects caused by a short-term dogmatism, and we see the same results in the housing schemes of our cities. The Government are causing great damage by their policies of cutting back on house building and reducing public expenditure. They are also producing divisiveness and tensions because of their short-term dogmatism. All that will have long-term, massive and unhappy effects on the social fabric of Scotland.
      The Leader of the House has told Tory Members to realise that they are not involved in a dogmatic crusade. He could have fooled me. I see little other justification for their policy, although they do not seem to be getting anywhere near the Holy Land.
      The most interesting speech in the debate was that of my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar). He referred to his conversion on the subject. I am an inveterate opponent of the sale of council houses, as is my hon. Friend the Member for Kilmarnock (Mr. McKelvey). There is no justification for the policy in Scotland, where we are still short of 150,000 houses. There might be a remote case for the policy where a ghost town had been built and laid waste, though even there I could see little reason for it. There is certainly no justification for such a policy in the boroughs, towns and cities of Scotland.
      My hon. Friend the Member for Garscadden has changed his view because of his own experience and not because of any doctrinaire view. He used to be a moderate on the subject. He and I have argued about it and he has said that he saw no massive matter of principle involved. Now, on the precise basis of his own experience, my hon. Friend recognises-as Conservative Members do not—the problems in constituencies such as his own, where perhaps 90 per cent. of constituents are council house tenants. He recognises the divisiveness of Government policy
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      Those of us who have large clinics know the problem as well. People come to see us, and when asked if they have seen their local councillor they say "No". As Members of Parliament we tell them that we have no authority, but that if they will state their case we will do what we can—but there is litttle we can do unless we see that things are going badly wrong.
      What emerges from almost every other case is not simply that our constituents are without a house when they need one but that they nurse a sense of grievance if they think that others are jumping the queue. Time after time a constituent will say that he knows of people who have lived in an area for six months and have obtained a house. When the case is examined, that allegation is usually found to be true, but there is still a burning sense of grievance. If a situation is just, people on housing lists are willing to take their time, but if they believe it to be unjust they have a sense of grievance.
      That is precisely what will happen as a result of Government policy. That policy will create a "them and us" situation. There will no longer be simply grievance suspicions ; there will be grievance realities, because those people—all of them living in houses that they did not choose—have always hoped to reach their particular Holy Land of obtaining a house with a little bit for garden. Those tenants wish to make that kind of change, but the Government have frozen the situation and created total immobility among our council tenants. The worst areas will be hit and the best houses will be sold. In every possible way the Government are running down what should be a marvellous asset for our people.
      Various attempts have been made to deal with the situation. I think it was suggested in new clause 24 that where a case was made an inquiry should take place. The suggestion was made that we should create reserve areas in order to prevent the rapid rundown of other districts, and different solutions have been advanced in ameliorative clauses.
      I believe that if the local authorities get together to use their strength to defeat and thwart the will of the Government they will be serving the cause of

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      democracy and will prevent the causes of social tension in their areas. Democracy itself is being attacked by the Government. There is an element of fair play and equality within democracy. There is also the other element—that people who, by statute, have been democratically elected to look after the needs
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      of their communities find that democracy is being thwarted by the dogmatism of this Government. They are entitled to mobilise their strength and get the support of the trade unions and the working people of this country behind them in order to turn this Government off their tracks. The sooner that happens the better.
      Mr. Lambie: I support the new clauses and amendments under discussion, for the reasons put forward by my right hon. Friend the Member for Glasgow, Craig-ton (Mr. Millan). They allow the Government to draw back a little from the full implications of the Bill for Scotland.
      The Government may have the right to introduce such a measure in England, where they have a majority of Members of Parliament and where they won the last election without fear of contradiction, but they have no right to introduce such a Bill for Scotland where, at the last election, they obtained the votes of fewer than one in four people and where 44 Opposition Members were elected out of a total of 71 Members representing Scottish constituencies. [Interruption.] It is well seen that when one succeeds in hitting the Government on a sore spot by saying that they do not represent Scotland, Conservative Members forget their public school upbringing. They begin to roar and shout and bray, because they cannot justify their arguments.
      I ask Conservative Members to remember their English public school upbringing. If they want to intervene, let them stand up and do so. They should not roar from a sedentary position from the Front Bench.
      Mr. Ian Lang Mr. Ian Lang (Galloway) rose——
      Mr. Lambie: I am dealing only with the Government Front Bench now——
      It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Tenants' Rights, Etc. (Scotland) Bill may be proceeded with, though opposed, until any hour, and that the motion relating to European Community Institutions may be proceeded with, though opposed, until half-past Eleven o'clock or for one and a half hours after it has been entered upon, whichever is the later.—[Lord James Douglas-Hamilton.]

TENANTS' RIGHTS ETC. (SCOTLAND) BILL
Question again proposed, That the clause be read a Second time.
Mr. Lambie: The Government have no right to introduce such a Bill in Scotland. They are in a minority parliamentary position in Scotland and they represent very few district councils that are housing authorities in Scotland. At the local elections that took place on I May even the constituents of the Secretary of State for Scotland returned a Labour majority for the Kyle and Carrick district council, for the first time in its history. The Labour Party fought the election on the basis that if elected it would stop the sale of council houses.
The Secretary of State does not speak for the people of Scotland. He does not even speak for his own constituency. The district council within his constituency is now adopting the policy of stopping the sale of council houses. It is one of the authorities that will take up the fight against the Bill if it ever becomes an Act.
The Government should consider the new clause and the amendments, which are designed to introduce the element of flexibility that is needed in the Scottish context. In Scotland more than half the people remain in council houses. The Tory Government cannot get away with policies that they can get away with in England and Wales, where the minority stay in council houses. That is why the Government will build up trouble with local authorities, the trade union movement and hon. Members unless they listen to the ideas that have been advanced from the Opposition Benches.
This is an occasion that indicates that it was a disaster when we did not get a Scottish Assembly, and devolution. If we had been successful in setting up a Scottish Assembly, this situation would not have arisen and this debate would not have taken place. All our English colleagues who want us to keep quiet so that they may discuss other things would have had the Chamber to themselves tonight to discuss English or Weish matters if devolution had taken place.
It is on an occasion such as this that we recognise the different tradition of Scotland, how different traditions should

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be fostered within a Scottish Assembly and how a devolvement of power should take place from the House to such an Assembly. That is why the Government should listen to the arguments advanced by my right hon. and hon. Friends.
The Government have a precedent that they should follow. In the Local Government, Planning and Land (No. 2) Bill the Government, in introducing major changes in the rating and valuation system in England and Wales, have excluded Scotland. The major clauses do not concern themselves with Scotland. The Government, including the Secretary of State for Scotland, have introduced in that Bill the element of flexibility for which we are asking in the Bill before us.
Why do not the Government, as they have done in the Local Government, Planning and Land (No. 2) Bill, accept our amendments and enter into consultation with the local authorities? They did that on rating and valuation. Why are they being dogmatic on Scottish housing, when they chose to hide behind the coat tails of the Secretary of State for the Environment on the fundamental issues of local government finance and rating and valuation?
The Government have the answer. On many occasions when the local government Bill was considered in Committee I put the case to my English colleagues and Government Back Benchers that the Government and the Secretary of State for Scotland were being fair to the Scottish ratepayers and local authorities by not following blindly the policy that the arrogant Secretary of State for the Environment was carrying out in England and Wales. The Minister who led the Government team in Committee came to me privately and warned me that I was antagonising them too much. He said "If you do not watch what you are doing, you will get clauses to cover Scotland as well as England and Wales."
Mr. Deputy Speaker: Order. We must not discuss numerous other Bills. The hon. Gentleman is straying somewhat.
Mr. Lambie: It is good and reasonable to show a precedent at this moment, when the Government are not carrying out the policy that we are demanding and that is contained in the new clauses and amendments that we are now discussing.
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That is why I hope that the Secretary of State for Scotland will listen to the Minister with responsibility for industry in Scotland. He should widen his experience in the short time available before we take the decision. The Government should allow this measure, which provides for the selling off of council houses in Scotland, to be carried not by the votes of the Scottish Members of Parliament, the Scottish district councils and the people of Scotland, but by the votes of English and Weish Members of Parliament, who are outside waiting to come in to vote down Scottish housing and vote in support of the sale of council houses in Scotland.
Mr. Ernie Ross :: Listening to the debate, I think it would be wrong if I did not at least make the position of my party in Dundee quite clear, if it is not already clear to the Government. We said unequivocally that we would not sell council houses. We do not intend to sell council houses, whatever the cost. I do not expect my my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) to agree with me on this point. We shall certainly say that, morally, we campaigned and won an election. Having gained, during that election, an overwhelming majority from the people in Dundee on a campaign not to sell council houses, we do not intend to sell them.
We are taking part in the discussions on a Bill that can be best summed up as the steal of the century. That is exactly what the Bill means. It offers a bargain to those who are lucky enough to be sitting in the best houses, but it is an absolute disaster for the 30,000 tenants who would eventually move to those houses if they were not sold off.
The plan evolved by the local Tories would mean that thousands of tenants in Dundee would have to remain in their present houses without a chance of moving to better houses in a better area. It would mean that the city's best semidetached houses would be sold off at half price to those lucky enough to be living in them at the time. The Tories went further. They decided that anyone, at any stage, even if he moved in the day before yesterday, could buy his house at 50 per cent. of its cost. We find that despicable and unacceptable.
We believe that the existing houses, which were built by successive Labour

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administrations in Dundee, were handed down in trust by previous generations. We in Dundee will fight to the last to preserve them within our pool of council houses. The Tory plan would ensue that rents in the city would be forced up because of the loss of the rent pooling arrangement. We shall be asking the people in Dundee to go along with us. They gave us their overwhelming support in their election on 1 May and we shall work to carry out our promise.
The current arrangements for the sale of council houses in the Bill have been developed as part of a philosophy to reduce the role of the State in housing and to increase private expenditure on housing. Those on the Government Benches who advocate sales argue that a greater proportion of housing resources should be controlled and financed through private market mechanisms that ration houses according to income, occupation and rating. As Socialists, we must reject these values. The public sector, on the other hand, gives pecedence to need, household size, structure and housing circumstances. The public sector provides housing at standards that the majority of its tenants could not secure in the private market.
Council housing challenges the profit system. Because of this, the Tories and their property-owning groupings—solicitors, estate agents, architects and financiers—are continually seeking ways of undermining council housing. It was not by accident that the Tories created the illusion of Britain being a property-owning democracy. The Labour Party's programme sees housing based on need with siting, type, allocation and rent levels democratically decided. The Tory alternative sees housing based on the ability to bear the burden of 25 or 30 years of wildly fluctuating interest charges and speculative land and building prices, and for those unable to compete there is the council house dormitory estate, of which we have our own in Dundee. There is no rational doubt about what system gives the most hope to the vast majority of people.
I shall support the new clause and the amendments despite the fact that I do not particularly agree with them. They seek to ameliorate a Bill which, by its very nature, cannot be amended. The Bill must and can only be repealed. It
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will require more than this Bill to ensure that any council houses are sold in Dundee.
The Secretary for State for Scotland (Mr. George Younger): If the hon. Member for Dundee, West (Mr. Ross) will forgive me, I shall not go on to the subject of Dundee now. There is a later new clause on which it might be appropriate to mention that matter. I hope that the hon. Member will not think me discourteous.
I was extremely flattered to hear that the hon. Member for Central Ayrshire (Mr. Lambie) had been defending me so nobly in Committee on the Local Government, Planning and Land (No. 2) Bill. I cannot think of anyone who could do it better. As usual and as always, I am grateful to him.
I think that the hon. Gentleman's reasoning was confused. It sounded as though he should be away joining our old friend Jim Sillars, who has made his decision. If the logic of what the hon. Gentleman said meant anything it was that the previous Labour Government had no mandate to nationalise anything or to take any Socialist measures in England. The hon. Gentleman cannot have it both ways. It must be one way or the other. Perhaps he will think about that.
I should like to comment on the more general matters that have taken up much of the debate before getting on to the new clause. Somebody from outside who did not know all this would think from the debate that the present system of council housing operating in Scotland for more than half the population was perfect, marvellous, easy to run, satisfying to customers and tremendously easy and flexible in regard to all the arrangements.
Mr. Robert Hughes: Will the right hon. Gentleman give way?
Mr. Younger: I think that I had better get into my speech.
Mr. Hughes: On this point.
Mr. Younger: I had better get on with my speech.
Mr. Hughes Mr. Hughes rose——
Mr. Younger: I find from experience that if I give way every two minutes to

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everybody who wants to get in, it breaks up the continuity of what I want to say. I do not want to be discourteous. I always enjoy the hon. Gentleman's interventions, but perhaps he will let me get on.
Despite the fact that we had the impression created that everything was perfect, the hon. Member for Glasgow, Garscadden (Mr. Dewar) pointed out that people in our cities—certainly in Glasgow—have been waiting for many years in council houses allocated to them by bureaucrats years ago with little prospect of moving to houses that they would prefer elsewhere. What a system to be proud of!
We are trying to inject a little flexibility into a system that is so rigid that it forces that sort of fate on many thousands of our constituents. No hon. Member on either side of the House who has ever done constituency work will deny that there is a great deal of heart-searching, dissatisfaction and discontent among people in Scotland about the rigidity of the council house system as it has been practised in past years. That is the background.
10.15 pm
The second impression that could be gained by somebody from outside who is listening to the debate is that the Government are about to force all tenants to buy their council houses tomorrow morning at an exhorbitant price. That is an absolute parody of what is involved. We are giving council tenants the right to buy the homes in which they live, if they wish to do so. If the hon. Member for Glasgow, Cathcart (Mr. Maxton) was right when he said that no one would be able to afford to do that, that it was not a good deal, that it was a con, and that people should not wish to buy their houses, so be it. No one who does not think that it is a good deal needs to buy his house. Nobody should ask him to do so, and nobody will ask him. It is a question of giving a right to people who have been allocated a council house, in their fair turn, by the local authority under the rules that Opposition Members think are so marvellous. They are being given the right to buy their homes.
Mr. O'Neill: If a council tenant is being given the right to buy his home, why is that right not being extended to private sector property?
Mr. Younger: The private sector properties were not built with public money.
Mr. Maxton Mr. Maxton rose——
Mr. Younger: I think that I should continue. We are injecting a limited and rather small additional element of flexibility into a system that is so rigid that many find it highly unsatisfactory. It would be a little more convincing to hear Opposition Members pleading that all that they are asking for is a little modification or flexibility in a system that they do not like, but realise will be introduced. It would be more convincing to hear that argument if Labour-controlled authorities had shown the slightest keenness over the past five years, when this has been an issue, to meet the genuine aspirations of some tenants to own their own homes and to buy their council houses.
If it is the case that only certain council houses can be sold under the rather qualified scheme suggested by the right hon. Member for Glasgow, Craigton (Mr. Millan) and if it is the case that the Labour Party is asking only for some control and the ability to ensure that certain houses cannot be sold, that could have been practised during the years when the Labour Party were in office. In the Green Paper produced by the hon. Member for Glasgow, Provan (Mr. Brown) lip service was paid to the fact that it was quite acceptable for council houses to be sold. I welcomed that Green Paper. In spite of that, the definite, deliberate and continuing policy that was pursued in practice was that the previous Labour Administration refused consent for the sale of council houses all over Britain, and almost all the time. There were few exceptions to that. No one can deny it.
Mr. Hugh D. Brown: I do not mind some members of my Party misrepresenting the Green Paper, but I object to the Secretary of State for Scotland's doing so. We did not advocate the sale of council houses. We gave limited permission in accordance with a conference resolution, and we gave it within the context of the housing plan.
Mr. Younger: That is true. However, I am sure that the hon. Gentleman will not disagree with me when I say that the Green Paper recognised that there was a

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case for selling some council houses. That was all that I was saying. Had the spirit behind the new clauses been genuine, and had Labour Members wanted a certain derogation so that there would be control over the matter, that could have been practised. In fact, it was not, because the number of houses that were allowed to be sold was absolutely minute. Yet during all those years literally thousands of Scots wished to have the right to buy the homes in which they lived. Every survey that had been taken, in every possible way in which one could take it, demonstrated that fact. The Labour Party cannot argue about that.
Before dealing with the new clauses and amendments, I want to reinforce the facts about the policy. First, it has all to do with giving to a person who has already been allocated a house a right to buy that house if he so wishes. Therefore, I start from the position—this is different from the position adopted by Labour Members—of wanting to do my best to ensure that the right that we are giving is spread as widely as possible. It would be my wish, if it were possible, that every public sector tenant everywhere should have that right, because if one is giving rights, I feel that one should try to give them to everyone.
From what has been said by Labour Members, it is fair to say that they start from a quite different position. Their argument is that the best system of running housing is to have it centralised under the local authority and to have the local authority bureaucrats deciding where the houses are to be built and how and to whom they are to be allocated. Some Labour Members are honest enough to nod their heads. That is what they believe. It is a respectable point of view, although I think that it is absolutely wrong. Those are the two philosophies. We Conservatives are determined to try to give every tenant the right to buy his home if he wants to. Labour Members wish to perpetuate the bureaucratic system run by local authorities, which allocate houses to everyone.
Another thing that must be said is central to everything that has been argued by every Labour Member who has spoken. I refer to the assumption that having got a proposal to give people the right to buy their houses it follows, as
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night follows day that every house that is sold has disappeared from the system, cannot be used, is not helping a family, and is generally a write-off. What an absurd proposition.
Let us consider for a moment what happens. A family already allocated a home decides that it would like to buy it. It does so only if it wishes. Having bought it, that family continues to live in it. It still occupies it, but it is paying a mortgage and building up some savings in the process, instead of paying rent for ever more—rent that increases every year, whether there is a Labour Government or a Conservative Government.
It is not the case that at the moment when that family is given the right to buy its home, if it wishes, the home disappears because it is still housing a family, but let us suppose that after five years, when the transitional period has ended, the family decides to sell the house. Let us suppose that it is sold to a different family. That family also needs housing, and if it does not get a house in that way it will go on to the housing waiting list and the local authority will be responsible for housing it.
The only difference produced by this policy is that the family, or one replacing it, still lives in the house. Under the Labour Party system it will pay rent for ever more, whereas under our proposals it will have the chance of owning its own home. The Labour Party is not keen to give people a chance to own their own home in that way, and the Conservative Party is keen to give people that chance. That is the difference. That is why we believe that we are right to take these measures, and why we believe that this right should be spread to everyone.
As the right hon. Member for Craigton fairly said, these new clauses are not intended to change the principle of the Bill ; they are intended to impose some form of restriction on the sale that would be permitted in order to achieve—as the right hon. Gentleman would see it—some control by the Secretary of State of the day. One of the new clauses seeks to restrict by type of house, and the other seeks to restrict by area. Both those restrictions are unacceptable to me, in that they take away from some people the rights that should be available to all people, if possible.

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Secondly, the new clauses are openended. Under the scheme of the hon. Member for Edinburgh, Central (Mr. Cook) the housing plan would have been a sort of yardstick whereby a restriction could be brought in that it would require the 25 per cent. figure. It would be possible for any authority that wished to frustrate the matter to build up a huge alleged list of houses that needed to be built, and it would be easy to produce 25 per cent. that would not be started in the current year. That would be too open-ended, and I cannot agree to it.
The same applies to the schemes put forward by the hon. Member for Dundee, West and others. They are wide open to frustration by an authority—of which there are apparently plenty—that did not wish to operate the policy and that wished to find any loophole for frustrating it.
The right hon. Member for Craigton said much about multi-storey dwellings. It was a fair point to discuss, and it was not discussed in Committee. I accept that difficulties can arise over multi-storey flats in multi-ownership, but I do not think that a case can be made—nor was a case made—for those problems being insurmountable. All the evidence, not merely in this country but all over the world, is that this is a normal situation in every city. In almost every other city there are huge apartment blocks and tower blocks, where different flats are ownd by different people, and different houses and parts of houses are owned by different people.
The hon. Member for Garscadden, who is a lawyer, will know that there are well-established procedures for dealing with repairs, multi-ownership, and so on. I do not think that the right hon. Member for Craigton was wrong in raising the matter, or for canvassing the problem, but he was wrong to suggest that it was unusual and insoluble. In this country and in every other part of the Western world it is standard practice in every city. No one can deny that, and no one can say that it is impossible.
I have sympathy with the hon. Member for Inverness (Mr. Johnston) who raised the question of excluding listed buildings. No hon. Member would wish any harm to come to the standard or upkeep of listed buildings. The hon.
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Gentleman gave examples of such buildings in Jedburgh. There is no evidence that the considerable number of listed buildings in private ownership are worse looked after than the few in public ownership. I can give examples in both cases of good looking after and not-so-good looking after of such buildings. That alone is not a reason for excluding them. Indeed, some people would say that ownership of such listed buildings would probably lead people who wished to buy them to look after them extremely effectively.
There is also a safeguard, in that there are laws that prevent anything being done to cause the deterioration of listed buildings. It would also be open to the local authority, in selling such houses, to impose conditions of sale that would prevent their being spoiled or defaced in any way. The planning authority has control over the exterior of listed buildings, and it can prevent that.
Mr. David Steel: I am grateful to my hon. Friend the Member for Inverness (Mr. Johnston) for standing in for me while I was out of the Chamber. I think that my hon. Friend gave figures to show that in the case of a newly constructed scheme, which has won conservation awards, the costs are double the district valuer's present estimate. In that scheme the local authority has already declined to sell the shops to occupiers. It has power to do that, but it has no power to prevent the fragmentation of the scheme in terms of the houses. It seems to me that this matter needs to be looked at again.
10.30 pm
Mr. Younger: I shall certainly be glad to look at that point. It is well worth examining this matter to make sure that there is nothing detrimental to the upkeep of listed buildings. I think that we all take a responsible view of that matter.
The debate has been valuable. We have gone over much of the ground that in general has been gone over in the Bill. I think that the difference between the two sides of the House is one not of detail but of principle. We approach this problem from two different points of view. As I have said, we on the Government side feel that everyone possible should have the right to own his own home if

457
he can, and this is the only way that is put forward for him to do it. Opposition Members believe that the presumption should always be that the maximum number of people should be put into the public housing system and allocated their homes, and should be jolly thankful to be given them, and that is that.
That is not our philosophy. That is why I reject the general opposition to this proposal. I also reject the new clause and amendments, because all of them would interfere with the basic right of as many council tenants as possible to have this element of choice if they want it. That is the reason why the new clause and amendments are not acceptable. That is why I advise the House to support Government amendment No. 34 and to oppose the new clauses.
Mr. Millan: The right hon. Gentleman's description of Labour policy is such a travesty that I shall not even dignify it by answering the points that he has made. He knows that it is a travesty. I have never heard such a pathetic attempt to rebut new clauses as that to which we have just listened. If that is the standard that he brings to these debates, we are extremely thankful that he was not a member of the Committee.
The right hon. Gentleman has made no attempt to deal with the serious points made by a number of my hon. Friends and hon. Members of the other parties on the Opposition Benches, as well as by myself, on the new clauses. The Government have started off on the basis that they will concede nothing in the way of flexibility in these arrangements, however reasonable the case put up and however difficult the circumstances that are likely to arise if the Government maintain the Bill's present provisions.
There is no point in the right hon. Gentleman saying that he will consider the question of historic buildings, and the rest. I do not suppose for one moment that anything will be done about that important but comparatively detailed matter before the Bill reaches the statute book. The right hon. Gentleman has not dealt with the problems of multistorey buildings and many other specific problems that were drawn to the Government's attention in Committee. What he has done, quite deliberately, is to decide now to impose an inflexible system on local government in Scotland. He will compel Scottish local authorities to sell houses against their wishes, regardless of the local circumstances and regardless of the interests of the people living in the communities concerned.
As I said in my opening remarks, the right hon. Gentleman will produce considerable bitterness among local authorities, and confrontation with them. He is extremely unwise to adopt this attitude. It is obvious that nothing that we say in this debate on Report will change the Government's determination on this matter.
The right hon. Gentleman will live to regret the day that he turned down this last opportunity to introduce even the most minimal and commonsense element of flexibility into the Bill. I can only advise my hon. Friends, with considerable anger but also considerable regret, because of the damage that this legislation will do to housing in Scotland, to vote for the new clause. I hope, Mr. Deputy Speaker, that when we reach amendment No. 39 you will allow us a separate vote.
Question put, That the clause be read a Second time :—
The House divided : Ayes 218, Noes 277.

Division No. 352]

AYES

[10.34 pm

Abse, Leo

Booth, Rt Hon Albert

Clark, Dr David (South Shields)

Adams, Allen

Boothroyd, Miss Betty

Cocks, Rt Hon Michael (Bristol S)

Allaun, Frank

Bottomley, Rt Hon Arthur (M'brough)

Cohen, Stanley

Anderson, Donald

Bradley, Tom

Coleman, Donald

Archer, Rt Hon Peter

Bray, Dr Jeremy

Concannon, Rt Hon J. D.

Armstrong, Rt Hon Ernest

Brown, Hugh D. (Provan)

Conlan, Bernard

Ashley, Rt Hon Jack

Brown, Ronald W. (Hackney S)

Cook, Robin F.

Ashton, Joe

Brown, Ron (Edinburgh, Leith)

Cowans, Harry

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

Buchan, Norman

Cox, Tom (Wandsworth, Tooting)

Bagier, Gordon A. T.

Callaghan, Jim (Middleton & P)

Crowthsr, J. S.

Barnett, Guy (Greenwich)

Campbell, lan

Cryer, Bob

Barnett, Rt Hon Joel (Heywood)

Campbell-Savours, Dale

Cunliffe, Lawrence

Beith, A. J.

Cant, R. B.

Cunningham, George (Islington S)

Bennett, Andrew (Stockport N)

Carter-Jones, Lewis

Cunningham, Dr John (Whitehaven)

Bidwell, Sydney

Cartwright, John

Dalyell, Tarn

Davidson, Arthur

Janner, Hon Greville

Roberts, Gwilym (Cannock)

Davies, Rt Hon Denzil (Llanelli)

Jay, Rt Hon Douglas

Robertson, George

Davies, Ifor (Gower)

John, Brynmor

Rodgers, Rt Hon William

Davis, Clinton, (Hackney Central)

Johnson, James (Hull West)

Rooker, J. W.

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

Johnson, Walter (Derby South)

Ross, Ernest (Dundee West)

Deakins, Erie

Johnston, Russell (Inverness)

Rowlands, Ted

Dewar, Donald

Jones, Rt Hon Alec (Rhondda)

Ryman, John

Dixon, Donald

Jones, Barry (East Flint)

Sandelson, Neville

Dobson, Frank

Jones, Dan (Burnley)

Sever, John

Dormant), Jack

Kaufman, Rt Hon Gerald

Sheerman, Barry

Douglas, Dick

Kilfedder, James A.

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

Douglas-Mann, Bruce

Kilroy-Sllk, Robert

Shore, Rt Hon Peter (Step and Pop)

Dubs, Alfred

Lambie, David

Short, Mrs Renée

Duffy, A. E. P.

Lamborn, Harry

Silkin, Rt Hon John (Deptford)

Dunn, James A. (Liverpool, Kirkdale)

Leadbitter, Ted

Silkin, Rt Hon S. C. (Dulwich)

Dunnett, Jack

Lestor, Miss Joan (Eton & Slough)

Silverman, Julius

Dunwoody, Mrs Gwyneth

Lewis, Ron (Carlisle)

Skinner, Dennis

Eastham, Ken

Lofthouse, Geoffrey

Smith, Rt Hon J. (North Lanarkshire)

Ellis, Raymond (NE Derbyshire)

Lyon, Alexander (York)

Snape, Peter

English, Michael

Lyons, Edward (Bradford West)

Soley, Clive

Evans, loan (Aberdare)

Mabon, Rt Hon Dr J. Dickson

Spearing, Nigel

Evans, John (Newton)

McCartney, Hugh

Springs, Leslie

Ewlng, Harry

McDonald, Dr Oonagh

Steel, Rt Hon David

Field, Frank

McKay, Allen (Penistone)

Stewart, Rt Hon Donald (W Isles)

Fitch, Alan

McKelvey, William

Stott, Roger

Flannery, Martin

Maclennan, Robert

Strang, Gavin

Fletcher, Ted (Darlington)

Magee, Bryan

Straw, Jack

Foot, Rt Hon Michael

Mark", Kenneth

Summerskill, Hon Dr Shirley

Forrester, John

Marshall, Jim (Leicester South)

Taylor, Mrs Ann (Bolton West)

Foster, Derek

Mason, Rt Hon Roy

Thomas, Jeffrey (Abertillery)

Foulkes, George

Maxton, John

Thomas, Mike (Newcastle East)

Fraser, John (Lambeth, Norwood)

Maynard, Miss Joan

Thomas, Dr Roger (Carmarthen)

Freeson, Rt Hon Reginald

Meacher, Michael

Thorne, Stan (Preston South)

Garrett, John (Norwich S)

Millan, Rt Hon Bruce

Tilley, John

George, Bruce

Miller, Dr M. S. (Eas Kilbride)

Tinn, James

Ginsburg, David

Mitchell, Austin (Grimsby)

Torney, Tom

Graham, Ted

Mitchell, R. C. (Soton, lichen)

Wainwright, Richard (Colne Valley)

Grant, George (Morpeth)

Morris, Rt Hon Alfred (Wythenshawe)

Walker, Rt Hon Harold (Doncaster)

Grant, John (Islington C)

Morris, Rt Hon Charles (Openshaw)

Watkins, David

Grimond, Rt Kon J.

Morris, Rt Hon John (Aberavon)

Weetch, Ken

Hamilton, James (Bothwell)

Movie, Rt Hon Roland

Wellbeloved, James

Hamilton, W. W. (Central Fife)

Newens, Stanley

Weish, Michael

Hardy, Peter

Oakes, Rt Hon Gordon

While, Frank R.(Bury & Radcliffe)

Harrison, Rt Hon Walter

Ogden, Eric

While, James (Glasgow, Pollok)

Hart, Rt Hon Dame Judith

O'Halloran, Michael

Whitehead, Phillip

Hattersley, Rt Hon Roy

O'Neill, Martin

Whitlock, William

Haynes, Frank

Owen, Rt Hon Dr David

Wigley, Dafydd

Hogg, Norman (E Dunbartonshire)

Palmer, Arthur

Willey, Rt Hon Frederick

Holland, Stuart (L'beth, Vauxhall)

Park, George

Williams, Rt Hon Alan (Swansea W)

Home Robertson, John

Parry, Robert

Wilson, Gordon (Dundee East)

Homewood, William

Pavitt, Laurie

Wilson, William (Coventry SE)

Hooley, Frank

Penhaligon, David

Winnlck, David

Horam, John

Powell, Raymond (Ogmore)

Woodall, Alec

Howell, Rt Hon Den's (B'ham, Sm H)

Prescott, John

Woolmer, Kenneth

Howells, Geraint

Race, Reg

Young, David (Bolton East)

Huckfield, Lea

Radice, Giles

Hughes, Mark (Durham)

Rees, Rt Hon Merlyn (Leeds South)

I ELLERS FOR THE AYES :

Hughes, Robert (Aberdeen North)

Roberts, Allan (Bootle)

Mr. Joseph Dean and

Hughes, Roy (Newport)

Roberts, Ernest (Hackney North)

Mr. George Morton.

NOES

Adley, Robert

Boyson, Dr Rhodes

Churchill, W. S.

Aitken, Jonathan

Braine, Sir Bernard

Clark, Hon Alan (Plymouth, Sutton)

Alexander, Richard

Bright, Graham

Clark, Sir William (Croydon South)

Amery, fit Hon Julian

Brinton, Tim

Clarke, Kenneth (Rushcliffe)

Arnold, Tom

Brittan, Leon

Clegg, Sir Walter

Aspinwall, Jack

Brocklebank-Fowler, Christopher

Cockeram, Eric

Atkins, Rt Hon H. (Spelthorne)

Brooke, Hon Peter

Colvin, Michael

Atkins, Robert (Preston North)

Brown, Michael (Brlgg & Sc'thorpe)

Cope, John

Atkinson, David (B'mouth, East)

Browne, John (Winchester)

Cormack, Patrick

Baker, Kenneth (St. Marylebone)

Bruce-Gardyne, John

Corrie, John

Baker, Nicholas (North Dorset)

Buck, Antony

Costain, A. P.

Banks, Robert

Budgen, Nick

Cranborne, Viscount

Bell, Sir Ronald

Bulmer, Esmond

Critchley, Julian

Bendall, Vivian

Burden, F. A.

Dean, Paul (North Somerset)

Benyon, Thomas (Abingdon)

Butcher, John

Dickens, Geoffrey

Best, Keith

Butler, Hon Adam

Dorrell, Stephen

Bevan, David Gilroy

Cadbury, Jocelyn

Douglas-Hamilton, Lord James

Bitten, Rt Hon John

Carlisle, John (Luton West)

Dover, Denshore

Biggs-Davison, John

Carlisle, Kenneth (Lincoln)

du Cann, Rt Hon Edward

Blackburn, John

Carlisle, Rt Hon Mark (Runcorn)

Dunn, Robert (Dartford)

Body, Richard

Chalker, Mrs. Lynda

Durant, Tony

Bonsor, Sir Nicholas

Channon, Paul

Eden, Rt Hon Sir John

Boscawen, Hon Robert

Chapman, Sydney

Edwards, Rt Hon N. (Pembroke)

460

461

Eggar, Timothy

Lee, John

Ridley, Hon Nicholas

Elliott, Sir William

Lennox-Boyd, Hon Mark

Ridsdale, Julian

Emery, Peter

Lewis, Kenneth (Rutland)

Rifkind, Malcolm

Fairbairn, Nicholas

Lloyd, Peter (Fareham)

Roberts, Michael (Cardiff NW)

Fairgrieve, Russell

Loveridge, John

Roberts, Wyn (Conway)

Faith, Mrs Sheila

Lyell, Nicholas

Robinson, Peter (Belfast East)

Farr, John

McCrindle, Robert

Rossl, Hugh

Fenner, Mrs Peggy

Macfarlane, Nell

Royle, Sir Anthony

Finsberg, Geoffrey

MacGregor, John

Seinsbury, Hon Timothy

Fisher, Sir Nigel

MacKay, John (Argyll)

Scott, Nicholas

Fletcher, Alexander (Edinburgh N)

Macmillan, Rt Hon M. (Farnham)

Shaw, Giles (Pudsey)

Fletcher-Cooke, Charles

McNair-Wilson, Michael (Newbury)

Shaw, Michael (Scarborough)

Fookes, Miss Janet

McNair-Wilson, Patrick (New Forest)

Shelton, William (Streatham)

Fowler, Rt Hon Norman

McQuarrie, Albert

Shepherd, Colin (Hereford)

Fox, Marcus

Madel, David

Shepherd, Richard (Aldridge-Br'hills)

Fraser, Rt Hon H. (Stafford & St)

Major, John

Silvester Fred

Fry, Peter

Marland, Paul

Sims, Roger

Gardner, Edward (South Fylde")

Marlow, Tony

Skeel, T. H. H.

Garel-Jones, Tristan

Marten, Nell (Banbury)

Smith, Dudley (War. and Leam'ton)

Gilmour, Rt Hon Sir Ian

Mates, Michael

Speed, Keith

Glyn, Dr Alan

Mather, Carol

Spence, John

Goodhew, Victor Goodlad, Alastair

Maude, Rt Hon Angus Mawby, Ray

Spicer, Michael (S Worcestershire) Squire, Robin

Gow, Ian

Mawhlnney, Dr Brian

Stanbrook, Ivor

Gower, Sir Raymond

Maxwell-Hyslop, Robin

Stanley, John

Grant, Anthony (Harrow C)

Mayhew, Patrick

Steen, Anthony

Gray, Hamish

Mellor, David

Stevens, Martin

Greenway, Harry

Meyer, Sir Anthony

Stewart, Ian (Hitchin)

Grieve, Percy

Miller, Hal (Bromsgrove & Redditch

Stewart, John (East Renfrewshire)

Griffiths, Eldon (Bury St Edmunds)

Mills, lain (Menriden)

Stokes, John

Griffiths, Peter (Portsmouth N)

Mills, Peter (West Devon)

Stradling Thomas, J.

Grist, Ian

Miscampbell, Norman

Grylis, Michael

Moata, Roger

Tapsell, Peter

Gummer, John Selwyn

Monro, Hector

Taylor, Teddy (Southend East)

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

Montgomery, Fergus

Tebbit, Norman

Hamilton, Michael (Salisbury)

Morris, Michael (Northampton, Sin)

Temple-Morris, Peter

Hampson, Dr Keith

Morrison, Hon Charles (Devizes)

Thomas, Rt Hon Peter (Hendon S)

Hannam, John

Morrison, Hon Peter (City of Chester)

Thompson, Donald

Haseihurst, Alan

Mudd, David

Thorne, Nell (Ilford South)

Hastings, Stephen

Murphy, Christopher

Thornton, Malcolm

Havers, Rt Hon Sir Michael

Myles, David

Townsend, Cyril D. (Bexleyheath)

Hawkins, Paul

Neale, Gerrard

Trippier, David

Hawksley, Warren

Needham, Richard

Trouer, Neville

Hayhoe, Barney

Nelson, Anthony

van Straubenzee, W. R.

Heddle, John

Neubert, Michael

Vaughan, Dr Gerard

Henderson, Barry

Newton, Tony

Viggers, Peter

Heseltine, Rt Hon Michael

Nott, Rt Hon John

Waddington, David

Hogg, Hon Douglas (Grantham)

Onslow, Cranley

Wakeham, John

Holland, Philip (Carlton)

Page, Rt Hon Sir R. Graham

Waldegrave, Hon William

Hooson, Tom

Page, Richard (SW Hertfordshire)

Walker, Bill (Perth & Perthshire)

Howell, Rt Hon David (Guildford)

Parkinson, Cecil

Walker-Smith, Rt Hon Sir Derek

Howell, Ralph (North Norfolk)

Parris, Mathew

Waller, Gary

Hunt, David (Wirral)

Patten, Christopher (Bath)

Walters, Dennis

Hunt, John (Ravensbourne)

Patten, John (Oxford)

Ward, John

Hurd, Hon Douglas

Pattle, Geoffrey

Warren, Kennth

Irving, Charles (Cheltenham)

Pawsey, James

Wells, John (Maidstone)

Jenkin, Rt Hon Patrick

Peyton, Rt Hon John

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

Johnson Smith, Geoffrey

Pink, R. Bonner

Wheeler, John

Jopling, Rt Hon Michael

Pollock, Alexander

Whitelaw, Rt Hon William

Kaberry, Sir Donald

Porter, George

Whitney, Raymond

Kershaw, Anthony

Prentice, Rt Hon Reg

Wickenden, Keith

Kimball, Marcus

Price, David (Eastleigh)

Wiggin, Jerry

King, Rt Hon Tom

Prior, Rt Hon James

Wilkinson, John

Knight, Mrs Jill

Proctor, K. Harvey

Winterton, Nicholas

Knox, David

Pym, Rt Hon Francis

Wolfson, Mark

Lamont, Norman

Raison, Timothy

Young, Sir George (Acton)

Lang, Ian

Rathbone, Tim

Younger, Rt Hon George

Langford-Holt, Sir John

Rees, Peter (Dover and Deal)

Latham, Michael

Rees-Davies, W. R.

TELLERS FOR THE NOES :

Lawrence, Ivan

Renton, Tim

Mr. Spencer Le Marchant and

Lawson, Nigel

Rhodes James, Robert

Mr Anthony Berry.

Question accordingly negatived.

TENANTS' RIGHTS ETC. (SCOTLAND) BILL
  New Clause 22

    REPEAL OF SECTION 10A(3) OF HOUSING (SCOTLAND) ACT 1974
    ' Section 10A(3) of the Housing (Scotland) Act 1974 is hereby repealed.'—[Mr. Cook.]
    Brought up, and read the First time.
    Mr. Cook: I beg to move, That the clause be read a Second time.
    The clause repeats the terms of an amendment that I moved when we considered the Housing (Financial Provisions) (Scotland) Bill in 1978. As some hon. Members are present who did not sit on the Committee, including the Minister with responsibility for housing, I

    463
    may be forgiven for giving some background to the nature of the new clause and the amendment, that I moved two years ago, and what it would achieve.
    In the course of the passage of the 1978 Act, the previous Labour Government created a new repairs grant that was available to owners of property, not necessarily within a housing action area, in order to assist them to carry out improvements to their property. It was aimed at repairs that are desperately required, in tenemental areas, to stairs, roofs and, where necessary, sound proofing. There is enough background noise in the Chamber at the moment to merit some sound proofing here.
    The trouble is that the 1978 Act, as well as intending the repairs grant to be an incentive to encourage owners to carry out repairs, particularly to the mutual parts of the property, applied a means test for eligibility for the grant. This is objectionable, because there arises a confusion of two separate principles. The grant attempts to provide an incentive to owners to carry out repairs while carrying out an income support function in combating the hardship that would arise among owners faced with carrying out repairs without assistance from public funds.
    That confusion of purpose is undesirable. It defeats the object of the whole exercise. If the object is to provide an incentive to owners to carry out repairs, the incentive should be provided equally to all owners irrespective of whether they can satisfy a test of hardship. The terms of the statute refer to hardship. They do not seek simply to exclude those who are comfortably off and can afford to carry out the repairs.
    The grants are confined solely to the small number of owners who can establish that they are unable to pay the bill without hardship. The trouble is that the provision has frustrated the purpose of the grants to provide an incentive and has not provided the stimulus for repair of tenement areas that is desperately required. In providing for the test of hardship, the Government, at the time, were short-sighted. If the Government resist this amendment they will be equally short-sighted. In the longer run, there will be real savings to the public purse if the present owners of tenement areas
    464
    can be persuaded to carry out reasonable maintenance.
    Improvement grants were created in order to encourage owners to improve their property so that the property did not decay into a slum that would have to be cleared with the result that the owners would be rehoused at far greater expense to the public purse than arises from the provision of improvement grants as an incentive to the owners to avoid that situation. In five or six years' experience of operating the housing action areas it has become clear that the threat to tenemental areas arises not so much from lack of internal approvals as from the crumbling structure of the tenements and faults in the drains and the roofs, which threaten the long-term stability of the tenements.
    It is anomalous that improvement grants should continue to be made available for internal improvements that are not subject to means test—it is appreciated that such a test would frustrate the incentive—although a grant is not provided for repairs to the mutual parts, essential to the stability of the building, without a means test.
    Other difficulties have flowed from a means test in a repair grant intended to provide an incentive. The first is that the test of hardship is left to be defined by the local authority. That is unsatisfactory, and amounts to passing the buck of a decision to the local authority. It is particularly unsatisfactory at a time when housing authorities are no longer the social work authorities and have no staff or expertise to make a judgment on what is hardship and what is the right level of income support.
    More seriously, it is difficult for a local authority to apply the test of hardship in connection with a grant that relates to repairs that may stretch over one or two years. It is comparatively easy to apply a test of hardship in assessing income for the purposes of supplementary benefit, rent allowances or rebates, because those calculations are done on a week-to-week basis, depending on the income of the claimant in the week of application. But with repair grants, the owner applies for a grant, receives approval, and then sets out on the lengthy business of obtaining contractors, persuading them to start work, getting the work completed satisfactorily, having it inspected by the local authority and persuading the authority to

    465
    pay the bill. That process can take anything up to two years.
    Mr. McQuarrie: Rubbish.
    Mr. Cook: It is not rubbish. I have considerable experience of the difficulties involved.
    Mr. McQuarrie: So have I.
    Mr. Cook: I do not deny that the hon. Gentleman has considerable experience. I merely assert that I have considerable experience of the problems of owners in tenement areas who seek to get repairs carried out. I shall refer later to a case that has been going on for three years, where the work has still not yet started.
    The process can take two years and at the end the income of the owner can be radically different from his income when he started on the process two years earlier. In Edinburgh there have been cases of undergraduates who owned properties in tenemental areas applying for repair and improvement grants while they were students but who, when the point of payment came round, had qualified and were earning reasonable salaries. That poses for the local authority problems that do not arise in any other test of means applied for income support functions.
    A number of practical problems have arisen from the conflation of the purposes of a repairs grant as an incentive for repairs to be carried out and as an income support because it is means tested. That is why I sought to delete the provision from the repairs grant proposed by the Labour Government two years ago. The attempt commanded support that went wider than merely the Labour Benches. A letter from COSLA to all members of the Committee indicated that it supported the deletion of the test of means
    "on the grounds that the purpose of a repairs grant should be to preserve the property and that the financial position of the applicant should not be relevant in considering an application for grant."
    The hon. Member for Southend, East (Mr. Taylor), as he is in his new translation, was the Opposition spokesman on the Committee. He said :
    "it worries me that there is no standard grant for repairs. There is a standard grant for improvements which everyone, irrespective of income, can get, and that undoubtedly encourages people to apply for improvement grants and to undertake improvements. I think that there is a case for having a modest standard
    466
    repair grant which would be available to everyone. That would undoubtedly result in a greater incentive to carry out repairs."—[Official Report, First Scottish Standing Committee. 2 February 1978 ; c. 237.]
    Of course, it is a favourite tease of hon. Members to produce quotations made by Opposition spokesmen that they are not carrying out in government, but there is considerable force in the views expressed by the hon. Member for Southend, East.
    We can now see what has happened in the two years since we deliberated in that Committee. We must accept that the uptake of the repairs grant has been appalling. If hon. Members ask their local directors of housing and directors of building control they will receive the almost unanimous advice that the uptake of the repairs grant has been derisory. The simple reason is that the grant applies only to those who satisfy the test of hardship. In any tenement that is likely to apply to only two or three of the owners. Those owners can obtain a grant to carry out repairs, and may be willing, indeed enthusiastic, to do so, but they will be unable to persuade other owners in the tenement, who will get no grant, to carry out repairs.
    As a result, few grants have been made under the repairs grant provision and, therefore, the state of the roofs, the stair wells and the drains of the tenements in our inner urban areas is, arguably, worse than it was two years ago when we made this provision.
    11 pm
    The longer we delay providing proper, reasonable provision from the public purse to encourage investment in the repair and maintenance of those buildings the faster they will continue to crumble. We are laying up for ourselves a substantial bill in the future.
    I accept that if my amendment were carried there would be a modest increase in public expenditure. It would not be that much, because one of the problems facing directors of building control at present is the enormous growth of bad debts. At the end of the day it is those directors who have to authorise the carrying out of the essential roof repairs in default of the owners, and they frequently find it very difficult to recoup the expense.
    The cost to the public purse would not be a gross cost. It could be set against the cost at present incurred by

    467
    the inability to recover bad debts. In the longer run any public expenditure that we undertake in this context will be more than recouped in the investment that it will represent in giving a longer life to those tenement areas. If we fail to take that step now I must warn the House, from what I see in my constituency every weekend, that it is only a matter of time before we are faced with another major spasm of demolition such as we faced in the 1960s. That will represent a far greater cost to the public purse than the modest change that I am now proposing in order to forestall that situation.
    Mr. Rifkind: I am sure that the hon. Gentleman will agree that the repair and maintenance of property must continue primarily to be the responsibility of the owner of the property. That is not a particularly radical proposition, but I am sure that it will have the agreement of the whole House. The hon. Gentleman will also accept that the effect of his amendment, if it were to be approved, would remove any question whether the applicant for a grant requires financial help or whether he could carry out the necessary work without the grant.
    I accept that there are individual cases where the view on the question whether hardship would be caused if a grant were not made might be debatable and doubtful. I am happy to look at the general question that the hon. Gentleman has raised—whether the way in which the grant is implemented in various parts of Scotland could be improved, and where there are particular difficulties, but I cannot accept his amendment, because that would make the grant available irrespective of the needs of the applicant. I shall consider the specific points raised to see whether the application of the system can be improved.
    Mr. Cook: I put it to the Minister that his Department encourages local authorities to disburse improvement grants daily that are not in any way means tested. We accept that as a necessary price in order to provide the incentive to owners to improve their property.
    There is no test of income for the 50 per cent. improvement grant. I complain about the anomalous position that the test of income is applied to the repairs
    468
    grant, which is copied from the same provisions as those for the improvement grant. I find that unsatisfactory. It is not a matter of some local authorities interpreting the provisions in an unduly harsh way. By and large, local authorities try to make a go of it, but as it stands the provision is nonsensical.
    The Minister said that the responsibility for maintenance must primarily be that of the owner, and that this measure is intended to assist only those who experience hardship. But those who may suffer hardship, pass the test, apply for the grant and are pronounced to be eligible for it, find that other owners who are not eligible will not join in the repair work. Thus, nobody gets the grant. That is why there has been such a meagre uptake.
    If the Minister wishes to rescue this repairs grant provision from remaining other than a dead letter in housing law he will have seriously to amend it. He should consider the matter soon and look with favour upon the issue being raised in another place. One of our colleagues there might be motivated to raise the matter. By the time that the issue is raised in another place the Government may have given more thought to the matter, reviewed the experience of the past two years and come to the same conclusion that has already been reached by every local authority administering it, which is that, as it stands, the provision is profoundly unsatisfactory.
    Mr. Millan: Some of the arguments of my hon. Friend the Member for Edinburgh, Central (Mr. Cook) are valid, but basically I accept what the Minister said. There is a difficulty in saying that the repairs grant should be paid regardless of the means of the owner. The hon. Gentleman spoke of the possibility of a standard grant of a fairly modest amount. That possibility is worth considering. If the Minister is not able to go the whole way I hope that he will give further thought to a standard grant of the sort that he indicated. It would not be an open-ended commitment, and the public expenditure involved would be limited. It might lubricate the machinery in certain instances.
    Mr. Rifkind: There may be a case for arguing that the availability of the improvement grant, irrespective of need, is

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    itself an anomaly. That is no argument for extending the anomaly as the hon. Member for Edinburgh, Central (Mr. Cook) urges. I have indicated that I am happy to consider the hon. Gentleman's argument and the suggestion of the right hon. Member for Glasgow, Craigton (Mr. Millan). I see no case for removing the basis of need as the criterion on which the grant is paid. I am glad that the right hon. Gentleman recognises some strength in that position.
    Mr. Cook: I beg to ask leave to withdraw the motion.
    Motion and clause, by leave, withdrawn.

  New Clause 25

    INDEMNITY OF TENANTS
    Where prior to this Act a landlord has invited a public sector tenant to purchase the dwelling house of which he is tenant and where the tenant has made a formal application to purchase the dwelling house and paid any fees or expenses solicited by the landlord and where the landlord has unilaterally revoked the intended sale before a contract has been entered into, the landlord shall repay to the tenant any fees or expenses outlaid by the tenant to the landlord and shall indemnify the tenant against any reasonable loan, survey and legal expenses incurred by the tenant in relation to the revoked purchase.'.—[Mr. Gordon Wilson.]
    Brought up, and read the First time.
    Mr. Gordon Wilson: I beg to move, That the clause be read a Second time.
    The clause raises an issue of principle for tenants who have been caught and driven under by the political steamroller or involved in personal loss for reasons for which they are not at fault.
    I shall read the clause because it sets out a sequence of events that has taken place. I suggest that the terms of the clause will almost meet with agreement on that ground alone. It states :
    "Where prior to this Act a landlord has invited a public sector tenant to purchase the dwelling house of which he is tenant and where the tenant has made a formal application to purchase the dwelling house and paid any fees or expenses solicited by the landlord and where the landlord has unilaterally revoked the intended sale before a contract has been entered into, the landlord shall repay to the tenant any fees or expenses outlaid by the tenant to the landlord and shall indemnify the tenant against any reasonable loan, survey and legal expenses incurred by the tenant in relation to the revoked purchase."
    The background to the clause is that prior to the recent local elections certain
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    local authorities approached their tenants and offered to sell houses which were occupied by the tenants to the tenants. On the strength of that they issued application forms to the tenants who came forward. In some instances they invited tenants to pay deposits to indicate a serious interest. In other instances they were invited to pay loan fees or survey fees where a valuation was required. Where a contract or missive of purchase was entered into, that was the end of the matter. There was a legal contract that could be enforceable.
    After the local elections there was a change of policy in at least one local authority. I am content to argue the issue as much in general terms as in the particular. However, the Dundee district council revoked the intended sales by a political decision. No one can doubt that as the elected local authority it was entitled to do so. However, I question whether it was correct in taking the action that it did.
    A corporate entity such as a local authority is a continuing body, a corporation, although it may change hands in political terms. If that body has encouraged people to enter into intended sales of houses under a previous management, it should not apply its change of policy to those who have been caught up with the previous administration. The events in Dundee, which were repeated in other areas, and the change of policy became retrospective.
    There could be argument whether the original policy should have been maintained for those tenants who entered into, or who intended to enter into, agreements with the local authority. That is an irrelevant consideration, for two reasons. First, one or more of the tenants in Dundee sought legal advice whether there might be some way in which they could enforce their rights in the courts. One such tenant may be taking a case to court. Secondly, if the Bill becomes law, as appears to be the case, and if there are no flaws in it, the same tenants may apply to the local authority to purchase then-houses under clause 1. If they do that, the same tenants will be forced to pay certain expenses twice.
    I assume—I think that it is correct—that Dundee district council will agree, in the particular case that I mentioned, to refund the deposit that was accepted.

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    Perhaps it will be able to refund some of the survey fees and other charges that it collected. However, the tenants, even though they may get back some of the money that they laid out to the local authority, will still have to pay their own surveyors, or, if they went to a building society, the building society loan fees and their solicitors for any work that has been done. It is unfair that tenants should have to do that twice if they pursue their rights under this measure a second time round.
    It may be that the form of redress open to tenants in the case that I mentioned is to take the local authority to the Local Authority Commissioner, or Ombudsman, on the grounds of maladministration. That will not deal in any way with the money that they have paid out, which was solicited from them by the local authority for a transaction into which they individually entered in good faith. That is the main point. They entered into that agreement, and intended to go through with the purchase, in good faith. On the strength of the invitation that they received from a responsible local authority or authorities, they laid out their funds.
    My new clause seeks to do two things, in the circumstances described. First it seeks to cause the local authority concerned to repay to the tenant any sums that he may have paid to the local authority. So far so good. I cannot see any legal reason why the local authority might not be able to do that. That would be within its authority.
    11.15 pm
    Secondly, the clause—this is where the legislation would be necessary—seeks to cause the local authority to indemnify the tenant against
    "any reasonable loan, survey and legal expenses "
    that that tenant has had to pay because of the original invitation to take part in the transaction and the subsequent unilateral decision of the local authority to revoke the arrangement.
    The clause is necessary because it may well be outside the powers of local authorities to indemnify the tenant for these expenses. There is a moral case—certainly a strong case—that whatever else may happen in relation to the battle between the local authority and the Government, the tenants themselves, as individuals, do not suffer.
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    It has been accepted for many years that individuals who are affected by local authority decisions should receive compensation if they suffer material financial loss. I can take the examples of compensation for compulsory purchase or, indeed, disturbance payments paid to tenants when they have to move from a block that is taken down, or payments that are sometimes made as dislocation expenses for tenants who move from a house, to cover removal expenses for decanting when modernisation work takes place, or the grants that are made available for double glazing windows because of airport noise, where the public good, requiring aircraft movements, causes disturbance to tenants whose premises are, unfortunately, located near airports, or again, where planning decisions are taken, or are held up, and a claim arises for blight. In those circumstances, the owner is indemnified against decisions taken by the local authority. I think that a strong case for compensation has been established.
    I commend the attitude of the district secretary of the Labour Party in Dundee, Mr. George Galloway. At a recent meeting at which this matter was discussed, he pledged—allegedly speaking on behalf of the Labour Party—that the administration would reimburse people who stood to lose money. That was subsequently overturned by elected councillors in Dundee, who objected to a party official taking a decision on their behalf. Nevertheless, Mr. Galloway's attitude was correct. I never thought that I would support Mr. Galloway in that direction but his sentiments towards equity were better balanced than those of the district council.
    This is a question of fairness to prevent injustice to individual tenants who, regardless of their political views, have been affected by a change of policy, legitimate or otherwise, by the local authority. I think that the House should stand on the side of the individuals concerned and agree to indemnify them against the loss that they have sustained.
    Mr. Peter Fraser: The hon. Member for Dundee, East (Mr. Wilson) dressed up the new clause as being of general application to Scotland, but he was talking about and dealing with Dundee district council.
    Constituents of mine in the Dundee district council area have similarly been

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    caught. Having been invited by the previous Tory-controlled Dundee district council to make applications, and having done so, they find that what they set out to do has been taken away from them. This is not a technical point. Within my constituency I have two examples of single-parent families who have also been caught.
    I take issue with the hon. Member for Dundee, East on this matter. The Scottish National Party is now about to reap the whirlwind of its own political ambivalence on the sale of council houses. From my political standpoint, it seems both unfair and disgraceful that the new Labour administration within Dundee should have adopted this attitude, but it is not surprising that it should have taken this line. Both before the district council election and in Committee here the Scottish Labour Party has repeatedly expressed its outright opposition to the sale of council houses. The Scottish National Party has sought to sit on the fence on this issue. It must face the fact that democratically elected local government has the right to make the decision on what is or is not to be sold. Alternatively, the SNP takes the line taken by this Government that it is the statutory right of tenants in Scotland to purchase their council houses. I unashamedly support that view.
    Mr. Deputy Speaker (Mr. Richard Crawshaw): Order. This new clause relates to indemnity. We have already had a long debate on council house sales.
    Mr. Fraser: My argument is that what is being presented, although dressed up in terms of indemnity, is a complaint about the Labour-controlled Dundee district council. I submit that it is not surprising that Dundee district council should have taken this decision. The inevitable consequence of the stand taken by the SNP is this new clause. Whatever political differences I may have with the hon. Member for Dundee, East—I recognise that he is a lawyer of some ability—he must know that the clause is unworkable nonsense. If he were to explain to the House exactly what he meant, in the law of Scotland, by the unilateral revocation of an intended sale, I would be fascinated to know. It is a consequence of the fact that he will not make up his mind that he now finds it necessary to put forward the new clause. He and his
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    party must make up their minds. Do they support the Government on the issue of council nouses or do they support the Opposition? If they make up their minds on that matter the new clause will be unnecessary.
    Mr. Ernie Ross: I do not wish to argue the pros and cons of the legality of the matter, being a mere humble proletarian and in no way a member of the legal fraternity. I agree with some of the comments made by the hon. Member for South Angus (Mr. Fraser). It is quite clear that the hon. Member for Dundee, East (Mr. Wilson) is engaged in a piece of political tomfoolery with the new clause. When Labour councillors in Dundee were in opposition they opposed the Labour Government's proposal that council houses might be sold. They made it clear that they would not——
    Mr. Hugh D. Brown: The Labour Government did not suggest that we should sell council houses. I wish that some of my hon. Friends would stop repeating a myth.
    Mr. Ross: There are one or two district councils that might disagree with my hon. Friend. I do not wish to debate that issue tonight.
    Mr. Brown: I wish that my hon. Friend would listen. Will he give me one instance where we suggested to a housing authority that it should sell a single council house?
    Mr. Ross: We shall continue that debate later. The Dundee Labour group had many disagreements with the previous Labour Government about their housing policy, and I have no doubt that there will be further arguments in the future until the policy is correct.
    The hon. Member for South Angus is correct. The Labour group in Dundee made it clear that they would not sell council houses. It was the main plank of their election campaign. They are morally bound not to sell council houses. Although they may have some feeling for those who mistakenly took up the option under the previous Conservative administration in Dundee, they do not believe that they have any responsibility towards them. They made it clear that they were likely to be the new administration, and that they would not continue with any sales. It is important to consider the position

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    in Dundee. Although the hon. Member for Dundee, East pretends that the provision covers all local authorities, quite clearly it is aimed at the Dundee district council.
    The Labour Party in Dundee has agreed to accept its commitment, as far as it is legally bound to, up to the limit. That involves about 61 houses. It intends to stop sales of houses where the district has simply exchanged prices with the tenant. In the Dundee district there are 40,000 council houses, 5,000 of them in low letting and low demand areas, such as Scarne, Beechwood, Kirkton and Mid Craigie. Those houses will not draw inquiries for sales.
    There have been 500 inquiries from council house tenants who evinced a desire to own their homes. Of those 500 inquiries, 80 per cent. were for terraced or semi-detached homes, in what can only be described as the best areas of Dundee. For example, 20 per cent. of the inquiries related to the four in a block, which those who know Dundee will realise are similar to——
    Mr. Deputy Speaker: Order. The new clause deals with whether indemnity should be given to people who have entered into a legal commitment and incurred expenses. I hope that the hon. Gentleman will not go through the whole of the policy. We are at present dealing with a very small point.
    Mr. Ross: I shall try not to stray too far, Mr. Deputy Speaker. However, it is important to give some background——
    Mr. Deputy Speaker: Order. We have had a long debate on the sale of council houses. This new clause deals with indemnity for anyone who has paid out money and is not able to purchase the house afterwards. Can the hon. Gentleman direct himself to that matter? If not, I shall have to call someone else.
    Mr. Ross: I accept what you say, Mr. Deputy Speaker. I do not want to cross swords with you. However, I do not think——
    Mr. Deputy Speaker: Order. I hope that the hon. Gentleman is not thinking ot crossing swords with me.
    Mr. Ross: I do not think that any hon. Gentleman is in any doubt that we are
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    talking about Dundee district council. I am trying to give hon. Members who may wish to participate in the debate, or divide the House, an indication whether they should support the new clause. Therefore, it is important to give some indication whether or not the new clause is worth supporting.
    So far as I am concerned, this attempt at retrospective legislation is a piece of t political tomfoolery, which in itself seeks to support the decision taken by a previous local council on the casting vote of the Lord Provost. I believe that Dundee introduced an ill-advised and badly I drawn-up scheme, which goes much further than what is contained in the Bill. For example, the Government scheme suggests that there should be a 33 per cent., loan to those who wish to buy their houses. The Dundee scheme, which we did not accept, gave a 50 per cent. loan to those who wished to buy their houses. It suggested that someone who entered, a house yesterday could buy it, yet that provision is not contained in the Bill. We also disagreed with many other aspects of the Dundee scheme.
    Perhaps more important are the points raised by the hon. Member for South Angus. It is not good enough for the hon. Member for Dundee, East simply to try to hide behind this attempt to safeguard some of his constituents. Clearly, he must put on record whether or not he agrees that council houses in Dundee should be sold.
    Mr. Deputy Speaker: Order. I thought that I had made the point quite clear. We are not discussing whether the houses should be sold. We are discussing whether to give indemnity to people. If the hon. Gentleman cannot come to that point, I shall call another hon. Member.
    Mr. Ross: I do not believe that there is a need for the new clause. Those people for whom the hon. Member for Dundee, East seeks to claim indemnity knew quite well that they were liable to suffer some loss, if they are suffering any loss at all, following the May elections. We in Dundee believe that they should have the basic sums of money returned—that is, the money that they put down initially which allowed them to make application to buy the houses. If they wished to go further they were required to pay another £10 for legal expenses to see whether or not they could be given a council mortgage.

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    We agree that those moneys should be returned, but we do not see any other responsibility in relation to those people. We made our policy quite clear, and I do not see the need for the new clause as it stands.
    11.30 pm
    Mr. Bill Walker: I declare a constituency interest, in that Dundee district council forms part of my constituency.
    There are two reasons why new clause 25 appears on the Amendment Paper. The first is the ambivalent attitude of the Scottish National Party. The second—which should be condemned even more strongly—is the cavalier and callous attitude and action of the Labour administration in Dundee.
    This new clause, which is intended to indemnify those individuals who were unfortunate enough to be caught up between one administration and another, is not something that we should brush aside as being of no consequence. The only crime that council house tenants have committed is their honourable desire to purchase the homes in which they live. That is what we should be considering this evening.
    Mr. Russell Johnston: I had no intention of participating in this debate, but I found some aspects of it extraordinary. It is extraordinary that the hon. Member for Dundee, West (Mr. Ross) should calmly suggest that it is proper that a person should lose money because an administration changes political hue and that we should take no responsibility for that. It is an extraordinary view.
    I failed to understand the speech of the hon. Member for South Angus (Mr. Fraser). I normally listen with great care, attention and respect to the hon. Gentleman. Whether or not the SNP is in favour of selling council houses has nothing to do with the new clause. The clause is concerned with securing indemnity for persons who have——
    Mr. Peter Fraser: My point was that, under the law of Scotland, if there is a contract a legal remedy will be available to the tenant. As the hon. Member for Dundee, East (Mr. Wilson) said, those tenants who have been caught have already taken the legal opinion of a Queen's counsel. One way or another they will succeed.
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    I asked what was meant by the unilateral revocation of an intended sale. If a person goes into a local estate agent and asks him to advise him whether it would be a good idea for him to buy his council house, will he receive his bus fare, the sum of £5, or whatever? It is nonsense, and the hon. Member for Dundee, East knows that it is nonsense. He is a competent lawyer, and he knows that under the law of Scotland it is absurd to attempt to introduce this category in terms of breach of contract. Like the hon. Member for Dundee, West (Mr. Ross), I think the new clause is a matter of political tomfoolery.
    Mr. Johnston: I am grateful to the hon. Gentleman for that extended intervention. If he is saying that it is his view that the new clause is legally redundant and that the protection of the law already exists, I would be prepared to abide by the view expressed by the Minister. I would also give him the opportunity to intervene and explain the phrase that has been attacked——
    Mr. Gordon Wilson: I am grateful to the hon. Member for Inverness (Mr. Johnston) for giving me the opportunity to intervene—an opportunity mat was not afforded by the hon. Member for South Angus (Mr. Fraser), who refused to accept an intervention.
    If a person has a legal remedy, and if there is a legal contract, that situation is provided for. Here, we are dealing with people who submit applications and pay money to the local authority where the price may have been agreed but where there is no formal contract in writing that is needed for the purchase of heritage. In those circumstances, it is not simply a question of going to an estate agent. This is where there are direct relationships between the tenant who wanted to purchase and the local authority that offered to sell.
    Mr. Johnston: I am grateful to the hon. Member for that intervention. It appears that a number of hon. Members want to intervene. They are helping my understanding of the matter.
    Mr. Cook: Perhaps we may nudge forward the hon. Gentleman's understanding a little further. I should like to take up his point about redundancy. I understand that the new clause itself is

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    redundant right down to the second from last line, where we find the words "shall indemnify", because the fees paid are not in question. I understand that the district council has agreed to repay those fees. That is what the House was told. The only part that is in question is the indemnification in the last two or three lines.
    I should not like the hon. Gentleman to be under the impression that that is legally redundant. I understand that the clause seeks to create an explicit protection for people who have shown an interest in purchasing a local authority house—a protection that does not exist anywhere in the private sector. People put their houses up for sale and from time to time change their minds and withdraw the offer of sale, but they are under no obligation to refund survey costs undertaken by people who thought that they might buy. Why should a local authority be under a stricter obligation than any private individual putting his house up for sale?
    Mr. Johnston: I approach the matter from a very simple point of view—the possibility of injustice to a number of people who approached a public authority on an assurance by the authority that certain property would be available. If the result is that those people spend money in good faith, with a view to purchasing it, that is different from their entering the private property market, where one knows that one may or may not be fortunate ; one is to some extent taking a chance. But one does not expect that a public authority, having given public assurances, will completely renege on them if its political complexion changes.
    That is the essentially simple point that I think the lion. Member for Dundee, East (Mr. Wilson) is seeking to make. It should not be clouded by political flim-flammery.
    Mr. Younger: I well understand the great concern of my hon. Friends the Members for South Angus (Mr. Fraser) and for Perth and East Perthshire (Mr. Walker) and the hon. Member for Dundee, East (Mr. Wilson), who tabled the clause. I understand their concern, because they have constituents who are affected. I shall briefly try to make clear what is the problem and what my reaction to the clause is.
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    We are concerned with an attempt by the hon. Gentleman to obtain an indemnity for a local authority tenant who in good faith started the process of trying to buy his own home under the scheme introduced by Dundee district council, and was effecting such a purchase when the council's political control changed following the May elections. We are not discussing the principle of whether council houses should or should not be sold ; we are addressing ourselves to a narrow point.
    I understand that where the sale has reached the point at which any form of legal bargain has been struck, that is a matter for the courts. Such a person can take action in the courts if he wishes. If the courts find that the deal must still go through, that is a matter for them, and not for the House or for me. The people affected may decide to act in that way.
    However, the hon. Member for Dundee, East, the hon. Member for Inverness (Mr. Johnston) and other hon. Members are concerned about those who may have been in the process but not reached the point where any legal bargain had been struck, but had, in good faith, incurred some costs. Those costs could be a deposit—I understand that that has been involved—or in respect of a survey, and so on, all entered into in good faith with a local authority by ordinary people in ordinary homes trying to exercise a right that they thought that the public authority was giving to them.
    The hon. Member for Dundee, West (Mr. Ross) will perhaps note that such people are not normally necessarily aware of the full implications of such matters as May elections. Indeed, many of them, alas, do not even vote in them. Therefore, I think that to expect that all such people involved had a clear close knowledge of what was liable to happen, let alone being able to make a value judgment as to who was likely to win the election, is a bit hard. I shall return to that matter shortly. As far as the principle of the matter is concerned, therefore, that is what we are discussing.
    It has been suggested that we should now legislate in retrospect to compel the local authority to pay such an indemnity to these people for something that was done before the date of any legislation of this sort, which I suggest the House

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    should pass. I am very sorry to say that I do not see that it is open to the House to legislate retrospectively in a matter such as this, however much we may feel inclined to favour the cause of these unfortunate tenants. I do not think that we could retrospectively legislate to compel the local authority to indemnify them in arrears when there was no such law at the time that the actions were taken. The principle concerning retrospective legislation is a longstanding one which has always worried the House very much.
    The question of what is incurred in the way of costs would, I think, be rather difficult to define, particularly if it were done in arrears. That is another difficulty.
    I am not in any way criticising this district council's views now. after the change of control, about selling council houses, because at present there is no law that compels councils to sell council houses. They are perfectly entitled not to do so, just as their predecessors were entitled to decide to draw up a scheme to sell council houses, and did so, very properly—and, of course, I agreed with them. However, if a responsible elected authority decides to use small local people, tenants in their houses, to work off political spite on them, to the effect of possibly causing them considerable financial difficulty, I think that that is the most disgusting piece——
    Mr. Ernie Ross Mr. Ernie Ross rose——
    Mr. Younger: I am sorry to have to speak in this way, but I think that that is the most disgusting piece of callous insensitivity that I have heard of any public authority. Opposition Members are all very honourable men, in every respect, but to belong to a party that condones that sort of activity is derjlorable. I hope that they will tell the Dundee Labour Party that it is deplorable. I do not ask anyone to say anything publicly, but I hope that behind the scenes they will tell the Dundee Labour Party that to act in this way towards their ordinary constituents and tenants is quite deplorable and should not be condoned by anyone in a civilised country. I hope that it will not be accepted.
    Mr. David Steel: I do not want in any way to minimise the right hon. Gentleman's condemnation, but it is not enough just to condemn what is happening. We
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    should be able to do something about the unfortunate people who are caught in this trap, A few sentences ago the right hon. Gentleman was talking about retrospective legislation. Does not the difficulty arise because in this case the previous authority was acting with regard to prospective legislation? The Bill was not an Act. Many authorities were preparing schemes based on this Bill. Therefore, I think that it is quite fair that we should take that into account in the Bill.
    Mr. Younger: I am sympathetic to the right hon. Gentleman's point. If he could find a way for me to help the unfortunate tenants of Dundee district council I should do so. However, I do not think that he is correct. The previous district council did not anticipate legislation per se. It drew up a scheme, as it was entitled to do. I accept that it did so on advice. The right hon. Gentleman's idea is ingenious, but I do not think that it will work.
    11.45 pm
    Mr. Cook: I note the right hon. Gentleman's vigour and determination. However, it is not clear what the Secretary of State expects the Dundee district council to do. When the Labour Party came to power in that area it was committed to halting sales. As the right lion. Gentleman pointed out, it was entitled to do so. It decided not to go ahead with sales for which there were no binding legal contract. What does the right hon. Gentleman suggest the council should do about those referred to in the last few lines of the provision? As local authorities are creatures of statute, and have no binding contract or legal obligation towards those affected, Dundee district council would be unable to make an ex gratia payment—even if it wished to do so—to cover the expenses. It is difficult to understand what the right hon. Gentleman is so angry about.
    Mr. Younger: I am glad that the hon. Gentleman has given me an opportunity to spell out the reasons. I hope that he will not mind if I speak frankly. It is incredible that anyone should adopt a bureaucratic attitude to such a situation. The hon. Gentleman is wrong to suggest that Dundee district council would find it beyond its powers to honour——
    Mr. Cook: Ask it.
    Mr. Younger: Dundee district council is as free as its predecessor was to draw

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    up a scheme for the sale of council houses on the terms that it chooses. The hon. Gentleman has asked a direct question. In all decency, if I were a member—that is a thought—of the Dundee Labour Party, I would say that when we came to power we pledged that we would not sell council houses. I would say that we were humane and decent people, and that we knew that about 180 people were trying to exercise the right to buy their houses in good faith, and had spent money. I would point out that although we were members of the Dundee Labour Party we would let those sales go ahead because they had been undertaken in good faith. Most people—with the exception of some members of the Dundee Labour Party—would give me great credit if I were to say that.
    I appeal to Dundee district council not to reverse its policy. It should realise that the money and family affairs of ordinary people are more important than political principles. For once, the members of the Dundee Labour Party should act as decent people as well as local politicians.
    Mr. Ernie Ross: The Secretary of State spoke about the spite of the local Labour group. We have been unable to discuss the scheme under which people were encouraged to buy assets that did not belong to them. If we had had a chance to discuss that scheme, people might have understood. The previous local authority clearly did not have the support of the people of Dundee. As I suggested earlier, it sought to introduce a scheme that went further than the Bill. The district Labour Party is not a spiteful group of people. It wished to ensure that those who had entered into contracts did not lose money. [Interruption.]
    Mr. Cook: On a point of order, Mr. Deputy Speaker. The Minister will accept that we are trying to find a solution to an important problem.
    Mr. Alan Clark: Then why are we wasting time?
    Mr. Cook: It was the hon. Member for Plymouth, Sutton (Mr. Clark) who provoked me into raising the point of order. If he wishes to save time, he should do the House the courtesy of——
    Mr. Deputy Speaker: Order. May I save time by intervening? The hon. Member for Dundee, West (Mr. Ross)
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    was making a speech. I did not intervene, because hon. Members who were present when the hon. Gentleman made his speech are aware that I prevented his bringing out one or two points that he wished to deal with. I do not wish to be discourteous or unfair to the hon. Gentleman. He is seeking to deal with a point that the Secretary of State made, and I hope that the House will allow him a little latitude.
    Mr. Ernie Ross: We did not intend to be spiteful. As the right hon. Gentleman said, a difficulty arises in determining who has incurred what expenses. The Labour Party made it clear that the system would be stopped immediately we came to office. It did all in its power to prevent people even entering into agreements or putting down deposits. It went out of its way to make the position clear. It will honour contracts that have been legally undertaken.
    Mr. Younger: With respect to the hon. Gentleman, in opposition the Labour Party has no right to expect people to do anything. When the Labour Party is not in power, it does not have power over people. Labour Members must realise that.
    The hon. Gentleman still does not quite have the point, which has nothing to do with the principle of selling houses or the scheme. It is a matter of human decency. I hope that the hon. Gentleman will privately take back to his friends in Dundee district this message. They may by all means follow their political creed and wishes. That is the right of us all. However, if they must take it out on someone, let them take it out on me, or on the Tories, but not on their own tenants, who are innocent people.
    I say to the hon. Member for Dundee, East that I am sorry, but I do not believe that the scheme would work as a means of indemnifying those involved. I wish that it could. If I could find a way, I should be only too glad to help, but I am afraid that I must ask the House to reject the new clause.
    Mr. Gordon Wilson: This is a serious debate. I had intended to make a joke about the new centre party between South Angus and Dundee, West, but I shall not.

    485
    We are dealing with human rights and a small number of people. We are not dealing with what the Secretary of State said about the sales going through. Those who in good faith were invited to take part in the transaction, which was revoked, have expended money, not only to the local authority but to professional advisers, building societies, and so on, and they should not be any worse off. The matter comes down to the rights of individuals and human rights. The Secretary of State was right to speak out, but he, too, has his obligations.
    The right hon. Gentleman said that the House is wary of retrospection. As I recall the rule, the House is reluctant to legislate retrospectively to the detriment
    of individuals, but it has frequently legislated for their benefit, such as on pneumoconiosis and pension schemes. There is no barrier.
    Individuals will be defrauded of their resources. They have entered into an arrangement with a public body. People should be able to rely on the good faith and integrity of local authorities. They are continuing bodies, regardless of who is in control at the time.
    I hope that the Secretary of State will reconsider the matter, but in the circumstances I must press my new clause.
    Question put, That the clause be read a Second time :—
    The House divided : Ayes 8, Noes 178.

    Division No. 353]

    AYES

    [11.54 pm

    Beith, A. J.

    Penhaligon, David

    TELLERS FOR THE AYES

    Howells, Geraint

    Steel, Rt Hon David

    Mr. Gordon Wilson and

    Johnston, Russell (Inverness)

    Wainwright, Richard (Coins Valley)

    Mr. Donald Stewart.

    Meyer, Sir Anthony

    Walker, Bill (Perth & Perthshire)

    NOES

    Adley, Robert

    Eggar, Timothy

    MacKay, John (Argyll)

    Alexander, Richard

    Elliott, Sir William

    McNair-Wilson, Michael (Newbury)

    Aspinwall, Jack

    Falrbairn, Nicholas

    McQuarrie, Albert

    Baker, Nicholas (North Dorset)

    Faith, Mrs Sheila

    Major, John

    Banks, Robert

    Fenner, Mrs Peggy

    Marland, Paul

    Bell, Sir Ronald

    Fisher, Sir Nigel

    Marlow, Tony

    Bendall, Vivian

    Fletcher, Alexander (Edinburgh N)

    Marten, Neil (Banbury)

    Benyon, Thomas (Abingdon)

    Fowler, Rt Hon Norman

    Mates, Michael

    Best, Keith

    Fox, Marcus

    Mather, Carol

    Bevan, David Gilroy

    Garel-Jones, Tristan

    Maude, Rt Hon Angus

    Bitten, Rt Hon John

    Gilmour, Rt Hon Sir Ian

    Maxwell-Hyslop, Robin

    Blackburn, John

    Goodhew, Victor

    Mayhew, Patrick

    Bonsor, Sir Nicholas

    Gow, Ian

    Miller, Hal (Bromsgrove & Redditch)

    Boscawen, Hon Robert

    Gower, Sir Raymond

    Mills, lain (Meriden)

    Bottomley, Peter (Woolwich West)

    Grant, Anthony (Harrow C)

    Miscampbell, Norman

    Boyson, Dr Rhodes

    Greenway, Harry

    Moate, Roger

    Bright, Graham

    Griffiths, Eldon (Bury St Edmunds)

    Monro, Hector

    Brittan, Leon

    Griffiths, Peter (Portsmouth N)

    Montgomery, Fergus

    Brocklebank-Fowler, Christopher

    Grist, Ian

    Morrison, Hon Peter (city of Chester)

    Brooke, Hon Peter

    Gummer, John Selwyn

    Mudd, David

    Brown, Michael (Brigg & Sc'thorpe)

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

    Murphy, Christopher

    Browne, John (Winchester)

    Hampson, Dr Keith

    Needham, Richard

    Bruce-Gardyne, John

    Haseihurst, Alan

    Nelsor, Anthony

    Buck, Antony

    Hastings, Stephen

    Neubert, Michael

    Budgen, Nick

    Hawkins, Paul

    Newton, Tony

    Butcher, John

    Hawksley, Warren

    Page, Rt Hon Sir R. Graham

    Cadbury, Jocelyn

    Heddle, John

    Page, Richard (SW Hertfordshire)

    Carlisle, John (Luton West)

    Henderson, Barry

    Parkinson, Cecil

    Carlisle, Kenneth (Lincoln)

    Higgins, Rt Hon Terence L.

    Parris, Mathew

    Carlisle, Rt Hon Mark (Runcorn)

    Hogg, Hon Douglas (Grantham)

    Patten, Christopher (Bath)

    Chapman, Sydney

    Hooson, Tom

    Pattle, Geoffrey

    Clark, Hon Alan (Plymouth, Sutton)

    Howell, Ralph (North Norfolk)

    Pawsey, James

    Clark, Sir William (Croydon South)

    Hunt, David (Wirral)

    Pink, R. Bonner

    Clarke, Kenneth (Rushcliffe)

    Hunt, John (Ravensbourne)

    Pollock, Alexander

    Colvin, Michael

    Kurd, Hon Douglas

    Proctor, K. Harvey

    Cope, John

    Jenkin, Rt Hon Patrick

    Pym, Rt Hon Francis

    Corrie, John

    Johnson Smith, Geoffrey

    Rathbone, Tim

    Costain, A. P.

    Jopling, Rt Hon Michael

    Rees, Peter (Dover and Deal)

    Cranborne, Viscount

    Knox, David

    Rhodes James, Robert

    Dean, Paul (North Somerset)

    Lament, Norman

    Ridsdale, Julian

    Dickens, Geoffrey

    Lang, Ian

    Rifkind, Malcolm

    Dorrell, Stephen

    Lawrence, Ivan

    Roberts, Michael (Cardiff NW)

    Douglas-Hamilton, Lord James

    Law n, Nigel

    Roberts, Wyn (Conway)

    Dover, Denshore

    Lennox-Boyd, Hon Mark

    Rossi, Hugh

    du Cann, Rt Hon Edward

    Lloyd, Peter (Fareham)

    Shaw, Giles (Pudsey)

    Dunn, Robert (Dartford)

    Lyell, Nicholas

    Shelton, William (Streatham)

    Durant, Tony

    Macfarlane, Nell

    Shepherd, Colin (Hereford)

    Edwards, Rt Hon N. (Pembroke)

    MacGregor, John

    Shepherd, Richard (Aldridge-Br'hills)

    Sims, Roger

    Townsend, Cyril D. (Bexleyheath)

    Wheeler, John

    Smith, Dudley (War. and Leam'ton)

    Trippier, David

    Whitelaw, Rt Hon William

    Speed, Keith

    van Straubenzee, W. R.

    Whitney, Raymond

    Speller, Tony

    Vaughan, Dr Gerard

    Wickenden, Keith

    Spicer, Michael (S Worcestershire)

    Viggers, Peter

    Winterton, Nicholas

    Steen, Anthony

    Waddington, David

    Wolfson, Mark

    Stevens, Martin

    Wakeham, John

    Young, Sir George (Acton)

    Stewart, Ian (Hitchin)

    Waldegrave, Hon William

    Younger, Rt Hon George

    Stewart, John (East Renfrewshire)

    Walker-Smith, Rt Hon Sir Derek

    Stradling Thomas, J.

    Waller, Gary

    TELLERS FOR THE NOES;

    Taylor, Teddy (Southend East)

    Ward, John

    Mr. Spencer Le Marchant and

    Temple-Morris, Peter

    Wells, John (Maidstone)

    Mr. Anthony Berry.

    Thompson, Donald

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

    Question accordingly negatived.
    Further consideration of the Bill adjourned.—[Mr. Younger.]
    Bill, as amended (in the Standing Committee), to be further considered this day.

EUROPEAN COMMUNITY INSTITUTIONS
12.5 am
The Lord Privy Seal (Sir Ian Gilmour): I beg to move,
That this House takes note of the Report of the Committee of Three on European Community Institutions.
Mr. Deputy Speaker (Mr. Richard Crawshaw): Order, I shall inform the House that Mr. Speaker has selected the amendment in the name of the Leader of the Opposition.
Sir I. Gilmour: I welcome the opportunity on the recommendation of the Scrutiny Committee, to debate this report, which is to be discussed at the European Council meeting in Venice on 12 and 13 June. As the House knows, the report originated with a suggestion by the President of France, and was conducted on the basis of terms of reference agreed by the Governments of all the member States at the European Council held in Brussels in December 1978, when the Labour Government were in power.
For the preparation of the report the Community was fortunate in being able to call upon three distinguished and independent personalities, Mr. Biesheuvel of the Netherlands, Mr. Marjolin from France, and Mr. Edmund Dell from the United Kingdom. Their terms of reference were to examine all the institutions of the Community in the perspective of enlargement, and to suggest practical ways of improving their operation.
I hope that it will be for the convenience of the House if I deal with the report's recommendations institution by institution.
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To take first the European Council, which brings together the Heads of State and Government of the member States three times a year, the report recommended limited agendas, limited attendance, coherent preparation and follow-up, early circulation of documents and presidency responsibility for drafting clear and accurate conclusions. In general, we agree with those recommendations.
Over one proposal we, and a number of our partners, had some doubts. That was that the European Council should adopt, in collaboration with the Commission, a "master plan" of priorities for the Community as a whole. We do not feel that the preparation of a specific formal plan of priorities for Community action is a task that the European Council should be called upon to perform. The Government can certainly agree that it is one of the most important tasks of the European Council to give broad guidance for the work of the Council and the Commission in general, but the danger in drawing up a formal plan of priorities is that it either becomes too rigid or so general as to be virtually meaningless.
A second proposal about which there has been some difficulty is that the President of the European Council should appear once during each presidency before the European Parliament. The Government recognise the need to establish a positive relationship with the European Parliament, and one way of furthering that relationship might be for the Prime Minister to appear before the Parliament during the next British presidency.
At least one member Government, however, has difficulty with this proposal for constitutional reasons. It does not seem to us that it need be a rigid rule. Each member State should be able, on assuming the presidency, to act as it sees fit.
The report then devotes considerable attention to ways of improving the efficiency of the ordinary meeting of the Council of Ministers. It considers the

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Council to be overburdened with detailed work, which restricts its freedom to concentrate on genuinely political issues. It recognises the key role that the presidency can play in directing the work of the Council, and it draws attention to the value of the presidency outlining its objectives to the European Parliament at the beginning of its terms and of presenting a report at the end.
It also recommends that the presidency should be free to delegate particular dossiers to other member States. Althugh we would not wish to rule out this last idea entirely, we see considerable advantages in retaining unity of control within the presidency. We therefore believe that any such delegation should be a general decision by the Council as a whole, and not just by the presidency.
We believe that a more generally acceptable way to lighten the presidency's burden would be to implement another of the report's proposals, namely, that the resources of the Council Secretariat should be put to fuller use.
To enable the Council to concentrate on policy issues, the report recommends greater delegation of decision taking to the Commission and greater negotiating flexibility for the Committee of Permanent Representatives and lower-level working groups. We support the objective of reducing the number of detailed issues that are at present brought before the Council and would like to see a greater degree of winnowing out by the Committee of Permanent Representatives with the main policy differences only coining for decision to the Council. As to the idea of delegating additional decision-taking responsibilities to the Commission, we are ready to consider this on case-by-case basis in accepted areas of Community activity.
In the interests of speeding up decision-taking within the Council, the report recommends an increased resort to majority voting where this is provided for in the Treaties but accepts that the existence of the Luxembourg compromise, under which, where important interests are at stake, unanimity is required, in a continuing fact of life in the Community. The Government continue to attach great importance to the principle of unanimity where very important interests are at stake. They believe that this recommendation achieves the right balance. They
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welcome the report's statement that each member State must be the judge of where its very important interests lie.
I take the right hon. Gentleman's amendment to the Government's motion to refer to the maintenance of the Luxembourg compromise and the existing relationship between the institutions of the Community. The report's recommendation on the greater use of majority voting does not affect the use of the Luxembourg compromise. There is no question of erosion of sovereignty.
Mr. Peter Shore: That is an important point. Indeed, it is the major point upon which we focus in this debate. We are not in favour of introducing, or accepting, majority voting in the Council of Ministers and we do not accept that it is possible to make a distinction between categories of matters that are of serious national importance and those that are not of serious national importance. If they are not of serious national importance they can be agreed in the ordinary way by unanimous voting, and not by resort to qualify majority voting.
Sir I. Gilmour: Of course there is a distinction between serious and non-serious matters. People may have differences that they are prepared, ultimately, to allow to be governed by majority voting, but, as I have already said, it is up to the member State involved to say whether its own important interests are concerned. If they are the Luxembourg compromise applies. There is, therefore, no erosion of sovereignty.
Mr. Jack Straw: Can the right hon. Gentleman explain what, so far as I can see, is a contradiction? At page 51, the report says that it will be up to each member State to decide whether there is an important issue that requires it to exercise a veto. However, at the bottom of that page we see that it will be up to the President to decide whether to put an issue to the Council of Ministers for a vote. It seems to me to that the decision whether a unanimous or a majority vote is required would not rest wholly with the member States but would, in certain circumstances, rest with the presidency.
Sir I. Gilmour: It is still up to a member State to invoke the Luxembourg

491
compromise if it so wishes. I do not think that there is any contradiction.
Mr. Shore: Has it been the practice of the Council of Ministers during the past year to resort to qualified majority voting, or has the tradition been upheld of maintaining unanimity in all Council matters?
Sir I. Gilmour: In the Foreign Affairs Council there has been unanimity. That has applied to every Council meeting that I have attended.
Mr. Shore: All that we are seeking to make plain is that there should be no departure from the present practice of not resorting to qualified majority voting and maintaining unanimity.
Sir I. Gilmour: We have said that we have no objection to the wise men's recommendations if we think that important national interests are involved. If they are involved, we shall invoke the Luxembourg compromise.
Mr. K. Harvey Proctor Mr. K. Harvey Proctor (Basildon) rose——
Sir I. Gilmour: Where important national interests are seen to be at stake, member States may continue to insist that discussions should continue until unanimous agreement is reached. In the same way, the report's recommendation for delegating additional decision-taking to the Commission does not alter the relationship between the institutions in any way. I can thus assure the right hon. Member for Stepney and Poplar (Mr. Shore) that the amendment is otiose, and it follows that we can accept it
So far as the Commission is concerned, the report concludes that its role and authority have declined in recent years. It recognises the value of the Commission's role as initiator and as guardian of the Treaties but argues that it should be made more effective and better adapted to current circumstances.
To this end the report endorses the proposal of the Spierenburg report on the internal organisation of the Commission, that on enlargement of the Community the size of the Commission should be reduced to one member per member State in the interests of efficiency and in order to enable the College of Commissioners to act more as a collective body.
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This recommendation has proved controversial. Several of the larger member States which currently appoint two members to the Commission have made clear that they could not accept it. We recognise the advantages on grounds of efficiency of limiting the size of the Commission. On the other hand, we doubt whether serious problems on this score will in practice arise on the accession of Greece, which will raise the number of Commissioners from 13 to 14. For our part the Government are inclined to see advantage in maintaining the present situation until the accession of Spain and Portugal, when we believe the matter should be reviewed again.
Mr. Roger Moate: The area that my right hon. Friend has left is of crucial importance, especially to the extended definition of the Luxembourg compromise. In page 52 the report categorically states that
"The overall effect must be to increase the frequency of voting ".
That being so, it means that by taking note of the document we are countenancing or approving a change in procedures of some significance. Will my right hon. Friend tell us in what circumstances he now expects a majority vote to be taken, whereas in the past the unanimity rule has applied?
Sir I. Gilmour: That will take place only when every member of the Nine does not think that very important national considerations arise.
The report recommends that the President of the Commission should be chosen six months before the appointment of a new Commission and that he be consulted on the selection of the other Commissioners and have the last word on the allocation of portfolios. The European Council has already agreed that the next President should be nominated six months before he and the new Commission take office. We also believe that it makes sense to consult the incoming President on the selection of the other Commissioners, but Governments will of course wish to retain the last word in this matter.
The allocation of portfolios has always been a matter for the collective decision of the Commission. W believe that it is best to leave matters that way, although

493
the President naturally plays a major part in the preparation of that decision.
It has been suggested, not least in a resolution passed by the European Parliament at its April session, that the Parliament should be consulted before first the President and then the other members of the Commission are appointed. Relations between the Commission and the Parliament are laid down in the Treaties. It is clear that the Commission is answerable to the Parliament, not least through the power that the latter enjoys to dismiss the Commission.
The same treaties, however, lay down a specific procedure for the appointment of the Commission. We would prefer to keep to that procedure, which provides for the member governments to appoint the Commission by common accord.
The report recommended certain improvements in relations between the European Parliament and the Commission and Council of Ministers. It recommends that the Commission should present its programme to the Parliament for debate and that both the Commission and the Council should make a more serious response to resolutions adopted by the European Parliament. It also proposes that the operation of the conciliation procedure, which provides for consultation between the Council and the Parliament on Acts with appreciable financial consequences, should be improved.
The Government attach importance to the role ascribed to the Parliament by the Treaties and are ready to play their part in working out practical improvements in these areas, provided that no change in the relationship established by the treaties is involved.
The report points out that the prospective enlargement of the Community to 10 and then 12 members will not only tend to make the functioning of the institutions more cumbersome but will extend the range of differing circumstances and interests among the member States. It therefore urges the member States to maintain their solidarity in the face of the difficulties that the Community is likely to encounter, and argues strongly against any ideas of a "two-speed" Community. The Government wholeheartedly endorse the rejection of any such idea, which we regard as fundamentally misguided.
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The Government believe that the report forms a useful basis for ensuring that the Community works with the minimum of cumbersome bureaucracy and that, with the implementation of those proposals which the Member States accept, the Community will be well placed to meeting the challenge of enlargement.
Arguably, the report should have been more wide-ranging, and should have made broader recommendations for the development of the Community, if necessary by amendment of the Treaty. In my view, it was right not to make any such attempt. In the first place, the mandate did not provide for this. Secondly, this is not the time in the Community for futuristic visions. It is a time when we must keep our vision clearly focused on the near-at-hand, and find ways of dealing with the many and urgent practical problems which face us in all fields, and we must do so in order to protect the Community's achievements and to respond to the dangers which threaten it in an uncertain world.
I should like, finally, to extend the Government's thanks to the three authors of the report, and their collaborators, for taking great trouble to produce a sober, helpful and practical piece of work——
Mr. Proctor: Will my right hon. Friend give way?
Sir I. Gilmour: No. I am just finishing—a sober, helpful and practical piece of work aimed at promoting the more efficient working of the Community's institutions as we prepare to welcome three new member States.
12.23 am
Mr. Peter Shore: I beg to move, at the end of the Question, to add
"but declines to approve any proposals that would weaken the present power of national veto and control in the Council of Ministers."
I had the somewhat confused impression that the right hon. Gentleman was saying he accepted the spirit of v/hat we were saying but nevertheless was endorsing the recommendations in the report, which propose that the present procedures should be changed and that we should deliberately relax the power of control and national veto. I shall come back to that in a moment. We shall have to decide our tactics in this

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matter in the light of what we can learn from the right hon. Gentleman during this, unhappily, short debate.
We are talking about a matter of substantial importance. We are dealing with a document that covers the whole area of the European Community institutions. I cannot remember—I have taken part in many debates on the European Community—any serious and sustained discussion of the institutions of the Community. That is something that the House has lacked and that we should indeed put right. We shall look for other opportunities to return to this matter.
I am aware of the widely held view that Community documents, especially those that are aimed at the improvement of the working and machinery of the Communities, are little more than a waste of time.
There is a long history of shelved reports, as many of us can recall. Nevertheless, this report of the Committee of Three is, as the Lord Privy Seal reminded us, on the agenda of the European Council which is meeting next week in Venice. Therefore, it is right that the House should express itself as clearly as it can on the institutions of the EEC and on the main questions raised by the report.
I find it impossible to have any sensible discussion about the range of institutions that now exist in the EEC without some clear philosophy about the nature and direction of the EEC itself.
I have never had any doubt about this matter—at least from the British point of view. My view of the future of the EEC, on the assumption that it is possible for Britain to continue its membership, is that its institutions should reflect the reality of sentiment in this country and in the larger part of the Community. My strong view is that, while there is a wish for alliance, good relations and practical agreement with the countries of Western Europe, there is scepticism about the meaning of "Community", and massive opposition to the concept of "union".
The founding Treaties are a little ambiguous about the dominant purpose of the Community ; but the original architects clearly envisaged what they called "an ever closer union" among the peoples of Europe, and the future of the
496
Community for them lay in this development.
Whether such an approach was ever possible, I do not know, but from the moment that the Six became the Nine, the impetus to union was inevitably checked. Now that the Nine are shortly to become the Ten and—President Giscard permitting—in two years the Twelve, it seems inevitable that the vast differences of interest, development and history that motivate 12 different European nations will tilt the direction more and more towards the concept of alliance. Enlargement, to me, means dilution—a wider but looser association of European States.
I make this point at the start because it is the guiding light in my approach to tonight's debate on the Common Market's institutions, their development and reform.
The original institutions established by the Treaty of Rome reflect the union rather than the alliance view of the EEC. The Brussels Commission is clearly supranational, and so is the European Court. The European Assembly, during the period of indirect elections down to 1979, was closer to the alliance than to the union view of the EEC. But since direct elections—this was to me a major objection to direct elections—it has obviously come within the union camp, if I may group the institutions in that way.
The one institution that clearly reflects the alliance view is the Council of Ministers, not because of the Treaty's provisions, which call for qualified majority voting over a wide area of decisions, but because of the major change in its modus operandi—the acceptance of the national veto which followed the Luxembourg compromise of 1966.
What is striking to any student of Community affairs is the development and role of institutions that are not even mentioned in the Treaty of Rome. I refer first to COREPER, that all-important and over-powerful committee of national officials who work directly to the Council of Ministers ; the development of the secretariat, which serves the six-monthly presidency of the Council ; the political co-operation meetings of Foreign Ministers ; and, last but by no means least, the European Council, with its four-monthly meetings of Heads of Government.

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The report of the three wise men has at least one merit : it surveys comprehensively and for the first time the functioning of all these institutions—those created by the Treaty and those that have evolved since the Treaty was signed.
The authors were asked to look at the machinery and procedure of the institutions to see how they could be improved and, much more controversially, how they could contribute towards the goal of European union. I am glad to say that they found that latter task altogether too daunting and confined their observations on this question to a single chapter which is no more than a survey of the most important problems affecting member States.
I quote from page 106 of the report.
"All the great problems facing a united Europe today—whether we think of monetary stability, energy supplies, or the new international division of labour—are world problems, which frequently require negotiations and agreements at world level or with particular economic units outside the Community."
I welcome that clear recognition of the limitation of the role of the EEC, and the simple fact that it is in far larger forums that effective world policies will be necessary in the 1980s.
As the authors rightly go on to say—I think that it is part of the same quotation put before us by the Lord Privy Seal :
"The present time seems to us ill-suited to futuristic visions which presuppose a profound and rapid transformation of attitudes within the Community."
That is a long way from the euphoria of European union by 1980, which emerged from the Paris summit meeting as long ago as October 1972.
Mr. Selwyn Gummer: I am sure that the right hon. Gentleman does not wish to mislead the House in any way. Page 106 goes on to state that
"It is desirable that the Community and the Nine should, in these various relationships, act as a united body."
Therefore, the paragraph means precisely the opposite from what was suggested by the right hon. Gentleman, who said that because it was all part of world problems the sense of the Community was less important. As the paragraph illustrates clearly, the sense of the Community is more important, because in
498
world contexts we should act as a united body.
Mr. Shore: I do not wish to labour that point at great length. The hon. Gentleman should contain himself. He becomes rather excitable in these debates. The report points to a fact that has often been overlooked in these debates, namely, that so many of the problems that we face in the world today cannot and will not be solved within the context of a group of nations, even an important group of nations, in Western Europe. They can be solved only in much larger forums—I refer especially to oil problems and the OECD. I do not wish to pursue that point further at the present time.
I turn to the more practical suggestions, of a more modest nature, which the so-called three wise men made about the functioning of the Community's institutions. They rightly give a great deal of space to the European Council. I say rightly, because that non-Treaty institution is undoubtedly the most important institution in the Community. Moreover, in its procedures it reflects the alliance character of the Council of Ministers. Unanimity is the rule, and long may it continue. There are undoubtedly difficulties with the European Council. I suspect that the three pre-set meetings a year are too many. There is a real danger that its informality, and the high publicity that attaches to its meetings, could lead to conclusions that are ill-thought out and too vague for effective subsequent action by other Community institutions. It is a real problem ; no one should doubt that. On balance, I would favour two well-prepared meetings a year, one during each six-monthly presidency, together with a willingness to meet ad hoc if so required by major developments.
The Council of Ministers is the key Treaty institution. It is essential that the veto power, recognised since the Luxembourg agreement in 1966, should be retained. I reject—this is why I moved the amendment—the suggestion that
"majority voting should be accepted in all cases where the Treaty does not require unanimity and no very important national interests are involved."
I do not think that it is possible to work out any guidelines that would distinguish very important national interests from important national interests, or simply

499
national interests. To attempt to do so would give rise to protracted and sterile debate.
I do not know whether the Government intend to accept the proposals of the three wise men, and whether that would involve a significant departure, or any departure, from normal practice. The Lord Privy Seal has not enlightened the House on that point. It is an important matter when deciding how to advise my colleagues and the House to vote tonight.
I should also like to make it plain that I do not accept the recommendation that there should be greater delegation of decision-making by the Council, both to the Brussels Commission and to CQRE-PER. These are both unelected and bureaucratic bodies. Indeed, far from delegating Council decision-making to them, the real problem is to ensure that more of the decisions that they now take are brought before the Council of Ministers.
I now turn to the Council of Foreign Ministers, meeting in political co-operation. That institution, which owes nothing to the Rome Treaty, exactly fits the alliance view of the Common Market. Provided that it is not used as an excuse for individual nations to stay silent when they should speak out, provided that the obsession for speaking with one voice is overcome, and provided that it does not take precedence over other major international forums, it could play a sensible and useful role in international affairs—as useful as Western European Union proved itself to be throughout so much of the earlier post-war period.
So much for the alliance institutions of the Community. I now want to say a few words about the quasi-federal institutions. First, there is the Commission. As the three wise men correctly point out, it has several roles. It has the right of policy initiative, it polices the Treaties, and it has executive functions for the day-to-day implementation of common policies. Certainly, since the high-water mark of the Hallstein era, the Commission has indeed lost power and influence—in my view, not enough. The Commission's right of initiative in all policy matters is still a matter of major concern. One of the advantages of the growth of importance of the Council presidency and the formation of the
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European Council is that rival sources of initiative have de facto been created. I certainly hope that they will be strengthened.
The Commission has, however, a number of independent powers under the Treaty, and these need to be carefully watched and checked. These include its considerable delegated powers in the operation of the CAP. The procedures vary with different management committees. I am sure they need review. I suspect that it is in their special decision-making procedures when dealing with absurdities such as the sale of cheap butter to the Soviet Union that the management committees find what authority they have.
Furthermore, it is notorious that the Commission has a seemingly insatiable appetite for harmonisation proposals under article 100 of the Treaty. The three wise men devote an appendix to that subject and sensibly distinguish between harmonisation proposals that are directly relevant to the main purposes of the Treaty and those that are not, but the truth is that an enormous amount of unnecessary work continues to be generated by the Commission as it seeks to stretch Community competence and interest into areas which are far outside the Treaty itself.
When I was Secretary of State for the Environment, I was amazed at the sheer volume of proposals—and their total inappropriateness—that flowed from the so-called environment programme of the EEC. It is all too easy to see how these things develop. The Commission proposes ; the Council is persuaded to pass a seemingly innocuous and non-binding resolution, then a whole series of draft directives are fired from Brussels at the Council of Ministers. COREPER does most of the examination and processing, and then Ministers are called in basically to ratify what has already been bureaucratically agreed and to settle what officials believe should be the few outstanding points of disagreement. That should not be allowed to continue.
I have two proposals that I think could help and that are worth consideration. First, it is necessary to bring COREPER under stronger political control. I would wish to see a Minister of State replace the eminent civil servant who now sits on that Committee in Brussels.

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My second proposal is that in the whole area covered by article 100—aproximation and harmonisation—and in many other areas of the Treaty, directives should be time-limited. It is a matter of acute embarrassment to Ministers to discover that their predecessors had long ago committed them to laws and regulations that they had no means of repealing or amending, except if they got—this is improbable—the unanimous agreement of the Council to do so. Just as we have an expiring laws continuation machinery in the House of Commons, I believe that no Community directive should have a longer life than three or four years, and thus make possible the amendment or repeal, in the light of experience, of those directives that are clearly not working or that are inappropriate. I hope that the Government, if they have not considered that before, will do so now.
I do not believe that the judgment of the European Court should be binding on the Community. Instead, it should have the power to give advisory opinions. In the event, of course, it has no means of enforcement against determined national policies—unless, as in our European Community Communities Act, the legislatures of member States allow it such authority. My view is entirely in line with that of the Government of France, who demonstrated in their approach lo the question of lamb imports from Britain and the judgments of the European Court upon it that even now they regard the European Court as having only an advisory function.
I hope that I have made plain my view of the three wise men's report, and, further, what I believe to be the philosophy that should guide our consideration of the future role of the Community's institutions. Alliance is the key concept. Of all the Treaty institutions the Council of Ministers most accurately reflects this approach. There cannot be any tampering with the rights of veto or any shuffling of Council responsibilities to non-elected bodies.
That is why, unless we hear clearly during the remainder of this short debate that the Government do not intend to change and tamper with existing procedures and do not intend to transfer repairs to COREPER, the Commission, or to the Council of Ministers, I shall
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advise the Opposition and the House as a whole to vote in favour of the amendment.
12.43 am
Sir Ronald Bell: It is most regrettable that this debate should be taking place so late at night, and that it should be of such short duration. This document is one of the highest importance, and one which takes us on a conveyor belt to an unwanted destination. We should have had a three-hour debate on this issue, ending at midnight, instead of which we are having a one-and-a-half hour debate which will end at about 1.30 am. It is most unfortunate that this seems to have become the pattern for even the most important debates on the Treaty of Rome and the Brussels institutions. It compels all hon. Members to be brief in order that those other hon. Members who wish to take part may do so.
This document is not just an essay on improving procedure in the Common Market. It concerns improvement for a specified purpose, and that purpose is set out in the terms of reference. It concerns progress "towards European union". That is what this is all about. Therefore, the fundamental analysis throughout the document is faulty, because this is not an aim that the peoples of the member States wish to be obtained.
The right hon. Member for Stepney and Poplar (Mr. Shore) spoke of some of the excesses of the Community. It is interesting to note that in the document the three authors set out what most of us would consider the Community's defects as its achievements so far. On page 5 they set out some of the achievements that they think have been overlooked, and say by way of illustration :
"In the four years 1975–1978 the Commission presented a total of 2,798 legislative proposals to the Council and withdrew 212 proposals (a balance of 2,586)."
What would be thought of us if we passed 600 new laws every Session, on the Government's proposal, and if the Government withdrew 50 of their Bills every Session?
The European Legislation &c Select Committee recommended the document for debate. Those of us who serve on the Committee know that the torrent of paper from Brussels is an outrage. It has two characteristics that the House should

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not overlook. First, it is permeating into every branch of our life—what the document calls setting up a legal entity throughout. Secondly, it is cumulative. As the right hon. Gentleman pointed out, there is no time limit on these matters. The extent of our arrangements that is Brussels in origin, Community legislation, is increasing substantially every year—one might almost say "dramatically"—because it is cumulative. It will gradually take over almost the whole of our legislative arrangements.
Mr. Tarn Dalyell: Many of us on the European Legislation &c Select Committee made the point that we hoped that the document would be debated in prime time at some length.
Sir R. Bell: I entirely agree. I have made that point, I hope emphatically. It is scandalous that a document of this significance should be accorded this treatment. Most people, because the newspapers have gone to bed, will never even know about this debate. Even those of our colleagues present tonight are not numerous.
The document proposes the tighter institutionalisation of all the Community's activities. The meetings of Heads of Government become meetings of the European Council, the procedure of which, it suggests, should be formalised. It says that its agenda should be primarily consideration of drafts prepared by the Brussels secretariat.
The President of the Commission is alleged already to attend by right. In fact, it is a meeting of Heads of Government, nothing to do with the Treaty of Rome, and he attends by invitation. It is proposed in the document that the President should be built up in power and authority, clearly with the intention that he should become a kind of Prime Minister, with the other Commissioners as Ministers in his Cabinet. It is specifically proposed that nobody should be appointed a Commissioner by a member State without consulting the President. So be it, but the document also says that nobody should be appointed a Commissioner by a member State against the President's wishes. In other words, he is to have a veto on the appointment of members of the Commission by nation States. Is that something that the British Government will endorse? My right hon.
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Friend did not mention it, but to me it is a most significant proposal.
It is then proposed that the presidency of the Council of Ministers should also be built up so that the President—
Sir Ian Gilmour: I made it clear in my speech that we did not accept that proposal.
Sir R. Bell: I did not hear my right hon. Friend say that. As he did, that is reassuring so far as we in this country are concerned. But that is the proposal put forward.
It is proposed that the President of the Council of Ministers should decide what subjects should be decided by vote and could, at will, exclude any subject from the agenda. If hon. Members look at page 41 of the document, they will see that it is quite explicitly put forward, without any apology or qualification, that :
"the Presidency should be able to reject any substantive item proposed by others for the agenda, consulting the Commission as necessary."
What sort of a Council of Ministers would we have under the proposals in this document if the President for the time being could exclude any substantive item that a member State wished to put on the agenda of the Council of Ministers?
The whole idea is to turn the Brussels set-up from a treaty organisation into a super-State, controlled not by delegates from national capitals but internally by its own institutions. That is not what the Governments of the member countries want. It is not what their peoples want. But the people who work inside such an organisation as this are soon working for it and not for those who sent them there. The organisation becomes an end in itself—politically, a sort of Frankenstein, and infinitely expansionist.
The Treaty of Rome gives legitimacy and stimulus to these tendencies, as the right hon. Member for Stepney and Poplar pointed out. That is the principal reason why we must have a quite different arrangement from the Treaty of Rome with our Continental neighbours, and why we should, meanwhile, regard all proposals such as this with the utmost suspicion. If we do not do so, we shall find ourselves swept along to a destination which most of us profoundly abhor.
12.52 am
Mr. Russell Johnston: I too do not consider that this report is either very stimulating or very encouraging, but I take that view from an entirely opposite posture to that adopted by the hon. and learned Member for Beacons-field (Sir R. Bell).
As the Lord Privy Seal said, one certainly welcomed the establishment of the Committee of Three. But, from the Liberal point of view, one did that because one saw that the steady erosion of the Community's decision-making capacity was leading to regular situations in which there was inertia. One saw that the Tindemans report, for example, which we had welcomed, was being pigeonholed, and one saw enlargement in the offing. One hoped that there would be a new initiative, and one hoped that, perhaps, the Committee of Three might provide the opportunity for it.
I am afraid that I do not think that it does that. To do the Committee justice, right at the beginning it recognised this by saying that at the end of the day it did not believe a solution could be found in terms of "procedural and mechanical adjustments". That was a secondary matter. The reasons for failures in the Community were "political". That is true. The committee could very usefully have stopped at that point, because it did not say a very great deal after that.
Despite the apocalyptic visions of the hon. and learned Member for Beaconsfield of super States, the prospectus that I read was very far from being that. It ploughed on for 109 pages.
Sir Ronald Bell: I should like to be clear that the hon. Gentleman regards the prospect of the super State as apocalyptic. That is a very important matter that we should have on the record from the Liberal Party.
Mr. Johnston: I did not say that. I said that the hon. and learned Gentleman regarded the matter as apocalyptic. I did not say that I did. I do not regard progress towards European union as being other than desirable.
I notice that the report places great emphasis on the Council. That emphasis is mistaken. There are 49 pages on the European Council and the Council of Ministers, and about 22 pages on all the other institutions. The wise men want to
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strengthen the European Council. They think that it should have a broad policymaking role. I do not agree. The European Council is not equipped for such a task. That is the Commission's job. The Commission should not become a general secretariat to the Council. I am sure that the hon. and learned Member for Beaconsfield would like it to develop in that way. It has been suggested that the President of the European Council should make six-monthly reports to the European Parliament. However, that would be a cosmetic. It would constitute a consultative exercise only if the President discussed future action with the European Parliament and its committees before Council meetings took place.
The Council is the central cause of inertia in Community decision making. I do not agree with the right hon. Member for Stepney and Poplar (Mr. Shore) about the Luxembourg compromise. That compromise has had a bad effect on Community decision making.
The concept of a vital interest has been abused. I agree with the Lord Privy Seal. He tried—in a somewhat circumlocutious manner—to avoid answering the questions that were put. However, he clearly believed that there was a difference between an important and a less important issue. I would have thought that that was a fairly simple political concept. There is a difference between something that is vital, and something that is not. The right hon. Member for Stepney and Poplar wishes to ensure that all decisions—vital, less vital or unimportant—arc unanimous. I reject that approach.
Mr. Robert Sheldon: Is it not clear that if a country does not like a measure, it can say that it is important and in its national interest? It can therefore prevent a measure from being enacted. The Committee of Three has done nothing in that respect. It has stated that all member countries have the right to stop any measure.
Mr. Johnston: I agree with the right hon. Gentleman. However, the Committee of Three should have pressed boldly for majority voting. At the very least, it should have suggested that if a country invoked the idea of a vital interest, it would have publicly to explain why it had done so. It is often difficult to find

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out which country has blocked what, and why. For example, we recently blocked the non-quota section of the regional fund. The House has not discussed that issue. The Government have given no explanation. That is profoundly unsatisfactory.
I agree—Liberals generally agree—to disagree with the three wise men. Perhaps I could have phrased that more felicitously. I shall start again. I do not believe that it is a good idea to reduce the number of Commissioners after enlargement.
It is surprising that, contrary to the views expressed by the hon. and learned Member for Beaconsfield, the three wise men seem to believe that there are insufficient portfolios to occupy the Commissioners after enlargement. I do not accept that. The Commission is the linchpin of the Community's institutional framework. It must remain independent. As I said, it must not allow itself to drift into becoming a secretariat for the Council of Ministers.
The problem with the Commission, which to some extent Roy Jenkins has sought to overcome in stressing that its role is political, is that it must try to ensure that its proposals are acceptable to the Council or there is no point in going through a long, laborious process. The result is that often, when a proposal is put to the Council, it is so attenuated and compromised in order to balance national pressures that the only body capable of making a fair evaluation of the proper action in European terms is prevented from outlining such propositions fairly and clearly.
Time is short. I should like to say a great deal more, but many other hon. Members wish to speak. The nature of the debate will be, and has been, coloured by the never-ending argument about whether we see the Community developing into a more coherent grouping, which is my wish and which inevitably presumes more effective supranational structures, or as a grouping from which we should like to withdraw. Every discussion about any aspect of the Community seems to be put in that way. It is profoundly depressing for the Community's future that the only amendment on the Order Paper is negative and backward looking
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and that the Government have accepted it. The Lord Privy Seal even said that this is not the time in the Community for futurist visions. I believe that it is. The Community desperately needs Britain to make an effort to make it work better. It will not work better if all that we can do is vie with each other as to which country is the more nationalist.
Mr. Deputy Speaker: Before I call the next hon. Member, I draw attention to the fact that there are only 23 minutes left before I hope to call the Front Bench spokesman.
1.3 am
Mr. Selwyn Gummer: I start by agreeing with the serious complaint of my hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) about the time allotted to the debate and the time of night. We have just spent an hour discussing the pecuniary position of 180 citizens of Dundee. Although that may be of great importance it is not as important as this debate. We must press those who make these decisions—and there is always a decent reticence about who they are—for serious matters to be given serious time.
I do not share my hon. and learned Friend's fears about the document. I perhaps find the apocalypse a less frightening possibility. However, I believe that the way forward for the European Community must be to grow together rather than follow a laid down programme, with careful steps imposed from outside.
I am disturbed that the right hon. Member for Stepney and Poplar (Mr. Shore) should have been upset that I was excited about his suggestion that the report means the opposite of what it does mean. If we are to make anything of the Community we must regard as important the concept of seeking to do together that which we can do together in the world. To ignore the final sentence of an important paragraph and pretend that it means something else is something about which we should be excited, whatever view we take of the Community.
It is a pity that the invigoration of the Community should be left entirely to my hon. Friends who wish to build unity in Europe. It is sad that a party with a

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long tradition of internationalism should propose such a mealy-mouthed amendment. It is so unimportant and otiose that the Government can accept it or not as they think fit. It shows how empty the Opposition are in their consideration of Europe's problems.
The right hon. Member for Stepney and Poplar made a sad comment on his attitude to the European Court. One of the most satisfactory ways in which we can bring some order to the long disorder in Europe is to have an institution which we can support in its careful and deliberate decisions. The fact that the French have not done that recently is no reason why the British should follow. I wish that we could set the example and take the lead. I wish that we could say that we are prepared to accept the judgment of the court which is making some important judgments about the human rights of people in this country. The human rights of our people depend on the ultimate court which decides whether the law is being obeyed. If the French will not follow that ideal, we must set the example.
The right hon. Member for Stepney and Poplar mentioned unelected institutions. It is difficult to understand that the European Parliament, now that it is elected, is less than the place that he would like, and that other unelected institutions should be brought down to size. I hope that the European Parliament will grow in power because it is based upon all the people.
Mr. Proctor: From where will the European Parliament gain its power?
Mr. Gommer: It will gain power from the representative people who elected it. That is why those who fear that the spirit of Europe will grow fought hard against the elective process in the European Parliament.
I hope that this report will be noted in the spirit of the remarks of the hon. Member for Inverness (Mr. Johnston). It is a first attempt to draw up some suggestions. It is not a long step. It is not a very exciting report. It is, however, an important step. We are now beginning to examine the Community to which we belong and to which we shall continue to belong and which will become the most important institution in the free world.
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We should have spent more time discussing what is a small step on a loag road.
1.10 am
Mr. Robert Maclemian: Both the Government and the Opposition Front Benches are at least united in believing that this is not a time for futuristic vision. It might be thought that some hon. Members, so far from looking forward, have been looking backwards The value of the report should not be judged by the wrong standards. The practicality of its suggestions mark the report as a distinguished contribution to improving the efficiency of the Community.
The report is clearly intended to tackle what the three wise men describe as the lourdeur of the Community's operations—the cumbersome aspect that flows from inadequate preparation for meetings of the Council, the proliferation of papers, and practical obstacles that not only clog up the machinery but can actually prevent forward-looking decisions being taken. Judged at that level, the report is important. I imagine that the institutions will concern themselves more with those recommendations than those of a striking and politically controversial nature on which the Lord Privy Seal gave the Government's view.
It was right that the report should set out clearly, at the beginning, both the nature of the achievements of the Community in the period to the present time and show clearly that the Community is not the mere alliance of like minded people that my right hon. Friend the Member for Stepney and Poplar (Mr. Shore) suggested as its role. It is a wholly new political institution that contains elements of alliance and elements of union. It has created, by the important transfer of powers to the Community institutions, supranational bodies more fitted to take decisions effectively in matters that cannot be decided individually by member States.
It has also created a new legal order that my right hon. Friend also called in question, expressing doubt about its effectiveness. The corpus of law being built up by the European Community deals largely with matters that do not touch the vital interests of member States. As it is possible to distinguish the vital interests of member States in matters that fall to be decided by the

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Council of Ministers, so that distinction can be seen in the operation of the European Court.
For example, many decisions have been taken by the court in the sphere of European competition policy. That is properly a subject of legal regulation and it is beyond the competence of individual member States to regulate effectively in this sphere, even to protect their own national interests. It goes far towards what the Labour Party has seen for many years as an important objective—namely, the desirability of exercising some control over the multi-national companies that are so responsible for what happens in the development of our economy.
I should also like to point out the liveliness of the development of the Community, to which the three wise men draw attention, and, as they put it, a new international presence on the world negotiating scene. That may smack more of alliance than of union, but it is because these negotiations are conducted with one voice and on the basis of a prepared and agreed position that the voice of the Community is listened to with more respect than would be nine individual States seeking to co-ordinate their positions.
In suggesting the dismantling of some of the institutions, my right hon. Friend the Member for Stepney and Poplar does less than justice to the achievements of the Community and, far from being futuristic, is backward looking in his approach.
We are not in a position of stasis in the development of European union, as has been implied in more than one speech. Direct elections and the establishment of the European monetary system are marked achievements in the direction of union and it is interesting that the terms of reference of the three wise men incorporated the injunction that they should consider measures necessary to adjust machinery and measures for progress towards European union. Although that is not a consummation that will be arrived at for many years—and many of us think that it would be wrong to try to bring about such a consummation in advance of public opinion—it is right that measures should be taken to make the machinery of the Community more efficient and to tend in that proper direction.
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One of the most controversial and important recommendations was that the European Council should adopt, in collaboration with the Commission, priorities for the Community as a whole. The analogy is with the Queen's Speech at the beginning of a parliamentary Session. I believe that the Government were right to take the view that that recommendation was not a good idea. The necessary preparations that would be involved would result in the establishment of a bureaucratic machine which would militate against some of the other objectives of the three wise men who emphasised the importance of speed and flexibility in the operation of the European Council. I understand the reasons for seeking to institutionalise the role of the Council in giving an impetus to the Community's proceedings and a shape to its deliberations, but the Government were right not to accept that recommendation. I am also glad that the Lord Privy Seal has accepted the desirability of the President of the European Council appearing before the European Parliament once every six months.
The question of the delegation of decision making is not a matter of ideology but a matter of practicality and not one to which, if we wish to see the Council of Ministers operating effectively, we should take exception. If matters are important, they will be decided by Ministers. If they are not important or are technical, they can be ironed out at an official level, with reference to Ministers if necessary. Putting on the shoulders of Ministers every decision that the Council must take will disrupt the business of the Council and prevent progress.
One of the other controversial elements in the debate has been whether the Luxembourg compromise has been watered down by the recommendations of the Committee of Three. It appears that the Opposition amendment is latching on to that. I can only say that I think it is perfectly plain from everything that the three wise men have said that no such intention was in their minds. They specifically maintained the Luxembourg compromise and acknowledged the right of every member State to recognise what its own major national interests required it to do in voting. If a matter is not considered by a member Government to raise a point of vital national interest it is

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clearly nonsensical that it should be necessary to obtain the support of that member Government for the particular proposal. That is not an issue of high principle but one of practicality, designed to speed up decision making and to render the Council of Ministers a more effective body.
I welcome the report and express gratitude to the three wise men on the speed with which they produced it. That is, perhaps, in contrast with the relative slowness of the Council in acting upon it.
1.23 am
Mr. Tony Marlow: I speak to the House as one with the strongest commitment to Europe—I am probably one of the most dedicated Europeans in this House. I believe that it is absolutely vital that we work together with our European friends and allies in defence and foreign policy. The Americans are less certain in the world and the Russians are becoming daily more dangerous.
However, the great tragedy of our current association with European is that we have associated with the Community on the wrong issues, such as the CAP and trading policy. We are enmeshed in the minutiae of economic measures. The report before the House would seek to enmesh us even further and even more directly and if that happens it will be more difficult, damaging and dangerous—and cause more trouble—when, eventually, we have to withdraw from some of the institutions with which we are involved.
As the right hon. Member for Stepney and Poplar (Mr. Shore) said we move towards an alliance—as opposed to a federation—which some of my right hon. and hon. Friends, for reasons best known to themselves, wish to follow at the moment.
When one looks at any report, one should first see who are the authors. The authors of this report are a Dutchman named Mr. Biesheuvel, Mr. Edmund Dell—of whom Lady Bracknell might have said that to be a Socialist was unfortunate but to be a Socialist and a European was to be damned careless—and Mr. Robert Marjolin, a foreigner and a Frenchman as well. As hon. Members have said, part of the objective of this report is to achieve progress towards European union. I think that many of my right hon. and
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hon. Friends, as well as Labour Members, would resist the way in which we are progressing towards European union at the moment.
I touch briefly on a couple of the recommendations in the body of the report. It says says that before 1981 the European Council should adopt, in collaboration with the Commission, priorities for the Community as a whole. That is a sort of European national plan with a series of commitments. That would mean that when Her Majesty's Government wished to put forward proposals and policies in the House they would be tramelled by European procedures and be prevented from adopting proposals which they might otherwise think were in the best interests of the nation.
Sir Ian Gilmour: I did not say that we accepted that part.
Mr. Marlow: I am delighted to hear that my right hon. Friend is not accepting that. I did hear him say that before. I appreciate the point that my right hon. Friend is making. However, I did raise that point because these sort of recommendations predominate throughout the whole of this paper.
We talk about a greater delegation of decision making. Why is that? Are too many decisions being made at the moment? Can the structure not cope with the decisions that are being made at the moment? My hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) has already maintained that we are getting far too many papers from the European Community. If we are to delegate decisions, there will be more of them and they will be bad ones.
Time has moved on. There is much more that I would like to say. But I think that to accept this wretched piece of paper would be damaging to the sovereignty of the House and to the interests of the constituents that I and others represent.
Several Hon. Members Several Hon. Members rose——
Mr. Deputy Speaker: I call the hon. Member for Crewe (Mrs. Dunwoody).
Mr. Dalyell: On a point of order, Mr. Deputy Speaker. I make no personal complaint about not being called. However, should it not be put on the record for the benefit of the Leader of the

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House that, despite all hon. Members clearly truncating their speeches and being unselfish in limiting their speeches, at 26 minutes past one o'clock in the morning, with no vote, at least nine hon. Members wanted to speak? It is totally unsatisfactory that in a debate of this sort and in these circumstances the Front Bench speakers are being called. I make no complaint about the Front Bench spokesman being called, but should not this be recorded for the benefit of the Leader of the House?
Mr. Nigel Spearing: Further to that point of order, Mr. Deputy Speaker. Will you confirm that, had this been a Commission document, rather than a non-Commission document, and subject to Standing Order No. 3, it would have been within Mr. Speaker's discretion not to put the Question if he had considered that there had been inadequate time? Is there any other Standing Order that applies to the document not being a Commission document?
Mr. Deputy Speaker: I do not have the discretion in this instance.
1.27 am
Mrs. Gwyneth Dunwoody: I find it appalling that we should be talking about something as important as the institutions of the European Community so superficially. It is frightening that the House, which increasingly has been faced with decisions being taken by the Community institutions, is forced to talk about reform with an embarrassingly superficial amount of time at its disposal. I hope that this will never happen again.
I do not regard the report as the best thing since sliced bread. It is typical of many Commission documents. One of the nice things about the Community is that frequently the problems of language produce their joyous moments. In the official report of the European Parliament of 12 May the French language version records its appreciation of the report not by the three sages—that is to say, wise men—but by the three singes—that is to say, monkeys. I cannot help but regard that as an interesting Euro-Freudian slip.
The document does not deal with the important issues. It does not refer to the effect that the Commission is having on our day-to-day life. It does not consider
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the way in which the Commission is functioning. It does not examine the freezing of posts and the rigidity of the structure. It does not turn its attention to the areas of the European Court of Justice that concern me the most. It does not spell out the way in which the court is taking decisions that are highly political in their implications, are frequently not debated in the House and are having the effect of allowing European law to take precedence over our own law.
In the brief time that is available to me I return to the substance of the Opposition's amendment. It is not good enough, when dealing with an issue of such importance, to say "Yes, we accept the Opposition's amendment, but when it suits us we shall ignore it". Unless I am gravely mistaken, that is exactly what the right hon. Gentleman was saying. I draw his attention to the exact wording of the amendment—namely :
"declines to approve any proposals that would weaken the present power of national veto and control in the Council of Ministers."
It is not possible to accept what the right hon. Gentleman appears to be suggesting—namely, that there is not a delegation of powers because we still have the right to decide on the issues that are of national interest.
The right hon. Gentleman and I know that there will always be instances when something is important but, because it cannot be defended as being absolutely vital, it will be allowed to go by default. Therefore, I ask him again to spell out in the five minutes that he has whether he is suggesting that there is no change in the situation. If that is what he is saying, and if he accepts the Opposition amendment on that basis, we are prepared to go ahead without a vote. Frankly, I warn him that if the Government imagine that they can say "There, there" to the House of Commons on something as basic and important as this, and then, within a very short period of time, demonstrate in the Council of Ministers that they are prepared to go along with the whole question of majority voting, they will be opening themselves to charges of straight dishonesty in relation to the House of Commons.
We are becoming increasingly tired of the situation that arises where the Scrutiny Committee decides that matters are of immense importance, yet the House

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of Commons does not have to take a decision or even make its decision clear.
I ask once more, and I ask in very simple terms, whether the Lord Privy Seal is saying that he accepts not just the exact wording on the Order Paper but the spirit and the intention behind the Opposition amendment. If he does not, will he please explain to us exactly what he has in mind?
1.32 am
Sir Ian Gilmour: The Government will not be very encouraged to accept future Opposition amendments if the Opposition complain that the Government have done so. It would have been easier to vote against the amendment.
There has been a considerable contrast in this debate. My hon. and learned Friend the Member for Beaconsfield (Sir R. Bell) saw the report as leading to a super State, whereas the hon. Member for Inverness (Mr. Johnston) thought that it had very little in it and that it was very day-to-day, jejune stuff. Certainly, it would seem unlikely to those of us who knew Mr. Edmund Dell that he would come out strongly in favour of a super State. Therefore I cannot help feeling that a great many of the fears about this stated by hon. Members on both sides have been rather overdrawn.
As my hon. Friend the Member for Eye (Mr. Gummer) pointed out, the right hon. Member for Stepney and Poplar (Mr. Shore) made one or two fairly selective quotations. I have no objection to him not paying attention to what I said, but he attacked the report without reference to what I said, except my remarks on his amendment.
The hon. Member for Crewe (Mrs. Dunwoody) made a rather strident speech and asked the same question four times. There is no great difficulty. I said that we were prepared to accept the amendment for the simple reason that it is totally otiose. There is nothing in this report which in any way reduces the right of national veto.
Mr. Marlow Mr. Marlow rose——
Sir I. Gilmour: I am very sorry but I have only two minutes. It is best if one of us speaks at a time.
There is no question but that the Luxembourg compromise is not in any way affected by this report. The report
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advocates that people should agree matters. It does not suggest voting. It advocates that people should come to a compromise, which is, roughly, what I think the Labour Party is not very good at doing. However, it is what most bodies seek to do. If my hon. Friend will contain himself and read pages 50 and 51 of the report he will see that the member States are exhorted to come to agreement and not to vote, if at all possible. The Luxembourg compromise is in no way affected by this report. Therefore it is perfectly all right for us to understand that.
I see that I have run out of time. Therefore I shall not repeat what I said earlier.
Mr. Dalyell: Has the Lord Privy Seal read the report?
Sir I. Gilmour: I read the report, I think I can say, at least one and a half times.
1.34 am
Mr. Jack Straw: If the Lord Privy Seal has read the report, I find his remarks strange. The Opposition's amendment is otiose only if the report proposes no change at all in the status quo. It is proposing a change in the status quo. It is proposing that majority votes should be used in circumstances where at the moment vetoes are exercised——
It being one and a half hours after the commencement of Proceedings on the motion, the debate stood adjourned.

MINISTRY OF DEFENCE STAFF (BATH)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Cope.]
1.35 am
Mr. Chris Patten: There is hardly any hon. Member I should less like to keep from his bed at this hour of the morning than my hon. Friend the Under-Secretary of State for Defence for the Royal Navy. We have known one another man and, in my case, boy for 13 or 14 years. I received a good deal of my initial political education at his hands, so he has a great deal to answer for in that respect.

519
More recently, my hon. Friend was extremely understanding when in Bath we were resisting—happily, successfully—the ill-judged pork barrelling scheme that he inherited from the previous Labour Administration for relocating jobs from Bath to Glasgow. My hon. Friend has my condolences for the fact that this thorny problem has landed in his "In" tray after passing like a hot potato through several pairs of ministerial hands.
While I have certain qualms about keeping my hon. Friend up tonight, I have no qualms about raising this question again on the Floor of the House, but in greater detail than I achieved in the debate on the Defence White Paper. I do so principally for two reasons. The first is that it affects 67 of my constituents who feel that they have been unfairly treated. The number was 68, but one of the ladies concerned left her job before the redundancy notices were issued.
The second reason is that I believe this question touches a wider principle—namely, how we can best improve efficiency, reduce manpower and generally get better value for money throughout the Civil Service. I should make it clear, because I want to return to this point later, that I wholly support the objectives for the Civil Service which were set out by my right hon. Friend the Prime Minister a few weeks ago and which have been set out from time to time by my hon. Friend the Minister of State, Civil Service Department. I have also made that clear to the Civil Service unions in my constituency where the Ministry of Defence is the largest single employer.
But that is not at issue. At issue is whether the proposal that has come from the Ministry of Defence will save any money and whether the Ministry's approach is most likely to carry employees in the years ahead as the Ministry and other Departments attempt to get better value for money. I remind the House of the facts. As part of its cost-cutting plans, the Ministry of Defence last year instituted a number of surveys covering a wide range of work from research and development to quality control. The first of those surveys to be finished was the report on contract cleaning and catering.
We have been assured on a number of occasions that, wherever possible, cuts in Civil Service manpower will be
520
achieved through natural wastage rather than redundancies. In this instance, clearly there was a good deal of pressure on the Ministry of Defence to cut numbers, partly because it employs about one-third of the total number of civil servants. Against that background the cleaners may seem to be an easy target. After all, in the Government's statistics, as in the divine plan, one Mrs. Mopp counts the same as one permanent secretary. In this instance the axe was not spared, and it fell not on a single deputy secretary, under-secretary, assistant secretary, senior principal or principal, but on just under three and a half score cleaning ladies. It is not surprising that one or two of my constituents have suggested that the whole episode sounds as though it comes from the television programme—which I have not managed to get home in time to see—called "Yes, Minister".
The contention was, and the contention remains, that the change to contract cleaning will save 5 per cent. of the cost of cleaning. That cost was given in a parliamentary answer before Whitsun, by my hon. Friend the Under-Secretary of State for Defence for the Royal Air Force, as totalling £299,700. Against that, the cost of redundancies amounts to £27,000. Even if we accept the figure for the total cost of cleaning, and even if we accept the figure for the alleged saving, it is still clear that it will take at least a couple of years to recoup the cost of the redundancies. The position is not as simple as that. First, let us consider the figure for the cost of cleaning the establishment. I do not accuse the Department of sleight of hand, but as I understand it, the figures given in the parliamentary answer actually covered all the Ministry of Defence establishments in Bath, including those that have already changed to contract cleaning.
It has been suggested that if we consider the figure for those establishments where the change will be made, it amounts to less than half the amount given in the answer. That suggestion is confirmed if we gross up and annualise the weekly wage costs, national insurance costs and bonus payment costs which have been given to the staff side of the local Whitley council. On those figures it would not take two years to recoup the costs of redundancy but at least four years. More important, the Ministry of

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Defence has refused to give any figures to prove that the saving of 5 per cent. will be made. We have to take that on trust. I find that slightly strange. When we consider the White Paper on defence, paragraph 732, we see the cost for a nuclear-powered submarine, a type 42 guided missile destroyer, a Tornado GRI aircraft, a Puma helicopter, a Milan anti-tank missile, and so on. Yet, a veil of secrecy is drawn over the costs of contract cleaning. I commend the Department's openness in the one case, but in the other its reticence slightly surprises me.
Even if we accept that the tenders that have been put forward by the contract cleaning companies should remain secret—and I do not find the arguments for that overwhelming—there are some other facts that the Civil Service Union and the employees generally are entitled to know. For example, how many cleaners will be employed by the contract companies, and what hours will they work? Was a comparison made with the notional establishment, or was it made with the actual number of cleaners employed? The two figures are not the same. Is it true that the comparison was made on August 1979 pay rates? What would the comparison be if it was made on present pay rates? What rates of pay will the contract cleaners receive? Does the comparison take into account some allowance for the administrative forces that will be needed to monitor the contract?
As I understand it, there is no dispute that the present cleaning staff do an efficient job. I am told that their hourly work rate of 1,898 square feet is extremely good by any standards. Nor is anyone suggesting that they are well paid or highly paid. Actually, I think that I am right in saying that their rates of pay are rather less than those of their counterparts in local government. If that is the case, how can the job be done for less? Where will the savings come from? Will we see them come from a reduction in overheads? Will the contract cleaning companies be able to achieve a higher hourly work rate? Will the pay which they give out be lower? Will less be cleaned, or will it be cleaned to a lower standard? That is what worries a large number of people—that the savings, if they are made, will not be achieved
522
through greater efficiency but through a I lower standard of work.
I do not want to criticise the contract cleaning companies. They may well beable to achieve the savings about which J we have heard. If so, good for them. What I am saying is that we are entitled to receive the facts on which that contention is based. After all, the Governmcnt have been commendably open about such things as the Chevaline project. One is entitled to ask that they be a little more open about something which is perhaps of less importance.
Mr. Gavin Strang: I congratulate the hon. Gentleman on the diligent and assiduous way in which he has pursued this matter on behalf of his constituents, not only because of his commitment to them but because the Government are particularly vulnerable J on this issue. He is reluctant to criticieise the contract cleaning firms. Does he accept that there is evidence in the past of a clear inadequacy on the part of many of those companies, although perhaps not all? Does not the failure and refusal of the Government to provide the basic data—as the hon. Gentleman has clearly brought out—on which they are basing their decision, totally undermine the credibility of the assurance which Ministers have given in the House time and time again to the effect that they will make these changes only if they can justify them on cost-effective grounds?
Mr. Patten: The latter point is one which concerns me. As for the former point, I understand that the standards of cleaning by outside companies have been a source of concern in a number of the departmental Whitley councils. I am sure that my hon. Friend will confirm that.
It is an open secret, if it is a secret at all, that at the Foxhill establishment in Bath a good deal of work is going on in regard to Polaris, and that classified work which is almost as important, is also undertaken at that establishment. For that reason, the existing cleaning staff has had a security clearance before being employed. That will not happen with the contract cleaners. Indeed, one cannot see how it possibly could. Is the Ministry now saying that security clearance is no longer necessary because the nature of the classified work has changed? Is it

523
saying that the rules for security clearance have changed? Is it saying that other security checks will be applied? If it is saying that there will now be less security clearance, why did we spend so much on it in the past? Have we been wasting money? Are we still wasting money by operating security checks on some groups but not on the new contract cleaning staffs?
My last point is the one about which I feel most strongly. I think that everyone accepts that this group has done a first-class job. Do the Government intend to help them secure jobs? In making them redundant, we are not shedding the Government function. We are not saying that the taxpayer will no longer have to pay for this. What we are saying is that the taxpayer will go on paying for this service, but that he will get better value for his money. We know that for two years at least, and arguably for four, he will be the loser. The figures on which we can reach the conclusion that at some stage in future he will get a better bargain are being withheld. I think that is a pretty rum way of proceeding. I do not think that it is a reasonable reward for the effort and loyalty of the cleaning staff which has now been made redundant. It also provides a bad precedent for future attempts to cut costs in the Civil Service, which if they are to be successful should be carried through, as far as possible, with the full-hearted consent—I pick up a phrase which might have been used in the previous debate—of those who are concerned. The Department has much larger plans in the pipeline for cutting costs and increasing efficiency. I hope they will not be jeopardised by the ham-fisted way in which the Department carries them out.
I conclude by reading a letter from one of my constituents, who was a civil servant last March. He said :
"Personally, I have a lot of sympathy for the overall aims of the present Government, even where the policy is one of optimising the resources in the Civil Service. However, I cannot and will not ever agree with any action of any Government which executes policies based on the ill-informed and biased views of public opinion, regardless of the effect and regardless of the fact that by so doing only a cosmetic result is achieved."
I sympathise with that point of view, and I hope that my hon. Friend the Under-Secretary will be able to allay the anxieties
524
of that constituent and other constituents as well as my own.
1.52 am
The Under-Secretary of State for Defence for the Royal Navy (Mr. Keith Speed): First, even at this late hour, I should like to congratulate my hon. Friend the Member for Bath (Mr. Patten) on raising this human problem. He is properly concerned about the jobs of his constituents, and I appreciate that concern.
He mentioned the problems, with which we dealt last year, of the possible move of many of his constituents out of Bath to other parts of the country. I am glad that that problem has been solved. I hope that if I explain the procedures and what lies behind the problem, that will go some way towards allaying his fears and answering some of his legitimate questions.
As my hon. Friend is aware, the position at Bath stems from a Government decision in June last year not to extend the moratorium, which had been imposed by the previous Administration, on the transfer of cleaning Government offices by directly employed labour to cleaning by contract services. In essence, that represented a reversion to the previous practice of deciding the most appropriate method of cleaning on the basis of cost comparison. I stress that this is nothing new. It went on long before the moratorium. It is entirely consistent with the Government's search for every reasonable economy in public expenditure.
My hon. Friend is also aware that this moratorium applied only to headquarters offices but that the Ministry of Defence took this opportunity to review the cleaning arrangements in all its establishments. During my speech to the House in the defence debate on 29 April I said that this exercise was in its first phase and that we v/ere concentrating on 80 or so establishments with the largest cleaning staffs. Those where a review is in progress were identified by my hon. Friend the Under-Secretary of State for Defence for the Army in an answer to the hon. Member for Thornaby (Mr. Wrigglesworth) on 2 June. A copy of the consultative document that was prepared to cover the possibilities of both contract cleaning and catering has now been placed in the Libraries of both Houses.

525
In each case relative costs are being assessed by means of inviting contract tenders as well as a detailed examination, largely at local level, of the non-financial implications. It is our intention to proceed to contract where financial savings are indicated, but only if there are no other over-riding considerations to prevent this.
The exercise is still not complete. However, at those establishments where a full evaluation has been made, the indications are that contract services will be able to offer a comparable service at lower cost than a directly employed work force. So far the potential savings indicated are very encouraging, with the average savings for a number of disparate buildings and cleaning costs running at about 20 per cent. of the directly-employed labour costs.
I turn to the specific issues raised by my hon. Friend. Ministry of Defence headquarters at Bath are housed in 10 locations. Of these, five are already cleaned by contract services and the other five are cleaned at present by a directly employed work force. My hon. Friend the Under-Secretary of State for Defence for the Royal Air Force, in answer to the hon. Member for Thornaby, told the House on 23 May that the cost of cleaning all 10 Ministry of Defence establishments at Bath, together with an element for administration costs, was just over £299,700. The current cost of cleaning those establishments where we shall replace the directly employed labour force is £175,400.
The Ministry's final selection of contractors indicated a 5 per cent. saving against the cost of direct labour, even after the inclusion of 15 per cent. VAT in the tender prices. My hon. Friend will realise, of course, that VAT will accrue to the Exchequer. It was decided, therefore, to extend contract cleaning to the whole of the Ministry of Defence's Bath complex, with the result that 67 staff will be made redundant.
The savings identified are based on a comparison of the costs of the number of staff needed to achieve a specified standard of service—the complement—with contract tenders to achieve the same standard and cover the same area. Present restraints, such as the recruiting ban now in force, mean that the current work
526
force at Bath is below the complement. In any case contract cleaning would still be cheaper than the current directly employed labour. The comparison was made in August last year at the then rates of pay on both sides, and the updated costs still show the same order of savings in changing to contract services. Furthermore, it also includes an allowance for the administrative resources needed to monitor the contracts.
Unfortunately, I am unable to give details of the number of cleaners who will be employed by contractors or the hours that they will work, as this would allow a fairly accurate estimate to be made of the contract tender prices. The normal rules governing commercial confidentiality must apply here.
Although I took my hon. Friend's point about the White Paper, the cost of Type 42 destroyers, Milans and so on, that is not germane, because here we are talking about a commercial tender made in confidence to the Ministry, and in the White Paper we are talking in broad-brush terms about the cost of items of equipment rounded to the nearest £1 million or £100,000. The two are not directly comparable.
The matter of commercial confidentiality was one of the questions referred by the Civil Service Union to the Central Arbitration Committee, an independent body, which endorsed the Ministry's stand. Subsequently the union approached the Divisional Court for a judicial review of the committee's findings, but its application was turned down.
I appreciate my hon. Friend's point and the point about trying to be as open as possible, and I should like to go a long way with it. But commercial confidentiality, which arises not only in this context but in others, is very important. The need for it has been upheld by an independent committee and upheld again by a court on appeal in recent weeks.
Contractors will use all their own material and equipment. The savings identified are attributable to a number of factors. A major saving lies in the fact that contractors' employees tend individually to work fewer hours a week. Therefore, the contractors are often not liable for national insurance contributions—quite legally. Their staff will be paid at least the current local authority rate.

527
In practice, the wage movements of Ministry of Defence staff and those of the contractors we engage follow each other closely.
In addition, shorter periods of working, generally rather higher work rates and the use of more up-to-date equipment, which has capital expenditure the MOD can less well afford, also result in savings to the benefit of the contractor. I assure my hon. Friend that they will not be achieved by a lowering of standards. All 28 of the central London MOD headquarter buildings are cleaned currently by contract cleaners, and standards in most of those that I have been in are pretty high, as I am sure my hon. Friend would agree. In order to achieve this end, the contract tenders selected were not necessarily the cheapest of those submitted.
We shall take suitable precautions to ensure that we have confidence in the security of contract staff. I note what my hon. Friend said about that important feature. Other measures, such as controlling hours of access, can also be taken to maintain proper security standards, and special arrangements are made for particularly sensitive areas, as we do, indeed, where contract cleaners are being currently used. My hon. Friend will not expect me to go into details of these publicly tonight, but I assure him that that is already the situation.
I am sorry that it has been necessary to involve these redundancies, but the Government are determined to press on
528
with their policy of achieving public sector economies. Everything possible has been done to soften the financial effect of the redundancies. All but two of the staff affected at Bath are part-time workers. Except for two cleaners recruited this year on a purely casual basis, none will be paid for less than six months from the date of issue of the redundancy notices and those entitled to more than this by virtue of length of service will receive it. Five of the staff are over 60 and will be retired on pension, but additional compensation payments will be made to those staff who have been employed for 12 months or more and have not yet reached retirement age. It is generally the case that contractors offer re-engagement to former staff made redundant. We are encouraging this and we have agreed to provide facilities for interview on site.
The Ministry's staff side has been given opportunity for comment and discussion at every stage, but I must stress that the saving to be secured by transfer to contract services has never been other than clear cut.
I hope that my hon. Friend will accept, therefore, that, painful though these decisions are, our resources must be deployed to be as cost-effective as possible. Over the years we have had plenty of experience of contract cleaning. We are convinced that in this and many other instances it has an important part to play in making savings of taxpayers' money.
Question put and agreed to.
Adjourned accordingly at two minutes past Two o'clock.

TRADE
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SCOTLAND
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NORTHERN IRELAND
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SOCIAL SERVICES
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DEFENCE
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EDUCATION AND SCIENCE
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TRADE
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AGRICULTURE, FISHERIES AND FOOD
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  Fishing Industry
  Fishing Industry
  Vivisection
  Vivisection
  Colorado Beetles
  Colorado Beetles

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.

COUNCIL HOUSES: TENANTS' RIGHTS TO PURCHASE
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 whether they will confirm that they are determined, despite threats from newly elected Labour councils, to give all council tenants the right to buy the property in which they have resided for many years.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, yes. The proposal that council tenants should have the right to buy is contained in the Housing Bill, which was read a second time in your Lordship's House on 9th June.
Baroness VICKERS: My Lords, has my noble friend seen the case of a member of the Labour Party who was living in a council house, who was negotiating to buy it for £6,000, but has now been refused? What action can my noble friend take in such a case?
Lord BELLWIN: My Lords, there are a great number of such people who were in the midst of negotiations prior to the local elections in May, when control changed, and as a consequence sales that were in hand at the time were stopped. Of course the Government regret this very much, but at the present time have no powers to do anything about it. After the Housing Bill becomes the law of the land it will be a different matter because, in the unlikely event that any local authority should then decide not to comply with the law, under Clause 22 of the Bill there will be powers for the
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Secretary of State to take over the sale. But we confidently expect that that is most unlikely to happen.

IMF TERMS TO THIRD WORLD COUNTRIES
2.37 p.m.
Lord HATCH of LUSBY: 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 using their influence in the International Monetary Fund to modify its terms to Third World countries.
The MINISTER of STATE, TREASURY (Lord Cockfield): My Lords, the IMF's role is to provide balance-of-payments assistance to its members and to help them take whatever corrective measures are needed to adjust their economies. Assistance from the Fund is essentially of a temporary nature, and this means that the Fund must ensure, by the imposition of conditions where necessary, that advances are repaid. The Fund's guidelines were revised in March 1979 and, in the light of this, Her Majesty's Government do not consider that any special initiative on their part is called for.
Lord HATCH of LUSBY: My Lords, may I ask the Minister to address himself to a specific example to illustrate the point behind the Question? Does he agree that in the case of a country like Jamaica—when it is short of foreign reserves as a result of massive increases in oil prices, high import costs and declining commodity prices—it is a scandal that the IMF should make it a condition of supporting its claim for foreign reserves that there should be massive devaluation, substantial increases in import prices, severe restrictions on budget expenditure—
Several noble Lords:
Reading!
Lord HATCH of LUSBY:—and a relaxation of price controls, causing drastic cuts in social services, in addition to an already long queue of unemployed numbering between 10,000 and 11,000?

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Does the Minister agree that those conditions must be changed, and that we, as one of the major members of the IMF, should take a lead in that regard?
Lord COCKFIELD: No, my Lords, I would not agree with anything the noble Lord said. Negotiations between the IMF and Jamaica were broken off by Jamaica. One hopes that at some stage those negotiations will be resumed. I do not think it would in any way assist the matter in endeavouring to debate it by way of Question and Answer in this House.
Baroness GAITSKELL: My Lords, is the Minister aware that Mr. Michael Manley, the Prime Minister of Jamaica, is a remarkable man, not a Left-Wing "nut" or a man who in any way is like some of the very disreputable Prime Ministers in various parts of the world? He is a man whose economy really deserves to be helped. Would the Minister not be quite so hard in answering my noble friend Lord Hatch of Lusby on this issue?
Lord COCKFIELD: My Lords, I do not know whether the noble Baroness was endeavouring to distinguish between Mr. Michael Manley and her noble friend. I have already said that we are well aware of the negotiations between Jamaica and the IMF, and of course that they talk. Negotiations are essentially a matter for the management of the Fund and the country concerned. I do not think it would assist either in the resumption of such negotiations or in their successful conclusion to endeavour to debate the matter in the terms which both the noble Baroness and her noble friend have used.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, is the noble Lord aware that he is talking about a situation which is full of human tragedy, and that cheap gibes at this side of the House are not really appropriate? Is he further aware that if a country finds itself unable to benefit socially and politically from the terms of a loan of this kind, it makes the loan inoperable? Is it not time that Her Majesty's Government looked around them, outside their own terms of vision,
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and saw that the rest of the world already recognises that the IMF is too rigid in the way it approaches these matters?
Lord COCKFIELD: My Lords, it is because I am aware of the circumstances that the noble Baroness has mentioned that I have made the point that I do not think it would assist the matter by endeavouring to debate in your Lordships' House an individual case of this type in the kind of terms which have been used by noble Lords opposite.
Baroness LLEWELYN-DAVIES of HASTOE: My Lords, may I ask the noble Lord whether he is aware that it is not for him to say what we debate in this House? Any noble Lord is entitled to ask a Question and Her Majesty's Government then have to reply.
Lord COCKFIELD: My Lords, I entirely agree with the noble Baroness about the rights of Members of your Lordships' House. Nevertheless, it is a perfectly valid point that some of the comments of the kind which have come from Benches opposite are not the sort which assist the furtherance of negotiations in a matter of this nature. Her Majesty's Government have no responsibility for negotiations in individual cases; these are matters for the management of the IMF itself. I have already said that the guidelines were revised in 1979. We need to see what the effect of those revisions will be. There are periodic meetings at ministerial level, where all these matters can be, and are, kept under review. The last such meeting was held in Hamburg in April, and another meeting is scheduled for Washington in September.
Lord KILMARNOCK: My Lords, may I ask the noble Lord whether he has read the Brandt Commission Report, and, if so, what conclusions he has drawn from it?
Lord COCKFIELD: My Lords, the Brandt Commission Report is a matter to which Her Majesty's Government are giving their attention.
Lord BROCKWAY: My Lords, notwithstanding the economic views of the Government, does the Minister think it right that an international monetary fund

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for aiding nations in difficulty should impose conditions such as those which were proposed in Jamaica, which would have meant the deepening of the poverty of most of its people?
Lord COCKFIELD: My Lords, the imposition of conditions by the Fund is accepted by the great majority of its members. That is in fact essential if the Fund is to carry out the duties imposed on it by its articles. The loans from the Fund are of a temporary nature. They are intended to enable countries to adopt policies which will put their balance-of-payments situation on a healthy basis, and in many instances it is essential to impose conditions to ensure the repayment of the funds in question.
Lord HATCH of LUSBY: My Lords, may I draw the Minister back to my original Question? I am sure that he will accept that the British Government have a responsibility as a member of the IMF. He has mentioned the guidelines of March 1979. My Question is designed to elicit from the Government an indication of whether they consider that since that time conditions of the kind that I have described in fact—not in opinion—have not put those guidelines out of date. Will the British Government now use their influence to persuade the IMF to return to the articles which the Minister has mentioned and which include respect for members' policies?
Lord COCKFIELD: My Lords, while it is a matter for the IMF to defend their own decisions, I do not accept that they are acting outside the guidelines which have been laid down. I have already said that these matters are kept under review, that there are periodic meetings at ministerial level, that one such meeting has just taken place, and that another is scheduled for September.
Lord LOVAT: My Lords, on a point of order, am I not right in believing that questions should be asked, not read? I noticed that the first speaker on this Question read for a considerable time from his notes, and it is quite impossible for a Minister to make an intelligent answer when he does not know what is coming next.

BRITISH RAIL: UNUSED TICKET REFUNDS
2.47 p.m.
Baroness TRUMPINGTON: 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 under what authority British Rail are refusing to make refunds on production of unused return tickets without documentary evidence of the alternative method of travel on the return journey.
Lord MOWBRAY and STOURTON: My Lords, I understand that the British Railways Board's Conditions of Carriage of Passengers give them discretion whether to allow refunds on unused tickets.
Baroness TRUMPINGTON: My Lords, may I, through the offices of my noble friend, ask whether the Government will request British Rail to state publicly the rules that they are now implementing, so as to avoid causing dismay to law-abiding citizens who, by the treatment they now receive, are made to feel like criminals?
Lord MOWBRAY and STOURTON: My Lords, my noble friend may be interested to know that a British Rail booklet, which is available on demand at any station, sets out the Conditions of Carriage of Passengers. Condition 13 states that the board:
"do not undertake to make any return to passengers in respect of the value of lost, mislaid, or unused tickets, or of any fares which may be charged in consequence of the passenger's failure to produce a ticket when required. The board do not undertake to issue a duplicate of any ticket lost. Subject to the minimum refund amount and administrative charge from time to time in force, consideration will be given to applications for refunds in respect of unused tickets returned within seven days of the expiry of their validity".
The British Railways Board have always included this condition in their small print, which I agree very few of us ever bother to ask for or to read. Since 1st May they have been requiring people who send in tickets to provide documentary evidence; someone must sign a statement that he was in charge of a vehicle in which the passenger travelled

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the journey concerned. British Railways estimate that they have been losing at least £1 million a year through frauds of this type, and it is in this context that I ask your Lordships and my noble friend to accept British Railways' attitude to the case.
Lord WELLS-PESTELL: My Lords, may I ask the Minister whether it is a reasonable requirement, and whether the Government ought not to do something about it? I suspect that it is many decades ago that those regulations were adopted by British Rail, and I think one must bear in mind, and it should be pointed out to them, that return rail fares can now amount to £6, £7, £8, £9 or £10, or even more. We are not dealing with just a few pence these days; we are dealing with many pounds. Provided the return ticket can be sent to them unclipped, I should have thought that that was as much evidence as they were entitled to ask for.
Lord MOWBRAY and STOURTON: My Lords, I understand that the British Railways Board are advised that they are being cheated to a considerable extent—they estimate over £1 million a year—by people managing to get through barriers without handing in their tickets. They consider that if you do the journey in another vehicle, it is not unreasonable to ask for a signed statement saying that. It is merely an aid in attempting to stop what they consider may be rather massive cheating.
Lord WALLACE of COSLANY: My Lords, there is also this point to bear in mind, that these days, in point of fact, many railway stations are not manned at night, due mainly to vandalism; and is the noble Lord aware that many people walk through stations with tickets in their hands which have not been clipped because at Charing Cross and other stations they do not clip them anyway?
Lord MOWBRAY and STOURTON: My Lords, I am sure the noble Lord is not suggesting that because a ticket has not been collected he is entitled to try to collect a refund.
Baroness TRUMPINGTON: My Lords, may I ask my noble friend how he would
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distinguish between a fake letter written by the person himself and a genuine letter written by the carrier of the person?
Lord MOWBRAY and STOURTON: My Lords, I understand that the British Railways Board recognise the validity of what the noble Baroness is saying, but, nevertheless, they still consider that the extra effort required to get someone to sign a false document will be sufficient to help save them from enough false claims as to make it worth while.

BUSINESS
Lord DENHAM: My Lords, it may be for the convenience of your Lordships to know that dinner will be available this evening at the usual hour. The Committee stage of the Employment Bill will be adjourned at approximately 7 o'clock for approximately an hour, and the Second Reading of the Sea Fish Industry Bill will be taken during this adjournment.
WESLEY'S CHAPEL CITY ROAD BILL
Read 3ª, with the amendments, and passed, and returned to the Commons.

EMPLOYMENT BILL
2.53 p.m.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(The Earl of Gowrie.)
On Question, Motion agreed to.
House in Committee accordingly.
[The Earl of Listowel in the Chair.]
Clause 3 [Unreasonable exclusion or expulsion from trade union]:
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 19A:
Page 5, line 27, at end insert—
("or to any rule of a trade union or any agreement to which a trade union is a party
[Lord Wedderburn of Charlton.]
providing for an appeal within a reasonable time by an applicant for membership against refusal or by an expelled member against his expulsion.")
The noble Lord said: It falls to me to move Amendment No. 19A, standing in the name of myself and of my noble friend. When your Lordships' Committee rose last Tuesday night, my noble friends and myself were delighted that at last the noble Lord, Lord Lyell, relented and the Government at last agreed to reconsider a matter in Clause 3, which we are still discussing, in the light of our amendment. We are hopeful that they will be equally generous today, but more speedily. We hope to make good progress with the Bill, as indeed we did when the noble Lord, Lord Lyell, and the noble and learned Lord the Lord Advocate took up the Government's case last Tuesday. We have high hopes that this amendment will at least find favour with them, linked as it is with Amendment No. 21, which my noble and learned friend Lord Elwyn-Jones will move later.
Clause 3 gives to the industrial tribunals and then (it is perhaps never to be forgotten) to the appellate courts above them the power to decide, on the basis of reasonableness, who is to be and who is not to be a member of a trade union in respect of unreasonable expulsions and unreasonable refusals to admit. But in coming to that decision they have to take account of subsection (11), which provides:
"Any provision in an agreement shall be void in so far as it purports to exclude or limit the operation of, or to preclude any person from presenting a complaint or making an application under, this section,"
and the following section, with the exception of the operation of conciliation officers and agreements made with conciliation officers.
It appears from previous discussions that the Government are not in disagreement with my noble friends and myself that this clause and subsection (11) cover the area which might loosely be called, first, the rules in the trade union rule book, which are the internal appeals machinery, the contractually agreed appeals machinery against disciplinary offences and, especially here, expulsions (and, I shall show, even refusals to admit in some cases); and, secondly, agreements
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between unions, whether or not they are contractual, and in that second category a group of agreements and principles which are indeed contractual in the last resort, the so-called Bridlington procedures and principles of the Trades Union Congress, more correctly described, perhaps, as the Trades Union Congress disputes principles and procedures.
As to the first, the rendering as void of the internal appeals machineries set up within each union, it is perhaps worth stressing that such arrangements do not exist only in every rule book of every reputable and bona fide trade union in the country—appeals from decisions of the branch or from the region to the executive committees, and sometimes to other bodies to which I shall come. It is also worth noting that in some cases—indeed, in many cases still—the High Court itself, when faced with a complaint by a member against a trade union which is within its jurisdiction (which, broadly speaking, may be called a complaint that the union has broken its rules in expelling him, or that the union has failed to observe the principles of natural justice) does not regard the appellate machinery of the union itself as void. Indeed, it is still true to say that where the rules lay down an expectation that the member against whom action has been taken will exhaust the internal appeals machinery (what is usually called "exhaust his internal domestic remedies") before he goes to the court, on many occasions the High Court will still tell him that he must do that before he comes to the High Court. It is true that if there is an unreasonable delay or some other factor of injustice, then even in face of such a rule the court will take jurisdiction; but the proposition which I have just advanced to your Lordships' Committee is, I think, fully sustained by the judgment of Mr. Justice Goff in the case of Leigh v. National Union of Railwaymen in 1970. So that the High Court in a sense trusts at least reasonable internal appeal rules of the unions, and does not put them aside.
But in Clause 3(11) the Government's Bill appears to take very little heed of the appeals machinery inside the union. In another place, in Committee, it appeared from the debate that the Government were accepting that in very many cases the obligation or expectation that a

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member should go through the internal appeals machinery in face of expulsion or refusal to admit would be a clause in an agreement or a provision in an agreement which purported to exclude or limit the operation of the section. I can see that that may be an arguable case. That is why we are moving this amendment to say that there should be excluded from that rendering as nugatory these agreements of internal appeals machineries.
It is worth stressing that the actual machineries laid down in trades union rule books are quite different from the kind of account which normally appears before the public in the media. I have here the rule books of the two largest unions in the land, the Transport and General Workers' Union and the Amalgamated Union of Engineering Workers, the second being the engineering section. The Engineering Workers have three pages of carefully drawn appeals machinery and a final appeals court with lay members drawn one each from the 11 divisions sitting wholly independently of the executive committee hearing appeals against decisions of the executive and other bodies. The Transport and General Workers' Union has a series of appeals machineries from branches and divisions through the regions to the national executive council and also an appeals committee beyond that in certain cases. Indeed, the rule book illustrates a development which has been going on in trade union rules over the last few years in providing that where a person is refused membership of the union he or she may appeal to the regional committee albeit there is no contractual right to do so, because, not being a member, he or she will not have acquired any such contractual right. The union observes that machinery.
No doubt mistakes occur in the administration of trade unions as in other bodies; but I must submit from my experience (and my noble friends are supporting this point) that most British trade unions have appeals machineries which are properly used and far better than the appeals machinery of some institutions including some of the professional institutions. We say it is quite wrong that the matter should be left at risk that all those machineries, instead of being contractually binding (as they have been since 1957), might suddenly be rendered void, because, if they are rendered
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void, it will be difficult for the industrial tribunals to take them into account in coming to a determination of "reasonableness", which is the overriding test under this clause.
This becomes more important when we approach the question of inter-union arrangements and the Trades Union Congress. There are many inter-union arrangements which solve problems, and which are necessary to solve problems, in the multi-union system of industrial relations which history has bequeathed to us. The most important are the Trades Union Congress disputes principles and procedures. They are central. What is usually called "Bridlington" is a set of principles, not in themselves contractual but which operate as a contract binding on all the unions affiliated to the TUC—12 million workers—and operated as a contract because they are incorporated into TUC rules.
Disputes between unions as to overlapping membership, or poaching of members, or the right to organise in one place or another, are first conciliated by the TUC staff and, if not solved, may be referred to a disputes committee consisting of experienced trade union officers who are not interested (in the sense of having an interest) in the dispute, and the decision of the disputes committee is binding upon the disputant unions. The disputes committee approach the job, it is perhaps not irrelevant to remind your Lordships, under a regulation which says:
"The basic approach of the disputes committee shall be to seek to obtain an agreed settlement of a permanent or interim character acceptable to all the disputants. The committee may at any time make such recommendations as it sees fit. Whenever the disputes committee considers it to be necessary it shall make an award and in deciding the dispute the disputes committee shall have general regard to the interests of the trade union movement and to the declared principles or policies of Congress but shall in particular be guided by the principles governing relations between unions as amended by the General Council and adopted by Congress from time to time".
Those are the so-called "Bridlington" principles. The hard work of the Trades Union Congress staff and the experienced trade union officers who work at this problem day after day is scarcely noticed in the publicity given to trade union affairs. In 1979 there were 111 reported disputes. After conciliation, only 16 were referred to disputes committees and at the end of the year only seven remained unsolved.

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There are no headlines for the hard toil that trade union officers and TUC staff give to this saving of many hundreds of thousands of hours which might otherwise be lost to British industry.
Most trade unions affiliated to the TUC will have in their rule book the link between the TUC's disputes under Bridlington and their own rules. This is a point of particular importance in regard to subsection (11) because this rule, too, it appears, stands at risk of being rendered void. Since 1956 the TUC has recommended its affiliated bodies to include the following rule in their rule books and many dozens of its affiliated unions have adopted most of it. The rule reads:
"Notwithstanding anything in these rules"—
that is, the rule book of the union—
"the General Executive Council may by giving six weeks' notice in writing, terminate the membership of any member if necessary in order to comply with the decision of the disputes committee of the TUC".
In 1976, before Mr. Justice Foster in a case in the High Court, the validity of this rule was challenged under common law and the matter was left with the rule not declared unlawful, and, still less, void.
The first question to the Government on this amendment must be this. Will the TUC model rule which is on the rule book of nearly 100 unions be rendered void, or is it valid under Clause 3(11)? That is a matter which the Government advisers must have decided by now. I am not asking about some vague formula, but about the model rule which has been there since 1956. Is it void or not? In looking for guidance on this, I found much more reassurance from the noble and learned Lord the Lord Advocate in what he said last Tuesday than I did from his right honourable friends in another place. Last Tuesday the noble and learned Lord (in column 1379 of Hansard), when speaking about the Bridlington procedures, said this:
"I give the unreserved assurance that there is no intention whatsoever in this Bill on the part of the Government to undermine those procedures".
I think it would be fair to quote a further passage. He went on to say:
"A tribunal, under the provisions of Clause 3, and particularly Clause 3(5), will have to determine whether, in all the relevant circumstances, a trade union has acted reasonably in excluding or
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expelling a person. The tribunal, therefore, will of course include in its consideration the question whether the action was taken in pursuit of the Bridlington procedures or similar arrangements".
But when I look at the remarks of his right honourable friend on 14th February in Committee in another place I see that he did not speak in quite the same terms. In speaking of the Bridlington type arrangements and of various amendments being moved by the Committee, he said:
"The amendments do not go so far as to say that the tribunal should be bound by it, but they do say that it should be taken into account by the tribunal. If we were to write that into the clause, the effect in the case of the first amendment would be to make the tribunal take account of an agreement that might be in conflict with subsection (11)".—[Official Report, Commons, Standing Committee A, 14/2/80; col. 419.]
In colum 420, he said:
"In so far as [the amendment] protects actions properly taken in accordance with Bridlington arrangements, the amendment is not necessary. But it goes further and asks tribunals to have regard to union membership agreements or arrangements which may seek to curtail rights otherwise created by the clause, and which subsection (11) declares to be void in so far as they do so—".
At that point he was interrupted by a Member of the Committee who said,
"I do not think so".
He went on:
"and on those grounds the amendment is unacceptable".
He says to the Member who interrupted him:
"But Clause 3(11) makes void agreements or arrangements that have the effect of contracting out of the provisions of the rest of Clause 3".
That is a very particular interpretation. Subsection (11) does not talk about contracting out; it talks about any provision in any agreement which purports to exclude or limit the operation of the clause. So a further question arises. First, if the Government are so clear that the existing Bridlington arrangements are not rendered void by subsection (11), will they frame their own amendment and come back on Report and put that in the Bill?
Secondly, if what they are worried about is that some Bridlington type agreement —to use the phrase of the noble and learned Lord's right honourable friend—will be void because it will go too far, will they not at least give an assurance on this amendment that they will come back with a form of words which allows for the

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existing arrangements and arrangements like them not to be rendered void? The burden of the Government's arguments again and again under Clause 3 is: "Do not worry, it will all be all right because the industrial tribunal will be reasonable. It will always be reasonable, so do not worry." If that is right, then the Government really should not introduce clauses which might have the effect of rendering Bridlington and internal rules void, because we can rely, they say, upon the industrial tribunals and, presumably, the employment appeal tribunals, the Court of Appeal and the Judicial Committee of this House on appeal to be reasonable and to know what to follow and what not to follow in terms of a reasonable expulsion. So why include a clause which any lawyer worth his salt could say rendered Bridlington or a particular internal union appeal rule void?
It is arguable that the words "in a provision which purports to limit the operation of this clause" covers many appeal procedures inside unions, and possibly arguably—strongly arguably, some people say—the Bridlington arrangement itself and the model rule. So it will not do to say that there is no other way of doing it. It will not do to say: "We must have this very broad clause that will make everything void, just in case the tribunals take account of it when they should not", because, on the Government's own admission, the tribunals are never going to take account of anything when they should not. I sometimes think that the industrial tribunals are regarded by the Ministers on the Government Front Bench as so wise that all courts of appeal could be abolished, because, being tripartite, they will always come to the same decision.
It is a distinct possibility that the various arrangements which I have described, inside many unions, between many unions, in the TUC and its unions, and their contractual arrangements, the whole Bridlington arrangement dealing with whatever problems arise of an inter-union kind—and heaven knows, they have fallen off astonishingly in number in the last decade, largely because of work done by the TUC—all of those are at risk, at the minimum of being void. I say that that is to legislate an act of industrial vandalism. It is, in fact, to
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get rid of or make void many bits of machinery which keep the wheels of industry going. I hope very much that the Government have thought again and will accept the amendment which we have put forward; or, if they do not, that they will at least assure us that on Report they will replace subsection (11) which, as it stands, would do grave damage to the operation of British industry. I beg to move.
3.14 p.m.
Lord ROCHESTER: I should like to support this amendment because of its close association with Amendment No. 21 to which we shall shortly come and with the principle of which I very much agree. I do not intend to say more than that on the amendment which has just been moved, except that I wonder whether I may make what is really a procedural point at the start of what looks like being a very lengthy Committee stage of the Bill for this week.
A good many amendments have been tabled substantially in the same form as in another place. I think it is fair to say, from my observation at least, that this applies to both sides of the Committee. I cannot think that this is right, any more than it was right, as the noble Lord, Lord Houghton of Sowerby, pointed out, that we should have been required to vote on whether Clause 1 should stand part of the Bill when opposition to the Bill was not pressed that far even in another place. In my view, it would greatly assist the Committee if fewer amendments were moved and, as far as possible, only those that dealt with major points, particularly where they have been insufficiently debated in another place or where, as in the case of a closed shop, there have been material developments since in the situation. In the same way, I wonder whether I may take the great liberty of suggesting that we could do with rather fewer Divisions than appear to be in prospect.
It was said by the noble Lord, Lord Wedderburn of Charlton, at Second Reading that he proposed to press every line of the Bill in Committee. One allows for a great deal of exaggeration in the heat of debate; but to the extent that this is done, I cannot think that it will give pleasure, even to his noble friends,

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particularly if it occurs at three o'clock in the morning. So I take leave to suggest to the noble Lord and also, if I may, with respect, to the noble Lord, Lord McCarthy, that they consider very carefully the desirability of speaking briefly and pressing amendments selectively, at least in the case of those that have already been debated in substantially the same form in another place. I hope that I said that without too much offence and I think that it comes better from someone on these Benches than from someone either on the Government side or on the Labour Opposition. I hope that it will be taken in the spirit in which it is offered. Having said that, I am pleased to support this amendment.
3.18 p.m.
Lord LEE of NEWTON: It was very necessary that my noble friend Lord Wedderburn should have explained the background to the Bridlington arrangements. In this country we pioneered so much in the way of the formation of trade unions that much of the structure is now pretty well obsolete. It follows that instead of the structure of industrial unionism with one union per industry, we have a large multiplicity of unions even within one industry, many of them indeed organising the same type of labour. This leads to differences and difficulties which would not be with us if we had a structure of industrial unionism. Therefore the points made by my noble friend in explaining Bridlington are vital in understanding the reasons for this amendment.
We tend at times like this almost to look upon the trade unions as organisations which are trying to find excuses to keep people out. I have spent many, many years of my life trying to induce people to get in; and the thought that we go around looking at dots and commas, and so on, in an effort to show just how we can exclude everybody in sight, is really grossly misleading people as to our purpose.
My noble friend mentioned the constitution of the number of unions, including my own, the engineers. He mentioned the final appeal court. I would challenge contradiction in trying to show any more democratic set-up in any kind of organisation, either employers or employees, than
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the manner in which the final appeal court in the engineering union is brought together. It is elected by the members of the union. The whole membership of the final appeal court are rank and file members of the union. We will not have any full-time official present, except the secretary of the union, to read out the minutes. So the whole thing is conducted by rank and file people examining the cases put before them. That, I should have thought, is a democratic set-up which could not be beaten anywhere.
I can tell your Lordships of very many occasions when our executive council —a full-time body of seven people—have appealed to the final appeal court against members who have done something or other, and the final appeal court has turned down the executive flat time after time. I see my noble friend Lord Pargiter here. He, like myself, has spent a lifetime in the movement and could probably emphasise what I am saying. The idea that there is any sort of red tape concerning some erring member who goes to an appeal court and is not considered as being a bona fide type of person is quite wrong. I hope, therefore, that the type of legislation against which we are now protesting will be at least made better by the acceptance of the kind of amendment that is being moved.
I have mentioned the engineers. I know this applies certainly to practically every one of the large unions affiliated to the TUC, and why we should find it necessary to try to hem them in on all sides with this kind of thing, I really do not know. On Second Reading my noble friend emphasised that a great deal of what is deemed to be increasing the powers of the trade unions is nothing of the sort, but is merely getting back to the basis of the 1906 Act. I hope the Government will look at this amendment in the light of what my noble friend and I are saying, because there is now a need for this Government in particular to try to prove that they are not simply trying to lie on the trade unions in every possible way, because this is the feeling that many of us have. By accepting an amendment like this they will do something at any rate to mitigate the damage they are doing.
Lord RENTON: In spite of the sweet reasonableness of the noble Lord, Lord

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Wedderburn of Charlton, and other noble Lords who have supported him, I would hope that the Government will leave these matters to be decided under the Bill as it stands. After all, provision is made for conciliation under subsection (11) where it is used. Provision is made for resort to a tribunal and to an appeal under subsection (8) to the Employment Appeal Tribunal. I do most seriously suggest to your Lordships that if we are going to have it as a necessary part of this procedure for adjusting complaints in these very delicate circumstances, there should also be resort, as a prior condition, it seems, under this amendment and that of the noble and learned Lord, Lord Elwyn-Jones, which is to come later; and if it is to be a condition precedent to the procedure under the Bill as it stands, then I think it is going to be dealt with in a very cumbersome manner. Delays are inevitable and, bearing in mind the difficulty which the individual trade union member may inevitably feel himself to be in when he wishes to appeal against explusion or exclusion, he will have much more confidence in a totally external and independent procedure such as the Bill has mentioned.
The noble Lord, Lord Wedderburn, said that the two largest unions in the country—both of which, I should mention, are affiliated to the Labour Party—have rules carefully drawn, which are reasonable. I do not doubt that; but what if those rules are amended in ways which become or appear to become oppressive to individual members, perhaps by introducing still further procedural steps? Those rules could not then be regarded any longer as carefully drawn and reasonable.
As to the appeals machinery, the noble Lord has said it is properly used. Within the limitations of the present law, I have no doubt that is true: I am not in a position to challenge it. But, surely, if we make it a condition that this appeals machinery shall be used, then the tribunal or, if the case is referred to it, the High Court (and that is not impossible, I think) then we have to consider whether the union rules are sound, whether they have been properly applied and whether the appeals machinery is sound and properly applied. Then ultimately there will be
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procedural wrangles instead of decisions upon the main issues; and the main issues are carefully set out in this clause, particularly in subsection (2). Surely it is best for the machinery envisaged by the Bill to be used to decide those issues instead of the matter being made cumbersome and complex by introducing this further step.
A noble Lord: Hear, Hear!
3.27 p.m.
The LORD ADVOCATE (Lord Mackay of Clashfern): May I begin by reminding the Committee that the opening words of subsection (11) are:
"Any provision in an agreement shall be void in so far as it purports to exclude or limit the operation of … this section."
It does not make automatically void an agreement of the kind to which the noble Lord, Lord Wedderburn, referred. It makes it void only if such an agreement impinges on the section—
… in so far as it purports to exclude or limit the operation of … this section."
This amendment falls, I would agree, to be considered along with Amendment No. 21, to which the noble Lord, Lord Rochester, referred. The Government in the other place undertook to give serious consideration to this matter, because it is a matter which is important. On considering it, what we did was to lengthen the time within which a complaint must be taken to the industrial tribunal by the complainer. That gives the complainer the option of waiting until that period of six months has expired in which one would have anticipated that reasonable procedures of this type might well have reached a conclusion. If they have not, we would say it is unreasonable to expect the complainer to wait longer than that when a decision to exclude him—and I take that as the example for simplicity—has been taken. There is nothing to prevent the rules of a union being in such a form that the exclusion will not take effect until the appeals procedure has been exhausted. In other words, there is no exclusion until the final decision has been taken, and in that case, of course, the six months' period does not begin to run subject, of course, to the requirements of subsection (9)(a), which limits the total time a person has to wait before he hears one way or the other.

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This present amendment in my submission would include a case of this sort. A union rule might forbid an appeal to a tribunal until any internal appeals procedure, perhaps the independent review committee procedure, was exhausted. The delay in making an application to a tribunal arising from exhaustion of these procedures might be very unreasonable from an individual's point of view. The individual might have lost his job before having an opportunity to exercise his statutory right of appealing to a tribunal, and the delay involved might take him well beyond the six months within which he is expected to make any complaint. But this amendment seems to go even further than that. Clause 3 (11) makes void an agreement,
"… only in so far as it purports to exclude or limit the operation of … this section".
The amendment, therefore, as I read it would validate rules or agreements which did so exclude or limit the operation of the clause. Any other purpose it might have is unnecessary because any other rules or agreements are not voided by the subsection.
Under the amendment, a rule which provided an appeals procedure and directed members to use this and give up any statutory rights would be valid and could therefore result in individuals being stopped from using the rights of this clause altogether. Not only could union rules provide an appeals procedure and forbid the use of the statutory rights under Clauses 3 and 4, but the union membership agreement itself could incorporate an appeals procedure, perhaps concluding with an outside independent arbitrator to determine the question and lay down that the individual must not make use of his statutory right to appeal under Clauses 3 and 4. In my submission, the amendment would really destroy the clause altogether if it permitted that kind of thing. Accordingly, in my submission to your Lordships, the extension of time which the Government have given for the complaint to be lodged deals properly with this matter and I would invite your Lordships to reject this amendment.
3.32 p.m.
Lord WEDDERBURN of CHARLTON: I cannot express how disappointed
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I am at the Government's response. First, may I say to the noble Lord, Lord Rochester, that we welcome his support for this amendment. I accept the point that he made about the number of amendments in the spirit that he put it to us. I feel bound to say, in fairness to my noble friends as well as myself, that we started with about five times as many amendments, that our noble friend the Chief Whip put us through our paces, that we went away late at night with wet towels and came back with these amendments. If they overlap the amendments that were taken in another place that may well, as we think it does, reflect the fact that in another place the Government were singularly obdurate and unrelenting in refusing to accept a large number of reasonable amendments which have to be argued properly again, to which they gave no answer except usually, "No".
Turning to the points that have been made on my amendment, may I say to the noble Lord, Lord Renton, that of course I appreciate that the clause leaves the agreements made with a conciliation officer under Section 133 of the 1978 Act. But those, of course, are agreements which, if they fail, will lead to proceedings in the industrial tribunal. Secondly, both he and the noble and learned Lord the Lord Advocate to some extent addressed a different amendment from the one which I am moving. My noble and learned friend will move an amendment in somewhat different terms, but all this amendment does is to say that the internal appeals machineries and the Bridlington machinery should not be void or that such agreements should not be void.
If the noble Lord and the noble and learned Lord say that some of them may be unreasonable, I would say that there is no evidence of that in British trade union practice; but if it be right then at least the tribunal could take account of it. What is the point of saying that they are necessarily void? The noble Lord, Lord Renton, says there will be procedural wrangles. To address the first of the arguments put by the noble and learned Lord, the Lord Advocate, it is indeed true that the clause says they are void in so far as they purport to limit the operation of the section. That does not make things better; it makes them worse. What a field day for a couple of lawyers to argue

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about the Bridlington arrangement, to which the noble and learned Lord addressed not a single word.
It will not pass without notice in the trade union movement that the Government's reply on this amendment did not mention the TUC Bridlington procedures in any way to explain whether and how far they are valid under this clause. In so far as they limit the operation of the section they are void. What is Congress House, what are the trade union headquarters, to do about that except to go and ring up their lawyers? And their lawyers will not know until it is decided. It is really no good the Government saying, "Oh, but we've dealt with this. We've extended the time during which, after the exclusion or the refusal to admit, a complainant can come to the tribunal, because now we've amended our Bill to give him six months rather than three".
It is true they did that. But that gives the complainant the option. What rights does the trade union have if its internal appeals machinery should be exhausted? What right does the TUC have to see that the Bridlington machinery is gone through in the interests of peace in industry? It gives the complainant, the individual, as always, all the rights, and the individuals who form the trade union movement, with whom he is in dispute, no rights at all. That is the attitude of the Government in this Bill and that is the attitude against which we are complaining. I have no objection to a complainant being given a six months' limitation period; that is perfectly reasonable. But I do object, and my noble friends object, when a provision is left in an Act, as this will be, which to some extent makes void agreements which are necessary for the exclusion of wrangles in British industry day after day.
After all, they get enough publicity when a bad one breaks out, when everyone is at fault, probably, not so many miles from here—employer and unions and everyone alike. But when things go well not even the Government, in drawing up a Bill, are prepared to give them credit. All that this amendment would have done would be to validate such agreements. It would not have made them binding on the tribunal, and the arguments which the noble and learned Lord addressed to the second point are irrelevant to this amend-
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ment. However, as the noble Lord, Lord Rochester, has pleaded, we should not have too many Divisions. Divisions take time. The Government's position is noted. We can only hope that they will come back to it on Report, because if they do not they really cannot expect the trade union movement to believe that this Bill is anything other than an anti-trade union Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.38 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 20:
Page 5,1ine 27, at end insert—
("(12) No person may make a claim under this section by reason of a refusal of his application for membership by a specified trade union where he objects to membership of another specified trade union, to which it is the practice for the class of employees of which he is one to belong.").
The noble Lord said: I think I can satisfy your Lordships by being brief with this amendment, although it is a somewhat complex one. It attempts to add to Clause 3 a subsection which would avoid a quite unnecessary case ever getting to a tribunal. Clause 3 applies where there is a union membership agreement, usually, but rather loosely, called a closed shop. The hypothesis on which the clause proceeds is that there is an agreement between the employer and one or more independent trade unions that certain practices shall be observed in terms of the workforce belonging to the specified trade unions. It is a commonplace in such arrangements that there will be more than one trade union. Sometimes there is one trade union and that is enough, but usually in our situation there are more than one. That, of course, is what makes quite irrelevant the arguments of bodies like the European Commission dealing with situations where they expect different types of union pluralism.
Let us take an example to which this amendment is addressed, where an employer has a workforce with three unions—a craft union and two general unions. The craftsmen belong to the craft union. The stokers belong to general union A and the rest of the manual workers belong to general union B, and that has been the practice over many years. Suppose someone comes along and seeks to get a job—because last week the Government said

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this clause must apply to those seeking work—and then claims admittance to union A. Union A may say to him, "You really can't join us because the practice at this place of work, agreed by the employer, agreed by all the unions, agreed by everybody else, is that we provide for the stokers and general union B provides for the others. You're one of the cleaners. We'd love to have you, but union B is your union". But he insists. He says, "No. I want to join union A and I'm going off to the tribunal to say that this is an unreasonable refusal of admittance".
The worry of it is that the things said in another place make one wonder whether the obvious reply that is to come from the noble and learned Lord, namely, that no tribunal would ever consider such a case to be made out as a reasonable case of unreasonable refusal, is really the Government's expectation.
In order to save time I shall not read it, but if the noble and learned Lord looks at what his honourable friend said on 22nd February, at column 586 of the Official Report, he will see a somewhat lengthy passage in which Mr. Mayhew describes a case where someone quite reasonably refuses to go into one union rather than another, because one is led by Communists and the other is not. I suppose that other people might object because one is led, as the Government Benches hopefully expect every day, by Conservatives and the other is not. But if that is to be the type of reasonableness test applied, I suppose it is possible that such a case could give rise to a favourable award by a tribunal.
At least, I put this in the alternative to the Government. If it is a case where no tribunal would ever say about a refusal to admit, contrary to an agreed practice—which I stress is agreed by the employer, the unions and everybody else in the union membership agreement—"It is reasonable to exclude that man. He has applied to the wrong union. He must apply to the right union. That is the reasonable course", then the Government should accept the amendment, because that will make things clear to us which, from the debates in the other House, they are not.
If, however, it is not so, then the amendment is needed even more, because I can-
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not think of a way in which bargaining structures would be more fragmented, in which industrial peace would be more disturbed, in which employers and personnel managers would be more frequently driven to despair, than if the clause gave a statutory right to someone to join a union which employer and unions in a place of work had agreed it was not the practice of that grade, qualification or class of employee to join.
We have arrangements between employers and unions. They give rise to practices. We have used the word "practice", because that is the word on which the dismissal law depends. I ask the Government whether, in the face of those alternatives, they have any choice but to accept this amendment or, at least, to clarify the clause along lines which are parallel if they find the drafting inadequate. I beg to move.
3.42 p.m.
Lord MACKAY of CLASHFERN: The Government's answer to this amendment is similar to the answer which I gave to Amendment No. 12. The justification which the noble Lord, Lord Wedderburn, put for the amendment is that it would be entirely reasonable that an application which was founded on circumstances such as those should be refused. What we say is that it is far better that the general principle of reasonableness should be the test, than that the Bill should be cluttered up with a lot of particular cases.
Nobody can think of all the cases and we are, therefore, strongly of the view that it is much better that the general principle should be adhered to and that each case should be determined on its merits. If it be true, as the noble Lord said, that the result of applying the standard of reasonableness to this case would be as he said, then that is the result which we would expect from the tribunal.
Baroness SEEAR: I very much hope that the noble Lord, Lord Wedderburn, will not press this amendment. I entirely agree with him that it would make for the most frightfully confused bargaining, if people joined what was not the right union for the bargaining unit that they should be in, and that it is highly desirable that the objective which he seeks should be followed.

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On the other hand, there can be—and I have a case in mind—the very exceptional case where an extremely awkward industrial relations situation can be resolved by allowing something of this kind to happen. I believe it would happen only very rarely and, therefore, I think it most improbable that bargaining units will be confused in this way. But if it is in the legislation that it may not be done, then the very exceptional case which can be eased by an unusual procedure of this kind would become illegal. So, while supporting the objective of the noble Lord, I think it would be much wiser not to have it in the legislation.
Lord MACKAY of CLASHFERN: In view of what the noble Baroness has said, may I add that we contemplate a code of practice in which it would be possible, after discussion, to deal in a much more appropriate way with a large number of particular cases, perhaps as illustrations of the general principles.
Lord WEDDERBURN of CHARLTON: May I say to the noble Baroness, Lady Seear, that, accepting as I do that she agrees broadly with this amendment, we agree that there may be cases where the practice should be broken. But the difference in our approach to industrial relations from hers is that we say it should be done by agreement, not by the fiat of an industrial tribunal. That is the basic difference with the Government as well. We say that there are not a lot of cases such as this. I traverse the argument of the noble and learned Lord the Lord Advocate, if I may address him, that there are a lot of other cases of this kind. There are not a lot of other cases of this kind. This is a very particular point, which is singular and central, and to give the matter over to the control of the industrial tribunals is to take a chance. After all, Grunwick was not a very important factory in terms of the British economy, and yet it blew up into a great national cause célèbre, apparently because of legal proceedings.
It is possible for an industrial tribunal on such matters as this to make a decision which trade unions do not regard as reasonable. There is not a national consensus about all these matters; but where there is an agreement between an
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employer and his own unions it should not be upset. It is possible for an industrial tribunal to be unreasonable and, with respect, it is also possible for the Court of Appeal to be unreasonable, in the eyes of a large number of people in this country.
To give over the control of the bargaining units and arrangements to courts and lawyers is what the Government are insisting on, in being, once again, unrelenting and not accepting an amendment of this kind. It is to that, we insist again, that the trade union movement—and, I fear, the Government will find, as it is spelled out to them, many employers, too—will come to object as they came to object to the Act of 1971, when they see what it means. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.47 p.m.
Lord ELWYN-JONES Lord ELWYN-JONES moved Amendment No. 21:
Page 5, line 27, at end insert—
("(12) No person may make a complaint against a trade union under this section who has not exhausted any appropriate internal appeals procedure of that union relating to exclusion or expulsion from union membership, and who has not exhausted the procedure of the Independent Review Committee established by the Trades Union Congress.").
The noble and learned Lord said: This amendment, as your Lordships have already heard, is linked to some extent with No. 19A, but deals with a separate matter. Its purpose is to promote voluntary procedures for dealing with refusals of union membership or expulsions from a union, instead of—as I submit the language of the Bill now does—encouraging employees to by-pass those voluntary procedures or, certainly, discouraging them from having recourse to them.
It is significant that in paragraph 16 of the Government's own working paper in July 1979, it said:
"The provision of this statutory right"—
that is, the right that we are talking about; namely, complaints in respect of arbitrary exclusion or expulsion—
"would not conflict with voluntary procedures in handling these types of problems. It would be clearly valuable to individuals and unions that such proceedings should continue to be available where parties avail themselves of them. The more effective voluntary procedures are made, the

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greater the chance that these cases could be satisfactorily dealt with without recourse to the law".
That is not the approach of the Bill. Without the amendment which I move, the Bill would encourage complainants not to exhaust the appropriate internal appeals procedures, but, on the contrary, to go straight away to either the industrial tribunal or the Employment Appeal Tribunal. The outcome of this would be that an arrangement, painstakingly hammered out, possibly, between union and management or within a union after consultation, could be summarily ignored.
In the circumstances that we are considering, instead of having the industrial tribunal or the Employment Appeal Tribunal in the background, which is where they ought to be, they will always be well in the foreground, especially with the blaze of publicity that would frequently, at any rate, attend these proceedings. It is far better that those tribunals, if they are to have jurisdiction in this field, should be a recourse of last resort. The words of the Donovan Commission on this were wise. They said that you cannot have labour courts operating on individual matters between employer and employee if you also give them the much more politicised role of determining collective disputes or, and I emphasise this, relations between trade unions and their members. This, I concede, reflects the general Donovan preference, which is also our preference, for consensus and voluntarism over legal compulsion.
Dealing with exclusions from unions in closed shops they said:
"Complaint should in the first instance lie to the executive committee of the trade union concerned. It is desirable that trade union rules should be revised to make provisions to this effect where this has not already been done".
Most unions, as my noble friends Lord Wedderburn of Charlton and Lord Lee of Newton have already explained, do have rules to this effect, and we have heard about the appeals procedures within unions and under the auspices of the TUC.
There is also a source of recourse to which I should like to refer and which has proved to be of great value; namely, the Independent Review Committee which is referred to expressly in my amendment. This was established by the TUC in 1976,
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following closely the model recommended by Donovan. The Independent Review Committee exists to consider appeals from individuals who have been dismissed or given notice of dismissal from their jobs as a result of being expelled from or having been refused admission to a union in a situation where trade union membership is a condition of employment. Its chairman is my noble friend Lord Wedderburn of Charlton and another member is my noble friend Lord McCarthy, to both of whom the noble Earl, Lord Gowrie, was good enough to say that they had served on the committee with distinction. I am sure that the noble Earl did not mean that as an ironic courtesy.
The EARL of GOWRIE: No, I did not.
Lord ELYWN-JONES: The third member is Mr. Doughty, a former General Secretary of the Technical and Supervisory Section of the Amalgamated Union of Engineering Workers.
The review committee is completely independent in reaching its decisions. Although I concede that its terms of reference are limited, in the field where it has functioned it has shown itself to be of very considerable value. Employees should be encouraged, not discouraged, from having recourse to it in appropriate cases. In the three years following its establishment, 45 cases have been referred to it. This, incidentally, suggests that the problem we are considering, as my noble friend Lord Lee of Newton indicated, is not so great as the Government imply and contrasts starkly with the many thousands of unfair dismissal cases. Of the 45 cases referred to the committee, 17 were outside its terms of reference. Of the remaining 28, 12 did not proceed; but of these, several were settled with the aid of the committee's staff. Of the cases which went to a hearing before the committee, 10 complainants were ordered to be readmitted or admitted. The union concerned—this is the important and encouraging matter—in every case complied without demur with the decision of the committee. The complainants in those cases were all given their cards, which after all is the crucial point.
Emphasis is placed in the Independent Review Committee upon its informality. Conciliation is stressed before and after

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the hearing. It is both able to and bound to engage in conciliation to a far greater extent than the courts think it right to do. Latterly the committee has placed great emphasis on post-hearing conciliation, directed particularly at ensuring that the complainant does not remain unemployed if he is unemployed at the time of the hearing. In many cases, I submit that the procedures in this committee may be far more effective not only in establishing a good result for the complainant in the particular case but also in establishing good industrial relations. Certainly it is a procedure which should be tried first in the appropriate case, within its terms of reference, before launching into a battle before one of the tribunals. Accordingly, in the light of experience in this field, I submit that it is essential to urge and press for the acceptance and use of these voluntary procedures, and that a condition of establishing that result should be to require the exhaustion of those appropriate internal measures before recourse to the tribunals. I beg to move.
3.57 p.m.
Lord SHINWELL: One of the Government's intentions in promoting this legislation is to encourage some people to by-pass the trade union. That is their purpose. The Government are suspicious of the tribunal procedure of a trade union. They do not trust the trade union tribunal procedure. They want these people to put their case before the courts. In other words, they want publicity. They want those who are representing the trade union before the court to be reprimanded and to be castigated so as to afford an opportunity to the press, who have no particular enthusiasm or affection for the trade unions, to publicise the case to their heart's content, in order to damage the reputation of the trade union movement. That is the purpose of it.
I have followed the argument of my legal friend to the best of such ability as I possess, but I do not pretend to have any real knowledge of legal matters, and if I intervene at all it is because I happen to have in my pocket (I may be among the few in this position) a trade union card. However, my union card is almost unique because I do not pay any subscription. I am, and have been for 50 years or so, an honorary life member of a particular union for services rendered—that is all.
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That is my only claim for intervening in this discussion. If anybody challenges me I will produce the card. Indeed, I brought it with me deliberately this morning. I do not usually carry it with me; we have far too many papers in our pockets. But let me return to the point.
There is a vast difference in the procedure of trade unions nowadays as compared with the situation when I first joined a trade union in the year 1903, which is quite a long time ago. Eventually I became the national organiser of a trade union—without the knowledge, I note, that it is possible (I mean what I say) to use some person to make a claim against a trade union, not because he wants to be a member of it or because he objects fundamentally about exclusion from that union but because he is concerned about political motives. I have experienced that myself many years ago.
To return to the point, either the Government—and I am saying this with the utmost respect to the Minister responsible—are suspicious of the procedure in operation in a particular union or regard its procedure as improper, not properly drawn up or something of the sort, or they want deliberately to encourage the by-passing of the trade union and its tribunal procedure in order that the matter should receive the utmost publicity. If that is their purpose then we say goodbye to any improvement in industrial relations in this country. If anything is going to exacerbate this situation, it will be that.
I just want to add this, which may as well be said. I have been watching what has been happening with the trade union movement for some years now, not with great passion. Many things have happened that I have disliked. It is a personal matter. There is sometimes leadership which troubles me. Many things have happened in recent years that I would much rather had not happened. I merely say that in passing, but I should like to see industrial relations improved; I should prefer more consensus than confrontation. Sometimes I listen to debates on economic matters, as, for example, that most interesting debate the other day on productivity, or to debates on how to improve the economic situation, only to discover at the end that there is no implementation but that the Government pro-

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duce the usual ministerial replies—the sort of thing I used to do myself.
When I have to listen to that type of thing I ask myself whether we are ever going to put things right. By that, I do not mean ideologically that we are going to create a different atmosphere, far different from what has existed in the past, and that we are going to have happiness and contentment and love and kisses all round. I do not believe that is possible in my time, or even long after my time. There will always be problems, but here is an opportunity to deal with one aspect which concerns our industrial situation and our economic and social existence, and I beg of the Government not to make things worse.
With others in your Lordships' House, in another place and among the general public, I have watched with intense interest the endeavours of Mr. Prior to push through legislation which is regarded by many of his colleagues as being far too moderate. I can recall—and I am sorry that he is not present, but I make no complaint about it—the activities of the noble Lord, Lord Drumalbyn, when in 1970–71 we had to deal with industrial relations legislation. I can remember how enthusiastic were the Members on the Conservative side of the House, and how depressed we on the Opposition side of the House were because not one of our amendments was accepted, yet many of them were intended to improve the legislation and were not moved for the purpose of "taking the mickey" out of the Minister or of the Government. There was no biased political motive involved, but not one of our amendments was accepted. Are we to have the same situation now? Is it not possible that in this situation we are all concerned, without exception, with improving industrial relations, encouraging more co-operation? Is it not possible that the Government may sometimes be wrong and that some of our amendments may be right?
Therefore I will ask noble Lords on the other side of the Committee to look at this matter very carefully and consider what it means. Do not throw too much of this legislation into the courts. I do not distrust them, nor am I suspicious of them, but there ought not to be too much
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publicity about matters which could be settled by consensus within the ambit of the trade union movement. It is possible, if not probable; let us try it out.
4.5 p.m.
Lord BOYD-CARPENTER: I am sure most of your Lordships would be in warm agreement with the general spirit of the speech of the noble Lord, Lord Shinwell, and, if he will allow me to say so, it must be a unique contribution, coming from someone who was an active trade unionist before the Act of 1906. I doubt whether we shall have any other contributions in this House—and certainly not in another place—based on so prolonged an experience and (if he will allow me to say so) on such a spirit of warm, human generosity as the noble Lord so often shows.
I certainly fully agree with him that one of the great problems that this House has to face in deciding what the legal background to industrial relations shall be after this Bill becomes an Act is whether or not what we are doing helps towards that relaxation of tension and reduction in confrontation which all of us want to see. The only point on which I would differ a little from the noble Lord is his bringing those general sentiments with which we all agree into rather close relationship with this particular amendment.
I differ with diffidence from any amendment moved by the noble and learned Lord, who has not only filled the Office of Lord High Chancellor of Great Britain but, if he will allow me to say so, the even more distinguished and eminent office of Recorder of the Royal Borough of Kingston-upon-Thames. However, I thought that the noble and learned Lord rather skated over what is to me a rather important aspect of this matter. He just touched on the position in the interim of the complainant while these procedures are going through.
I am concerned as to what is to happen to a man who ex hypothesi is in dispute over union membership, or the question would not have arisen. His job is either in jeopardy or he has lost it or he cannot get one. From that man's point of view a speedy settlement of the dispute is of very great importance. Whatever anybody may say, few people relish being

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unemployed, and he and his family are likely to be in that situation while this matter is being settled, when we are concerned, as we are concerned in this clause, with a closed shop situation.
As I understand it, there is no guarantee in this amendment—and the noble and learned Lord will correct me if I am wrong —that the procedures of the union will be carried through rapidly. As your Lordships know, there have been cases where a complainant has been regarded by the union—perhaps rightly—as an awkward customer. In those circumstances he does not always stand very well with the union. What guarantee is there, if he cannot exercise his rights under the provision to go to the tribunal until these procedures have been exhausted, that these procedures will be carried through speedily? I am not suggesting, though it could be the case, that there would be deliberate delay, but I am suggesting that there might be, as in many bureaucracies—and the larger unions have their own bureaucracies—some delay in the process. What this amendment would do, as I understand it, is to deny to the man in that position—a man who is, as a matter of definition, in a vulnerable and unhappy position while all this is going on—the right to go direct to the tribunal.
It does seem to me that this man should have this option. If he has confidence in both the fairness and the expedition of the union procedures he may well, being accustomed to them, go ahead with them. What I would object to is compelling him, whatever his own feeling is about these procedures, to go through them as a necessary condition precedent before he takes advantage of the tribunal. Unless, therefore, much better argument is given for depriving this man—and there are a number of them, all of them as a matter of definition in an unhappy situation—of the option which the Bill at present gives them, I very much hope the Committee will reject the amendment.
4.12 p.m.
Lord LEE of NEWTON: I do not know why the noble Lord, Lord Boyd-Carpenter, imagines that going to the ultimate, to the tribunal, could be any quicker than the usual procedures within the trade union movement. I have taken cases of this type, where an individual has
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been annoyed about a decision, the day after the occurrence. I agree with him that expedition is vital in this kind of case. May I widen this a little? Those who have been used to negotiation in industry will know that the custom and practice far more often gets a settlement than reference to a tribunal or court, and so on. We are all aware of the fact that you cannot start at the far end; you work your way through. Indeed, the noble Lord will know from his experience in industry that in thousands of instances which are never recorded settlement is made at the point where the dispute arose, in the factory, where the two sides discussed the matter. In the vast majority of cases that is where it is settled.
Especially in the engineering industry, if one cannot settle it at factory level it goes to what we call local conference. At that stage the employers make their representations and the employees make theirs, and it is only when you go through those stages that you go to the final appeal court. We would not understand how it could come about in an individual case that we jump over all these procedures, which have been worked out over the years and which have proved their effectiveness in keeping peace in industry, and go to the final point. It seems to me that it is vital to go through those procedures so that new minds are brought to bear on the problem. We would not understand how you would get a position where a person jumps the whole of the procedures and gets straight to the final point. You might as well not have the procedures, and if we did not there would be huge problems in industry every day.
This is the vital reason why this amendment should be accepted. It does not take away any of the final power which an individual has; I would oppose it if it did. It does not take any rights away from him. I would have thought that going through the procedures gives a far better chance of having the point discussed by people who are au fait with the whole situation, than going to the tribunal in the first place.
Lord RENTON: Any amendment moved by a former Lord Chancellor not only commands but deserves respect, but on this occasion I think the respect is deserved mainly because of the undisguised innocence displayed by the

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noble and learned Lord. He is asking your Lordships to accept an amendment which would create a condition precedent to the procedure used in the Bill. The condition precedent is to consist, at first instance, of the trade union committee or official or whoever it may be acting as judge in their own cause, and, secondly, an appeal to an independent review tribunal of which a noble Lord on the Opposition Front Bench is chairman, the next most important member is the noble Lord, Lord McCarthy, and there are other trade union members on this body.
It seems to me that, although one has enormous respect for those noble Lords and the members of that tribunal and can accept all that has been said about the good work they have done so far, to introduce as a condition precedent procedures of that kind would be most unfair, especially in the cases of exclusion; because in the cases of exclusion we are not dealing with people who are already members of the union concerned; we are dealing with people who because they are not members of it are not known in it, are not familiar with its procedures, and therefore are unlikely to get the kind of sympathetic treatment which total impartiality requires. Under the noble and learned Lord's amendment we would not get total impartiality until the opportunities offered by the clause in the Bill are taken up. Therefore, I very much hope that your Lordships will not accept this amendment.
Lord ROCHESTER: I would like to speak in favour of this amendment. Although what I said earlier on, on a procedural point, may appear to have application to this amendment too, there are in my view special reasons for its inclusion now in much the same form as it appeared in another place. May I take this opportunity of thanking the noble Lord, Lord Wedderburn, for the gracious way in which he received what I had to say on the procedural point?
Those of us whose task it has been to acquaint ourselves in some detail with what went on in another place in Committee will know—and if we had forgotten we have since been reminded by the noble and learned Lord the Lord Advocate—that when Clause 3 was discussed there
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the period within which a complaint had to be presented before it could be entertained by a tribunal was three months, not six months as now stipulated in subsection (6). In Committee at least two Conservative Members gave some support to the principle that existing trade union procedures should be exhausted before a complaint was taken to a tribunal. Much of the discussion at that time centred on what was a reasonable time to allow to enable those procedures to be used.
The Minister showed some sympathy, too, with the principle of voluntarism underlying the amendment, and he undertook to look into the matter further, as the noble and learned Lord the Lord Advocate has told us. As he rightly said, it was dealt with very briefly on Report by the Government simply extending the time limit in subsection (6) of this clause from three to six months. The Opposition did not divide the House on the Question—I think it occurred rather late at night—but it made it plain that it did not accept that as a solution to the problem; and nor, my Lords, do I.
I have for long argued in this House for the establishment and the observance throughout industry of agreed negotiating procedures between employers and trade unions. Even where they already exist, a major cause of there now being so much unofficial industrial action is that it is taken before such procedures are exhausted. I recognise that this amendment deals with quite different procedures within individual unions or established by the TUC, but it seems to me that precisely the same principle should apply to these cases as under joint negotiating procedures and that if orderliness is to be maintained in industrial relations generally—as it so badly needs to be—then people excluded or expelled from trade unions should positively be encouraged to use the relevant union procedures before having recourse to outside bodies.
I hope that that principle will commend itself to at least some noble Lords on the other side of the Committee who have industrial experience. Indeed, I had hoped—and I still hope—that we had reached the point in the Bill where the Committee for once could unite on common ground. I do not attribute to the Government the same somewhat base

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motives in this matter as the noble Lord, Lord Shinwell, appeared to do. I hope that the noble and learned Lord, the Lord Advocate—if it falls to him to reply—will, whatever his brief may say, at least express now some sympathy with the principle underlying this amendment, upon which I have endeavoured to expand, and the willingness of the Government to look a little further into the whole question. It seems to me that the Opposition, for its part, should not find it too difficult to accept—as it did in tabling Amendment No. 19A—that there is a need, which is not explicitly mentioned in the amendment, for hearings under union appeals procedures to be carried out within a reasonable time.
There is the difficulty to which the noble Lord, Lord Renton, referred concerning the Independent Review Committee of the TUC. To reach some consensus it may even be that there would have to be an acceptance that the inclusion of reference to that committee should not be insisted upon. For my part, I have a quite open mind on the matter, but I recognise that it presents some difficulty because, under its own terms of reference, as I understand it, that committee cannot hear a case until the voluntary procedures of the union concerned have been exhausted. That was a point which was referred to by, I think, the noble Lord, Lord Boyd-Carpenter. The precise form that any revised amendment might take at the Report stage—if that proves in any way a possibility—is something that I do not quite know. I suppose that it might in some way include provision for hearings under union procedures to be completed in a period of not more than, say, three months—that is, half the overall time limit which is now envisaged in subsection (6).
It seems to me that it would be an occasion for general satisfaction if the principle underlying this amendment could somehow be included in the Bill and go forward from this House with all-party agreement. It is, of course, for the mover of the amendment, the noble and learned Lord, Lord Elywn-Jones, and indeed for the Minister to decide between them whether this is really feasible. But if an attempt could be made to bring us all together in some such way as I have suggested, then I certainly should be happy to engage in any off-stage discussion—if I may put it that way—and lend my
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name also to any amendment that might be brought forward either by the Government or by the Labour Opposition on Report. I ask that we endeavour to find some common ground upon this principle, which seems to me to be a very important one to uphold in the area of human relations in industry.
Lord PARGITER: I shall intervene only briefly. I should have thought that one of the matters which the Government must consider in not only this legislation but any legislation is what is the end product. There is another dictum which we use from time to time—namely, not only must justice be done, but it must be seen to be done. If an individual can by-pass the whole of union machinery and go straight to a tribunal, then what will be the end product, whatever the decision of the tribunal? That is what really matters. We must have a decision which is seen by all concerned to be practical and proper in all circumstances. The trade union machinery is devised to do just that, but if it is deliberately bypassed by an individual, what will be the result on the shop-floor after it it all over? I ask the Government to consider that point.
4.28 p.m.
Lord MACKAY of CLASHFERN: I think that it has already been made clear that the Government very seriously considered the principle behind the amendment. I would say to the noble Lord, Lord Shinwell, that I am sure we would all agree that, in view of his life's work, he well deserves a free union card. As regards the present situation, the Government have made it abundantly plain that they would not want the matter to be dragged forward prematurely to the industrial tribunal. That is not the purpose of their present structure. The fact that they have extended the period within which a complainant may go to the industrial tribunal to permit of these procedures being gone through is, I think, eloquent evidence of that. So, the matter has been seriously considered. It is a matter, of course, which will be dealt with in the code of practice, but the question as to whether we can accept the amendment goes rather further.
The Independent Review Committee has itself acknowledged that the main concern

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of individuals appealing to it is to retain or regain their jobs. It must be borne in mind that the longer the process of appeal —appeal of whatever kind—the less likely it is that an individual who is not a member of a union as specified by a closed shop agreement, will be able to regain or remain in his job.
As I said earlier, union internal rules over expulsion or exclusion vary greatly. In some cases the individual is not refused membership or expelled from membership until the appropriate procedures have been exhausted. If that is the situation then the right to go to the industrial tribunal will not begin to run until that has happened, subject to subsection (9). Accordingly, if these procedures are important from the point of view of the union—and from our point of view they are—then it is very easy for the exclusion or expulsion only to take effect when they are completed by the proper provision in the union rules.
Lord BOYD-CARPENTER: Will my noble and learned friend amplify that a little? How would he apply that principle to the case where the man is not already in employment but is seeking employment in a closed shop industry and, therefore, membership of a union?
Lord MACKAY of CLASHFERN: In the situation of which I am speaking there is no express answer from the union until the procedures have been exhausted in the union. Of course, it is for that reason that we need a reasonable time provision, which is the subsection that we debated earlier. Therefore, if the union rules have the structure that, on an application being made, there is no effective answer until all the procedures have been gone through and it only becomes final and definitive at that stage,—
Lord LEE of NEWTON: Why then cannot we put into the Bill the six-month rule starting from the moment the complaint is made?
Lord MACKAY of CLASHFERN: I am sorry, but I am not sure that I completely understand that.
Lord LEE of NEWTON: The noble and learned Lord seems to think that to
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go through the procedure will take a very long time, plus six months before it goes to the tribunal. Why do we not say in the Bill that from the moment the man makes his complaint the six-month rule will be included?
Lord MACKAY of CLASHFERN: To take the one case of exclusion—I do not want to complicate matters by taking both—the present structure is that the complaint becomes competent once there is an exclusion by the union. Depending on the form of the union rule, that exclusion may be at the level of first instance, if I can call it that, or only after all appeals have been gone through. The right of appeal may well render ineffective the decision at first instance until the appeal is disposed of. In that case there is no exclusion until that happens. Of course, we have said that where an applicant in that situation does not receive an answer on the point, after a reasonable time he can treat his application as having been refused, Therefore, effectively the present structure gives the union a reasonable time to go through its own internal procedures and decide the question, if it adopts this form of machinery.
On the other hand, if the exclusion becomes effective at the time it is given at first instance, the right to complain will, of course, run during the period when the appeal procedures are taking place. That is a matter within the union's choice, depending on how the union rules are framed in that situation. If the individual has, effectively, been excluded and the appeal then takes effect within the appeal procedures, and there is also an application to the Independent Review Committee, that of course could take a considerable time.
I should perhaps pause here to say that I have paid tribute already to the Bridlington procedures, and we fully appreciate the importance of this work and of the work of the Independent Review Committee. I am sure that they do an extremely good and valuable job, and nothing that I say or that we propose in the Bill is intended to undermine that in any way. We want to make full use of that work, and I hope that the code of practice will make that even plainer.
However, we must not forget that if the

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union has excluded the person during the time that all this is going on, he is having a good long time to wait. This is not just a question about the union card—although that is very important; it is also the question of his job. One criticism—perhaps it is not a criticism, but a comment—that has been made on the work of the Independent Review Committee is that it has been able to get individuals back their cards, but not their jobs. Of course, I appreciate what the noble Lord, Lord Wedderburn of Charlton, has just said, that that is a matter for the employer. I entirely appreciate that, but we are dealing with practical matters. We are dealing with employers against a background of the union having refused the card in the first place. So the complaint to the Independent Review Committee has led, in quite a number of cases, as the noble and learned Lord, Lord Elwyn-Jones, said, to the employee getting back his union card, but in these cases, generally speaking, he has not got his job back.
Lord WEDDERBURN of CHARLTON: I accept everything that the noble and learned Lord has said, but I trust that he will not leave the matter without pointing out that when the person goes to the industrial tribunal, the industrial tribunal can order, not his card to be returned to him, but compensation. However, that tribunal cannot tell the employer to take him on for a job.
Lord MACKAY of CLASHFERN: I entirely appreciate that, and that is the reason for the procedures to obtain compensation, with particularly enhanced compensation if the industrial tribunal orders reinstatement and the employer refuses to make it. Therefore, what I am really aiming at is this. However good these procedures may be, they do not eliminate the need for some procedure which ultimately gives rise to compensation for the individual. In this field, as in many others, to delay too long the individual's right to receive his compensation is to deny him justice; delaying justice for long is to deny justice. I am sure that those who warmly supported the noble Lord, Lord Wade, in his promotion of the Bill of Rights will remember that one of the provisions of the Convention on Human Rights is that everyone is entitled to a fair and public hearing within a reasonable time by an independent
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and impartial tribunal established by law. That is, of course, what the industrial tribunals are—fair and impartial tribunals established by law.
Accordingly, our attitude to this matter is that we have done quite a lot to adhere to the spirit of this amendment by extending the period, making it very easy for the complainant to allow these procedures within the union—including the Independent Review Committee—to become exhausted before he goes to the tribunal at all. We consider that that is the right attitude to take. Of course, it is clear that when a person goes to the industrial tribunal, the procedure before the tribunal is in the hands of the tribunal.
These proceedings could be subject to conciliation by a conciliation officer, in accordance with Section 133(2) or (3) of the 1978 Act. As a result, industrial tribunal proceedings may be stayed until either the appropriate union procedures have been exhausted or the committee has heard the case, or both. The attitude of the union, the speed with which unions and the committee handle a case and the individual's own circumstances will all be relevant factors.
In my submission to your Lordships, in the light of all the circumstances, what the Government have already done to meet this amendment is appropriate, and I would invite the noble and learned Lord Lord Elwyn-Jones, to consider withdrawing his amendment; but if he is not minded to do so, I would invite your Lordships not to agree with it.
4.39 p.m.
Lord ELWYN-JONES: I must say that I am very disappointed in the noble and learned Lord's failure, if I may say so, to respond to the reasonable approach of the noble Lord, Lord Rochester, and to my own pressing of the fact that the Bill should do its utmost to promote the voluntary procedures that are available instead of doing the opposite, as it does; namely, to encourage direct and immediate, or as early as possible, access, by-passing the voluntary procedures to the tribunals.
I confess that I was dismayed by the speech of the noble Lord, Lord Renton. It seemed to me to be castigating and questioning the integrity of my noble friends sitting upon the committee; and

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by denigrating the committee for its partiality, or absence of impartiality, it seemed to me to be reflecting upon the impartiality of those who constitute it. If he did not mean to intend that, of course I shall hear him.
Lord RENTON: I am grateful to the noble and learned Lord for giving way. Of course I did not mean that, and I hope that I made it clear. What I tried to point out was that the noble and learned Lord's amendment purports to make statutory a procedure in which, in first instance, the unions are judges in their own cause, and finally under that procedure they go to an independent review committee whose members, however impartial, however learned, however distinguished, are people who are associated with particular attitudes which are being strongly contested on both sides of this Committee. In the circumstances, I should have thought that we should have to consider whether we were letting justice be done and appear to be done by accepting the noble and learned Lord's amendment.
Lord ELWYN-JONES: Unions are not judges in their own cause in their procedures. I am informed that there has never been any complaint about the partiality, or apparent partiality, or alleged partiality of the committee that I have mentioned.
With regard to the time factor, we are certainly prepared to consider that. May I remind your Lordships that procedures in appeals to the Employment Appeal Tribunal will not be exactly speedy. I do not know how soon a date could be arranged. There are the appeals available to the Court of Appeal, to the House of Lords. It must not be thought that we are in the presence of quick procedures here. I understand that the arrangements that are made in many of the unions now where issues of this kind arise and there are references to appeals are that more and more collective agreements are providing for withdrawal of any threats of dismissal before, or pending, the hearing of appeals to the independent committee.
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I understand that to be the case. That tendency is increasing in the process of building up the authority of the independent committee.
I am further informed that, on expulsion, if a man appeals to the national executive of his union he will normally remain a member until the process of appeal is completed, so the threat of unemployment does not arise inevitably, as has been suggested.
Lord BOYD-CARPENTER: Will the noble and learned Lord give way? On this point of the threat of unemployment, if the matter proceeds in the case of a man already in work, as he has outlined, this certainly would be an alleviation. But would he explain how this helps the man, such as a former constituent of mine, who was denied a job solely because the union in a closed shop situation would not admit him to membership?
Lord ELWYN-JONES: The rules of the union provide in that situation for appeals which would be available. I do not know what happened in the individual case to which the noble Lord has referred, whether his constituent appealed or what the outcome was. Unions provide in their rules for appeal procedures.
I should have thought that, as my noble friend Lord Shinwell stressed in his speech, what we want to do at this time is to build up these voluntary procedures as best we can and keep in the background the recourse, as he has said, to the highly publicised proceedings before these tribunals. I assure the noble Lord, Lord Rochester, that we shall certainly look again at the time element here between now and Report stage. In the meantime, I do not withdraw the amendment, and I advise those who support it to stand firm in the Division Lobby.
4.45 p.m.
On Question, Whether the said amendment (No. 21) shall be agreed to?
Their Lordships divided: Contents, 87; Not-Contents, 142.

CONTENTS

Airedale, L.

Gosford, E.

Parry, L.

Amherst, E.

Hale, L.

Peart, L.

Amulree, L.

Hampton, L.

Pitt of Hampstead, L.

Ardwick, L.

Hatch of Lusby, L.

Plant, L.

Balogh, L.

Hayter, L.

Rhodes, L.

Banks, L.

Henderson, L.

Ritchie-Calder, L.

Birk, B.

Houghton of Sowerby, L.

Rochester, L.

Blease, L.

Howie of Troon, L.

Ross of Marnock, L.

Blyton, L.

Hutchinson of Lullington, L.

Sainsbury, L.

Bruce of Donington, L.

Ilchester, E.

Seear, B.

Burton of Coventry, B.

Jacques, L.

Sefton of Garston, L.

Byers, L.

Janner, L.

Segal, L.

Caradon, L.

Kaldor, L.

Shinwell, L.

Chitnis, L.

Kilbracken, L.

Stewart of Alvechurch, B.

Cledwyn of Penrhos, L.

Kilmarnock, L.

Stewart of Fulham, L.

Collison, L.

Kirkhill, L.

Stone, L.

Cooper of Stockton Heath, L.

Leatherland, L.

Strauss, L.

Crowther-Hunt, L.

Lee of Newton, L.

Tanlaw, L.

David, B. [Teller.]

Leonard, L.

Taylor of Mansfield, L.

Davies of Leek, L.

Listowel, E.

Underhill, L.

Davies of Penrhys, L.

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

Wallace of Coslany, L.

Donaldson of Kingsbridge, L.

Walston, L.

Elwyn-Jones, L.

Lloyd of Kilgerran, L.

Wedderburn of Charlton, L.

Evans of Claughton, L.

McCarthy, L.

Wells-Pestell, L.

Foot, L.

MacLeod of Fuinary, L.

Whaddon, L.

Gaitskell, B.

Maelor, L.

White, B.

Gladwyn, L.

Masham of Ilton, B.

Wigoder, L.

Glenamara, L.

Northfield, L.

Wootton of Abinger, B.

Gordon-Walker, L.

Pargiter, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

NOT-CONTENTS

Abercorn, D.

Denham, L. [Teller.]

Howe, E.

Ailesbury, M.

Derwent, L.

Inglewood, L.

Airey of Abingdon, B.

Donegall, M.

Ironside, L.

Alexander of Tunis, E.

Dundee, E.

Keyes, L.

Allerton, L.

Ebbisham, L.

Killearn, L.

Amory, V.

Eccles, V.

Kilmany, L.

Ampthill, L.

Elton, L.

Kimberley, E.

Auckland, L.

Emmet of Amberley, B.

Kinloss, Ly.

Avon, E.

Energlyn, L.

Kinnaird, L.

Bellwin, L.

Evans of Hungershall, L.

Lauderdale, E.

Belstead, L.

Exeter, M.

Lindsey and Abingdon, E.

Berkeley, B.

Fairfax of Cameron, L.

Long, V.

Bessborough, E.

Faithfull, B.

Loudoun, C.

Birdwood, L.

Ferrers, E.

Lucas of Chilworth, L.

Boothby, L.

Ferrier, L.

Lyell, L.

Boyd-Carpenter, L.

Forester, L.

McFadzean, L.

Bradford, E.

Fortescue, E.

Mackay of Clashfern, L.

Brentford, V.

Fraser of Kilmorack, L.

Macleod of Borve, B.

Bridgeman, V.

Gage, V.

Mancroft, L.

Burton, L.

Gisborough, L.

Mansfield, E.

Caccia, L.

Glenkinglas, L.

Marley, L.

Caldecote, V.

Gore-Booth, L.

Massereene and Ferrard, V.

Camoys, L.

Gormanston, V.

Milverton, L.

Carrington, L. (A Principal Secretary of State.)

Gowrie, E.

Monckton of Brenchley, V.

Grantchester, L.

Monson, L.

Chelwood, L.

Gray, L.

Montgomery of Alamein, V.

Clifford of Chudleigh, L.

Gridley, L.

Mowbray and Stourton, L.

Clwyd, L.

Grimston of Westbury, L.

Murton of Lindisfarne, L.

Cockfield, L.

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

Newall, L.

Cottesloe, L.

Norfolk, D.

Craigavon, V.

Halsbury, E.

Nugent of Guildford, L.

Cranbrook, E.

Hankey, L.

Orkney, E.

Crathorne, L.

Harvington, L.

Orr-Ewing, L.

Cullen of Ashbourne, L.

Hatherton, L.

Pender, L.

Davidson, V.

Hawke, L.

Piercy, L.

de Clifford, L.

Henley, L.

Porritt, L.

De La Warr, E.

Hives, L.

Redmayne, L.

De L'Isle, V.

Hood, V.

Renton, L.

Richardson, L.

Somers, L.

Trumpington, B.

Roberthall, L.

Spens, L.

Vaizey, L.

Rochdale, V.

Stamp, L.

Vaux of Harrowden, L.

St. Aldwyn, E.

Strathcarron, L.

Vickers, B.

Salisbury, M.

Strathmore and Kinghorne, E.

Vivian, L.

Sandford, L.

Swinton, E.

Ward of Witley, V.

Sandys, L. [Teller.]

Teviot, L.

Westbury, L.

Selkirk, E.

Tranmire, L.

Wise, L.

Sharples, B.

Trefgarne, L.

Wynford, L.

Skelmersdale, L.

Trenchard, V.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.

4.54 p.m.
On Question, Whether Clause 3 shall stand part of the Bill?
Lord UNDERHILL: Both today and when your Lordships last debated this matter we moved a whole series of amendments and we do not think we have made anything like sufficient progress with them to put ourselves in the position where we need not oppose this clause. Indeed, we still believe the clause to be fundamentally unnecessary. It should never be lost sight of that, so far as exclusions or expulsions are concerned, the position is considerably dealt with by the existing common law, and the Government have done nothing to explain what the relationship will be under the new situation between the decisions of the industrial tribunals arising out of Clause 3 and the jurisdiction of the common law courts arising out of their practice of regarding the trade union rule book as a contract between members.
Therefore, we are not satisfied, and particularly we are not satisfied on a number of very serious points about which the Government have told the Committee they have no desire whatever to change the existing position and in respect of which we have tabled a number of amendments which have been and are, as I said they would be when we last debated this subject, intended to be declaratory of the position the Government say they adopt; for example, in relation to creating a liability in tort or taking into account the consequences of the Bridlington procedures. On all those matters, about which we consider the Government have themselves said they have no desire to change the existing position, they have not found it possible to accept our amendments.
It is most of all in respect of the TUC
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Bridlington procedures that we are uncertain and fearful about the consequences of the clause. It is not simply that the Trades Union Congress may find its procedures made void or set at nought, but the effect this may have on the very wide functions in which the TUC now takes part in respect of inter-union disputes. For example, the very presence of the TUC at this moment in seeking to solve the Isle of Grain dispute arises out of Bridlington. If the general secretary of the TUC were able, as we hope he will, to find some solution to that dispute, then if it has to be enforced on unions in the TUC it will be enforced via those Bridlington procedures. If individual members of one union or another are not satisfied with the result, whether they are members of the GMWU or ETU, if they go along to whichever union has the job and ask for entry to that union, they will be refused entry according to the Bridlington procedures.
We have to say that if provisions of this kind are incorporated in Acts of Parliament, the continued operation of the dispute resolutions and activities of the TUC under Bridlington will be put at nought. There are many unions today which are quite reasonably saying, "We have submitted ourselves to the principles of Bridlington, often against our interests and often against the pressure, the just contained pressure, of powerful sections of our membership. If we are to be told that if we observe Bridlington, sections of that membership may be able to go to industrial tribunals, to courts and perhaps to the highest court in the land and reverse the Bridlington procedures, we cannot see ourselves continuing to operate and observe those Bridlington procedures ". It is because of fears of that kind that I agree with my noble friend Lord Wedderburn of Charlton when he says that this clause is an act of vandalism, and it is on that basis that we ask the Committee to reject it.
5 p.m.
The Earl of GOWRIE: Clause 3 embodies one of the major changes in the closed shop law which we promised the electorate last year. In our view it will provide a new and readily understood right against unreasonable exclusion or expulsion from union membership in situations where a person's job depends upon such membership. The idea behind such a right is not at all new, as noble Lords opposite will be aware. The Donovan Commission suggested that individuals should have a legal right of appeal to an independent body against exclusion or expulsion. The Labour Government of that day put forward such a right in their 1969 White Paper In place of Strife. Our 1971 Act included it in its provisions on member's rights, and Section 5 of the 1974 Act of the Labour Government gave individuals a right to complain to a tribunal of arbitrary exclusion or expulsion. Even the last Administration appeared to accept the case only to be persuaded to try first a new voluntary body, the TUC's Independent Review Committee, which has been referred to during our debates on previous amendments, but in doing so it promised to review its effectiveness and came forward with a legal provision if necessary.
It is not hard for us to see why this particular issue will not lie down or go away. In our society union membership is often not a voluntary issue. Over 5 million workers are in closed shops and for them union membership is necessary to get, or keep, a job, or even to pursue a career at all. The right that we are providing in Clause 3 is clearly necessary. As the Donovan Commission put it,
"it may well be thought unacceptable that a citizen's livelihood should depend upon the will of a few other citizens being members of a trade union committee or branch committee".
That is unacceptable. People should be protected from unreasonable loss of their livelihoods, whatever the source.
Of course union members do have certain common law rights, but often these are insufficiently clear or not easily enforceable, and the rights of applicants for membership are perhaps even more doubtful. What we are providing is a much more straightforward right, based on the reasonableness or the unreasonableness of the union's action, just as in 1971 we introduced a general test of reasonable-
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ness for determining whether an employer dismisses unfairly; and that was the basis of unfair dismissal even in the last Government's legislation. Even the Opposition would agree with Donovan that a trade union can sometimes be in the wrong.
The noble Lord, Lord McCarthy, and indeed the TUC, have expressed fears that the clause will disrupt the workings of their Bridlington principles and procedures, or arrangements which unions make in order to comply with those principles, or awards of the TUC Disputes Committee. I understand that concern, which was expressed very reasonably by the noble Lord, Lord Lee of Newton, earlier this afternoon. We acknowledge that Bridlington is a necessary and important feature of the industrial relations scene. It improves inter-union competition, to which the number and structure of British unions inevitably give rise, and it ameliorates ill consequences there.
However, I believe that here the fears of the noble Lord, Lord McCarthy, are exaggerated, as are the fears of the TUC. The arrangements that the TUC and Opposition Members have described are sensible, and we pay tribute to them, but I do not know of any reported case under Section 5 of the 1974 Act where an exclusion or expulsion in order to comply with a Bridlington award was found to be unreasonable. However, I know of one case in which the tribunal specifically endorsed the application of Bridlington; that was the case of Bannister v. APEX. We will consider providing satisfactory guidance in the code to meet some of these fears expressed by noble Lords this afternoon. Clauses I and 2 of the Bill empower us to do this. I am sure that that will satisfy any of the real fears that remain. In the light of that undertaking, I ask noble Lords not to press a Division on this clause.
Lord WEDDERBURN of CHARLTON: Bearing in mind that we are in Committee, there is one very important point that the Government have not answered. The noble Earl may think it right that I should put the point to his noble and learned friend the Lord Advocate—or indeed to the noble Earl himself as it is a legal point. The question has been raised, but I think not answered,

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about the competing jurisdictions which the clause establishes. I should like to give a brief example of this. A person applies to join a union and is told by the union, "No, we refuse your application, and we do so partly because you do not meet certain rules". The person then goes to the industrial tribunal, which says to him, "We agree with you. The rules are not reasonable. You must be admitted". Obviously that is a case possible under the clause. The tribunal then says to the union, "Either admit him or pay compensation under Clause 4", a clause to which we are to come.
At that point another person goes to the High Court or, I anticipate, in another jurisdiction, the Court of Session, and says, "Your jurisdiction is to ensure that the rules are obeyed". Nothing in the Bill changes that. This admission of the person would be ultra vires the ruling, and the High Court must grant an injunction, and the Court of Session, I suspect, must grant interdict. Further than that, because the money will be paid in order to effect a purpose which is contrary to the rules, and, therefore, ultra vires, the High Court must grant an injunction to stop the money being paid.
I appreciate that the last point may seem extraordinary, but are the Government thinking of introducing a provision on Report at least to clarify the outlines of an answer on this matter on which at the moment the Bill is totally silent?
The Earl of GOWRIE: While I do not in any way wish to pre-empt the legal knowledge of my noble and learned friend, which, it must be obvious to everybody, is considerable and is in advance of mine, as is the knowledge of the noble Lord, Lord Wedderburn of Charlton, my understanding is that this is really an extremely finnicky hypothetical situation. I say this because any sensible industrial tribunal concerned with the reasonability or unreasonability of expulsion or exclusion
will be perfectly aware both that union rule books exist and what they are. The tribunal will not be in the position of adjudicating on whether such rules were or were not reasonable when originally drawn up. The tribunal will accept that the particular union has such and such a practice, and I should have thought that that would be quite enough to enable most industrial tribunals to make a sensible judgment on whether an exclusion was reasonable or unreasonable. Presumably the applicant would have some notion of what were the rules of the union to which he was applying.
I also consider—and this is a general view of mine about the proceedings of this Committee stage, which are becoming almost legendary in their snail's pace; at this rate we shall be here until seven or eight in the morning—that when considering the Question, Whether the clause shall stand part?, is not the best time to raise issues of the kind which we have just been discussing. I have tried briefly and succinctly to give the general policy principles relevant to the Question, Whether the clause shall stand part?, and my noble and learned friend has dealt very comprehensively and in detail with some of the finer points of the amendments. That, I think, is how we should proceed, though, rather more rapidly. I ask noble Lords not to press for a Division on a clause of so wide a general principle as this.
Lord MCCARTHY: I cannot accept what the noble Earl says. He has not moved one iota from the position set out in the replies to the amendments. He still relies entirely on reasonableness as interpreted by trade tribunals, and that is not enough for us.
5.9 p.m.
On Question, Whether Clause 3 shall stand part of the Bill?
Their Lordships divided: Contents, 156; Not-Contents, 58.

CONTENTS

Abercorn, D.

Ampthill, L.

Belstead, L.

Ailesbury, M.

Amulree, L.

Berkeley, B.

Airedale, L.

Auckland, L.

Bledisloe, V.

Airey of Abingdon, B.

Avon, E.

Bolton, L.

Alexander of Tunis, E.

Banks, L.

Boothby, L.

Allerton, L.

Barrington, V.

Boyd-Carpenter, L.

Amory, V.

Bellwin, L.

Bridgeman, V.

Burton, L.

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

Montgomery of Alamein, V.

Byers, L.

Morris, L.

Caccia, L.

Halsbury, E.

Mowbray and Stourton, L.

Caldecote, V.

Hampton, L.

Murton of Lindisfarne, L.

Chelwood, L.

Hankey, L.

Newall, L.

Chitnis, L.

Hanworth, V.

Norfolk, D.

Clifford, of Chudleigh, L.

Harvington, L.

Nugent of Guildford, L.

Cockfield, L.

Hatherton, L.

Ogmore, L.

Cottesloe, L.

Hawke, L.

Orkney, E.

Craigavon, V.

Henley, L.

Orr-Ewing, L.

Crathorne, L.

Hives, L.

Pender, L.

Cullen of Ashbourne, L.

Home of the Hirsel, L.

Porritt, L.

Davidson, V.

Hood, V.

Rawlinson of Ewell, L.

de Clifford, L.

Hornsby-Smith, B.

Renton, L.

De La Warr, E.

Howe, E.

Richardson, L.

De L'Isle, V.

Inglewood, L.

Rochdale, V.

Denham, L. [Teller.]

Ironside, L.

Rochester, L.

Derwent, L.

James of Rusholme, L.

St. Aldwyn, E.

Donegall, M.

Keyes, L.

Salisbury, M.

Dowding, L.

Killearn, L.

Sandys, L. [Teller.]

Dundee, E.

Kilmany, L.

Seear, B.

Ebbisham, L.

Kilmarnock, L.

Selkirk, E.

Eccles, V.

Kimberley, E.

Sharples, B.

Elton, L.

Kinloss, Ly.

Skelmersdale, L.

Emmet of Amberley, B.

Kinnaird, L.

Spens, L.

Evans of Claughton, L.

Lauderdale, E.

Stamp, L.

Evans of Hungershall, L.

Lindsey and Abingdon, E.

Strathcarron, L.

Exeter, M.

Lloyd, L.

Strathmore and Kinghorne, E.

Fairfax of Cameron, L.

Lloyd of Kilgerran, L.

Swinton, E.

Faithfull, B.

Long, V.

Tanlaw, L.

Ferrers, E.

Loudoun, C.

Teviot, L.

Ferrier, L.

Lucas of Chilworth, L.

Tranmire, L.

Forester, L.

Lyell, L.

Trefgarne, L.

Fortescue, E.

McFadzean, L.

Trenchard, V.

Fraser of Kilmorack, L.

Mackay of Clashfern, L.

Trevelyan, L.

Gage, V.

Macleod of Borve, B.

Trumpington, B.

George-Brown, L.

Mancroft, L.

Vaizey, L.

Gisborough, L.

Mansfield, E.

Vaux of Harrowden, L.

Glenkinglas, L.

Marley, L.

Vickers, B.

Gormanston, V.

Masham of Ilton, B.

Vivian, L.

Gowrie, E.

Massereene and Ferrard, V.

Ward of Witley, V.

Grantchester, L.

Meston, L.

Westbury, L.

Gray, L.

Milverton, L.

Wigoder, L.

Gridley, L.

Monckton of Brenchley, V.

Wise, L.

Grimston of Westbury, L.

Monson, L.

Wynford, L.

Young, B.

NOT-CONTENTS

Allen of Fallowfield, L.

Gosford, E.

Pitt of Hampstead, L.

Ardwick, L.

Hale, L.

Plant, L.

Balogh, L.

Hatch of Lusby, L.

Rhodes, L.

Birk, B.

Henderson, L.

Ritchie-Calder, L.

Blease, L.

Howie of Troon, L.

Ross of Marnock, L.

Blyton, L.

Jacques, L.

Sefton of Garston, L.

Brockway, L.

Janner, L.

Segal, L.

Bruce of Donington, L.

Kaldor, L.

Stewart of Alvechurch, B.

Burton of Coventry, B.

Kirkhill, L.

Stewart of Fulham, L.

Collison, L.

Leatherland, L.

Stone, L.

Cooper of Stockton Heath, L.

Lee of Newton, L.

Strauss, L.

David, B. [Teller.]

Leonard, L.

Taylor of Mansfield, L.

Davies of Leek, L.

Listowel, E.

Underhill, L.

Davies of Penrhys, L.

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

Wallace of Coslany, L.

Donaldson of Kingsbridge, L.

Wedderburn of Charlton, L.

Elwyn-Jones, L.

McCarthy, L.

Wells-Pestell, L.

Gaitskell, B.

Northfield, L.

Whaddon, L.

Glenamara, L.

Pargiter, L.

Wootton of Abinger, B.

Gordon-Walker, L.

Peart, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

Phillips, B.

Resolved in the affirmative, and Clause 3 agreed to accordingly.
5.18 p.m.
Lord HOWIE of TROON Lord HOWIE of TROON moved Amendment No. 21A:
After Clause 3, insert the following new clause:
"Requirement to participate in industrial dispute
(.No employee who is a member of a recognised profession or organisation which requires adherence to a code of professional conduct as a condition of membership or of professional standing shall be required by any trade union of which he is a member to take action in the course of an industrial dispute which is in conflict with the requirements of such professional membership or its code of conduct.")
The noble Lord said: I do not wish to delay the Committee very long, especially after the strictures from the Liberal Front Bench earlier today, but I do not think that this particular matter was raised in another place. It was referred to obliquely, I think, in Committee, but not quite in the form in which I have put it. It deals with a point which I raised in the debate on the Second Reading of the Bill; that is, the possibility of a conflict of loyalties on the part of a professional man, a member of a professional institution, between his duties to that professional institution and his loyalties to a trade union of which he may well be a member. I speak as one who approves wholly of professional men being members of appropriate trade unions; I am not presenting this as a means of evading trade union membership in any way.
The point is a fairly narrow one and it is likely to arise on a very small number of occasions; but, though the number is small, it is nonetheless significant. It might well deal with the industrial problems of something between a quarter and half a million people; probably nearer the smaller number than the latter—not an enormous army, but, nonetheless, not a platoon. The problem might not be large or great in the cosmic scene, but it is very real for the individual engineers who are caught in what they see as a dilemma, in what they see as a conflict of loyalties, both of them real, to their institution, on the one hand, and to the union, on the other.
I have put this proposition in the form of a new clause rather than as an amendment either to Clause 3 or to Clause 6,
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partly because I do not think that the problem or the dilemma can be dealt with within the structure of the Bill as it stands at the moment. That is so because Clauses 3 and 6 deal with matters such as exclusion or exemption from union membership or with compensation for loss of employment; and I am really dealing with the problem of professional people who wish to be members of a trade union, who do not want to be excluded, but who, at the same time, do not want to lose their jobs. The Bill does not in fact deal with them.
The new clause refers to a code of professional conduct; and that is really the crux of the matter. Most professional institutions bind their members to abide by a code of professional conduct as a way of conducting their professional affairs. The Institution of Civil Engineers, for instance, of which I am a member, has a rule of professional practice that a member, in his responsibility to his employer and to the profession, shall have full regard to the public interest, particularly in matters of health and safety. That rule of the Institution of Civil Engineers is taken seriously. Similar rules in other professional institutions are taken just as seriously by the members of these other organisations—and not only by the members but by the institutions, in the sense that transgression of that rule in the case of the Institution of Civil Engineers could, in the extreme case, mean expulsion from the institution. That, possibly, could lead to loss of employment in cases, which do exist, where membership of the institution is a condition of employment. The area in which the public interest, in matters of health and safety, is of extreme importance to the civil engineers that I am talking about—and I use them only as one example among many—is in matters dealing with sewerage, with water supply and with the rather less dramatic matter of gritting icy roads in winter time.
The code of professional conduct does not bar members of these institutions from joining trade unions or from being active members of trade unions. Nor does it limit in any way their right to strike. Where the conflict arises is not in the right to strike but in the behaviour during strike or any other alternative means of industrial action. Some professional engineers would feel compelled to defy a union instruction which

217
they believed was in conflict with their obligations under their professional code of practice. In water supply, for example, some engineers would believe that it was their professional duty, regardless of any instruction from their union, to ensure that a water supply was maintained to any community. It would not be quite enough for them merely not to cut it off; they might feel obliged to secure the water supply.
In that very dramatic (and, I admit, fairly unlikely) circumstances, I can well see the members of such unions as NUPE or NALGO getting "uptight". If they regarded their grip on the water supply as industrially important, they would be upset if professional engineers tried to ensure the water supply that they were trying to cut off. These are very marginal and unusual cases, but in such circumstances it is virtually certain that there would be demands for the expulsion of the engineers from the union of which they were members; and expulsion from the union, in a closed-shop situation, certainly would be the equivalent of loss of employment. So the dilemma on whose horns these members and others are impaled is that to defy their union in a closed-shop situation could in the extreme lead to expulsion from the union and loss of employment, while if they breach their code of professional conduct, they could be expelled from their professional institution and, in a small number of cases, could lose their jobs. Either way they jump, therefore, they lose their job. For a professional man, that is not a satisfactory situation.
I believe that the Government have a duty to do something in legislation to resolve this conflict of loyalties, this conflict of duties, this dilemma. The Govenment are aware that it exists and in the 1972 industrial relations code of practice they recognised it and said:
"Professional associations, employers and trade unions should co-operate in preventing or resolving any conflicts which may occur between obligations arising from membership of a profession and those which the professional employee owes to his employer and to his trade union, if he belongs to one."
The Government are not unaware of the conflict. The Government realised that the dilemma exists and in 1972 the code of practice was drawn up to recognise the fact. But the code of practice does not
218
take us very far. It is not binding. I believe that the situation at present is that it can only be presented as evidence in any inquiry which might proceed subsequently.
I say that the Government have a duty to deal with this. The noble Earl (who is not in his place at present) justified Clause 3 as having been promised to the electorate last year at the election. It was quite proper of him to do that; but other promises were made, too. In The Right Approach to the Economy, which was published before the election, the party opposite wrote:
"If voluntary agreements do not provide adequate safeguards for individuals, we should be prepared if necessary to legislate to guarantee them."
The word to note is "guarantee"; that is a very firm word. In their manifesto, the party opposite said:
"Those with personal convictions must be adequately protected".
In the discussions on this Bill in another place the problem which I have raised on this clause has been recognised as coming under the general heading of "personal convictions"; and the manifesto said that personal convictions should be adequately protected. I do not believe that the compensation for loss of job which the Bill prescribes can be described as adequate protection. Nor do I believe that Clauses 3 and 6 of the Bill as it stands provide a guarantee of adequate safeguards. I believe a clause of the nature of the one which I have put forward today would provide these safeguards. I beg to move.
Lord ROCHESTER: I have great sympathy with what the noble Lord, Lord Howie, of Troon, has said. On the other hand, I can almost hear the noble and learned Lord the Lord Advocate saying in reply that if special situations such as those with which this amendment is concerned are included in the Bill as affording reasonable grounds why people should not be excluded from union membership, then the Bill will become cluttered up—the noble and learned Lord has already used that phrase once this afternoon—with a whole host of other situations calling similarly for special treatment.
The noble and learned Lord the Lord Advocate will however recall that at

219
Committee stage in another place my honourable friend Mr. Cyril Smith moved an amendment in somewhat similar terms under Clause 6 of the Bill dealing with the closed shop. He eventually withdrew it when the Minister in another place said—and I quote from col. 797 of the relevant report of the Standing Committee for 28th February—this:
"The code of practice on the closed shop will discuss general criteria regarding the reasonableness of a decision to exclude or expel an individual from a union, and consideration will certainly be given by the Government to including in the code of practice advice on the attention that ought to be paid to professional ethical codes".
I realise that that code of practice has to do or will have to do with a somewhat different matter. But I wonder nevertheless whether the noble and learned Lord is able to tell us about the outcome of the consideration of the Government in that regard. It might help some of us to make up our minds as to the attitude we should take on this amendment. As I have said, we have a lot of sympathy with its general principle.
5.33 p.m.
Lord MACKAY of CLASHFERN: The Government have considerable sympathy with the reasons for which this amendment is moved. We were grateful to the noble Lord, Lord Howie of Troon, for raising this matter at Second Reading. My noble friend Lord Gowrie replied briefly on that occasion, and we have sought to re-examine the matter since then.
The problem is an important one, particularly in the circumstances of a union membership agreement or closed shop. However, although the particular circumstances mentioned in the amendment are not covered in terms in the Bill, we do not think that we require specific provision to deal with them for reasons to which the noble Lord, Lord Rochester, has already referred. I have mentioned them already this afternoon. We have taken the view that the correct place for general principles which may assist is in the code of practice; and, accordingly, this particular subject is one which would fall to be considered in relation to that.
If I could now examine the situation under the Bill, assuming a conflict arose
220
such as the one to which the noble Lord, Lord Howie, referred, the individual faced with the type of conflict will have two courses of action open to him under the provisions of the Bill. First, he may, after consideration of his position, feel that he must resign from his union. If he does so on the basis of a deeply held personal conviction related to his professional code of ethics (which could well be the case) against being a member of a union which required him to take part in some unacceptable action, he may have an objection on these grounds within Clause 6.
Alternatively, he may choose to ignore his union's instructions and comply with his code of conduct. The provisions of Clause 3 will be of assistance, in that if he is expelled from the union, either directly or because he refused to comply with some lesser disciplinary action by the union—such as a fine, for example—he would be able to complain that his expulsion had been unreasonable.
It is true that that theoretically leads to compensation only, and I entirely agree with the view that compensation is not much of a substitute in that situation. But it is a substitute to some extent. We hope that the result of having this provision will be to provide a strong deterrent to this kind of action so that a union would have regard to the convictions of its members on professional grounds such as those which the noble Lord has explained to us.
Therefore, although there is no direct remedy which is absolute in the sense of giving him a complete right to remain in position if the union decided that he was not to be so, we believe that the right to go for compensation—and it would be enhanced compensation in this case—is a right which would make the union take a reasonable view in the matter. I hope that this explanation is sufficient to enable the noble Lord to see his way to withdrawing this amendment.
Baroness SEEAR: I should like to ask the noble and learned Lord to think again about this amendment. It is a matter of fundamental importance, especially as unionisation reaches higher levels and includes people with very heavy professional responsibilities. I know that the noble Lord said that it will be considered

221
in the code of practice; but this, even at its best, is a weak defence in comparison with a right written into an Act of Parliament to obey the ethics of his profession, and the code of his profession, rather than to comply with the requirements of the union.
I can well see that it is undesirable—to use a much-used phrase this afternoon—to clutter up the legislation with matters of relatively minor importance. However, a clash of this kind between the ethical requirements of a profession and the closed shop requirements of a union is a matter of major importance and not a minor issue. The noble Lord said that compensation is no real substitute. Surely in this case it is especially true. It is no real substitute for being able to continue to comply with the professional code of one's own profession. Is it too much to ask the Government to take this back and think yet again?
Lord BOYD-CARPENTER: I very much agree with what the noble Baroness has just said. I must confess that I was less than happy over my noble and learned friend's reply. Indeed, if I may say so, I had the impression that he was not happy about it either; but I may have misjudged him. It is an issue of great and growing importance with the fairly modern tendency of professional people to become enrolled in trade unions. It was probably not a very serious problem at the time of the 1971 Act, and I wonder whether it has been looked at afresh in present circumstances.
I am bound to say that I should have been a little more encouraged if my noble and learned friend on behalf of the Government had made it clear that the Government took the view that if there is, unhappily, a clash between the professional obligations of a professional man or woman and their duties to their unions, there is no doubt that loyalty to the professional obligations should prevail. That certainly is the view that I hold, and many people who have been subjected in their lives to a professional discipline undoubtedly so feel.
If the noble Lord, Lord Howie of Troon, will allow me to say so, I do not feel wholly happy about the drafting of this amendment. For that reason, I hope that he will not press it to a Division. I should be a little reassured
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if my noble and learned friend could give a slightly warmer welcome to the general idea behind the amendment. Perhaps he could give an undertaking that some further thought will be given to this matter with a view to dealing with it explicitly in the Green Paper which we have been promised?
Lord WYNNE-JONES: I was very glad to hear the noble and learned Lord the Lord Advocate give the Government point of view in this matter. I listened with great interest to my noble friend Lord Howie. Having been in a professional position where I was also a member of a trade union, I appreciate that problems arise. It seems to me that the proper way to deal with these problems is through a code of conduct and not through writing it into an Act of Parliament. My reason for thinking that, in part, is that it is very undesirable to put professional people belonging to a particular professional association in a special legal position inside a trade union. I think that causes real problems and it is therefore a very undesirable thing to do. I would therefore hope that the noble and learned Lord the Lord Advocate would maintain the position of the Government in this regard.
Lord MACKAY of CLASHFERN: I am sorry that my noble friend felt that the response I had given was not adequate. I said, on behalf of the Government—and I repeat—that we certainly appreciate very much the great importance of this problem. I do not think we differ at all from the noble Lord, Lord Howie, from the noble Baroness, Lady Seear, or from my noble friend on this matter. The only question that arises concerns the best way of dealing with it.
In our view, the best way is to deal with it is in the code of practice which the Bill requires to be taken into account in the determination of approriate cases. That appears to us to be really as strong in effect as the clause that is proposed, although it does not expressly deal with that particular point; because ultimately this clause would only give direction as to what is to be taken into account by the tribunal. Therefore, although we certainly understand the problem and appreciate its importance, we consider that this is the best and most practical way of dealing with it in the circumstances.
Lord HOWIE of TROON: I am willing to yield to the criticism of the noble Lord, Lord Boyd-Carpenter, as to the drafting of the amendment, which I am sure is perfectly right. I do not think it is quite as feeble as the Minister intimated just a moment ago: I believe it is a little sturdier than he seemed to make out. However, I am rather inclined to agree with my noble friend Lord Wynne-Jones, when he expressed some doubts as to whether professional people should be in a special relationship within trade unions. I quite see that that is a very real difficulty and, having been myself a member of a trade union for many years, I quite understand the problem. Clearly, it would be better if the problem were dealt with within the rules of the union. Some unions do deal with it, but by no means all of them do. Some realise the position and deal with it precisely—indeed the clause has been taken from a union rule book more or less, though not entirely, intact.
Again, the matter could be dealt with in the union membership agreement itself. That would be another way of dealing with it, but that does not always happen either. If these things happened we should not need the legislation; but, since these things do not always happen, perhaps we do need the legislation to back it up.
I think this is a matter of great importance. I am not sure that I take the argument that the Bill should not be cluttered up with special cases, because it is cluttered up with all sorts of things already that I am not sure are totally necessary, although they may appear to be desirable to others of your Lordships. But in view of the comments that have been made I do not intend to press my amendment to a Division today. I hope, though, that the Government will undertake to look at the matter rather more closely and perceptively—that may sound insolent but it is not meant to be —than they have been willing to do up to now. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 4 [Compensation]:
5.45 p.m.
Lord ELWYN-JONES Lord ELWYN-JONES moved Amendment No. 22:
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Page 5, line 30, leave out from ("application") to ("for") in line 31.
The noble and learned Lord said: With the leave of the House, I should like to move Amendments Nos. 22 to 29 en bloc. That would at least mark some numerical progress on the Bill. It may be convenient for the Committee to consider also Amendment No. 33, which is interlinked with the amendments.
Clause 4 deals with compensation to be paid to a complainant whose complaint against a trade union under Clause 3 that he has not been admitted or re-admitted has been declared by the industrial tribunal to be well founded—whatever "ben trovato" may mean in its full significance I know not—"se non è vero" but we shall see. The clause provides a dual jurisdiction to deal with the problem of compensation to both the industrial tribunal and the Employment Appeal Tribunal. I know of no other example in labour law of such dual jurisdiction. In my submission, the clause is a recipe for confusion for all concerned, whether they be employees, employers or trade unions, and it will produce a position of unacceptable complexity.
It appears that if two members of a trade union are expelled at the same time but one is re-admitted to a union while the other is not, the one who was readmitted will go for compensation, for the period when he was unemployed, to the industrial tribunal, with an appeal on law and on fact to the Employment Appeal Tribunal—that is to say, a complete rehearing of the case before the Employment Appeal Tribunal with witnesses, union representatives, employers and the lot. Then perhaps there is further appeal to the Court of Appeal and then to the House of Lords. That is the recipe for industrial peace which is contained in so many parts of this Bill. That is the procedure which will face him.
But if the second union member is not re-admitted to his union, he does not go to the industrial tribunal but straight to the Employment Appeal Tribunal for enhanced compensation. One of the dangers of this procedure is that it may well lead some employees in that position to become deliberately obstructive to the point where no union would take them, in order to hope for the maximum of compensation.
Another feature of Clause 4, which may well in time become as notorious as another Clause 4 in the history of our politics, is the different measure of compensation which is awardable in the two cases I have mentioned. In the case of the re-admitted employee who will go to the industrial tribunal, under the provisions of Clause 4(4)(a), his compensation will be—and here I quote—
"… such as the tribunal considers appropriate for the purpose of compensating the applicant …"
for his loss as a result of the refusal or expulsion which was the subject of his complaint. That suggests purely economic loss, his loss of earnings.
As to the employee who is not readmitted to the union, Clause 4 (4)(b) provides that his compensation shall be such as the Employment Appeal Tribunal—and I quote—
"… considers just and equitable in all the circumstances".
I ask what is the purpose of this differentiation as to the method of computation of the compensation. Is its purpose to establish a wholly different calculation of compensation for the second case, with an element of penalty? I think the Committee are entitled to know, as are those who will be affected, what tests the Employment Appeal Tribunal is to apply.
Another problem which I see arising is this. What is the position where an expelled member is re-admitted to the union but to a different section, for example, to a non-craft section with different rights and obligations? Is he to have the enhanced compensation or not? Quite apart from these important questions of principle, we on this side of the Committee oppose the giving of primary jurisdiction to the Employment Appeal Tribunal. The EAT is intended essentially—that has been its history and that has been the key, I submit, to its acceptance—as an appeal body determining questions of law only. The lesson of the National Industrial Relations Court, with direct jurisdiction over facts in very heated and much publicised industrial issues, ought to have been learned, but clearly it has not been learned.
In many cases expulsion from a union will be associated with a strike because union members may well refuse to work
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with a non-unionist. This will plunge the EAT into having direct primary jurisdiction in the area of industrial disputes, which I submit was the very rock on which the NIRC broke. I am dealing with this briefly in view of the appeal for brevity. For these reasons of principle and practice I move these amendments.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Derwent): I do not think all these amendments can be moved en bloc, because, if Amendment No. 22 is agreed to, Amendment No. 23 will have to be put in a different form. Perhaps it would be wise to move Amendment No. 22 first and then see how we go on.
Lord ELWYN-JONES: I am appalled how quickly I have forgotten what I learned over five years. The noble Lord is, of course, right.
Lord MACKAY of CLASHFERN: Although technically we are speaking to Amendment No. 22, perhaps I can range a little more widely to save time later. The situation is that cases of appeal over unreasonable exclusion or expulsion from a trade union under Clause 3 are subject to a two-stage procedure. First of all, an industrial tribunal will give a declaration of rights regarding membership. Whether or not a union complies with this, an issue of compensation might arise although often the applicant will simply want his union card in order to prevent loss of his job. The procedure recognises this by requiring a separate and subsequent claim for compensation to be made and a time-lag between the determination by an industrial tribunal and that claim.
The issue of compensation, however, is quite different, depending on whether the union has complied with the declaration of rights. If it has done so then it will generally just be a matter of compensating for the loss suffered until membership was granted or restored in accordance with the declaration. That is a simple matter of past loss by the time the tribunal hearing would take place. If the union does not comply with the declaration then the question of compensation may involve future loss because the chances are that the person, having been deprived of his union card, will continue to suffer loss in the future after the date of the hearing.

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In this situation we consider that the two-stage procedure is justified and the question arises whether there is a case for giving the two stages to the same or separate bodies. We believe there is a good case for giving the second stage of compensation to the Employment Appeal Tribunal where a union has refused to comply with a tribunal declaration, because in that situation there is a standing declaration by the industrial tribunal which the union has refused to comply with. These cases will necessarily be the most delicate and contentious arising out of Clause 3 and may well arouse publicity and ill-feeling, and it is better that they are removed from the scope of industrial tribunals and referred to the EAT, which is a body of similar status to that of the High Court, with lay members of particular expertise, seniority and experience. The Employment Appeal Tribunal has power at the moment to award compensation on appeals to it, although very often it will remit the matter.
So far as the extent of the award of compensation is concerned, "just and equitable" appears a reasonable formula. It is important that in a case where there is future loss the award should be on the same lines as that available for unfair dismissal where the employer unreasonably refuses to comply with a tribunal order of re-engagement. Accordingly, although Amendment No. 33 is fairly far on, that is the answer in respect of it. I therefore submit to your Lordships that this is a reasonable way of dealing with cases of the most important and delicate kind, which, of course, we hope will be very few in number.
Lord ELWYN-JONES: I venture to submit that in his answer the noble and learned Lord the Lord Advocate has really established my case in that he has conceded that these cases that will go to the EAT will be delicate and contentious and arouse ill-feeling. There will be massive publicity attendant upon them, as my noble friend Lord Shinwell indicated at an earlier stage in the debate, and this is the very way in which the standing and acceptance and acceptability of the EAT will be undermined. We are again going straight on the road to the unfortunate experiences that we had with the National Industrial Relations Court. I plead with
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the noble and learned Lord to think again about this. I am concerned to maintain the respect and confidence of both sides of industry in the Employment Appeal Tribunal and I think this is a grave and dangerous path upon which we have trodden. I tried to argue this in another part of the Bill. I ask the noble and learned Lord to think again about this matter. If he is willing to say he will do that in the light of what I have said, then I will not press the amendment.
Lord MACKAY of CLASHFERN: I think this matter has been very thoroughly considered before we have come to this point and therefore I do not think I could do more than say what I have said already.
Lord ELWYN-JONES: Then we shall have to seek a remedy, but in the interests of time we may divide on the Question, Whether the clause shall stand part of the Bill? I urge the Government to think about this. If I may say so, I have discussed it with those who have responsibility in the judicial field, and it fills them with alarm and despondency.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES: What does the noble and learned Lord want to do? Does he want to move the remaining amendments en bloc, or not move them?
Lord ELWYN-JONES: I will not move them.
[Amendments Nos. 23 to 29 not moved.]
Lord MCCARTHY Lord MCCARTHY moved Amendment No. 30:
Page 6, line 27, leave out ("thirty") and insert ("twenty").
The noble Lord said: In the light of the words of the Deputy Chairman of Committees, I would not dream of moving Amendments Nos. 30, 31, 32, 34 and 35 en bloc. However, what I would like to do is speak first to Amendment No. 30 although considering Nos. 31, 32, 34 and 35 in what I want to say along the way. All these amendments relate to each other. They are probing amendments, much in the form in which they were put down in another place. They are intended to try

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to discover from the Government what is the logic and the basis of the maximum compensation which is written into the Bill. We were told in another place that the basis was the compensation for other forms of dismissal, which we were told in February 1980 would be in the region of £13,000. It is not quite clear to us, in the first place, how that sum is derived from the particular clauses in this Bill.
We were told quite a lot in another place about why the Government put the figures that they did into subsection (7)(a)—
"an amount equal to thirty times the limit for the time being imposed by paragraph 8(1)(b) of Schedule 14 to the 1978 Act".
It was not so clear how the Government came to take the figure in subsection (8)(c), which relates, as I understand it, to compensation when cases go to the EAT—
"an amount equal to fifty-two times the limit for the time being imposed by paragraph 8(1)(a) of Schedule 14 to the 1978 Act".
So we are proposing here a series of amendments—and I am now moving No. 30—which reduce the figures or the estimates for the sums, of one kind or another, which are put in at various places in the Bill—
"Page 6, line 27, leave out 'thirty' and insert 'twenty'.
"Page 6, line 32, at beginning insert 'two-thirds of'"
and so on. I am not suggesting to the Committee that our figures are any more scientific, or any more carefully worked out, than those of the Government. They are just somewhat lower. What I am asking is this. What is the logic whereby our figures should not be accepted, in place of those of the Government?
There are several arguments that we could pray in aid. First, as I have said, it is not clear that the Government's figures will come out at precisely the same as the figures for other forms of unfair dismissal, especially in the light of what the Government propose to do in relation to the basic award. The additional award for unfair dismissal is a very exceptional and unusual sum, which is imposed in very few cases, and it is not clear to me whether the sum of £6,240, which is included in the additional award, is put into the calculation of £13,450 in respect of this award: and, if so, why it is put there.
Further, we are dealing here with something which is quite different from
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unfair dismissal on normal grounds. Exclusion from a union may be due to a failure to submit to the more mild penalties and disciplines of the union, as I sought to explain when we discussed this subject previously, and it is not clear to me that for circumstances of that kind one needs a maximum such as this. Furthermore, it is usually the case that anybody who is excluded from a union is subsequently able to obtain re-entry to that union, unless the reasons are particularly grave.
For example, people who lapse and run out of time can almost always quite easily get entry back into the union if they are prepared to pay an entry fee of the subscriptions of a week or two. Or people who are expelled from a union for various disciplinary offences usually find, after a short period, that on payment of an entry fee they can get back into the union. In all these ways, expulsion from a union is not necessarily the same as unfair dismissal of the normal kind. We do not see why the figures should be the same, and we are asking the Government to justify them. I beg to move.
6.4 p.m.
Lord LYELL: The Committee will be very grateful to the noble Lord, Lord McCarthy, for explaining his amendments in fairly great detail. I hope that I can be fairly brief and non-contentious in answering the noble Lord, but I hope that the Committee will forgive me if I take a gentle dig at my erstwhile tutor. I was fascinated to see, in Amendments Nos. 32 and 34, the word "quotient". Perhaps the noble Lord believes that these amendments are fairly simple, and he asks me a clear question about the sum of £6,240. But perhaps he can explain to me the word "quotient", because this is a very complicated legal Bill. I had a look in the dictionary to find that it is,
"any number contained in a certain quantity".
I wonder whether the noble Lord really believes that that is a relevant and easy definition of the word "quotient". Certainly it is not how I understand it.
The general aim of the large number of amendments which the noble Lord has put down is to reduce substantially the compensation which may be awarded by industrial tribunals and the Employment Appeal Tribunal to individuals

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who may have been unreasonably expelled or excluded from a union. Your Lordships will know that similar amendments, which were also said to be of a probing nature, were debated in Committee in another place. We agree that Clause 4 appears to be fairly complex, but believe that the principle behind the compensatory levels is straight forward. The formula for the calculation of compensation is exactly the same, for the purpose of this provision as for unfair dismissal under the Employment Protection Act. Our aim has been to ensure that the maximum scales of compensation under Clause 4 shall be the same as those for unfair dismissal.
This parallelism seems reasonable, because the financial effects for an individual who is expelled or excluded from a trade union where there is a closed shop are likely to be similar to those flowing from unfair dismissal. Loss of employment may not always be the consequence of exclusion or expulsion from a union, but the formulae in Clause 4 merely set maxima: tribunals will award compensation within those maxima according to the circumstances.
It could be argued that maximum compensation awarded in exclusion or expulsion cases should be higher than in unfair dismissal cases. This is because exclusion or expulsion can remove access to not just a single job but a whole industry or trade if there is a single dominant union. In such cases, exclusion or expulsion could seriously affect an individual's career prospects and his earnings expectations. Nevertheless, the Government have decided that it is sensible that compensation in such cases should be subject to a limit, as it is in cases of unfair dismissal—
Lord WEDDERBURN of CHARLTON: Will the noble Lord allow me to ask a brief question? In unfair dismissal, the limits in the Government's Bill apply to someone who is 61 and has 20 years of service. If the man is younger or has less service, the maximum possible for him to recover is much less. Why should this maximum apply to people of all ages and service for expulsion from a union?
Lord LYELL: If the noble Lord will have a little patience while I turn the
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page, I am coming to that point. I hope that the noble Lord will hold on, because I have some detailed notes, though not necessarily about a person of the age of 61. Is it the 61st year or when the person is 61 and one day? It may assist the Committee if I attempt to explain briefly the scheme of compensation under Clause 4. Under subsections (7) and (8), the maximum amount of compensation, which is payable in cases of unreasonable exclusion or expulsion from a trade union, is, in the case of an applicant who is admitted or re-admitted to a union following an industrial tribunal declaration, the equivalent to the sum of the basic and compensatory awards in unfair dismissal cases.
If the application is to the Employment Appeal Tribunal, because the applicant has not been admitted or re-admitted to the union, the maximum amount is augmented by the additional award which may be available in unfair dismissal cases in which an order for re-engagement or reinstatement is made, but not complied with. That may go some way towards satisfying the noble Lord, Lord McCarthy. I am just coming to the noble Lord, Lord Wedderburn.
The formula for calculating the basic award, which he will find in Section 73(3) of the 1978 Act, gives one-and-a-half week's pay for years of service for the whole of which the employee was not below the age of 41, one week's pay for each complete year below 41 and not below 22, and half a week's pay for complete years below 22 and not below 18. Therefore, we see that the limit on compensation under subsection (7)(a) and subsection (8)(a) is equivalent to the maximum basic award which can be paid. The maximum is 20 years' service, multiplied by one and a half weeks' pay. We say that no more than 20 years' service can be taken into account when we calculate the basic award.
These figures are indeed arbitrary, and noble Lords opposite, especially the noble Lord, Lord Wedderburn of Charlton, asked why they are marked out as they are. I will try to take on board his 61-year-old person. I wonder why he queries these figures and details. May I ask him to consult his right honourable friends in another place because it was

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they who determined, when they were in Government, the formula, which I am afraid I may have been detailed and pedantic about, for unfair dismissals compensation. I do not think that we can recommend that these amendments should go through as they are.
Lord SHINWELL: As a matter of principle, I agree that if a man is unfairly dismissed or excluded as a result of a tribunal decision he ought to be compensated in some form. Before I proceed with my general observations, I should like to ascertain from my noble friend Lord McCarthy whether we intend to withdraw this amendment or go to a Division. If we are to go to a Division I shall join him wholeheartedly because, as I shall demonstrate, the final concept is fantastic.
For some years there has been a great deal of talk about how to deal with trade unions which are troublesome, recalcitrant, disruptive. A whole lot of adjectives could be used about them, most of them disrespectful. I can understand that. However, it has been suggested that if trade unions are too troublesome, truculent and disruptive members may be sent to prison. There has been some attempt at compromise, because it has been suggested that this might create some difficulties. I can imagine what they are and that the Home Office would be very troubled about it. Therefore, trade unions ought to be fined. The question which occurs to me—I cannot find the answer and I hope that somebody will find it for me—is this. Who will provide the compensation? If it is the trade unions who have got to find the compensation, that is an easy matter!
I imagine that if I were in charge of a particular branch of a shop floor I would say, "My lads, we have been asked to pay £5,000 because one of our friends has been unfairly dismissed, so they say. We don't think he has been unfairly dismissed but he has gone, so there it is and we have got to pay £5,000, £6,000 or £10,000. Where are we going to get the money from? We have been spending a lot of money lately on administration, and we have had strikes and so on. But we have got to raise the money, so we shall have to raise contributions. You will have to pay a little more by way of levy: not the political levy but the industrial levy". Then the lads would say, "That's
234
all very well, but we pay enough already". The reply would be, "Oh, that's a simple matter to deal with. We will just ask for higher wages. We will let the employers pay for it ". So what will happen in the long run? The employers will have to find the compensation. This is what the Government are leading up to.
I wonder who has thought this out—carefully, methodically. It could not have been the legal people; they are much too intelligent, or are supposed to be. Who are the people who have framed this? Have they not thought it out carefully? If you fine people where is the money to come from? The trade union will have to find it. But there are complications. They are at their wits' end, so they say they will ask the lads to pay an extra contribution; but the lads say that if they have got to come to the aid of the union they cannot afford to be bankrupted; they will declare a strike. The trade unions would then say that they could not have a strike and that they had got to stop this sort of thing, but it would be up to the shop floor to say. It is the shop floor which has got to decide. We are always told that it is the shop floor, anyway, that decides what the leaders do. That is the concept which appears in the newspapers—Conservative newspapers, of course. So there will be a bit of trouble, and the employers will say that they cannot afford extra wages. However, the compensation has got to be found somewhere, so wages will have to go up. And out of the extra wages the compensation will be found.
If that is challenged, can noble Lords opposite tell me the escape route? How does one deal with a situation of that kind? The only way to deal with it is not to make fools of yourselves and think you can take it out of the trade unions, or the shop floor, or even of the employees. You cannot do it. In the long run it is the taxpayers who will have to find the money. All we can say in extenuation is that for years and years, or weeks and weeks, or months and months, or days and days, or even minutes and minutes of our lives we have tried to prevent the Government from embarking upon this perilous adventure. We have failed, and we have to accept the consequences.
Lord MCCARTHY: I do not think that we can accept entirely what was said by the noble Lord, Lord Lyell,

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although I rather enjoyed his essay. I am not quite certain what he read for it, but I enjoyed it. We are trying to say two things and I do not think that the noble Lord has proved that we are wrong. We are trying to say that in the case of this Bill the circumstances are not similar in respect of unfair dismissal and in respect of compensation. Therefore, the sums should not be similar. We are trying to say that there is no rationale behind the sums which the Government have put into the Bill. I understood the noble Lord to say that he admits this; he said that it is arbitrary.
Since neither of these points has been established to our satisfaction, I am afraid that we cannot accept what the noble Lord said. However, in view of the lateness of the hour, I do not want to press this amendment to a Division.
May I assure the noble Lord, Lord Shinwell, that we take his points very seriously, but that we think the appropriate point at which to take them up is when we divide on clause stand part.
So far as "quotient" is concerned, I can assure the noble Lord that there is nothing wrong with his definition. If, however, he cannot see its application to the amendment he can, if he likes, have the word "result". "Result of the sum under (a) and (b) above" comes to the same thing. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 31 to 35 not moved.]
6.18 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 36:
Page 6, line 46, at end insert—
("( ) The amount of compensation awarded under this section shall be reduced by the amount of any damages awarded by the High Court in consequence of a cause of action which arises from substantially the same facts as the complaint under section 3 above.
( ) The amount of damages awarded by the High Court shall be reduced by the amount of any compensation awarded under this section where the complaint arises from substantially the same facts as the cause of action in respect of which those damages fall to be awarded.")
The noble Lord said: I can be very brief on this amendment. Although Ministers may find this hard to believe, this is an attempt to help the Government to understand what we believe is a very deep-seated problem in the Bill, one which was not debated in another place. I thought it right to raise one basic aspect of it by way of a brief question in respect of the last clause; namely, in relation to the breach of union rules which might give rise to an injunction in the High Court if it were caused by industrial tribunal proceedings.
The noble Earl answered the question on the previous occasion by saying that it was not appropriate to raise it on clause stand part, otherwise we should all be here until eight in the morning. Therefore it is raised this time by way of a probing amendment. The same facts may give rise to a claim in the High Court of expulsion contrary to the rules and also to a claim before an industrial tribunal for compensation for unreasonable expulsion. The amendment is obviously meant to suggest what would no doubt happen; namely, what the court or tribunal would take into account in assessing damages or compensation: the amount that had been awarded in the other court.
In saying that, I put to the Government the fact that this is an aspect of a very deep-seated problem in the Bill and ask them the question: if they do not accept these amendments, will they be bringing forward at Report amendments of this character and amendments dealing with the other aspects of the inter-relationship of jurisdictions between the tribunals and the EAT and the High Court and the Court of Session which will arise if Clauses 3 and 4 are enacted. I beg to move.
Lord MACKAY of CLASHFERN: The situation which is provided for in these amendments is a situation which I suppose could happen, although generally speaking we would think that a person would be content with one or other; but if a person in the common law case wrote to the High Court, we believe that the court would follow its normal practice in awarding any damages to a successful plaintiff by calculating the loss suffered by him as a result of the defendant's wrongful treatment. The calculation of the loss

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would take into account any compensation the individual may have received from the union under Clause 4 of the Bill and similarly the other way round, as the noble Lord envisaged. So our view is that these amendments are not required because this is exactly what would happen in any event, assuming this situation arose. I appreciate that the noble Lord has posed another question which does not arise directly in relation to these amendments, and perhaps I may take leave to answer it on some suitable occasion.
Lord WEDDERBURN of CHARLTON: I am grateful to the noble and learned Lord for the spirit of his reply. I accept that this is what would happen normally. The amendments are meant to raise the problem with the Government, and perhaps in doing so I may also say that the question surely arises whether the High Court should have power to stay the proceedings in the tribunal if the two sets of proceedings overlap. It would be very unfortunate if, as he accepts could happen, there were two sets of proceedings proceeding contemporaneously. On that basis, in the hope that the Government will deal with this matter expressly on Report and in the two jurisdictions, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 4 shall stand part of the Bill?
Lord MCCARTHY: It is only logical that we should oppose this clause since we opposed Clause 3 of the Bill and this clause is intended to extract the compensation which arises in circumstances in which trade unions are found to be responsible for unreasonable exclusion or refusal to admit. So it is logical that we should oppose this clause. But I think there are additional reasons which have arisen out of the debates which we have had in regard to the amendments. The Government would not give us any reassurance about the very reasonable concern which we expressed in regard to the position of the EAT. We still believe that the compensation element in this Bill is too high. It has not been rationally justified,
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and it strikes us as being extremely arbitrary in the very different circumstances from the normal unfair dismissal case. The noble Lord, Lord Wedderburn, has recently made the point about the considerable concern we have as to the position of High Court actions. On none of these things have the Government been prepared to budge an inch. Therefore we oppose the Motion that the Clause stand part.
Lord WIGODER: I should like to mention one matter which is wholly different in nature from the substantial matter raised by the noble Lord, Lord McCarthy. It is in fact a very small matter which I have already mentioned to the noble and learned Lord, Lord Elwyn-Jones, who utilised it in the course of one of his inimitable throw-away lines when moving an earlier amendment. It is the slightly unusual expression in Clause 4(1) about a complaint being declared to be well-founded, and that of course refers back to the similar use of the same expression in Clause 3(7). I am a little unhappy that a complaint being well-founded may not be coterminous with a complaint being successful, and I rather assume that what the Government have in mind is that the complaint should have been found to have succeeded. I raise this matter, asking the noble and learned Lord, the Lord Advocate, whether he might care to reflect upon this matter and to put my fears at rest in due course.
Lord MACKAY of CLASHFERN: I think the substantial matters which have arisen on this clause have been the subject of debates in relation to the amendments, and I am grateful that we saved time by taking a Division on all of them at once, so I do not wish to waste time now. I am happy to accept the suggestion made by the noble Lord, Lord Wigoder, that I should deal with this question in due course.
6.25 p.m.
On Question, Whether Clause 4 shall stand part of the Bill?
Their Lordships divided: Contents, 136; Not-Contents, 63.

CONTENTS

Abercorn, D.

Gisborough, L.

Mottistone, L.

Airey of Abingdon, B.

Glendevon, L.

Mowbray and Stourton, L. [Teller.]

Alexander of Tunis, E.

Glenkinglas, L.

Allerton, L.

Gormanston, V.

Moyne, L.

Ampthill, L.

Gowrie, E.

Murton of Lindisfarne, L.

Auckland, L.

Gray, L.

Norfolk, D.

Avon, E.

Greenway, L.

Northchurch, B.

Banks, L.

Gridley, L.

Nugent of Guildford, L.

Barrington, V.

Grimston of Westbury, L.

Ogmore, L.

Belstead, L.

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

Orkney, E.

Bessborough, E.

Orr-Ewing, L.

Bledisloe, V.

Halsbury, E.

Rawlinson of Ewell, L.

Bolton, L.

Hampton, L.

Redmayne, L.

Boyd-Carpenter, L.

Hankey, L.

Renton, L.

Bradford, E.

Hanworth, V.

Robson of Kiddington, B.

Bridgeman, V.

Harvington, L.

Rochester, L.

Brougham and Vaux, L.

Hatherton, L.

St. Aldwyn, E.

Burton, L.

Hawke, L.

Salisbury, M.

Caldecote, V.

Henley, L.

Sandford, L.

Carr of Hadley, L.

Hives, L.

Sandys, L. [Teller.]

Carrington, L. (A Principal Secretary of State.)

Home of the Hirsel, L.

Seear, B.

Hood, V.

Sempill, Ly.

Chelwood, L.

Howe, E.

Sharples, B.

Clifford of Chudleigh, L.

James of Rusholme, L.

Skelmersdale, L.

Cockfield, L.

Keyes, L.

Somers, L.

Colwyn, L.

Kilmany, L.

Spens, L.

Cottesloe, L.

Kilmarnock, L.

Stamp, L.

Craigavon, V.

Kimberley, E.

Strathcarron, L.

Cranbrook, E.

Kinloss, Ly.

Sudeley, L.

Cullen of Ashbourne, L.

Lauderdale, E.

Swinton, E.

Davidson, V.

Lindsey and Abingdon, E.

Teviot, L.

de Clifford, L.

Lloyd of Kilgerran, L.

Thurso, V.

De La Warr, E.

Long, V.

Torphichen, L.

De L'Isle, V.

Loudoun, C.

Tranmire, L.

Denham, L.

Lucas of Chilworth, L.

Trefgarne, L.

Derwent, L.

Luke, L.

Trenchard, V.

Donegall, M.

Lyell, L.

Trevelyan, L.

Dowding, L.

McFadzean, L.

Vaux of Harrowden, L.

Dundee, E.

Mackay of Clashfern, L.

Vickers, B.

Ebbisham, L.

Mackie of Benshie, L.

Vivian, L.

Eccles, V.

Mansfield, E.

Wakefield of Kendal, L.

Evans of Hungershall, L.

Marley, L.

Ward of Witley, V.

Exeter, M.

Monckton of Brenchley, V.

Wigoder, L.

Faithfull, B.

Monson, L.

Wise, L.

Ferrers, E.

Montgomery of Alamein, V.

Wynford, L.

Forester, L.

Morris, L.

Young, B.

Fortescue, E.

NOT-CONTENTS

Allen of Fallowneld, L.

Gregson, L.

Peart, L.

Ardwick, L.

Hale, L.

Phillips, B.

Balogh, L.

Hatch of Lusby, L.

Pitt of Hampstead, L.

Birk, B.

Irving of Dartford, L.

Plant, L.

Blease, L.

Jacques, L.

Rhodes, L.

Blyton, L.

Janner, L.

Ritchie-Calder, L.

Brockway, L.

Kirkhill, L.

Ross of Marnock, L.

Brooks of Tremorfa, L.

Leatherland, L.

Shinwell, L.

Burton of Coventry, B.

Lee of Newton, L.

Stewart of Alvechurch, B.

Caradon, L.

Leonard, L.

Stewart of Fulham, L.

Cledwyn of Penrhos, L.

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

Stone, L.

Collison, L.

Taylor of Mansfield, L.

Cooper of Stockton Heath, L.

Longford, E.

Underhill, L.

David, B.

Lovell-Davis, L.

Wallace of Coslany, L. [Teller.]

Davies of Leek, L.

McCarthy, L.

Walston, L.

Davies of Penrhys, L.

MacLeod of Fuinary, L.

Wedderburn of Charlton, L.

Elwyn-Jones, L.

Maelor, L.

Wells-Pestell, L.

Gaitskell, B.

Milner of Leeds, L.

Whaddon, L.

Gardiner, L.

Northfield, L.

White, B.

Glenamara, L.

Pargiter, L.

Wootton of Abinger, B.

Goronwy-Roberts, L.

Parry, L.

Wynne-Jones, L.

Gosford, E.

Resolved in the affirmative, and Clause 4 agreed to accordingly.
Clause 5 [Determination of fairness of dismissal]:
6.34 p.m.
Lord BALOGH Lord BALOGH moved Amendment No. 37:
Page 7, line 9, leave out from ("circumstances") to second ("the") in line 10.
The noble Lord said: There are two approaches to the problem of labour relations in modern economies which are characterised by the concentration of power on both sides of industry, which paralyses the ordinary balancing mechanism of a market economy and substitutes market power for market forces. The civilised way of dealing with this question is by having a package of measures agreed between the two sides, which ensures relative peace. The alternative is the method by which point by point the monopoly strength of one part of the bilateral monopoly situation is strengthened. Heath Mark 1 and the present Government have adopted this method: they want radically to restrict, through legislative action, the power of the unions. The attack on the unions after 1970 created such an atmosphere of tension and bitterness that it brought down the Government, because the bitterness prevented Heath Mark 2, which would have been quite sensible, being accepted by anybody. This Government, like the Bourbons, have forgotten nothing and learned nothing.
This clause is an illuminating example of this spirit, mainly concentrating on strengthening the strong for its own sake. What has the size of a firm to do with the fairness or unfairness of dismissal? Evidently the small firms are to be allowed to be more unfair than the large ones. The Government asseverate their desire to strengthen the small firm, and of course superficially this measure does strengthen the attraction of entrepreneurship in small industries; I would admit that. But what they have forgetton is that the very same measures, the very same atmosphere, will make the best workers emigrate from the small to the large firms. Yet the Government's whole industrial policy is said to be an encouragement of industry of small size.
Moreover, the problem of quantifying the size of the firm, its relationship with the amount of compensation and the
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judgment on fairness and unfairness, makes it quite impossible to have anything but judicial legislation, legislation in secret smuggled into this Act. It seems to me it is a bad act in a bad spirit and ought to be deleted.
Lord ROCHESTER: At Second Reading I made plain that we on these Benches were not altogether happy about the way in which under this Bill companies were to be treated differently depending simply on their size, however that may be judged, the number of people employed and so on. We have for a long time advocated that more needed to be done for the encouragement of small businesses, but, as I pointed out then, it is often the employee in a small firm who is more vulnerable and in need of protection than others. If, therefore, I have understood this clause and this amendment correctly, I think we have some sympathy with some of the points at least that the noble Lord, Lord Balogh, has just enunciated.
The Earl of GOWRIE: We have come to Clause 5 of the Bill. I think there are some misconceptions, judging from what the noble Lord, Lord Balogh, has said, if I heard him aright. It might be convenient if I reminded the Committee what Clause 5 is about. It amends Section 57(3) of the 1978 consolidation Act, so that the question whether the dismissal was fair or unfair shall depend, not as it depends at present under the present law on whether the employer can satisfy the tribunal that in the circumstances he acted reasonably in treating the reason for dismissal as a sufficient reason for dismissal, but on whether in the whole circumstances, including the size and administrative resources of his undertaking, he acted reasonably or unreasonably in treating it as a sufficient reason for dismissing the employee. Accordingly, the effect is to neutralise the burden of proof—that is how we see it—as to establishing the reasonableness of the dismissal, and specifically to require the tribunal at least to take into account the size and the administrative resources of the employer's undertaking.
The amendment moved by the noble Lord, Lord Balogh, nullifies one of the two principal purposes of the clause, because it removes the requirement that tribunals should take into account the

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size and administrative resources of the employer's undertaking when it comes to decide or determine whether the employer acted fairly or reasonably.
The part of the clause which the noble Lord seeks to amend simply spells out what should be good practice on the part of tribunals. It is not creating, as it were, two classes of citizenry in respect of undertakings: it is spelling out that the tribunal should take into account matters which sensible tribunals probably would take into account. It is providing a bit of statutory underpinning. It is doing so because the Government have received many representations alleging that tribunals have attached too great an importance to the requirements of the ACAS Code on Disciplinary Practice and Procedures. People say that small firms cannot be expected to comply with all of the code and that the structure of the code itself is geared much more towards large businesses which have formal personnel divisions and practices. In smaller firms there is, of course, closer contact between management and employees. That has many disadvantages, but it can make it more difficult to give formal warnings to people without souring working relations. As the noble Lord, Lord Rochester, will know, with the single-tier management as exists in many small firms, it is also more difficult to refer disciplinary matters or appeals to a higher level.
I wish to emphasise that we are talking about the administrative resources of a firm. We have no intention whatever of asking or allowing small employers to act less reasonably. All that we are doing is making it clear that smaller firms are not necessarily acting unreasonably if the procedures which they adopt in circumstances of this kind are inevitably slightly different from those adopted by large firms, and if such procedures take into account the size and resources. Therefore, the clause reassures employers that tribunals will look at the particular circumstances of the individual firm in each case. That is all that this part of the clause is intended to do.
The noble Lord, Lord Balogh, in moving the amendment, gave us perhaps a warm-up for what may be the remarks he will make on the general debate on Government policy tomorrow in your
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Lordships' House. I wish to say a little about our approach to small firms and the employment protection legislation. We have constantly emphasised that the purpose of this and allied provisions in the Bill which we shall be coming to later, is to reduce the burden imposed on employers, particularly small employers, without at the same time removing essential protections from employees. Our judgment is that the legislation on unfair dismissal has had, in the main, a negative psychological effect on small employers and we have considerable evidence that it has been a real deterrent to recruitment.
I wish finally to set these very limited changes in context. We are trying to stimulate small firms, because this area seems to offer some prospects for employment growth. We cannot, of course, give even an approximate figure of the number of jobs that may be created. But what we can at least say is that we hope that employers, particularly small employers, will no longer feel to the same extent that the employment protection legislation is maybe the last straw in making them decide not to recruit, or not to take on, an extra employee. That, at least, is one of the problems that we can do something about. It is often pointed out, of course, that what really worries small employers is high interest rates and the shrinkage of the home market. Issues like those may lie outside our control or may temporarily have to give way to wider economic needs, such as the need to reduce inflation or public spending. But that does not mean that there is any excuse for us not to try to help small employers where we can, and that is the point of the clause.
Lord McCARTHY: Is the noble Earl really telling us that he now has another reason for this part of the Bill? Way back in another place, and to some extent on Second Reading in this House, the Government were saying that they actually had evidence; that they had surveys and that those surveys indicated that small firms were really hurt by these provisions in the Employment Protection Act. Then, when it was pointed out to them that most of those surveys had a 2 per cent. response rate and that at least one of them was run from the Conservative Central Office, they changed their minds.
The second argument that we heard—and we heard it from the noble Earl on

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Second Reading—was that it was not a matter of evidence. He admitted that there was no evidence, or rather that the balance of the evidence was against him, but he said that it was psychological. He said that these provisions would make small firms feel psychologically better; they did not really need them, there was not any evidence, but they would feel psychologically better. Now he tells us that it is good practice. These are directions to the industrial tribunals as to how they should carry out their work—and, of course, they are not really necessary, because it is good practice and they are doing it already.
All day today, and during a considerable part of our discussions on the last occasion we debated this Bill, we sought to get the noble Earl to put things into the Bill which were declaratory of the existing position, what one might call "good practice". And over and over again he has told us, "Leave that to the tribunals", or, "Leave that to the code". But this is something which is such good practice that it cannot be left to the tribunals. This is something which is such good practice that it cannot be left to the code. This is something which is so good for the small firm that it must actually be put there by statute.
The noble Earl gave us two examples. He said that the exsting code will be very hard on small firms—although, of course, if it is good practice, and that is what the tribunals are doing, it is difficult to see why—in respect of notice and in respect of discipline. In respect of notice, there is absolutely no reason why a firm of one man and two girls cannot give notice if the man wants to sack one of the girls. One does not need size to give notice and one does not need size to write letters. The second reason he gives is levels. He says: "How can they have appeal procedures?" There are no firms with only one level. It is always possible to appeal to someone, and if they do not want to appeal to someone in the firm they can appeal to an independent outside.
The fact is that there are no reasons why the provisions of the code cannot apply to small firms. The fact is that they should apply to small firms. The fact is that the small firms are the very people who need the code and they do not need the Bill.
Lord DAVIES of LEEK: There is a point that I should like clarified. Reference has been made to "neutralised". Neutralisation means the equality of two different people. How can there be a neutralised position as regards a person working in a firm whose entire life revolves around his employment—his joy, his happiness and his home? What is really meant, is it not, is that he has the burden of proof put upon his shoulders under this Bill and Clauses 5, 6 and 7 revolve around that point? I do not want to delay the Committee, but I should like a further explanation of "neutralisation"
The Earl of GOWRIE: All that I said was that we were trying, as the noble Lord acknowledged in the latter part of his remarks, to neutralise the burden of proof. That seems to me to be a reasonably sensible thing to do. I take the point of the noble Lord, Lord McCarthy, that we are providing a statutory underpinning of good practice. Sometimes the judgment of the noble Lord, Lord McCarthy, and my judgment will differ widely about whether a statutory underpinning is necessary. I have mounds of evidence here which I have cut short, but which I should be very happy to go into in detail. Our judgment is that the onus had shifted too far, and that a corrective was needed, and that is exactly what we have done.
Lord BALOGH: In his usual charming and convincing way the noble Earl suggested that this is a code of practice. A code of practice of five lines? What sort of code of practice is it? Who will create the real precedents which are important? This Bill simply pushes the tribunal, which may comprise fairly weak men and women, for we do not always have Dennings around. It will itself set a precedent in discrimination against people employed in small firms. Cruelly speaking, this is one way of making people work, imposing discipline and all that.
But our situation is very different. Our situation is that we have a shortage of skilled labour; and skilled labour in a small firm is very much more important than it is in a large firm which is semi-automated or fully automated. Therefore, it seems to me that what the noble Earl has said is a very charming contribution to the English language, but no more.
6.51 p.m.
Lord MOTTISTONE: I do not quite understand the pressure from the noble Lord, Lord McCarthy, for the small firm to be subject to the procedures of this clause. It is rather as though he was trying to force them to the tribunals when they did not need to go there. It also seems to me that he was "twitting" my noble friend Lord Gowrie for not producing statistics to back up his case—although my noble friend, as we now know, has them before him; and I suspect that he does not have any statistics to prove that small firms, as he ended his speech, particularly need the treatment of his amendment. That is what he rather indicated.
Lord McCARTHY: If the noble Lord will allow me, I am not talking about what small firms need: I am talking about the employees who work in small firms. They are the people who need the provisions of the Employment Protection Act, not their employers.
Lord MOTTISTONE: I would question that. I do not know how well the noble Lord knows small firms, but I have a great deal to do with many of them, and on the whole they have better labour relations—they must have—than many larger and even medium-sized firms. If they do not work, they are not successful; they cannot make a success of their business if those concerned are not at least reasonably able to get on together. Therefore, we are talking about the exceptions; we are not talking about the normal run of small businesses.
The noble Lord, Lord Balogh, said earlier that these employees would emigrate to big firms. I do not think that they would. People who like working in small firms stay with small firms. They might emigrate to a competitor, but that is the sort of thing that the employer has to take into account quite independently of any legislation. I do not think that we shall find that this sort of myth about the small firms is borne out in practice.
I should like to make one final point. My noble friend spoke about making a situation more neutral, and as I read the Bill at present, it contains nothing which does not say that the size and administra-
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tive resources of big firms should not be taken into account as well. It does not say that, just because they are small, they must be taken into account. It could well be that the tribunal might say to itself, "These people are very well organised in this big firm and, therefore, they ought to have done better". It is a neutral situation. The size of the firm is a relevant factor. Whether it is big or small will balance the attitude the tribunal takes to the case in question. It gives them the opportunity to do that. I would suggest that this is very much an amendment which will make the Bill worse rather than better, and I hope that it is rejected.
Baroness GAITSKELL: I should like to intervene for a moment. Why are we worrying about small businesses when there are areas—and Hampstead is one of them, coming under Camden Council—where every small business has disappeared? In Hampstead there are a few rubbishy, cheap dress shops and a few food shops, and every woman has to walk a mile and a half to get a reel of cotton. There are no ironmongers and there are no businesses of any useful value to the ordinary housewife in Hampstead. Every one of them has shut down. One shop where one could buy cotton, and which has been in existence for 100 years, has had to close down. So much for what the Government have done for small businesses.
Lord PARGITER: I should like to raise one small point on the question of small businesses and complying with the requirements of the law as it is at present. Presumably the first thing that an employer, large or small, has to do is to provide a contract of employment. I should have thought that that involves the small employer in much greater difficulties than the matter of issuing the necessary warnings prior to dismissal. Incidentally, as a good deal of the question of dismissal may well depend upon the contract of employment, is this the first move, and soon shall we be having complaints about the contract of employment as well and, therefore, small firms will not he required to adhere to that either? Once we start this particular erosion of conditions, it does not end there.
Lord RENTON: I should like to set at rest the mind of the noble Baroness,

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Lady Gaitskell, because what she has said about the retail shops in Hampstead would not be true, for example, in Huntingdonshire where there are hundreds of small businesses, some of them progressive manufacturing businesses. Of course, every farm is a small business. But quite apart from that, I would say that throughout my former constituency there are hundreds of retail shops which are doing well.
Baroness GAITSKELL: Yes, but they are not doing well in Hampstead, and they are not doing well in these large villages. Why? Why have they been shut down? There was no need for them to be shut down.
The Earl of GOWRIE: In view of the terms of indignation of the noble Baroness, Lady Gaitskell, and precisely because things are not good for small businesses, she should follow us into the Lobby over this kind of corrective amendment.
Lord McCARTHY: On the contrary, I would say to my noble friend: "Look at the Government's economic policy. That is what is throwing firms out of Hampstead".
Viscount MASSERENE and FERRARD: I say to the noble Baroness, Lady Gaitskell, that one reason why so many small businesses have closed down is the Employment Protection Act. That legislation is unique in our law. It allows a claimant to enforce his rights straightaway, before the case has been tried, which I understand is quite unique in our law. As for the argument that a small firm should have to pay exactly the same compensation as a huge company, that is complete and utter nonsense. I have run small firms. If you employ, say 25 people and trade goes against you, and if, unfortunately, you have to get rid of one employee, that would account for perhaps 4 per cent. of your labour force, which might make all the difference to your being viable or not. I could go on like this for a long time. I do not think that noble Lords opposite are being practical. They are speaking theoretically and not practically.
Lord UNDERHILL: Can we bring the debate back to the actual point of the clause? Despite what the Minister has
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said, I should like to ask what is the point of including this at all, unless it is to try to influence a tribunal? It is almost the same as the argument I had on the Transport Bill. When the Government want to give a little tip to the traffic commissioners they put something in; when we try to stop it, they will not have it in. The only point of this surely is to remind the tribunal to take something into consideration because they believe that it is something that ought to be done for the business. But what about the employee? He is the one we are worried about.
The Earl of GOWRIE: The rights of the employee are still there.
Lord ROCHESTER: The noble Earl will understand that my concern is solely with these words:
"(including the size and administrative resources of the employer's undertaking)".
In support of what the noble Lord, Lord Underhill, has said, the Minister will also appreciate that the words suggested for inclusion in this clause are in substitution for Section 57(3) of the 1978 Act.
If one reads that subsection, the relevant parts read as follows:
"In determining whether the dismissal … was fair or unfair, having regard to the reason shown by the employer, shall depend on whether the employer can satisfy the tribunal that in the circumstances (having regard to equity and the substantial merits of the case) he acted reasonably in treating it as a sufficient reason for dismissing the employee".
If the Government are really seeking to be fair in this matter, why is it that those words in Section 57(3) of the 1978 Act need to be altered simply to take into account one factor; namely, the size of administrative resources of the employers' undertaking? I am seeking information. I am unclear, as is the noble Lord, Lord Underhill, why it is that there is need for inclusion of these particular words in this clause.
The Earl of GOWRIE: I just make two quick points, the first to the noble Lord, Lord Underhill, and the second to the noble Lord, Lord Rochester. To the noble Lord, Lord Underhill, of course we regard employment protection rights as important. It was after all a Conservative Government which introduced such a concept. But we felt that the balance should be restored between the need for

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statutory protection for employees and the burden it imposes on employers.
I have already said to the noble Lord, Lord McCarthy, that obviously the degree to which there may be statutory underpinning of existing good practice, or potential good practice, is a matter of differences of judgment between the Opposition and ourselves. That is really the answer to the noble Lord, Lord Rochester: we think that the provisions in the present legislation were insufficiently neutral and insufficiently clear, and we feel that we have improved them.
On Question, amendment negatived.
The Earl of GOWRIE: If I may make a suggestion, if it was felt that Amendment No. 38 could be reasonably taken, I would be enthusiastic that it should be taken before we adjourn. If the noble Lord feels that it is going to be a very substantial debate I suppose that I shall have to yield, but I must remind the Committee that we are not proceeding at the pace we should be.
Lord WEDDERBURN of CHARLTON: I am happy to adjourn now. I misunderstood the noble Earl.
The Earl of GOWRIE: What we are trying to establish is whether we should or should not now adjourn for dinner. I am enthusiastic to proceed to take Amendment No. 38. However, if the noble Lord, Lord Wedderburn, feels that 38 is going to be a very substantial debate, involving, let us say, more than a quarter of an hour's discussion, then perhaps, rather reluctantly, we must adjourn now. But it would be much more satisfactory if we came to the substantive closed shop debate immediately after dinner.
Lord WEDDERBURN of CHARLTON: I misunderstood the noble Earl before. It is the view of my noble friends as well as myself—I was discussing it when he made the point, which was why I misheard him—that there is a need to discuss the next amendment very fully because it is one of the most fundamental points in the Bill.
The Earl of GOWRIE: In that case, I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

SEA FISH INDUSTRY BILL
7.6 p.m.
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield): My Lords, I beg to move that this Bill be now read a second time. It is a short and uncomplicated measure which seeks to extend the powers of the White Fish Authority to collect the general levy by which it finances its administrative expenditure. The Sea Fish Industry Act 1970 prescribes these powers and as they stand they extend only to fish physically landed in the United Kingdom. The Bill will enable the Authority to collect levy also on the increasing tonnage of fish, mainly mackerel, which is transhipped within British fishery limits; that is to say transferred direct from British catchers to carrier vessels for export.
The Bill has two basic objectives. First, it will rectify the omission in the 1970 Act, thereby ensuring that the responsibilities for financing the White Fish Authority are spread equitably across the fishing industry as was the clear intention of the Act. The second objective of the Bill is to raise revenue of approximately £300,000 per annum for the Authority, although the exact figure of course depends on the fluctuations in the mackerel catch.
The Authority has managed by rigorous internal economies to survive on an almost fixed levy income since 1974, but spiralling costs last year brought it to the point of acute financial difficulty. The Authority then sought ministerial approval for a 100 per cent. increase in the general levy to 1·6p per stone, in order to maintain financial solvency until 1982. The Select Committee on Scottish Affairs in another place examined the application and concluded that an increase was justified, but added that if legislation could be enacted speedily to close the trans-shipment loophole, the Authority could manage with a smaller increase in the general levy than the doubling which they had sought. In anticipation, therefore, of the additional revenue which this Bill

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will enable the Authority to collect, and mindful of the Opposition's undertaking to facilitate the Bill's passage, the Government confirmed an increase in the general levy of only half, to 1·2p per stone. This took effect on the 8th of May.
The Authority is therefore depending on the Bill to balance its finances. If the Bill should not reach the statute book, the present anomaly of transhipments not being leviable will be exacerbated, as the Authority will either be obliged to seek a further increase in the general levy, or cut its services to the industry so drastically as to prejudice the forthcoming consultations on functions appropriate to the new body which we trust, in due course, will replace the White Fish Authority and the Herring Industry Board.
The exclusion of transhipment from the 1970 Act was not a deliberate move. It was simply due to the fact that the particular circumstances which have recently given rise to the practice did not then obtain. Large scale transhipments within the white fish and particularly the mackerel industry did not develop until 1977. That year saw the extension of British fishery limits out to 200 miles or the median line. This closed off the mackerel grounds off the South-West coast to Soviet and Eastern bloc catchers. In order to maintain supplies for their large and mainly human consumption market, these countries despatched factory ships to the mackerel grounds. These provided a ready market, offering prices higher than our domestic fishmeal industry could, thus stimulating the United Kingdom catchers into prosecuting the mackerel fishery as a timely alternative to the declining herring fishery. Transshipment has subsequently developed to the extent that last year, of the United Kingdom catch of around 350,000 tonnes, about 67 per cent. was transhipped. It is interesting to note that transhipment of herring, which until the recent sad depletion of the stocks was very common, has always been subject to the Herring Industry Board levy.
Originally the authority considered, in good faith, that the 1970 Act empowered them to collect levy on transhipments. About £300,000 was collected before their interpretation was queried and they then ceased such collections. Effectively this
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was the final factor which forced the authority last year to seek the rise in the general levy. I think the Bill is sufficiently self-explanatory as not to need a detailed exposition, except to point out the safeguard which is included to ensure that levy will not be collected twice in respect of fish or fish products which are, for example, transhipped twice or transhipped and subsequently landed in the United Kingdom.
I should like finally to turn to a matter over which much concern was expressed in another place; namely, enforcement and collection of the levy. The authority's present system for the general levy depends on a statutory requirement that persons in the industry keep accurate records of transactions over which the authority has powers of inspection. Where transhipments are arranged via onshore agents, the position will be no different. In framing the regulations which are needed to make the levy operable on transhipments, the authority will be considering what special requirements on record-keeping and so on might be desirable. The authority are confident that they will be able to handle satisfactorily the problem of collection of the levy, even if the actual transhipments take place out of sight of land.
The importance of the Bill is, I trust, clear. The urgency of its timetable is dictated by the fact that, assuming Royal Assent, the detailed regulations which I have already referred to must be provided by statutory instrument, all if possible in time for the commencement of the intensive Minch mackerel fishery around mid-August. I hope, therefore, that your Lordships will give the Bill a Second Reading. I beg to move.
Moved, That the Bill be now read 2a. (The Earl of Mansfield.)
7.12 p.m.
Lord MACKIE of BENSHIE: My Lords, we on these Benches welcome the Bill, which is a practical step to improve the finances of the White Fish Authority. That body has a tremendous amount of work to do if its to he of any value in rescuing the fishing industry from the appallingly low state into which it has sunk. I will not go into the reasons for that, in view of the fact that in another place

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they dealt with those matters to a considerable extent, but I hope the Minister will tell us in a little detail how the White Fish Authority proposes to monitor the catch and collect the levy.
I understand that off Cornwall in the mackerel season last year there were 40 freezer ships collecting fish from Cornish boats—some were Cornish boats but mainly they were boats from the hard-stricken ports of Hull, Grimbsy, Aberdeen and elsewhere. Some of these transhipments take place at night and it is immensely important that we know what the catch is and how much fish is being shipped out of this country. That is important not only from the point of view of the finances of the White Fish Authority but very much because of the need to know how stocks are being depleted. Indeed, if we go on at the present rate it seems clear that the mackerel stocks will go the way of the herring in five or six years' time. That is certainly the view of the Members representing Cornwall. Therefore, the monitoring of the catch is enormously important, and I should like the Minister to give the details of how that is to be done. Will people be put on board the boats or will a patrol boat actually monitor the transhipments?
Everybody will welcome the news that it has been firmly decided to amalgamate the White Fish Authority and the Herring Industry Board into a new body. That will save some money and give the advantage of scale. The main point to remember, however, is the general concern in the industry that stocks will not disappear as has been the case with herring.
7.15 p.m.
Lord PEART: My Lords, this is a small but very important Bill for the industry concerned. I echo what the noble Lord, Lord Mackie, said about the need for information concerning monitoring. He rightly referred to the trawlers which operate in the south-west, coming from Hull, Grimsby and Aberdeen, obviously fishing there because there is mackerel, with the Russian ships just outside the limit of course; and this has been going on for a long time. I have referred to this on previous occasions in your Lordships' House, especially about
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the importance of our mackerel stocks. That has been dealt with in another way and I am sure that the Ministry, who have it in hand, know what is happening.
This short Bill is designed to extend the White Fish Authority's powers to collect its general levy from the fishing industry. I understand that at present the authority can raise a levy on fish which is landed in the United Kingdom; the Bill will enable it to collect levy also on fish caught by United Kingdom fishermen in our own waters but which is then transhipped direct to an exporting vessel without being landed. That is really the basis of it. The Bill will not increase public expenditure or affect public service manpower requirements. It is a simple and straightforward Bill and it is needed. I am sure noble Lords hope that one day we shall have a full-scale debate on the fishing industry. In the short time that I have been in your Lordships' House, even when I was a Minister here, I cannot remember our having the sort of annual get-together they have in the Commons to discuss the fishing industry.
I read carefully the Official Report of the debate in the Commons on the Bill and, as the noble Lord, Lord Mackie, said, they extended their discussion into many other problems. I do not propose to do that tonight; only a short time is allowed for this debate. However, I should like the Minister to explain what is to be done about monitoring. Perhaps he could give an estimation of costs because that is a very important aspect of the matter.
The Bill is right and proper, although the tragedy is that it will take a long time before Aberdeen, Hull and Grimsby are able to build up another fishing industry. There are of course other factors concerning the industry which are affected by other things, but I will not go into those tonight. I hope the Bill will be useful and will enable our fishermen to fish satisfactorily in this area.
Lord MACKIE of BENSHIE: My Lords, may I ask the noble Lord, Lord Peart, if he would agree that it is very important not only that regulations are laid down about quotas to preserve the mackerel catch, which is what I think he was referring to, but that they should be enforced? Half the fishermen's complaint

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is that the regulations and quotas are not being kept by fishermen from other EEC countries. The monitoring of the catch is, therefore, extremely important.
Lord PEART: I entirely agree with the noble Lord, my Lords. We spoke together earlier about this and he knows that I completely agree with him about the need for proper monitoring. There can be no doubt about that.
Lord FERRIER: My Lords, my noble friend Lord Mansfield will be glad to know that from these Benches there is a great measure of support for this excellent Bill. I have really nothing to add to what the noble Lords, Lord Mackie of Benshie and Lord Peart, have said, except perhaps to ask my noble friend when he replies to assure us that he has adequate craft to handle this problem in the seas this autumn.
Lord PEART: My Lords, perhaps I may be permitted to intervene to say that I hope tribute will be paid to the work of the White Fish Authority and the Herring Industry Board. We shall wait with interest to see what happens when we have the amalgamation. I hope the standards which have been maintained to date by those bodies, and which have done so much for the fishing industry, will remain at the same high level.
7.20 p.m.
Baroness HORNSBY-SMITH: My Lords, I should like to endorse all that has been said about the Bill and I fully support the principle of it. I have an interest in Sutton Harbour, Plymouth. Reference has been made to the fishermen who sell direct to the factory ships, and we suffer them not only in Cornwall, as has been mentioned, but very much so in Devon as well. We are concerned about the monitoring question. We know that already there is evasion. If someone has had an extremely good run of catches and gets a chance of a bountiful catch which he can sell by a call to shore and a location with a boat, he will sell it. It is extraordinarily difficult to prove whether such a person has made a correct return of his catch to the White Fish Authority in regard to the sums that he was receiving. On the other hand, inshore fishermen who
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land their catches on the harbour have to pay landing charges, which help the port authority to maintain the port, whereas charges are not paid by those who sell direct to factory ships and revenue is lost.
In our case, the South-West White Fish Authority has its offices on the fishing harbour, and officials are on the spot to see that all the landings are duly accredited. However, I should like to think that there was some assurance that sales offshore to foreign ships could be monitored more adequately than seems possible at present. Not only might they be cheating in regard to landing charges, but, much more importantly, they might be reducing the stocks of fish, whereas, by and large those who return their catches to the docks and land them under the eye of officialdom are honouring the quotas. These fishermen feel very strongly that there is much sneaking over the quota, sometimes at night, as the noble Lord has suggested, when it is extraordinarily difficult to monitor the activity from the shore or the offices on shore.
7.23 p.m.
The Earl of MANSFIELD: My Lords, I wish to thank noble Lords and my noble friend Lady Hornsby-Smith for their general welcome of the Bill. With regard to the White Fish Authority, I concur with what was in effect said by the noble Lords, Lord Mackie of Benshie and Lord Peart, in praise of this body which has done, and continues to do, a great job. We in Government feel, particularly in view of the absence of herring—which unfortunately has been all too obvious for some years now, though one hopes that the position will be improved before very long—that a new body which will take the place of the two existing bodies is ripe for emergence. We have been in active consultation with the industry—and here I include such parts of the industry as the processors, the boat builders and other people who are one point or two points removed from the actual fishermen. I think I can say, without exceeding my brief, that the present position is that, having regard to the pressures of the parliamentary timetable, attention is being paid, and paid urgently, to a new successor body. But I should not want to go farther than that, and I hope that noble Lords will not press me.

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The area of anxiety so far as your Lordships are concerned appears to have been the monitoring of transhipments with regard to levies, and the whole question was somewhat broadened by my noble friend Lady Hornsby-Smith into an anxiety (if that is the right word) that a considerable amount of cheating has been going on over the catching and landings, which goes rather farther than transhipment.
So far as the collection of the levy is concerned, mackerel pose problems which are rather different from, and slightly more profound than, those proposed by herring. As I think has been said, while herring transhipments usually took place on piers or in close proximity to piers, and herring were in any event sold at auction, mackerel very often are caught at night. A large proportion does not go through auction channels, and can quite frequently be transhipped out at sea, where the "Klondykers" are wont to congregate. There is no requirement for a shore-based agent where fish is sold for trans-shipment, and therefore the levy will in fact have to be payable by the catchers.
The White Fish Authority is also aware of the difficulties, and noble Lords who are interested in the matter may have seen the authority's evidence as given to the Select Committee on Scottish Affairs in the other place. That Select Committee cross-examined the authority and myself on the subject, and noble Lords can see what the WFA had to say.
The details of the levy collection will be specified in regulations which are even now being prepared by the WFA, because, as I have said, they will need to be presented without delay. The WFA will be responsible for monitoring and enforcing the collection of their levy, with some powers of inspection, together with a requirement that all first-hand fish salesmen maintain accurate books and records. But of course the matter has to go much farther than that, and the Government have been giving anxious consideration to the question of how we can more efficiently and certainly more accurately monitor the catching and transhipment of mackerel.
The position in Scotland is slightly
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different from that in England, in that, first, the Minch, where the Scottish mackerel fishery takes place, is not perhaps an enclosed area, but is a small area of sea, which I have myself been in during the fishing, and it is comparatively easy to police. Having said that, I may add that we have already arranged that there will be an increased use of fishery protection vessels, which are owned and run by the Department of Agriculture and Fisheries for Scotland. Apart from that, there is to be a greater use of fast launches, and much more deployment of people to maintain a round-the-clock watch, and a quite comprehensive and sophisticated system of mobile radios is to be set up. I believe that with all these preparations and precautions one can be reasonably confident that a proper monitoring system will be maintained, at least in the Minch fishery.
Quite apart from this transhipment, the Government are anxious to keep an accurate watch on what goes on. We are extremely worried about the total allowable catch and the share of it so far as the Minch is concerned. There are of course the ICES recommendations which have to be put into effect and, not least, we have now agreed a system of catch reporting in the Community.
With regard to the South Western fishery, which is the one which my noble friend is most worried about, the English do not have fishery protection vessels and they have to hire (if that is the right way to describe this form of contract) the Navy and indeed the Air Force. I have visited the headquarters of the Fishery Protection Service in Pitreavie and talked to officials about all these matters, and my honourable friends in another place have also been exercising their minds on this question. Suffice it to say they are well aware of the difficulties and of the fact that the standard of monitoring must be very much higher this year than it has been in the past. Therefore, extra efforts are to be made and extra resources deployed to ensure that so far as is humanly possible an accurate and satisfactory record of all that goes on will be kept.
I welcome what the noble Lord, Lord Peart, has said about our not having had a fisheries debate since he became a Member of your Lordships' House, and that I think is the position. Who better

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than the noble Lord to use up an Opposition Wednesday to initiate such a debate—if I may make that suggestion. My noble friend Lord Ferrers or I should be delighted to reply to such a debate, and I believe that your Lordships' House would be a very good forum in which to discuss some of the very difficult fishery questions to be ventilated in due course. I repeat my thanks for the welcome which this modest measure has gained in your Lordships' House. We hope that it will reach the statute book without amendment very quickly.
Question, Bill read 2a, and committed to a Committee of the Whole House.
[The sitting was suspended from 7.30 p.m to 8 p.m.]

EMPLOYMENT BILL
House again in Committee.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 38:
Page 7, line 13, at end insert ("but it shall be for the employer to prove that he acted reasonably.").
The noble Lord said: I shall move this amendment as briefly as is consistent with its importance. It concerns one of the most important points in the Bill in the opinion of my noble friends and myself. It relates to the question where the burden of proof should lie in a case of the unfair dismissal of a worker. In any unfair dismissal case there are three stages under the law as it now stands in Section 57 of the Employment Protection (Consolidation) Act 1978, and there have always been three stages in an unfair dismissal case since unfair dismissal was introduced.
The first stage is that the employee must prove the dismissal. The burden of that rests upon him. The second stage is that the employer has the job of showing one of the principal reasons which are in the list of reasons which may justify a dismissal, sometimes called "the OK reasons"—a nomenclature used by the right honourable friends of the noble and learned Lord in the other place—such as misconduct, dismissal for lack of capability for lack of qualifications, redundancy,
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statutory requirements or some other substantial reason justifying a dismissal; and it is quite clear that the burden of showing that reason is of course upon the employer.
It is to the third stage of the unfair dismissal case that this part of the clause and this amendment relate, for in the third stage the final and ultimate test of the unfairness of a dismissal is whether or not it is reasonable, and the question which arises is where the burden of proof should lie in respect of the reasonableness of a dismissal. Pausing there, I believe it to be uncontroversial to say, in the law both of England and Wales and of Scotland, that there is a distinction between the legal burden of proof (or, as some authors and judges have it, the persuasive burden of proof) and, on the other side, the evidential burden of proof. All lawyers know of this distinction, the evidential burden being the question of the need to bring evidence to show a prima facie case on a point but the legal burden of proof being the burden which rests upon the party in respect of whom the issue will be decided contrary to his side of the case if the evidence is evenly balanced.
It is on this matter that, in view of the (in my opinion) extraordinary statements of the Government in respect of their new clause, I have taken opinion, both academic and practical. It is, in the view of all the authors I have been able to consult and all the practitioners I have been able to consult, a manifest requirement of any judicial system that there be a legal burden of proof on one party or the other. In the words of the Vinerian Professor at Oxford, as he was when he wrote it, Professor Cross, in his book on evidence—and I quote:
"It is a fundamental requirement of any judicial system that the person who desires the court to take action must prove his case to its satisfaction";
and he follows it with the tag (which, as your Lordships' Committee is not too crowded, I might dare to put in the original) of ei incumbit probatio, qui dicit, non qui negat. The burden of proof, therefore, as to reasonableness or unreasonableness, must lie upon either the employer or the employee.
The practitioners with whom I have had discussion, including noble and learned friends and others—those of very

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different political persuasions from myself—regard that as obvious. In fact, one of them put it back to me by saying, "Surely you are not suggesting that there can be such a thing as a neutral burden of proof". I said, "No, I am not suggesting that; the present Government appear to be suggesting it". Because what the Government want to do is to take out of Section 57(3) the requirement that the employer should prove the reasonableness of the dismissal, and merely leave the words
"that question shall be determined in accordance with equity and the substantial merits of the case".
Indeed, the Government's working paper of September 1979 stated that the Government's proposal was that the onus of proof as to reasonableness should be made—and I quote—
"neutral as between employer and employee".
On the basis of the authorities, the books and the practitioners whom I cited just now, there is no such thing as a neutral legal burden of proof. It is possible to discuss the question of a neutral evidential burden of proof, but not a neutral legal or persuasive burden of proof. All along, the Government have said that (if I may quote the right honourable friend of the noble and learned Lord during the Committee stage in another place on 26th February, at col. 653, when speaking of the burden of proof):
"It will be, as it were, in the middle";
and at another place he repeats that it will be "in the middle or neutral".
I am tempted to say (but it would be impertinent) that if law were taught in schools this would be a schoolboy howler. There is no such thing as a neutral burden of proof in the sense of the persuasive burden in court. If the evidence is balanced 50–50, one party loses and one party wins, and the party who wins is the party upon whom there is not the legal burden of proof. So merely to leave the matter to the circumstances of the case "in accordance with equity and the substantial merits" is in fact to transfer the burden of proof as to reasonableness from the employer to the employee. That is the first error that the Government make in their argument.
The second error which the Government make in their argument, and the reason for this amendment, is that on this point it is right that the burden of proof should rest upon the employer. It was suggested in some of the debates in another place—and, to save time, if I may, I will not refer to the actual quotations, but will summarise them—that the burden of proof of an issue in civil proceedings can really never lie on the defendant or respondent. Of course, that is not the case. If one takes the case of a bailee who has lost goods, the onus of proof in legal terms is upon him to prove why. If one takes the case of redundancy, the onus of proof is on the employer, under the Employment Protection (Consolidation) Act as it now stands, to prove that the dismissal was not by reason of redundancy.
Indeed, in this very Bill there is in Clause 11, in the new Section 56A, subsection (4), about the woman's right to return to the same job, a burden put upon the employer to show that it is not reasonably practicable for her to return to roughly the same job. That burden is quite rightly distributed, because that is a matter which is within the employer's special knowledge; and it is right that the burden be put—for it has to be put somewhere—upon the employer in an unfair dismissal case to prove that the dismissal is not reasonable. This is particularly the case because in many of the unfair dismissal cases the question will be determined in accordance with that which is within the employer's knowledge, and not within the employee's.
Perhaps I may refer very briefly to three recent judicial pronouncements. In the case of Weddell v. Tapper recently in the Court of Appeal—and this is not a dictum of the Master of the Rolls; it is Lord Justice Stephenson—Lord Justice Stephenson summarised the previous line of cases by stating a matter which is central to the argument on this question. It was the case of a meat salesman dismissed by reason of suspicion of dishonesty. Lord Justice Stephenson said (on page 100 of the 1980 Industrial Relations Law Reports):
"First, there must be established by the employer the fact of that belief, that the employer did believe it; secondly, that the employer had in his mind reasonable grounds on which to sustain that belief; and thirdly, that the employer at that stage when he formed that belief on those

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grounds, at any rate at the final stage at which he formed that belief, had carried out such investigation into the matter as was reasonable in all the circumstances of the case".
Those are matters which the employer can prove. The lack of such belief, the lack of such grounds, will rule out many a complainant unless he is lucky in having a good lawyer—and we do not want more lawyers in the tribunals—in the course of cross-examination.
Obviously, the employer is the person who knows about such matters. As Lord Denning said in a previous case, the tribunal must consider the employer's reasons and the employer's state of mind. The matter is put equally well in a Scottish case of Low v. MacCuish where the employment appeal tribunal under Lord McDonald in Scotland approved the same test.
How, then, can it be wrong not to put on the party who knows—just as he knows the reason for the redundancy, just as he knows the reason why the woman cannot return to her old job and just as he knows the reason and beliefs he had for the dismissal upon which the issue is to turn—the onus as to whether or not it is fair or reasonable? It must, in justice, be placed on the employer. The experience of the last six years, in which that burden of proof has been placed on the employer, has not been that the employer has been unduly disfranchised of his rights. Finally, the Government's case is not only bad in law and wrong in legal logic, it is wrong in social fact; because in the working paper and in their subsequent pronouncements the Government have said on a number of occasions and in different ways that a lot of businessmen complain that they are guilty until they are proved innocent. Of course, the Government complain that these are not criminal proceedings; and I understand the point.
When one looks at the research that has been done on this matter in a number of surveys quite independent of either side of industry, the facts do not stand up to the Government's allegation. The survey which is most respected in all quarters is the Industrial Relations Research Unit survey of Warwick University in 1979, where they surveyed not just all employers but a random sample of employers who had been respondents in unfair dismissal cases at industrial tribunals—and some of
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them on appeal. Of those employers who had been in these cases—some had won and some had lost—only 25 per cent. said that the system felt to them to be biased against them. But, much more significantly, of that 25 per cent., only 5 per cent. mentioned the problem of burden of proof or, in ordinary language, being guilty until proved innocent.
The survey records show that the Government working paper complaint that there has been a widespread feeling among employers that they were guilty until proved innocent is not true. It was stated at a time when the Government had not reflected upon the survey evidence of which the Warwick University survey is only one, but the leading case. Therefore, we on this side of the Committee say that the argument that the burden of proof will become neutral is a sham and is wrong; we say that the burden of proof should remain where it has remained with justice all round in the last six years, on the employer in the final stage of a reasonableness argument on an unfair dismissal claim; and that the social facts are that there is not the widespread complaint among employers that the Government allege.
On that ground, this amendment should be acceptable to all sides of the Committee as being a system now tried and tested for some years, which has given workers some security in their jobs (and which in future years will be even more needed), and that it is a security of which they will be unjustly deprived if the burden of proof at this particular point of the proceedings were put upon them as complainants. I beg to move.
8.15 p.m.
Lord DE LA WARR: I must confess that I was amazed just before the Committee adjourned to find the noble Lord, Lord Wedderburn of Charlton, saying that this was one of the most fundamental parts of the Bill. Furthermore, I fear that unless we do something about it we might be about to enter upon a lengthy and profound series of legal arguments. I can only approach this as a businessman who has been involved, directly or indirectly, in unfair dismissal cases. I find this amendment (and I will say briefly why in a moment) to be a cosmetic and of very little practical importance.

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I have to say that, although I welcome the change that the Government have made, in practice—and I have been advised of this by a number of personnel directors—it is not really going to make very much difference to the way the case is conducted. Therefore, I find that this amendment is not an amendment of great legal profundity but a cosmetic, political amendment designed to keep the Bill looking right from the point of view of the party opposite. No doubt the lawyers will say that I am wrong—and they may say that on this side too; I do not know. I am talking as a simple fellow who has had a lot of time wasted on these things. I hope that the noble Lord opposite—and I do not mean to be rude—will not take himself too seriously over this but will leave it as it is.
Lord MACKAY of CLASHFERN: I do not intend to be lengthy and I do not know that I shall necessarily be profound. I must say that I agree with my noble friend that this is not an amendment of great practical importance, because I do not believe that, to practising lawyers, the onus of proof is often important. I believe that in most cases the court has sufficient evidence not to rely on onus; and I think that I can back that by statements of great authority from practising lawyers through the years. This is so even in the ordinary courts; and the industrial tribunals are special in this respect because they have much more opportunity for an inquisitorial role than has the ordinary court. The fact that the onus has been expressed until now in the way that it has—the "guilty until proved innocent" point that the noble Lord, Lord Wedderburn referred to—is, in our view, important.
It is true that when a person goes to the tribunal, he may find once he actually gets to it, the atmosphere more genial than the onus aspect would lead him to expect. But it is the attitude of those who have never been that is perhaps more important. I agree with the noble Lord's analysis of the first two stages in the application for an award for unfair dismissal. As far as the third stage is concerned, in my view it is not so much a question of fact as a question of judgment in relation to the facts on the particular reasons given. I, personally, do not see
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that there is need for an onus of proof there. It is a question that the tribunal are asked to determine. They are asked to determine whether the dismissal is reasonable or not on the basis of the evidence that they have. There is nothing to prevent the tribunal from asking some further questions. Accordingly, I do not believe that this will have the effect of putting any greater onus on the applicant, on the dismissed employee, than in practice exists at the moment. Indeed, that is what the results of the survey tended to show. The employers, when they actually go, find that this frightening looking onus is not as frightening as it looks. Accordingly, I respectfully submit to the Committee that where the tribunal, as here, have a duty to determine the question and the facts at that stage have been ascertained, the duty to determine the question makes onus of no importance; and to neutralise the onus, as it has been called, or take away the onus altogether, is a perfectly possible thing to do and a perfectly apt thing to do in this situation. I invite the noble Lord to withdraw his amendment and, if he is not prepared to do that, then I invite the Committee to reject it.
Lord UNDERHILL: It was not my intention to speak on this amendment, but in view of the remarks that have been made about this amendment wasting the time of the Committee, frankly I felt compelled to do so. We are talking about the position of a dismissed employee in relation to a tribunal. It seems to me most unfortunate that whenever a question is raised from this side of the Committee, the balance is always shifted in one direction. That is what is happening on this occasion.
One must recognise the difference between an employee who is bringing a case and an employer. The TUC regard this as important. I hope that they do not think that they are wasting their time. This was in the 1971 Act, was then taken out and is now going back. There must be some reason why we have this shifting of balance. I am sorry that the Members of the Committee should consider it a waste of time. Maybe this side of the Committee are wrong; but I believe we are thoroughly right in raising this issue because an employee often finds it very difficult to get fellow employees to come as

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witnesses, for obvious reasons. The imbalance is often against them. I hope that the noble Lord will realise that there is a case here which needs to be answered far better than the Government have answered it so far.
Lord ALLEN of FALLOWFIELD: I, too, regret having to prolong the Committee's discussion on this Bill and this particular clause. Like my noble friend Lord Underhill, I have been provoked to intervene because I see this as a layman, not as a lawyer. I see this, too, not on the basis of burden of proof but of introducing a new concept in industrial relations: that to assess whether an employee is dismissed fairly or unfairly, the guiding principle, according to the Government's proposals, will be the size of resources of the business. Each Administration that has come to power in this country in the past decade or so has expressed, understandably and feelingly, its desire to do something for the low paid in this country. If this Government's proposals are established in the manner in which they are projected, then they will do precisely the opposite.
The principal casualties, if this proposal goes on to the statute book, will be the people who are low paid. To remove the onus of proof on the employers to show that they acted reasonably is in my view totally unfair. More than that, I believe that it is totally alien in the real life of industrial relations in this country. Taken separately, I believe that these provisions are highly objectionable, not on whether it is right to establish the burden of proof in the manner indicated from the Government Front Bench, but merely to ask that it is sufficient to justify reasonable dismissal by pleading extenuating circumstances.
I wonder what the big and medium-sized employers say about the special dispensations given to those who are alleged to employ small numbers? Nothing could be more unfair. We hear a lot of talk about "small". I have listened to this debate throughout and I have heard no one yet define what is small. Many attempts have been made in one form or another to try to define what is a small business. I believe the manner in which this is projected in the Bill is, to say the least, a novel provision. It is novel because there is no employer
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in this country—however small or whatever his or her financial problems are—who can escape from other legal obligations as a citizen of the United Kingdom—for example, to escape from paying his bills or from fulfilling his contracts. To afford to him or her a special dispensation in the manner in which he dismisses—fairly or unfairly—those he employs is in my view totally wrong.
The Government of the day and Governments who have preceded them—and quite rightly so—have alleged that they wish to help small businesses. I submit that this will not help small businesses. More than that, it will create a substantial differentiation between their rights and those who employ medium sized businesses and large businesses, no matter how we define them. I believe the effect of the proposal of the Government is such that it will create far more problems than it solves. It is an affront, in my view, to the low paid of this country.
My noble friend Lord Mottistone spoke earlier in this debate about his experience in the retail trade. He will know, as I know, that this is a trade which employs an immense number of low paid people. It is a very substantial industry in the United Kingdom employing about one-eighth of the working populace. Are we to afford to the measured proportion of that trade a special dispensation because they are small or because their resources are not as good as those of someone else? I hope that the Government will think again about this proposal, because it is totally unfair and alien to the whole concept of good industrial relations.
8.28 p.m.
Viscount MASSEREENE and FERRARD: Does the noble Lord want more unemployment?—because what he has said would create a great deal more unemployment. If, as I said previously, small businesses had to pay the same compensation as big businesses, it would probably mean that quite a few of them would go broke and their employees would then be all unemployed. That argument does not seem at all practicable. When courts of law award damages, if they are awarding them against a millionaire they award far larger damages than if they are awarding damages against somebody who is receiving national assist-

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ante. In fact, in that case they would not award any damages at all. I do not think that the noble Lord is being logical in any way.
Why should employees—who are, after all, in the majority—have statutory protection and the employer, who is in the minority, not have statutory protection? If these amendments are carried, the employer would have no statutory protection.
Lord MACKAY of CLASHFERN: May I say that this amendment applies to businesses large or small; it is exactly the same in all situations. I do not think that in this particular amendment these considerations are relevant.
Lord HOWIE of TROON: I had not intended to speak, but I was provoked by the noble Lord opposite who described this as a trivial matter. I do not think that it is. I speak as an employer who has had the experience of sacking a recalcitrant and unruly member of staff who was so recalcitrant and unruly as to take me to the tribunal. He did not do badly as it happened. But the point is that as an employer I was totally outraged by the fact that the onus of proof was upon me, and at that point I diverged slightly from my Front Bench colleagues. I felt this very keenly until I thought about what we are talking about—I thought about my commercial convenience as an employer and his livelihood. At that point the scales fell from my eyes and it became quite clear that, important as my commercial convenience was and indeed crucial as it still is, it was not as important to me as that man's livelihood was to him.
Therefore it is right and just that the onus of proof should lie upon the stronger, and there can be no doubt at all that in this kind of confrontation between employee and employer the employer is the stronger of the two. My Front Bench colleagues are right. This is not a trivial matter and this is an amendment which should be pressed.
Lord MOTTISTONE: Very briefly, it seems to me that we are not finding it easy to follow this argument, because the Government, quite rightly, have only quoted from subsection (3) of Clause 57 of the
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1978 Act, which is the only one they wish to amend. But if you read the whole of Clause 57 and see how subsection (1) calls upon the employer to give reasons, and you then read the amended Clause 3 in the context of the whole of Clause 57, you see why it is just a minimal change to make the balance even at the onus of proof stage.
There was a lot in the speech of the noble Lord, Lord Wedderburn, and he quoted from the law about the need to give reasons. All that is there. Subsection (1) requires an employer to give reasons, and all we are left with is the tribunal making a decision. With the Bill as it now is, when they make that decision they will make it on an even basis, and that seems to me the whole point about it. But, taking the statement of my noble friend Lord Allen, I think that if you must look at the Bill and at bits of it you might get the wrong impression that employers are not required to give reasons. They are: that part has not been changed at all. Therefore I think we are slightly off context in arguing on this narrow front.
Lord WEDDERBURN of CHARLTON: I hope the noble Lord, Lord Mottistone, will not think ill of me if I say that I do not think he was in the Committee when I began my speech on this amendment. I then said that the burden of proof has to lie on someone, and in an unfair dismissal case it lies upon the employee to prove the dismissal. It lies upon the employer to prove one of the what are sometimes called "OK reasons", such as conduct, capability, qualifications, to which he was referring as regards that subsection.
Therefore the first two stages are, as the noble and learned Lord, the Lord Advocate, said, uncontroversial and clear. The employee must prove the dismissal, which is not always easy in constructive dismissal cases, and the employer must get within the very broad gateways, which include the phrase "some other substantial reason", which might justify dismissal.
Then comes the crunch. Having had, as it were, one goal each to score, the question is: who then has to prove the reasonableness or otherwise of the dismissal? I entirely agree with my noble friends Lord Underhill, Lord Allen and

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Lord Howie, who spoke as an employer, that it is surely right that the employer, who is, as my noble friend Lord Howie said, the stronger and, as I said, knows the facts which the employee can frequently not know—it is surely right that he, who is dismissing someone and thereby getting rid of hs livelihood, should have to prove his point. The noble Earl, Lord De La Warr, talked about wasting his time on these things. I can assure the noble Earl that those workers who were dismissed did not regard him, by paying attention to their problems of losing their jobs when there were not many more around, as having wasted his time in caring about his workers. It was their livelihood at stake and their families at stake.
Unfair dismissal law exists in this society not in order that workers should not be dismissed—they are frequently and properly dismissed—but that they should not be unjustly dismissed. In the last resort, the justice of the matter is something which the employer can and must prove. The noble and learned Lord and I must agree to disagree about whether there can be such a thing as a neutral burden of proof. I repeat that there cannot be such a thing. That is my belief and the belief of many practitioners in industrial tribunals with whom I have discussed the matter.
This does matter: in forensic terms it matters in a sufficiently sizeable number of cases to mean that, if this Bill is enacted as it stands, workers will be unjustly deprived of their jobs. We will not press this amendment to a Division but we shall come to a Division on the Question of Whether the clause shall stand part?
On Question, amendment negatived.
On Question, Whether Clause 5 shall stand part of the Bill?
8.35 p.m.
Lord WEDDERBURN of CHARLTON: This is a clause upon which your Lordships will realise that my noble friends and I feel strongly and upon which our honourable and right honourable friends in another place spoke with some feeling. I should like to quote the Scottish president of the industrial tribunals, or the equivalent in Scotland
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of the president, in 1978: Mr. McDonald. He summed up all the complaints of employers that you could not sack people after the unfair dismissal laws had been brought in and revised after 1974 as meaning this:
"All you need to do is follow some simple guidelines. You should not dismiss people without thinking about it. That is what the legislation sets out to do. The objective is to have more rational and more civilised industrial relations, and I think there has been an effect in that direction. It has led to an improvement of standards".
That was the president of the industrial tribunals in Scotland, and Mr. Sealey, his counterpart in that year, made similar remarks. So have many other industrial tribunal members.
What then does this clause seek to do? In my submission, it reduces the level of civilisation which had been introduced into industrial relations by this law, which one had hoped by now was almost a bipartisan matter. First, as many of your Lordships have noted, it brings in a special consideration of size and special consideration for small firms. The first point about that is that the tribunals consider the size of the enterprise anyway. In the case of The Royal Naval School v. Hughes in 1979, the Employment Appeal Tribunal expressly said that you must look at the size—in that case of a school with 40 members of staff—in considering what was reasonable.
The noble Earl, without referring to the case, referred to the principle. What is he doing? He says: "This is a statutory underpinning of good practice." Throughout Clause 3 we were begging the Government to underpin their clause and get rid of its obscurities by under-pinning it by means of amendments which we moved. They said: "Not a bit: it will all 'come out in the wash' and it will all be done reasonably." If the tribunals already regard size as a factor, they are now being told to regard it as the pre-eminent factor.
More than that, they are being told to look at administrative resources. Not a word has been said in the debate so far as to why those words are there. They are not the same as size. Even a big firm, when the court comes to look, will say, "We are very sorry we did the dismissal in this uncivilised way perhaps, but we did not have the administrative resources to do anything else." The court will be

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pressed with that argument, whether it is a big or small firm: otherwise why are the words there? Inside small firms with bad administrative resources what a precedent it puts forward! It is an invitation to a firm not to build up its personnel and administrative resources which can protect workers by good procedures.
The question has been put again and again to the Government: what evidence is there in any case for special consideration for size in this matter? The noble Lord, Lord Allen, has made the case against it. Every single survey which exists shows that it is not the case that recruitment of labour is inhibited by the employment protection law. The noble Earl shakes his head and I, therefore, have to cite it. The Department of Employment survey published in 1979 by Clifton and Tatton Brown shows quite clearly that only 4 per cent. of those given unprompted questions cited employment protection legislation as in any way a difficulty in running their business. The Policy Studies Institute survey in 1969 showed that only 2 per cent. of the sample as a whole gave that as a main problem for their business, and only 6 per cent. of those who had in fact not recruited more labour in the recent past. The Department of Employment survey showed that only 6 per cent. of respondents even mentioned employment legislation at all, and the smaller plants dismissed one in every 58 employees during the year in question compared with only one in 200 with larger plants.
It is quite clear that the research which has been done both by those two surveys and also by Dr. Stanworth in his business unit at the North London Polytechnic has shown, for example, that among small employers it is knowledge of the employment legislation which is lacking. Only 24 per cent. of them knew the length of the qualifying period for unfair dismissal. They do not know. The shop steward knows and the workers know, but the employers do not know, and the Government are encouraging them not to know. The Government are encouraging them to remain in a position of ignorance, or, as the research surveys have suggested, in a position of fear, because the small businessman is afraid, and he is quite unnecessarily afraid, of the unfair dismissal law.
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The Warwick workplace survey found that the respondent employers whom they surveyed in firms employing fewer than 10 compared very badly in their practices and their procedures with the larger firms, and concluded, as did every other survey, that what was needed was an educational effort by the Government to explain to smaller employers that this, as Mr. McDonald put it, is merely a law which requires civilised dismissal. The small employer is frightened of a bogey, and in putting this new Bill forward the Government are encouraging the bogeyman.
As far as the onus of proof is concerned in this clause, the case has already been made, and, if I may conclude with a remark totally agreeing with my noble friend Lord Allen, the evidence is clear in all those surveys that two-thirds of the applicants to industrial tribunals who make claims, and often successful claims, for unfair dismissal are the low-paid workers of Britain. The low-paid workers of Britain are the workers whose rights are going to be trampled on by this clause. It is a serious matter. It is not a matter which noble Lords opposite should find amusing. It is something which affects a family in a society where policies are causing unemployment to soar to levels undreamed of since the war and which none of us thought we would see.
A noble Lord: Rubbish!
Lord WEDDERBURN of CHARLTON: To reduce in those circumstances the rights of workers not to be unfairly dismissed in a society which faces 2 million and more workers unemployed is something the Government cannot do without deep shame. We shall divide the Committee on this clause.
Viscount HANWORTH: It really surprises me that in these days of unemployment, in view of the fact that we have not enough small firms compared with other countries and that most of us recognise the importance of small firms and their difficulties, we should have an attack on that sort of scale from the Opposition.
Several noble Lords: Hear, hear!
Viscount HANWORTH: It is surely desirable that small firms should be able to take on people, not that they should

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not be able to do so because of the fear of not being able to dispense with them when things do not go as well as they are going. This is a very small area, and to have an attack on the scale that we have had it from the Opposition seems utterly unreasonable, out of context with the importance of the subject and wholly against employment by small firms.
The EARL of GOWRIE: I had hoped, when we debated Amendment No. 37, to save some of the time of the Committee by not trading surveys and statistics with the noble Lord, Lord Wedderburn. The reason I wanted to do that, other than saving time, was not because I have anything to fear in these figures or that my very competent department has not supplied me with them, but because I agree with the noble Viscount, Lord Hanworth, that this is to some degree a small matter. It is a matter of rectifying a psychological balance.
A noble Lord: You could be dismissed.
The EARL of GOWRIE: It is curious that I rather agreed with the noble Lord,
Lord Wedderburn, when he said the small man is frightened of a bogey. I think there is some truth in that assertion. What we are trying to do in a small matter, as the noble Viscount, Lord Hanworth, said, is to calm him about the bogey, because our view is that no amount of statistics, surveys or opinion polls in the world can measure the deterrent effect of not taking somebody into employment. That is the point about which we are anxious. I endorse the view of the noble Viscount, Lord Hanworth, that the noble Lord, Lord Wedderburn, whose phrases were rolling in a fine frenzy, like the poet, is really making much too much of an issue about this matter; and therefore I suggest that probably the best way for him to let off steam is to divide on this matter and then we can move to something more important.
8.46 p.m.
On Question, Whether Clause 5 shall stand part of the Bill?
Their Lordships divided: Contents, 107; Not-Contents, 55.

CONTENTS

Abinger, L.

Fortescue, E.

Montgomery of Alamein, V.

Airey of Abingdon, B.

Gisborough, L.

Mottistone, L.

Amherst of Hackney, L.

Glenkinglas, L.

Mowbray and Stourton, L.

Ampthill, L.

Gormanston, V.

Moyne, L.

Auckland, L.

Gowrie, E.

Murton of Lindisfarne, L.

Baker, L.

Gray, L.

Newall, L.

Barrington, V.

Greenway, L.

Northchurch, B.

Bellwin, L.

Gridley, L.

Nugent of Guildford, L.

Belstead, L.

Grimston of Westbury, L.

Orkney, E.

Bethell, L.

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

Orr-Ewing, L.

Boothby, L.

Rawlinson of Ewell, L.

Boyd of Merton, V.

Halsbury, E.

Renton, L.

Boyd-Carpenter, L.

Hampton, L.

Rochdale, V.

Bradford, E.

Hankey, L.

Salisbury, M.

Bridgeman, V.

Hanworth, V.

Sandford, L.

Brougham and Vaux, L.

Harvington, L.

Sandys, L. [Teller.]

Burnham, L.

Hatherton, L.

Savile, L.

Burton, L.

Henley, L.

Selkirk, E.

Buxton of Alsa, L.

Hives, L.

Sempill, Ly.

Caldecote, V.

Home of the Hirsel, L.

Sharples, B.

Chelwood, L.

Hornsby-Smith, B.

Skelmersdale, L.

Cockfield, L.

Hunt of Fawley, L.

Spens, L.

Cottesloe, L.

Killearn, L.

Stamp, L.

Cullen of Ashbourne, L.

Kilmany, L.

Strathcona and Mount Royal, L.

de Clifford, L.

Kilmarnock, L.

Sudeley, L.

De La Warr, E.

Lindsey and Abingdon, E.

Swinfen, L.

De L'Isle, V.

London, B.

Torphichen, L.

Denham, L. [Teller.]

Long, V.

Tranmire, L.

Donegall, M.

Lucas of Chilworth, L.

Trefgarne, L.

Duncan-Sandys, L.

Lyell, L.

Trenchard, V.

Dundee, E.

Mackay of Clashfern, L.

Trumpington, B.

Elliot of Harwood, B.

Macleod of Borve, B.

Vaux of Harrowden, L.

Elton, L.

Mansfield, E.

Vivian, L.

Exeter, M.

Massereene and Ferrard, V.

Wise, L.

Faithfull, B.

Merrivale, L.

Wynford, L.

Ferrers, E.

Mills, V.

Young, B.

Ferrier, L.

NOT-CONTENTS

Allen of Fallowfield, L.

Irving of Dartford, L.

Ponsonby of Shulbrede, L. [Teller.]

Birk, B.

Kaldor, L.

Blease, L.

Kirkhill, L.

Rhodes, L.

Boston of Faversham, L.

Lee of Newton, L.

Ross of Marnock, L.

Brockway, L.

Leonard, L.

Sefton of Garston, L.

Caradon, L.

Llewelyn-Davies, L.

Stewart of Alvechurch, B.

Cledwyn of Penrhos, L.

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

Stewart of Fulham, L.

David, B.

Stone, L.

Davies of Leek, L.

Lovell-Davis, L.

Strabolgi, L.

Donaldson of Kingsbridge, L.

McCarthy, L.

Taylor of Gryfe, L.

Elwyn-Jones, L.

MacLeod of Fuinary, L.

Taylor of Mansfield, L.

Gaitskell, B.

Maelor, L.

Underhill, L.

Glenamara, L.

Milner of Leeds, L.

Wallace of Coslany, L.

Goronwy-Roberts, L.

Morris of Kenwood, L.

Walston, L.

Gregson, L.

Noel-Baker, L.

Wedderburn of Charlton, L.

Hale, L.

Parry, L.

Wells-Pestell, L.

Hatch of Lusby, L.

Peart, L.

Whaddon, L.

Houghton of Sowerby, L.

Phillips, B.

White, B.

Howie of Troon, L.

Pitt of Hampstead, L.

Wynne-Jones, L.

Resolved in the affirmative, and Clause 5 agreed to accordingly.
Clause 6 [Dismissal relating to trade union membership]:
8.54 p.m.
The MARQUESS of SALISBURY The MARQUESS of SALISBURY moved Amendment No. 38A:
Page 7, line 14, at beginning insert—
("(1) Section 58 of the 1978 Act (dismissal of employee for non-membership of a union to be fair where there is a union membership agreement unless he objects to membership on grounds of religious belief) is hereby repealed.").
The noble Marquess said: In talking to his amendment, it may be to the convenience of the Committee if I include in the discussion Amendments Nos. 38B, 39 and 40. I have consulted my noble friend Lord de L'Isle, who has put down the last two amendments, and he is perfectly agreeable to this course.
In talking about Section 58 of the Employment Protection Act 1978, one is, of course, dealing very largely with the question of the closed shop and it is in an effort to cover this issue that I have drawn Amendment No. 38A as widely as possible. This question is likely to arise in some form or another, as a result of the report of the Commission on Human Rights which has recently been published. I shall say no more about that, because that is to be covered by other speakers later in this discussion, except to say that, presumably, if, when it goes to the court, a decision which runs contrary to the law as set out in Section 58 of the 1978 Act is seen to be correct, then as signatories of
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the convention Her Majesty's Government will need to move amendments.
Indeed, at this stage the Government are obviously not fully satisfied with that section, because they have decided that in future no closed shop arrangement can be enforced unless 80 per cent. of the work force is in favour. Of course, at the same time, this proposal propounds the view that Her Majesty's Government are in favour of the closed shop. If that is so, one is surely entitled to ask why it applies only to future closed shop proposals, because if it is wrong at any time, it is wrong for previous arrangements as well as for future ones.
I should have thought that any steps that they proposed to take should cover the whole field, so that everyone is treated in a like manner.
There are other aspects of Section 58 which I should like to mention. First, if a member is expelled from a union it would seem that he has, under certain closed shop agreements—not all of them—no prospect of being re-employed. This was, as your Lordships will know, touched on in a secondary form in our discussions on Clause 3 this evening. But it still seems to me to arise under this clause as well, and it is surely unacceptable that someone in a free country should be denied the right to work.
Membership or not of a union will depend, very largely, if there is any dispute, on a decision of the officials of the union. To me, at least, they are in the position of being prosecutor, judge and jury, all at the same time. However fair

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they may intend to be, it is extremely difficult to envisage that they do not start from some preconceived stance. The appeal procedure has already been touched upon, but I should have thought—and I am making no accusations against anyone—that however fair these members of the tribunal will be, they should not be associated with one side. This, surely, is a fundamental proposition of the laws of this country and should be extended to the tribunals which deal with appeals.
Finally, I should like to touch briefly on the position of the trade unions today, as against the past. I have always thought that there was a need for trade unions, and the last thing I should like to see is anything that makes the operation of their work more difficult. Indeed, their performance over past years shows how well they do their job and how it justifies their existence. However, the question is: how much power do they need to carry out these functions? This seems to me to be the crux of the whole issue of the closed shop. Their function, surely, is to look after the interests of the workforce which they represent, and that should be carried out to the full extent that is required. The question is, how much is required? Clearly this is a matter of opinion on which there will be many differences, but it seems to me that it is necessary to strike a balance between the requirements of the trade unions to carry out their functions properly and the obligations of a democracy to protect the freedom of the individual.
Section 58 of the 1978 Act goes too far towards tipping the balance in favour of the unions. It is weighted heavily on their side at the expense of individuals. Its purpose is to give greater power to the trade unions and to support their power with the full force of the law. In the longer term, there must be a grave danger that the unions will be able to deny work except on their own terms, which may not be acceptable to many individuals. It is for this reason that I raise this issue tonight and beg leave to move the amendment standing in my name.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Nugent of Guild- ford): Before I put to the Committee Amendment No. 38A, as the noble Marquess has been speaking also to Amendments Nos. 38B, 39 and 40, I should explain that if Amendments Nos. 38A and 38B—Amendment No. 38B in particular—were carried, the subsequent amendments on page 4 could not be moved.
9.2 p.m.
Viscount DE L'ISLE: I hope it will be for the convenience of the Committee if we discuss the amendments mentioned in one debate. I referred at Second Reading to the report of the European Commission on Human Rights which has been published since the debate on Second Reading—in fact, on 5th June. From that report we have some very valuable leads which will assist us in considering the contents of the Employment Bill which is before us, and in particular the clause now under discussion.
In the opinion of the commission, the Government of the United Kingdom violated the rights of the three railwaymen, James, Young and Webster, whose rights were assured to them under Article 11(1) of the convention, because the legal system, for which the commission hold the Government of the United Kingdom responsible, allowed interference with their right to form and to join trade unions. The railwaymen prevailed before the commission, despite the strenuous efforts of the present Government as well as those of their predecessor to have their complaints dismissed.
May I take the liberty of reminding the House that the European Convention on Human Rights has nothing to do with the EEC? The United Kingdom adhered to the convention in 1953, under its membership of the Council of Europe. We are by treaty bound to observe and give effect to decisions of the Court of Human Rights.
A number of Ministers have claimed during debates in both Houses, and elsewhere, that had the present Bill been in force when the three railwaymen were dismissed they would have had an effective remedy which would have barred any application to the commission. I shall seek to persuade your Lordships' House that that is not so.

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In reciting Article 11(1); namely, that everyone has the right to freedom of peaceful assembly and the freedom of association, including the right to join and form unions for the protection of his interests, the commission says this:
"As regards the individual to whom the rights mentioned in Article 11 are guaranteed, these words imply that a worker must be able to choose the union which in his opinion best protects his interests and, if he considers that none of the existing trade unions does so effectively, to form, together with others, a new one".
This is certainly one of the points by which we are required to test the Employment Bill: Does it in fact permit a trade union monopoly which the commission, in its report, specifically excludes?
Furthermore, the commission says that Article 11 safeguards the occupational interests of trade union members, depending, as it does, on the qualifying words: "for the protection of its interests". The individual may, they say, form, together with others, a new union. They add, and I quote again from the commission's report:
"This is particularly important since unions, as these cases show, may have political affiliations. It is not in dispute that the applicants joining the particular union available will have had to sign declarations which they could consider, in fact did consider, to have clear political implications".
This, then, is a further test of the Bill before us. Does it allow an individual threatened with dismissal for refusing to join a particular union because its affiliations are contrary to his convictions and opinions—those are the words of the report—a specific method of expressing a conviction and opinion of his own?
The report deals as well with the definition of the word "association" in Article 11(1). It states that the term "association" presupposes, and I quote:
"a voluntary grouping for a common goal".
It states as well that the relationship between workers employed by the same employer cannot be understood as an association in the sense of Article 11 because it depends only on the contractual relationship between employee and employer. The commission therefore rejects the Government's argument. Indeed, it was the argument of both Governments that a finding according to which the applicant's rights under Article 11 were violated would not respect the right of association of those workers who object to working alongside non-unionists.
Lord ELWYN-JONES: I am most grateful to the noble Viscount for giving way. Would he think it helpful to inform the Committee of the powerful dissenting opinion of the British member of the Commission, Mr. Fawcett, which disagrees quite fundamentally with the view, it is true, of the majority on which the noble Viscount has been relying?
Viscount DE L'ISLE: I rely on a majority and I hope the House relies on a majority still. If Mr. Fawcett, the President of the Court, dissents, then the Court will be able to consider his judgment. If, as the noble and learned Lord suggests, I must give equal weight to the minority, I hope that he will do so in the case which I am bringing before the Committee.
Lord WEDDERBURN of CHARLTON: I am grateful to the noble Viscount for giving way in order to save time on the point. Following my noble and learned friend's question, would the noble Viscount also not agree that the Commission decided the case on the facts before it? In paragraph 165 it said that the situation might be different where a worker entered into a contract of employment with an enterprise where a closed shop agreement already existed, in which case it might perhaps be said that he consented to join a specific union when taking up employment. In paragraph 166 the Commission states categorically that according to the Commission's interpretation (and again this is the majority) Article 11 neither prohibits nor allows the system of closed shops in general. They decided a particular case.
Viscount DE L'ISLE: I think it would be convenient for the Committee if the noble Lord would make his speech in turn. I am making my speech on the assumptions that I have given to the Committee and noble Lords must judge. I understand the noble Lord's anxiety, but he must restrain himself until I finish.
Lord WEDDERBURN of CHARLTON: I was asking a question.
Viscount DE L'ISLE: It is courteous for the noble Lord to wait. It was not a question but a statement, and I listened to the end. I resume. The Commission therefore rejected the argument of both Governments that a finding, according to

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which the applicant's rights under Article 11 were violated, would not respect the right of association of those workers who object to working alongside non-unionists. Thus the argument so often given as a reason for upholding the closed shop in its present form is rejected. This, then, is the third test as to whether the present Bill, as now drafted, conforms with the convention. Does it meet the Commission's definition of an association, including a trade union, as a voluntary grouping for a common goal?
I ask these questions because on several occasions Ministers have spoken of their very different approach to the railwaymen's case from that of the last Government. In the words of the noble Earl, Lord Gowrie, they claim that when the present Bill becomes law we shall be meeting the standards of the convention. I suggest that it is the task of your Lordships' House to see whether the Bill before us in its present form complies with the authoritative opinions of the 15 of the 18 Commissioners of Human Rights who have given long and careful consideration to the railwaymen's case. The Commission's approach surely supports the view that the concept of the will of the majority has no base in the systematic protection of individual human rights. It is the dissenting individual or minority—not the majority—which the convention is designed to protect. I must emphasise that. It is surely the case that the Bill before us continues to permit a trade union monopoly. The right to form an alternative union, which the Commission regards as essential, is not provided for. As the Bill confirms the monopoly powers, particularly to coerce individuals, the Government find themselves in the position of having to include tests of conscience in the definition of "unfair dismissal". Without coercion, no test of conscience would be needed.
Once again, measured by the opinions of the Commission the Government have failed to comply with the convention. Can it be justly claimed that the provision of compensation for unfair dismissal complies with the Government's obligation to guarantee—and the word "guarantee" is used several times—the rights assured to the individual by the convention? In my opinion the answer
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to that question is clearly, "No". If I promise or guarantee to do something, or not to do so, I cannot claim to have honoured my obligation by offering monetary compensation.
I have tested the Employment Bill and particularly Clause 6 against the opinions of the Commission advanced in their report. With the indulgence of the Committee, I should now like to explain why I believe the terms of this amendment, if accepted, would do something positive to bring the Bill back into line with the convention by removing that element of coercion of the individual which is contrary to the fundamental freedoms protected by the convention.
By omitting the word "genuinely" and "on grounds of conscience or other deeply-held personal conviction" the liberty of an individual to choose whether or not to join a trade union is restored. The amendment does not deal with the matter of compensation, to which I have just stated my objection of principle, but I am seeking to be as practical as I can. To amend the Bill so as to remove this feature would, I believe, be impractical at this stage. But besides restoring a measure of freedom of choice to the individual, my amendment removes what I believe to be the most objectionable feature of the Bill; that is, the investigation under the 1978 Act of a man's conscience or personal convictions. An individual does not have to give any reasons to justify his wish to form or to join a trade union. Why should he be compelled to give reasons, whether deeply held belief or otherwise, to justify his desire not to join a union?
Let me illustrate my point by referring to the House of Commons report of Standing Committee A, which considered the Bill before us. I turn to the Hansard of 28th February last, col. 793. The Minister, Mr. Mayhew, said this:
"It is in each case a question of fact for the tribunal to determine whether there is a deeply held personal conviction…"
and he proceeded:
"If one can show that one has been a member of whatever church it is, that says that no one must be yoked with the ungodly, and that one goes there every Sunday—or every Saturday, or whenever it is—that is probably the highest chance that one has of establishing it".

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The Minister later said this:
"On the question of how the tribunals decide the depth of conscience, I entirely take the right honourable gentleman's point—that this involves looking into hearts and minds." [col. 795.]
Then he added that he disagreed with the note submitted by the Association of British Chambers of Commerce saying that this is a great departure. He went on:
"The vast majority of cases under the criminal law involve taking account of what is or was in the heart and mind of someone at a given time—often long ago." [col. 795.]
Is it not revealing that a member of an Administration which so often proclaims its devotion to the ideals of a free and open society should see nothing wrong in submitting an employee who does not wish to join a trade union to a procedure identical to that obtaining in the criminal courts? Is it not a striking example of the consequences of abandoning principle and embracing expediency? Finding themselves in toils, rather than retreat, Ministers go blithely on their way downhill, but, my Lords, we have no need to accompany them.
Lord McCARTHY: So far as I understand the amendments that have been moved, they are in fact ruling out any form of union membership agreement at all. The Government's position is that they want to narrow the circumstances in which union membership agreements are lawful. It shall not just be, as it is at the moment, an exception for those who have genuine religious convictions. There should also be exceptions for those who have deeply held personal convictions and there should also be exceptions for those who are existing members. There should also be an ability for individual employees to say that they object to joining particular unions.
The Government, in other words, we shall be arguing subsequently, are making a series of breaches in the principle of the union membership agreement. So that, as we shall be arguing later tonight, for all practical purposes existing union membership agreements can be undermined and future union membership agreements will be virtually impossible to negotiate, because the Government are specifying all kinds of quite impractical demands in terms of votes and the numbers voting and the majorities required. Nevertheless, if you can trace your way through all
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these gateways, the Government are leaving open a small hole for the union membership agreement. As I understand it, the object of these amendments is to bolt that hole, to close that way through, to say in fact that no form of union membership agreement whatever should be lawful. That is the issue that we have to address ourselves to.
There are many arguments which could be made from this side of the House in favour of union membership agreements. At this time of night I merely wish to put forward two. The first might be said to be the emotional argument—the argument which many practising trade unionists feel and which, in fact, is the basic argument which generates most union membership agreements or, as they would call them, closed shops. I am referring to what has been termed the common obligation argument, the "free ride" argument, the argument by which trade unionists feel that if they are using their own industrial action, their own industrial strength and their own financial resources in order to improve the conditions of their associates at the workplace, there is a common obligation on those people to play their part in this effort—and not simply to play their part by giving money or support, but to play their part actively in the things required in order to improve wages and conditions.
Nothing makes a group of workers turn towards a closed shop and nothing makes a group of workers more concerned over the position of non-unionists than being involved in the kind of industrial relations situation in which trade unionists are on strike and non-unionists are going in to work and at the end of the dispute will expect to receive the benefits of industrial action. That is the common obligation argument. It is deep and long and has been around in trade unionism as long as trade unionism has existed.
It does not exist just in this country. Noble Lords are very fond of telling us what the legal position is in other countries. I say, with great respect, that, whatever the legal position may be in a particular country, if a group of workers are gripped by the forces of the common obligation argument, as printers are in Germany, as miners are in France and as all kinds of industrial workers are in all types and conditions of countries, they will enforce the closed shop. Moreover,

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whatever the constitution of the country, or indeed the European Convention, may say about it—and it does not say as much as some Members hoped it might say against the closed shop—nevertheless the closed shop will exist because of the deeply felt common obligation argument.
But, in practice—and this brings me to my second argument—the closed shop is not demanded by trade unions simply because workers feel this way. Trade union officials, on the whole, try to limit their demands for the closed shop to circumstances in which union membership agreements are relevant to the strength and position of the union. The fact is that there are many situations in which effective collective bargaining is not possible without the aid of union membership agreements. There are many situations in which problems of recruitment and retention, problems of entry control and problems of discipline are not possible in the trade union movement without the assistance of the union membership agreement.
Therefore we are being asked tonight whether or not we wish, irrespective of all the qualifications which the Government place upon the closed shop, to accept a situation in which there are no conditions whatever in which union membership agreements will be lawful. I say that this will be a foolish and an immoral thing to do and I ask the Committee to oppose it.
9.23 p.m.
Lord HARRIS of HIGH CROSS: May I, from the Cross-Benches, support the amendments in the name of the noble Marquess, Lord Salisbury, and the noble and gallant Viscount, Lord De L'Isle. As I understand it, the purpose of these amendments is to unlock the padlock on the door of the closed shop. The fact that the door will not immediately fly open in every case does not deter me from advancing these amendments, because the door would at least cease to be barred and bolted against the freedom of the individual.
I believe that there must be simpler or more effective ways of devising amendments that would accomplish the intention that I think is widely shared in all parts of
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the House. I suspect that that in the end will be a matter for lawyers to dispute, and after listening to the proceedings of this Committee for two days I am not too hopeful that our lawyers will reach a unanimous agreement. But thankfully the merits of ending a closed shop do not rely upon legal pleading—I shall not say "special pleading"—at which the noble Lord, Lord Wedderburn, has proved himself such a formidable past and, I say alas! present master. For however narrowly one tries to interpret the Convention on Human Rights and Fundamental Freedoms as advanced by my co-sponsor of the amendment, it surely must be repugnant to people of broad liberal sympathies to deny the individual a right to work because he declares a simple, unqualified objection to belonging to a trade union. That seems to me to be a proposition of such fundamental priority that it should be displaced only on the most exceptional grounds of public interest, like compulsory national service in time of war. It is certainly not sufficient to argue that the closed shop may be convenient for the conduct of union business in the way that the noble Lord, Lord McCarthy, has said this evening.
Against this towering principle of the individual's right to join or not to join an organisation, we have a variety of special pleading, and the noble Lord, Lord McCarthy, has touched upon two grounds. The first is the plausible, but often phantom, argument of the free rider; the argument that because all benefit from the activities of the union, all should be made to contribute to the costs of the union. Even if it were true that all members benefited, there would be no compulsion that you should require membership of the union. There are a great many organisations that confer benefits very widely among the general public without supposing that they have the right to impose membership and contribution. I dare say that noble Lords on both sides of the Committee might believe that membership of their party was beneficial to the entire nation. None of them would dream of supposing that he should conscript members and make them pay for these benefits. It would be absurd to say that someone must join this or that party unless he "genuinely objects on grounds of conscience or other deeply-held personal convictions".

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There are a large number of voluntary organisations that scatter benefits generously around the community. There are organisations like the Automobile Association, which in a hundred ways may benefit all motorists and many others without supposing that it has a right to compel all owners of motor cars to belong to it. There are more mundane organisations, like the Royal Society for the Prevention of Cruelty to Animals, the National Society for the Prevention of Cruelty to Children, and others for various other deserving causes. There are tenants' associations and churches that would claim, and whose members would believe, that they benefit others, and yet would not dream of trying to impose their charges on non-joiners.
However, in my view the truth is that workers do not necessarily get a free ride from trade unions. There is an increasing understanding that unions can seriously damage your wealth. In an ORC poll reported in The Times in January this year 84 per cent. of the population thought that trade unions are:
"to blame for the country's problems of low productivity".
A total of 84 per cent. of the general public supported that proposition. When one singles out trade union members only, I admit that the number falls—as they know about it from their own experience. Only 74 per cent. of trade union members agreed that trade unions are to blame for the country's problems of low productivity! It simply is not true that trade unions invariably provide a free ride to perpetual prosperity and higher living standards. Rather, they often enforce a march towards relative impoverishment through restrictive practices or even to premature unemployment through unrealistic wage claims.
In my view one can see the results of trade union closed shops in the decline of the London Docks, in the tragic decline of the great British shipbuilding industry, in printing and in other industries that are part of the Labour Party's story of "de-industrialisation". Trade union obstructions to manning and demarcation have often, it is true, brought short-term gains for their members but at the expense of long-term prosperity on which their jobs depend.
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Then we have the argument that the bosses want the closed shop. I agree there with the noble Baroness, Lady Seear, who at the Second Reading said that when the bosses and the trade unions gang up together the rest of us should beware. It is true that the CBI was at one time ambivalent on this matter, but more recently, I think at the end of last year, it voted at its conference against the closed shop. Some of the bosses say in public that they support a closed shop, but they do that often because they prefer to gain a quiet life by saying that kind of thing.
The proof that companies can flourish, and their workers flourish along with them, in the absence of a closed shop is demonstrated by the fact that many of our outstanding companies do not have closed shops, or indeed any burden from the trade unions. There are remarkable companies like IBM, Beecham, Black and Decker and many others that have no trade union negotiations and yet whose members, in matters of living standards and conditions of work, are certainly well ahead of the field.
Above all, there is the evidence from other countries. The noble Lord, Lord McCarthy, says you cannot operate these industries, or firms, without union membership agreements. I have to keep on telling him—because I think he does not like it—that from other countries we see evidence that large industries and companies can be operated without closed shops and indeed with quite modest union membership. The noble Lord, Lord Wedderburn, said, I thought rather artfully, on Second Reading that we could always learn from other countries but we should not import their methods—we should not import their methods except when it happens to suit, say, the Bullock Committee. Germany shows a picture of a wide spread of union membership in its leading industries ranging, it is true, from 90 per cent., at the top in the mining industry right down to 10, 20 and 30 per cent. in many other industries.
Another argument used here is that trade union leaders want the closed shop. We still hear that argument, but there was a time when an earlier generation of trade union leaders abominated the closed shop. If challenged, I have a number of impressive quotations from earlier generations of trade union leaders who were

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anxious to dissociate themselves altogether from any suggestion that a closed shop was part of the great tradition of the British trade union movement.
If we can now prevent union leaders dragooning members into closed shops, then it seems to me that we shall make it more necessary for union leaders to be responsive to their rank and file and not to rely upon conscript armies. From the economic viewpoint the most objectionable feature of closed shops is that they are always, everywhere the instruments of monopoly, and they are of course periodically the instruments of tyranny as well. So I would argue that the closed shop is a disfigurement of a free society. It would not be justified by its theoretical utility, and it is doubly damned by its practical inutility.
9.34 p.m.
Lord ROCHESTER: I think perhaps it is the turn of someone from these Benches. I should like to make plain at the start in the plainest possible terms that I and my noble friends detest the illiberal philosophy underlying the imposition of the closed shop in its most pitiless form. I assure the noble Marquess, and the noble and gallant Viscount, Lord De L'Isle, that they could not feel more strongly on this than I do. I recall the seething anger I felt against the tyranny of those responsible in 1976 for the dismissal of people who had been faithful employees of British Rail for many years. The question of the closed shop, as I see it, is indeed a matter of conscience, and in what I say I shall speak only for myself; my noble friends are quite capable of expressing their own opinions if they wish.
It seems to me that the main point in all this is how best to move at this stage in the real world of industry towards a more open industrial society in the interests of improved human relations and performance. I am convinced that this is not to be achieved by confronting the closed shop head on, and as I speak I am recalling cases I have actually had to deal with at the sharp end on the ground. Although I say it, who should not, such situations call, in my experience, for qualities in management of judgment and coolness under fire, and they are not best handled by issuing ultimatums or taking precipitate disciplinary action.
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Similarly, in my view, it will not help in the political field to take legislative action that goes a step further or faster now than is acceptable to the general body of trade unionists. It may be deplorable, but in 1971 the attempt to outlaw the closed shop did not work in practice; it went underground. I am satisfied from first-hand experience that if the Bill is altered in some of the ways suggested in these amendments, it will do so again with effects—because they will be hidden from view—that might result in even more illiberal and arbitrary practices than those that now obtain.
What is the point of passing laws that cannot be enforced? Even if they could be, I assure the Committee that that would not solve the problems of human relations in industry. I believe that progress in that field, apart from improved communication and consultation, is more likely to be made not through the law but through the operation of codes of practice, of which one is promised by the Secretary of State to cover the question of the closed shop.
In particular, it could, I believe, deal better than law with the question which is to be raised in a later amendment to which we shall come, of how best to review the level of support for existing closed shops. It does not seem to me, I say with respect to the noble and gallant Viscount, that the finding last week of the European Commission of Human Rights affects the present situation in this country, deeply though I continue to feel for the men involved in the British Rail case. Depending on the conclusion that the European Court may later reach, a different situation could arise which might call for further action on the part of the Government. Indeed, I see this as an additional reason for not taking action now because, if we wait, it may, by the time action is opportune, be the case that that action will have more widespread support and thus be more generally accepted than it would be if it were taken now.
For my part, I could not vote for the amendments that are before us, and for me it is just as much a matter of principle that I should not vote for them as it may be for others to do the opposite. In this matter I cannot be untrue to my industrial knowledge and experience. Should these

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amendments be pressed to a Division, my noble friends will of course determine for themselves how they should vote, if indeed they decide to vote at all.
9.40 p.m.
Lord DAVIES of LEEK: I have listened with care to the debate and I am grateful for the speech made a few moments ago by the noble Lord. This Chamber is supposed to have a modicum of wisdom, as has been proved at various times in our history; but this clause, if it is completely understood, is nothing more nor less than crude union bashing. I do not mind the shaking of heads, but let us see what we have done. Does this—
Earl De La WARR: Will the noble Lord allow me to intervene for one moment? Which amendment is he talking about?
Lord DAVIES of LEEK: I am talking about the amendment of the noble Marquess, Lord Salisbury, and the other two can come in quite logically. The amendment says—
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): I think that the confusion arose from the fact that inadvertently the noble Lord referred to the "clause" rather than the amendment. I think it was a slip of the tongue, and I believe that that was where the difference of opinion arose.
Lord DAVIES of LEEK: I am referring to the amendment, but it has an effect on the clause. The amendment asks your Lordships to look at Section 58 of the 1978 Act; and we shall take the time to do that. The amendment put down by the noble Marquess reads:
"Page 7, line 14, at beginning insert—
'(1) Section 58 of the 1978 Act '"—
I shall leave out what appears in parenthesis—
"'is hereby repealed'".
That is what it says. The amendment proposes that the entire Section 58 of the Employment Protection (Consolidation) Act 1978 should be repealed. Am I incorrect? No, I am not.
Noble Lords sometimes rush in where angels fear to tread because they know
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nothing about industrial relations. What have we done up until now? First, we have already taken away the maternity "job back" rights of women working in small firms. We have changed the unfair dismissal laws to exempt new firms with fewer than 20 workers for the first two years of trading. We have limited the employers' obligation to provide guaranteed pay, and we have repealed all or part of Schedule 2 to the Employment Protection Act. We have done nothing but bash the trade unions all along the line—in the hope of what?
I now come to the foolishness of all of this, as quoted (in a way) during the Committee stage in another place, where reference was made to what a Conservative Member said in a letter to The Times:
"I believe you overestimate the effectiveness of law in curbing trade union power"—
human relations are much more important than is law in this area—
"Do you suppose, for example, that the removal of legal immunity from all secondary action or the recourse to trade union funds in damages would provide anything other than a militants' charter?… Do you suppose that the imposition by statute of a requirement for secret ballots in key internal decisions would be the best way to encourage the trade union rank and file to demand such procedures from their leaders?… Surely our experience with the ill-fated 1971 Industrial Relations Act"
leads us to believe differently. Of course it does.
It is completely wrong to believe that the application of the law will make a tidy job of the legislation that noble Lords are at the moment trying to push through this Chamber. I say with all due respect to Members on the other side of the Committee that they have not read Section 58 of the Employment Protection Act, or they are not bothering to read it, and that therefore they do not understand the implications of the amendment of the noble Marquess. I do not want to delay the Committee—and on the other side of the Chamber there is an intelligent audience who know what they are doing for their own voters. All I am saying is, "Study Section 58". The noble Earl, Lord Gowrie, is a first-class Minister—of course he is—and I believe that in his heart he knows that this amendment is sheer bunkum.
Lord GISBOROUGH: I find this clause extremely complicated and very difficult to

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understand, and I have a suspicion that I am not the only one. The wording is difficult enough without all the references to the 1978 Act; and I should like to start by asking the Minister whether it might be considered possible that at Report stage there might be a consolidating section to put them both together, because it may be intelligible to lawyers but it is unlikely to be intelligible as it is to the layman.
The incidence of closed shops has increased dramatically during the last few years. At the same time, the intolerance of union members to non-unionists in those closed shops has also increased. In fact, I think the figures given in one of the reports show that in 1964 there were 3·7 million workers involved in closed shops, whereas in 1979 it had gone up to 5 million. The noble Lord, Lord McCarthy, made a point about free-riders and those people who are not members of unions not striking and causing dissent from the union people who are striking. But I think that in many of the strikes none of the unionists or the non-unionists in fact want to strike, but very often they are led by a very small minority of people who have them by the neck.
The protection of the non-union minorities and consideration for their freedom of choice as to whether or not they join a union has therefore become increasingly important. I should accordingly like to support this amendment in its effort to further widen the protection of those who do not want to join a union, and to protect them in their jobs. There can be imagined many perfectly valid reasons why a man may not wish to become a member of a union other than on religious grounds. For example, the political motivation of the union may be anathema to him and to his own political views, and this has become an increasingly likely occurrence. He may disapprove of the conduct of a union or the objects for which a union is pressing. As the Bill stands he will have to attend an inquisition to determine the strength of his conscience, which is an unheard-of procedure. I think there is a great deal behind the amendment, and I think it deserves serious consideration.
The Earl of HALSBURY: In rising to support the amendment moved by the noble Marquess, Lord Salisbury, if he
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chooses to stick to it, failing which the amendment of the noble and gallant Viscount, Lord De L'Isle, and Lord Harris of High Cross, I should like to begin by reading a sentence from a leading article in the Standard. By "the Standard", I do not mean the Evening Standard of today but the old Standard newspaper, the High Tory organ of 140 years ago, of which my great-grandfather was editor. The occasion of this leading article which he wrote was the passage of Lord Ashley's second Factory Bill, the first Factory Act, the first having been defeated. It said:
"…had not the mill-owners of Leeds excluded Mr. Sadler from the last Parliament, Lord Ashley's Bill would have been carried and a year of unspeakable misery to the factory children, a year of indelible infamy to the name of England, been obviated".
That sentence voiced the conscience of the nation, in this context expressed by the High Tories of that time. I have always been pleased that the head of my family in those days was fighting so manifestly on the right side, among the leaders who carried on the fight and won, and I have always regarded that connection as my passport to friendship with the unions, who have carried on the battle since. Hungry Time has made a glutton's meal of the affiliations and party names of those days. The High Tories have gone with the wind and their names will mean nothing now. The Liberals and the Whigs and so on have been transformed; and I am going to deal, with all the time that is allowed me, with the transformation in trade union practice. If I am critical, I do no more than follow the path trodden by the noble Lord, Lord Houghton of Sowerby, last week in a remarkable speech which earned him the commendations of every side of the House since nobody would suppose him to be an unfriendly critic—and no more than I.
The founding fathers of Marxism predicted that capitalist society would undergo a phase change due to the contradictions that it generated and would thereby become transformed, in a revolutionary manner, into a socialist society. To account for why this did not appear to be happening, Lenin postulated an intermediate phase change through an intermediate structure characterised by what he called monopoly imperialist capitalism which would eventually lead to the delayed revolution. This he proved by

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arguments based on the very best dialectical materialism.
Apart from a few card-carrying comrades who gather round the party pole on May Day chanting,
"Lenin is icumin in
Loudly sing OGPU"—
or words to that effect, I do not think that anyone now takes dialectical materialism as seriously as they did when I was young and when Harold Laski and J. B. S. Haldane were putting it forward as a universal metaphysic for science. But there is a striking parallel between Lenin's prediction and certain characteristics that have developed within the trade union movement. They have embarked upon empire building; they have been fighting battles with one another; and we had two of them falling to fisticuffs only a fortnight ago; and they have embarked upon monopoly practices. The less this parallel owes to theoretical Marxism and the more it expresses the common failings of our common human nature, the less excuse we have for humbug in finding fault with our neighbour instead of with ourselves.
I would ask your Lordships to follow a conversation I had with an old friend and colleague a few days ago at a lunch which the directors of a big company give to their old boys, their old directors. He was at one time the personnel director and deputy chairman of a company notable for having as good labour relations as the law allowed it to have. I asked him: "As between old boys, what do you think of the latest in Employment Bills?" He replied: "The usual Tory wish-wash! They never have understood and they never will." "But the closed shop," I asked. "Surely we must do something about the equity involved in that!" "You know very well," he answered, "that I like the closed shop. It enables me to do my job. I know where I am." I said: "But surely you can't justify removing a man's employment for that reason. It is contrary to any idea of freedom that I ever had." "Confound your ideas on freedom," he said. "You're a born trouble maker. I don't want you on my payroll." He continued:" I like the closed shop for the same reason that I like Clive Jenkins. He is a disciplinarian and so am I. If I do a deal with him, it sticks."
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Underneath that good-natured chaff between two old boys in retirement, there lies a reality: two monopolistic bureaucracies in their local swimming pool doing a deal with one another at the expense of the individual. And it is all quite unnecessary. The unions got along very well for a hundred years without any closed shop at all. Other nations get along, as the noble Lord, Lord Harris, has told us, without it. It does not mark the triumph of the trade union movement; it marks the decadence of the trade union movement. As a good friend of them, I am trying to persuade their representatives in this House to see that and to believe that if only they would get rid of it, it would be the best thing that could happen to them. In Germany, they have a structure recommended to them by the trade union movement of this country—which cannot impose it upon themselves because of all the squabbles that are going on. The German structure manages this vexed question of differentials in a way that they alone can do and manages it in a way better than we do. That is the constructive work that the unions ought to embark upon.
The noble Lord, Lord Houghton of Sowerby, in that remarkable speech that I referred to last week, believed that we ought to leave the unions alone to find their way home by their own efforts. They have been left alone to find their way home by their own efforts for rather a long time now and they have not found it. We are not playing at Finnegan's Wake, where a bottle booze will be sufficient to revivify the corpse for an allsinging, dancing act. The new monopoly phase will not go away to oblige us. It needs a push. When I reflect upon these things, I remember the admonition of the Almighty to Mephistopheles in the Prologue to Goethe's Faust:
"Initiative too lightly goes to sleep,
And life becomes an after-luncheon snooze.
Therefore I grant man freely, win or lose,
Companion devils to prod, to tempt to each creative leap".
It is that kind of a companion devil to the trade union movement that I am trying to be tonight. I admit that I am using the stick of vexation to the rump of complacency but it is time that stick was used. The closed shop has served us ill. Germany, France, Italy and the USA all get along better than we do without

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it. It is time to be done with it and to kick it away and kick the movement from today into tomorrow, squawking and bawling like a new-born babe, no doubt, but at least inhaling the breath of life into its lungs and ready to confront the future rather than funk it. In that spirit, I believe that the amendment of the noble Marquess is the kindest thing that the trade union movement can have.
Several noble Lords: Order!
Lord PEART: May I intervene here? No doubt the noble Earl who has just spoken has been listened to but that was a Second Reading speech. This is against all the traditions of both Houses. I hope that noble Lords opposite will approve of what I have said.
The EARL of HALSBURY: On every Question, That the clause shall stand part in both the Heath and Carr Bill and every other Bill since—
Several noble Lords: This is not "Clause stand part".
The EARL of HALSBURY: The party of opposition has read—
Several noble Lords: Order!
The LORD CHANCELLOR: It is not for me to intervene but I think we are discussing three particular amendments and although the eloquence has been splendid, I think that we have strayed a little.
9.58 p.m.
Lord WEDDERBURN of CHARLTON: There are two things to be said on this amendment and I address myself
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to them strictly. First, when I hear noble Lords speak of workers being illiberal in trade unions I note that they forget that the worker acquires his freedom from organisation and the worker who sells his labour is weak. The worker who organises begins to acquire freedom. The reason that this amendment and those like it are so misguided is that they do not understand that because of the need for organisation there therefore arises a conflict of rights and claims at work which can be put in a single sentence: the claim of the worker who says, "I want to work without joining in".
When the noble Lord, Lord Harris, speaks about special pleading, I shall listen to his pleading more clearly when he tells me about a worker's right to have a job; but the worker's right to say, "I want to have a right not to join in", and the individual people who are members of trade unions—squawked about as though they were tyrannous mobs—who say, "I want to work with those who join the common obligation"—
Several noble Lords: Second Reading speech!
Lord WEDDERBURN of CHARLTON: The noble Lord, Lord Rochester, is surely right, it is a matter of judgment to draw a line between those two claims that logically cannot be distinguished one from the other as a priority. As a matter of judgment, it is a debate between the Government and the Bill it is amending. That I understand. But the ideas put forward in this House, which would in effect take away workers' rights to organise, belong to the last century.
10 p.m.
Viscount CALDECOTE: The closed shop is clearly a very emotive issue. I must make it clear from the start that I dislike it intensely. I do not accept a word of what other noble Lords have suggested: that employers want the closed shop in order to have a quiet life. I do not accept that it gives them a quiet life; and if it did, I would not want it because I think it offends against a fundamental principle. I will not follow the noble Viscount, Lord De L'Isle, on the legal issues of the European Commission on Human Rights. I speak from a purely practical point of view—the point of view of one who has worked in industry and has participated in taking decisions on these exceedingly difficult issues.
We have to accept facts as they are and not as we would like them to be. The first fact is that when the Government of noble Lords opposite was in power they greatly encouraged the closed shop, and strengthened the power of the trade unions to have a closed shop when many of their members did not want one, to the great detriment of industry and to the great detriment of the rights of the individual.
The second fact is that the closed shop exists in industry today, however much we may object to it; and some noble Lords opposite may like to consider whether, if we have closed shops, we should not also have "open shops" where by law those who work in them could say that they want no trade unionists among them. But that is another issue. We have to deal with the situation as it is, and in my view it is impracticable and unwise at present to ban the closed shop, though of course it is perfectly possible in theory. However, we must make the establishment of the closed shop more difficult. We must protect the right of individuals who are working in a normal shop where there is no union membership agreement. We must protect the rights of those who have worked there, not being trade unionists, for many years.
I accept that many noble Lords think we should stand on a matter of principle and should fight to maintain the principle of individual human rights, whatever that may cost. I would just remind those
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noble Lords of the principle successfully followed by the late Field-Marshal Lord Montgomery. He would never attack unless he was 80 per cent. sure of success. A vital principle of this Bill is that its provisions are workable and enforceable, and I believe that is one of the important facts we should take into account when considering these amendments.
Clause 6, as drafted, accords with those principles, as I see it. It is sensible; it deals with the principle of making the closed shop more difficult to establish. Indeed, the noble Lord, Lord McCarthy, said a few minutes ago that it would make the establishment of new closed shops virtually impossible. That is a very good thing. It does not, on the other hand, outlaw the closed shop, which I believe would be totally impracticable in present circumstances. Therefore, in my view, it achieves the optimum balance between idealism and the practical facts of life as we know them in industry today. I therefore oppose these amendments.
10.4 p.m.
The Earl of GOWRIE: Some of your Lordships may feel, after listening to this important debate, that I am caught between the devil and the deep blue sea with these amendments concerning the closed shop. I want to make it quite clear that I prefer the deep blue sea; and I listened to my noble friends Lord De L'Isle and Lord Salisbury with considerable sympathy. Like them, like the noble Lord, Lord Harris of High Cross, and like my noble friend Lord Caldecote, in a forceful and brief speech just now, the Government dislike and disapprove of the closed shop and very much regret that our history has seen to it that it has become so institutionalised and so deep-rooted in our industrial society.
Like my noble friends, we are committed to reform—in our case, and at this particular time, to reform the situation with respect to basic individual human rights in the context of this closed shop which the Labour Government withdrew. This, as my noble friend Lord De L'Isle quite clearly demonstrated, in the view of the Commission on Human Rights, has put this country in breach of the European

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Convention, and towards the end of my remarks I will return to that point.
I must say at this point that I listened to the speeches of noble Lords opposite, particularly those by the noble Lord, Lord McCarthy, and the noble Lord, Lord Wedderburn, with the deepest pessimism. It is astonishing, and it surely bodes ill for human rights in this country, that there should still be that lack of understanding of the essential distastefulness of the closed shop—what the noble Lord, Lord Harris of High Cross, called its disfigurement of our society. If that kind of lack of understanding gets hold of the Labour Party again it bodes ill for us all, but I suspect that the major unions will tell the Official Opposition to drop their objections to our reforms before election time comes round again.
A noble Lord: Nonsense!
The Earl of GOWRIE: Noble Lords opposite emphasised the industrial relations aspect of closed shops rather than the effects on individual rights. In our view, that really is not good enough. What pressing industrial relations cause was furthered when in 1976 British Rail sacked some 40 or so of its employees, many of whom had years of loyal service? If most union agreements provide for conscientious objections why should the law not expect that all agreements make such provision? Our view is that noble Lords opposite seem content to acquiesce in and even applaud deficiencies in the law and therefore in the rights of individuals. We refuse to do so and that is why we are proposing the changes in this Bill.
We have a clear mandate for our reforms, not only in terms of the last general election—though that, of course, is the most important authority—but in terms of every kind of survey of popular opinion, both inside and outside the trade union movement. I myself by nature am sceptical of opinion polls and surveys. So much depends on when they are taken and on the rhetoric of the questions that are asked and the forms in which they are put. I prefer Governments to outline a programme and campaign upon it, put it into effect as
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nearly as they can and then await the electorate's overall judgment at the next election.
Be that as it may, there is clear evidence that the union movement itself is far from being insensitive at present to public unease and the unease of members of unions at closed shop abuses and the deep resentment that these occasion. The joint statement issued by the TUC and the Labour Government last year admitted that there were aspects of the closed shop principle that caused concern. The movement is surely right to be worried and that is why I said at Second Reading that there is much tacit as well as overt support for these reforms. It is the reputation and efficacy of the movement itself which suffers when virtually every right not to join a trade union is removed from individuals when a closed shop is set up in a firm.
What I am saying is that there is a clear consensus and a clear mandate for reform. Why, then, not go further and abolish the closed shop; that is to say, why not make illegal agreements between unions and management on the issue of who works in a given place of work? Your Lordships should make no mistake about it. That is the logical end and aim of noble Lords opposite and those who support them outside. That is the essence of the difference which we regret exists between us. We both dislike this institution, my noble friends are saying to me: it may be unconstitutional, they are saying—at least unconstitutional in respect of a signed undertaking and international agreement; you, the Government, they are saying, have a large parliamentary majority and four years before you need seek re-election and you can therefore get rid of this problem at a stroke with a relatively simple amendment to the law.
If only the law in a free society could move like a kind of Pentacostal spirit through the land, spreading sweetness and light as it goes. We could legislate away inflation, or, at least, the ill-effects of wage inflation upon levels of employment. We could legislate away strikes, and also injustice and oppression, or shortages or waste. Most useful of all in the context of our society, we could legislate away the number of trade unions. We could take

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112 major trade unions and reduce them to 12. Think what that would mean for the kind of productivity that the noble Lord, Lord Harris, mentioned. But all that is, I am afraid, a matter for the Government of what the Americans call "Rock Candy Mountain".
Our view is that the law can and should protect individuals from harm, and that the law can and should deter individuals from causing harm, wherever humanly possible. But the law is less effective—and we have to admit it—as an instrument governing collective endeavours, although subtly framed and applied it can help these. It is also a cultural, as well as an ethical, phenomenon—here I am perhaps getting on to the Second Reading area of the noble Earl, Lord Halsbury—and it has to take into account the history and development of the people it serves.
With great respect to him, does a radical thinker, like the noble Lord, Lord Harris, take historical consciousness into account? I have to, but then I am Irish. If we abolish the closed shop in theory, the practice of the closed shop will go on. There is no law on earth in a free society that can compel people to work beside those they do not choose to work beside. What the law can do, what the present law does not do—and I may at this point dampen a little the enthusiasm of noble Lords opposite—and what the law will do under this Bill is to provide that those who suffer as a result of one form of free association are themselves made free to seek redress and remedies for that suffering.
We do no service to such victims if we do not face—to use the phrase of my noble friend Lord Caldecote—the facts of British industrial life. We must not let our libertarian response to the closed shop as an objectionable practice dictate our legislative response, to the extent that the very individuals suffer whose rights it is vital for us to protect. That is what will happen if this Bill does not go through. That is also what will happen if, as happened between 1971 and 1974, the closed shop goes underground.
Research has shown that by persuasion, by the techniques of the recruitment interview, by induction or by a variety of other
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methods, managers set out to frustrate the intention of the 1971 law and largely succeeded. So we are determined to frame the law in such a way as to face the realities of this experience and create practical safeguards against the abuse of the closed shop. That is what the Bill does. It is what it sets out to do. It is what we ourselves set out to do before and during the general election. We presented our proposals for change in a detailed passage of our manifesto last year. The policy proposed then is the policy embodied in this Bill.
It is quite wrong to suggest, as one or two articles and, I should say, a rich crop of cartoons in the press have suggested, that we are in some way failing in our manifesto commitment. I must say that it is one thing for some of your Lordships, with a rich fund of industrial experience, to criticise us on the closed shop. It is quite another thing for some sectors of the press to do so, who have a record of appeasement on this issue which makes Mr. Chamberlain's umbrella look like Goliath's club.
By contrast with this carping, we are doing what we set out to do. We are providing new rights for those individuals arbitrarily excluded or expelled from a trade union. We are giving rights of compensation to existing employees and to those with personal convictions against union membership, who might lose their jobs as a result of the closed shop, and the sums involved here can reach over £16,000 at present. The employer must pay this sum, but he may join the union for his own financial redress.
We are providing for secret ballots for new closed shops, and later this year we shall be providing, through the code of practice on the closed shop which the noble Lord, Lord Rochester, commended and upon which we have to consult widely, further advice and guidance on good practice. Surely that is the right mixture of the voluntary principles, which are inevitable when you are dealing with anything involving 5 million people, and the statutory absolutes that you need to protect the solitary individual person. That is not pussyfooting but a coherent philosophy of good government.
We are all aware that British industrial relations have features which can only

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be understood in terms of our peculiar history, and we do not need an academic even of the undoubted distinction of the noble Lord, Lord Wedderburn of Charlton, to tell us that. In particular, the structure and the number of British unions generate huge problems. This weakens attempts by some people to get unions to operate in concert and to respond collectively to initiatives from employers or Governments.
As I have said, the multiplicity of our unions fragments our collective bargaining and generates restrictive practices. It denies to us the tripartism which some of our overseas competitors have found so mutually productive. These problems are recognised by the sensible and moderate union leaders and by employers who have to live with these kinds of deficiencies. In showing, ourselves, a proper concern for individual rights, we should not lose sight of this aspect of the problem in any solution which we propose. We do not wish to undermine present efforts to rationalise union structures or to create new industrial relations problems for employers. That is the answer to the point which the noble Lord made—taking up a witty sentence from the noble Baroness at Second Reading, although she should have known better, I dare to say—that one must be suspicious of collusion between employers and unions.
Finally, my noble and gallant friend has referred to the report of the Commission on Human Rights on the British Rail case which was published last week. Other speakers in the debate have also wondered whether, in the light of the report or, indeed, any future court decision on that case, this Bill goes far enough. I cannot speculate about future and hypothetical events but, as to the report itself, our contention is that the Bill does meet the point raised in the case. The applicants in this case were existing employees who were required by the British Rail closed shop agreement in 1976 to join a union or to be sacked. The Bill, in Clause 6(2), provides a new protection for just such employees and just such situations. The relevant part of the clause is the new subsection (3)(b) to Section 58 of the 1978 Act, dealt with in lines 26 to 36 on page 7 of the Bill. While I acknowledge the nuisance in Bills of having to refer to previous legislation, I must tell my noble friend Lord Gis-
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borough that it should not tax a man of his ability to carry two pieces of paper at the same time.
This provision, I should stress—because there has been some confused comment on the case—is additional to protections given where an employee has genuine conscientious objections to union membership or where a new closed shop is introduced, after the Bill is enacted, without the requisite ballot support. My noble friend Lord Orr-Ewing, whose persuasive tones on the "Today" programme of the BBC woke me at 6.45 this morning, seemed to imply that conscientious objection is not catered for. But it is. It is for all these reasons that the Government are confident that the Bill meets the point raised in the case.
Clause 6, amendments to which we are discussing, amends the unfair dismissal law, and the remedies it offers a person unfairly dismissed are those provided by that law. Normally, this is compensation. The common law and, since 1971, statute law as well, has always recognised that compensation has to be the ultimate remedy. The law has never sought to force employers to take somebody back, any more than it forces attempts to make one person work for another. For any breach of contracts or statutory rights, the only practicable remedy in such cases is compensation, because in a democracy unwilling partners cannot be forced to work together. In its report on the British Rail case the commission did not rule that compensation was an inadequate remedy. The fault with this case, it said, lay in the terms of the 1976 Act—the Act of the noble Lords opposite—which made the dismissal of the applicants fair. The fault therefore was not in the remedy of compensation, and in fact the commission found in this case that there had been no violation of Article 13 which deals specifically with the question of remedies.
In rehearsing the Government's position on this case, I hope I shall not be accused of smugness, as one newspaper described our attitude last week. No one can take any satisfaction from the treatment that these unfortunate individuals have suffered. On our side we have always been sympathetic towards them and we can demonstrate this by the fact that we have had their specific case very much in mind

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when drafting the Bill. No one therefore should be surprised if, as a result, we feel confident that we have met the point raised by the case.
With great respect to my noble and gallant friend, he is wholly wrong when he says that the present Government made strenuous efforts—and I quote him—
"to have the railwaymen's appeal to the commission dismissed".
It was quite the reverse. As I said, we designed the Bill to meet their case and believe that we have done so. Nothing in industrial relations, indeed nothing in the whole field of law itself, is static and if it proves that we are wrong we can take remedial action. The noble Lord, Lord Rochester, made that point, but at present we do not think that we are wrong.
As I said earlier, we dislike the closed shop and we are determined to protect basic individual rights in this context. No responsible Government can deceive themselves in the face of experience that the closed shop, covering as it does over a fifth of the working population of this country, can simply be legislated out of existence. As my noble friend Lord Caldecote said, we have to deal with the real industrial situation and the practical realities of protecting individual rights against abuse. That is what we promised the electorate and that is what we are determined to do. I hope that, in the light of what I have most earnestly said, and said with the greatest consideration over many days, my noble friends will not seek to press their amendment.
Lord RENTON: I am sure that the whole of your Lordships' Committee have listened with admiration to the candid statement made by my noble friend Lord Gowrie. I took particular note—because before he spoke I was hoping briefly to address your Lordships on the matter—of what he said about the effect of the opinion so far expressed by the European Commission on Human Rights. But there was one very important point which was brought out in that opinion with which he has not dealt and I should be grateful if he would do so. In giving the reasons for their decision the commission said that no man should be forced to join or to remain in a union whose political
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affiliations he does not accept. That was really the crux of the case. They accepted as a fact of life, as so many noble Lords have done, the fact of the closed shop, but they said that the question of political affiliations had to be considered. It so happens that some 11 million trade unionists are affiliated to the Labour Party.
May I put my question to my noble friend? It is this: in referring to other deeply held personal convictions as a ground for objection to being a member of any trade union whatsoever, or of a politically affiliated trade union, is the fact of political affiliation something which the tribunal is going to acknowledge or is that not contemplated in that phrase?
The Earl of GOWRIE: My noble friend Lord Renton said that 11 million unionists were affiliated to the Labour Party. They may be affiliated to it but it is questionable whether they always vote for it. On the question of whether that would be in contradiction of the European Convention, I think not. What we are dealing with here is what happens to people who are unreasonably or unfairly excluded, and our aim in this Bill is to give people redress and protection when their human rights in that way are violated. My reading of trade union rule books, which I have done—though I acknowledge that I am in no sense the expert the noble Lord, Lord McCarthy, is in this area—is that most of them are prefaced be general statements of intent and general aims, very often politically expressed, and with which many of their members would, either all the time or from time to time, in my submission, disagree. But that would not, in my view, constitute a violation of their rights, unless they were unreasonably excluded or expelled as a result of not subscribing to them.
Lord MONSON: May I put one very brief point to the noble Earl? He said that there was no law in a free society that compelled people to work alongside those they do not want to work with. Does not the most recent Race Relations Act do precisely that?
The Earl of GOWRIE: No.
The Marquess of SALISBURY: I think everyone has had their say and it

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remains for me to wind up. The noble Lord, Lord Davies, asked whether we had all read Section 58. Well, of course it deals purely with unfair dismissal, and the closed shop on which so much of our discussion is centred comes under that heading.
The LORD CHANCELLOR: I think my noble friend would be wise if he read the section himself and realised that his real object in his amendment—I do not want to be pedantic—is to repeal subsection (3) of that section.
The Marquess of SALISBURY: I am grateful to the noble and learned Lord. The noble Lord, Lord Rochester, supported by the noble Earl, Lord Gowrie, suggested that it would be a mistake to drive the closed shop underground. There may be a very good case for it, as it seems to me that this is a matter of tactics. At the same time I think one should bear in mind that there is a danger in strengthening the position of the closed shop by giving it the full support of the law. It is a matter of which method is likely to achieve the result that both he and I are agreed we desire to obtain.
The noble Earl, Lord Gowrie, has said that in the Bill we are honouring our obligations in the party manifesto. I wonder whether that is really so, because under paragraph 2, the closed shop, it says that people arbitrarily excluded or expelled from a union must be given a right of appeal to a court of law. The existing employees and those with personal convictions must be adequately protected. I think the second part is so, but I wonder whether the first is entirely covered in this. Later in the same paragraph the manifesto says:
"We will not permit a closed shop in the non-industrial Civil Service and will resist further moves towards it in the newspaper industry."
I do not think this is covered in the Bill. I wonder whether the noble Earl is correct in what he said.
However, having regard to everything that has been said this evening, I would not intend to press my amendment at this stage, although I would hope, in view of what I have just said, that the noble Earl will have second thoughts and will see whether some further amend-
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ment could be obtained. I should like to reserve my position for Report stage. In the meantime, I ask leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 38B not moved.]
10.30 p.m.
Viscount DE L'ISLE Viscount DE L'ISLE had given Notice of his intention to move Amendment No. 39:
Page 7, line 23, leave out ("genuinely").
The noble Viscount said: I have listened carefully, as is my duty, to the speech of my noble friend Lord Gowrie. As usual it was skilful and eloquent and I shall read it with great care, but he did not persuade me that he had paid attention to the details of the argument I had advanced. In his reply to the last intervention, he seemed to me to controvert directly the opinion of the Commission. I give notice that on the question of the Convention of Human Rights I shall return to the issue at Report stage.
[Amendment No. 40 not moved.]
Lord HOWIE of TROON Lord HOWIE of TROON had given Notice of his intention to move Amendment No. 40A:
Page 7, line 23, after ("conscience") insert ("or on grounds of a possible conflict with the practice of his professional institution, provided that membership of that institution is limited to persons who have or are seeking a qualification appropriate to the practice of the profession concerned").
The noble Lord said: We had a good run earlier on Amendment No. 21A which I moved. As this amendment covers more or less the same or very similar ground, I think it would meet the convenience of the Committee if I did not move it.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 41:
Page 7, line 23, leave out ("other deeply-held personal") and insert ("religious").
The noble Lord said: I am pleased that in the latter speeches we have brought the Committee back to the reality of the situation, because the purpose of the amendment is to deal with the real situation on the shop floor and with industrial relations as they actually exist.

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I say at the outset that we on this side recognise that there must be exemptions on the grounds of conscientious objection. It is my purpose to try to outline exactly what we mean.
If our amendment is carried, the phrase would read:
"genuinely objects on grounds of conscience or religious conviction".
In the 1978 Act, the law as it now is, the phrase is:
"genuinely objects on grounds of religious belief".
We regard that as far too narrow. There are grounds of conscience which are not necessarily of religious belief. The proposal in the Bill brings in the question of conscience, in my view quite rightly, but for some reason takes out "religious belief" or "religious conviction". Although the Bill specifically excludes grounds of religion, it introduces something totally new—that is, deeply-held personal conviction. It would be most unfortunate if this issue became bogged down on semantics, but that could easily be the situation.
Turning up my copy of The Concise Oxford Dictionary, I find that "conscience" is defined as:
"A moral sense of right and wrong",
which I believe all simple people like me can understand. "Conviction" is stated to be "a settled belief", which is something entirely different. I have no doubt that when I have sat down, all the noble and learned legal luminaries in the Committee will argue that point and that will indicate the problem which may be facing the tribunals which have to deal with this matter, because what is implied by "deeply-held personal conviction"? As "settled belief", it could cover many things. I have a settled belief that the free play of market forces is wrong, but that is not conscience. I have a conviction that monetarism is wrong, but that is not conscience. I have a very settled belief that the Employment Bill is wrong and will do nothing to help industrial relations, but that is not conscience.
Most of your Lordships will have deeply-held personal convictions on political and other issues, but political issues are not necessarily conscience; they are political convictions. The clause differen-
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tiates between grounds of conscience and deeply-held personal conviction, because the word "or" is inserted, so the Government appear to recognise that conscience and personal conviction are different things. With that I agree, and that is where I believe the difficulties will arise. In my view, personal conviction is not religious conviction, neither is it conscience. To leave the clause in its present form would open the gates to considerable problems and difficulties. All kinds of argument will be used to justify "deeply-held personal conviction". I believe that it will be difficult enough for tribunals to assess conscience, but when we come to ask them to assess "deeply-held personal conviction" they will find it an immense task.
What will be the criteria? I have pointed out already that I believe there to be a considerable difference between conscience and personal conviction. In the context of the Bill "personal conviction" could be a disagreement with the unions as such and an acceptance of an "each man for himself" philosophy. It could be a boss's mentality and the attitude that unity and loyalty to one's fellows is nonsense. Selfish and anti-social aims can be deeply-held personal conviction and have nothing to do with conscience. It could cover quite a number of other things—dislike of personalities and particular trade unions and disagreement with particular decisions of the union; objection to paying union dues and objection to paying increased union dues.
I should like to say, in conclusion, that the Under-Secretary of State for Employment in Committee in another place, said:
"The proposal is not intended to cover those with trivial, superficial or transitory objections to union membership".
But if the words: "deeply-held conviction" are included, then we shall have a situation where the tribunals have to decide this matter and it will be a very difficult task for them.
When we come to another amendment I shall follow up what my noble friends have said about free riders. However, this problem of deeply-held personal conviction can open the door to enmity towards free riders which the factory floor deeply resents. If all sorts of arguments are brought up as to what is personal conviction, we shall have difficulties.

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I hope that the Committee will recognise that our amendment removes the ambiguous phrase, "deeply-held personal conviction". It retains the grounds of conscience which are absolutely essential and it reintroduces religious conviction which, for some reason, the Government took out of this clause. I hope that the Committee will in its wisdom support this amendment.
Lord ORR-EWING: May I move that we go back to what was in the 1939 Act dealing with conscientious objectors? It merely says that one had consciously to object. It is much simpler than defining religious principles or deeply-held convictions, or anything else. When we were fighting for our very existence in 1939 we were prepared to accept that. The noble Lord shakes his head. Why complicate the matter? Why not do as we did during the war? We allowed a person to go away and not to do National Service and not to serve in our armed forces if he objected. That was enough. He did not have to explain it; he came before a tribunal, but he did not have to justify it in any way. If it were possible for that to go through Parliament in 1939, it should be possible in the case of a trade union, and they should not object to it.
Lord McCARTHY: I was only shaking my head because I thought that if the noble Lord, Lord Orr-Ewing, took that view, he should have put down an amendment to that effect.
Lord ORR-EWING: I did not know how persuasive the noble Lord, Lord Underhill, would be in his argument of the case.
Lord TAYLOR of GRYFE: I hope that there will be some clarification on this particular point. I am glad that the narrow reference to a religious objection has now been departed from, because I happened to be involved in the dismissal of the railway employees. It is an act of which I am ashamed, but as a member of the board I had no option than to operate the closed shop implications and dismissal.
The problem about limiting the provision to religious objection is that many people who are members of religious sects do
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not have any written constitution as part of their belief. When the tribunal was assessing religious objection it simply asked the question: "Has your religious organisation a prohibition clause in its constitution preventing you or prohibiting you from becoming a member of a trade union?" By that test all the religious objectors failed before the tribunals, and not only was that so, but several of the tribunals also insisted, with co-operation and support from the trade unions which were pursuing the recalcitrants, that the men concerned had been dismissed on account of their misconduct, with consequent further implications on their future careers.
Therefore, I am delighted that at last we have got away from this narrow religious objection and that we are incorporating in the Bill what I regard as a rather precious part of the British democratic Constitution, the right of conscientious objection. It is extremely difficult for a tribunal to assess and perhaps as a result of this clause we may get closer to some guidance for the tribunals. However, I am delighted that the rights of the conscientious objector will be observed in this piece of legislation.
Lord HOUGHTON of SOWERBY: I am sorry that my noble friends on the Front Bench have persisted in this amendment at this time of night and after the debate that we have just had. I want to uphold the right of agnostics to have a state of mind equal to that of conscience or of religious belief. The Opposition Front Bench is full of agnostics, and here they are trying to deprive their kith and kin of the right to hold a deeply-held personal conviction. My noble friend Lord Underhill ignored from the beginning to the end of his speech the fact that we got rid of both conscience and religion from the constitution of the parliamentary Labour Party and substituted "deeplyheld personal conviction". He was probably not around when we did that. I have said in this House before my noble friend came here that what is good for the parliamentaty Labour Party is good for the trade unions in this particular respect. I, personally, regret that we have had to rely on a Conservative Government to rectify the serious flaw in the Labour Government's legislation of 1978.

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If you look at the Donovan Report, where this began—we have been talking about conscience for 12 years—you will see that never once did it refer to religious belief as a condition for exception from the conditions of the closed shop. I shall not take up the time of the Committee in quoting three of the paragraphs in the Donovan Report which refer to "reasonable objection" or "strongly-held opinions". There was a a tolerance there which has not been shown in some of the debates that we have had in both Houses on trade union legislation. I think that one must uphold the right to hold a secular opinion with a deep conviction which is equivalent in moral terms to religious belief and conscience.
Let us examine just for a moment the quality of conscience. Conscience is said to be a still, small voice and, if you hear it, you have got it. Religion is a belief which you may not hold, but you still have it if you claim to be a member of a particular religious denomination. But to establish a deeply-held personal conviction on a secular basis is much more difficult than the easier task of saying, "I have a conscience" or "I have a religious belief". Therefore, there is no easy way out here. I think that it should be allowed to go to the test of practical experience. It will not be abused. I am not excusing this as a means of getting out of paying subscriptions, or the equivalent of them. That was fully provided for in the Donovan recommendations.
I must register my own view on this because I expressed this opinion in 1974, but at that time the House was not sufficiently united on the establishment of this principle to make it rewarding to pursue the matter to the bitter end. Now we have something to which we can cling, and I defend what is in the Bill and deplore the attitude of anyone who tries to take it out. Surely, we on these Benches are not going to have the shame of trying to remove from a Conservative Party Bill one of the tenets of civil liberty to which we attach considerable importance.
10.46 p.m.
The LORD CHANCELLOR: After that appeal, I seriously hope that the Labour Party official Opposition will yield to the persuasion of the noble Lord who has just spoken. I think that I am
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entitled to play a part in this debate. I know that some noble Lords and some noble Baronesses—I can see one opposite—will remember our debates of 1974, 1975 and 1976 in which I fought the then Lord Chancellor and I fought the Labour Front Bench who stuck to religious belief as the only ground upon which, in the closed shop context, a dismissal would not be unfair. Well, we have travelled a long way since then.
If I may answer the noble Lord, Lord Underhill, the reason why we do not have the word "religious" expressly in this clause is because conscience and deeply-held personal conviction clearly subsumes religious belief. It has always been accepted on all sides of the House, in our 1974 debates and thereafter, that persons like the Plymouth Brethren who have a religious belief that it is wrong to be, as they would put it, yoked with unbelievers, ought to be recognised as entitled to disregard the provisions of the closed shop. That is why even in the restrictive legislation of the Labour Party religious conviction was still in it.
I can remember saying, not once, but I should think 15 times in the course of those debates, that agnostics have consciences too. Unfortunately, we were told by the then Lord Chancellor, and we were then told by the Labour Government that it was too difficult to define "conscience". When we were fighting for our lives in two world wars we asked men to go to their deaths, but exempted them on the basis of conscientious objection. But we would not exempt them from the closed shop because it was too difficult for the Labour Party. We have travelled a long way since then, and I am glad that the sinners have come to repentance and I hope that the 99 just men I see on this side of the Committee will rejoice with me at their conversion.
I personally am rather attached to "deeply-held personal conviction" I think we borrowed it from the constitution of the Labour Party. But there are worse places to look. They allow one another to have deeply-held personal convictions, but apparently they do not like those who do not want to join a closed shop to have them, too. We rather think that what is good for the Labour Party is good for those who do not want to join a closed shop. In the light of the moving speech

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of the noble Lord, Lord Houghton of Sowerby, I hope that the noble Lord, Lord Underhill, will have second thoughts.
Lord McCARTHY: I hope that the Committee will accept that I am sorry that I must ask the Committee and my noble friend Lord Houghton to look again at the Bill and look at the amendment. What we are doing is leaving conscience in. What we are taking out is "other deeply-held personal conviction" so that the clause, if the Committee voted for our amendment, would read,
"if he genuinely objects on grounds of conscience or religious …".
In other words, everything which has been said so far, apart from what was said by my noble friend Lord Underhill, has been totally beside the point, totally irrelevant, and the Committee and those who believe in conscience for agnostics can happily vote for the amendment.
Lord HARRIS of GREENWICH: With respect to my noble friend, he has in no way disposed of the case put by my noble friend Lord Houghton of Sowerby and I feel I must comment on this issue. I do so with some regret because my noble friend Lord Underhill and I served at Transport House together for a number of years, but on this matter we certainly find ourselves in total disagreement. I, like many noble Lords on this side of the Committee and no doubt many noble Lords opposite, have been a member of a trade union for a substantial time. However, I am bound to say that at the time when I joined my trade union I would have regarded it as a most extraordinary proposition that a man who had a deeply-held personal conviction should, notwithstanding that conviction, be press-ganged into that trade union. After all, let us bear in mind what we are talking about here. We are talking about unfair dismissal, so that in fact not only could he be dismissed but he would have no redress after that dismissal. That is, after all, what we are voting on tonight, and I say without the slightest hesitation that I shall vote against the amendment.
Lord UNDERHILL: I must disagree with what my noble friend Lord Houghton of Sowerby said because he did not understand what I said. "Conscience" is in and we wanted it in for the very
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reasons he gave. I stressed that the 1978 Act has only "religious belief" and we thought that was wrong because we wanted to bring in the type of people with a conscientious objection to which my noble friend Lord Houghton referred. He obviously did not listen to what I said.
Lord HOUGHTON of SOWERBY: I object to being told, first, that I did not understand my noble friend and, secondly, that I did not listen to him. I understood him perfectly and I replied to him, so will he please stop it!
Lord UNDERHILL: I will reply to people in the same way as they talk to me, be they noble friends or opponents, and I replied to my noble friend in like manner. What, frankly, we are mainly concerned with is industrial peace, and having made certain that we have "conscience" in and having made it clear that "religious belief" is in, we go on to deal with the question of a deeply-held personal conviction. Nobody has dealt with the fact that "deeply-held personal conviction" is so sweeping and wide that all sorts of meanings could be attached to it, and instead of industrial peace we should have trouble on the shop floor. That is our concern, and I thought the whole Committee was concerned to do something to promote industrial peace.
The whole Committee has, I think, agreed that we must have "conscientious objection", so it is a question of defining what it should be. Our amendment brings in conscience and religious belief, but it takes out this very vague phrase "deeply-held personal conviction". We regard this as so important that if it were not nearly 11 o'clock we would divide the Committee, because we have here the germs of industrial trouble. Noble Lords must consider how people on the shop floor think. I may not have as many years membership of your Lordships' House as some, but I am in my 49th year of trade union membership with a life membership badge to come at the end of it, so I know a little of how people in the trade union movement and on the shop floor react. Having said that, we believe that our amendment is right. We will not withdraw it but we will not press it to a Division.
On Question, amendment negatived.
10.55 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 42:
Page 7, line 25, leave out from ("whatsoever") to end of line.
The noble Lord said: The object of this amendment is quite simple. The present position in this regard, without the Bill, is that the objection must be to joining any union whatsoever; in other words, the person concerned must have what might be described as a conscientious objection to joining trade unions. The clause would create a situation in which people could object to joining a particular union. We are saying in the amendment that this is a disruptive proposal, that it is very difficult to square conscientious objection or deeply-held personal convictions with the notion of objecting to particular unions, whereas it makes a certain amount of sense if a person says that he objects to unions on principle—that he will not join any union. That is the rationale behind the existing Act.
We are saying that there should be accepted by the Committee an amendment which leaves out the words from "whatsoever" to the end of the line referred to, and which would restore the position to what it is at the moment, in so far as the objection has to be to joining trade unions on principle. That is the issue from the point of view of both conscientious objection and deeply-held personal conviction.
There is also an argument against the proposal from the point of view of both practicality and industrial efficiency and peace. The noble Earl said recently that he did not want to fragment collective bargaining, that he did not want to undermine agreements. He has said on several occasions this evening that he respects the TUC Disputes Committee and the TUC disputes procedures. We are suggesting that it follows from that general position that one would not wish to create a situation in which people could object to joining particular unions, in which they could say, for example, that they did not want to join the GMWU but wanted to join the ETU. If they have that kind of right, and if it is built into the Bill, it will be one more bomb placed under Bridlington. I beg to move.
The LORD CHANCELLOR: I must
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say that I do not understand why the noble Lord who has just spoken should regard it as legitimate that in a closed shop situation a person should be dismissed without compensation if he objected on grounds of religion or conscience, or a deeply-held personal conviction to joining a particular trade union. Some trade unions are better than others. Some are following policies with which one profoundly disagrees and with which one should not at all wish to be associated. While I was practising the law I belonged to my professional association, but if it had been pursuing immoral policies—which at one time I thought it was likely to do by imposing a closed shop—I think that I would have withdrawn my subscription rather than have belonged to it.
The fact of the matter is that one is just as much entitled to object on grounds of religion or conscience, or a deeply-held personal conviction, to a particular union as one is to trade unions in general. All we are saying is that if a person is dismissed because he follows his conscience rather than his interests, he should be entitled to compensation. It seems a very modest suggestion to make, and I cannot exactly see why noble Lords on the Front Bench opposite should think it even proper to disagree with us on this particular point.
I wish to revert for a moment—but only for a moment—to the arguments which were presented on an earlier set of amendments. I must point out to noble Lords, as I pointed out to the noble and learned Lord on the subject of conscience in general in the Labour Party's legislation, that they are absolutely bound to fall foul of the European Convention on Human Rights if they press the amendment and pass it into law. In the light of the debate that we had a few moments ago I cannot advise the Committee to pass the amendment, because it is quite clear, whatever the Commission may have decided and whatever the court is going to decide—and it is what the court is going to decide which will ultimately decide the case—that the right to associate with those whom one chooses to associate with but not to associate under pressure with those one does not choose to associate with in the case of a particular union or any association which is committed to policies with which one pro-

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foundly disagrees, is one which is deeply embedded in the European Convention. I have no doubt whatever that if noble Lords insisted on trying to omit the words which this amendment would seek to omit, they would be flying in the face of the universally accepted international obligations of the United Kingdom of Great Britain and Northern Ireland.
Lord McCARTHY: I am not convinced by the noble and learned Lord. We are trying to say that there is a very clear difference between people objecting to trade unions per se and people objecting to particular unions. Of course they can object to particular unions on particular grounds, but we do not regard that as a matter of conscience. Nevertheless, since it is so late at night I propose to withdraw this amendment.
Amendment, by leave, withdrawn.
11.2 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 43:
Page 7, line 25, at end insert ("but such grounds shall not include objection to the amount of any subscriptions payable by the members of any trade union").
The noble Lord said: I do not think that even noble Lords opposite could say that this was a matter of conscience. We are suggesting that on page 7, line 25, there should be inserted at the end:
"but such grounds shall not include objection to the amount of any subscriptions payable by the members of any trade union".
In other words, we are saying that it is very difficult for anyone to have a deeply-held personal conscientious objection to paying the money. We are saying that if the only objection you have to belonging to a union is that you do not want to pay the subscriptions, then that cannot be said to be a deeply-held personal conviction. I know the answer that we shall be given by noble Lords opposite. We shall be told yet again: "But, of course, no industrial tribunal could conceivably be so silly as to think that this was a reason of deeply-held personal conviction". Nevertheless, we say that since we have spent a considerable amount of time today reinforcing the psychological fears of small businessmen, let us reinforce and help some of the psychological fears
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of small shop stewards and support this amendment. I beg to move.
The LORD CHANCELLOR: This is really a very extraordinary amendment. Having tried to take out the words "deeply-held personal conviction", which would clearly exclude the possibility that a person should refuse to join a trade union simply on the grounds that the subscription was too high, and having objected to that on the highest possible moral grounds because it was going to cause so much trouble on the shop floor, we are now being invited to insert this very narrow ground as an exception to the general rule. Such a tergiversation, such a degree of inconsistency, such a departure from logic, has seldom been seen even on the Front Bench opposite and even during the antics to which we have been subjected during the course of this Bill. The fact is that they are only trying to turn what is an obvious question of fact into a question of law, and by doing so they are wrecking the proper phraseology of the Bill. We have insisted, against their attempts, upon retaining the words "deeply-held personal conviction". The size of the subscription is not such a conviction, and therefore these words are both necessary—or, rather, are both unnecessary and deleterious.
Lord McCARTHY: The noble and learned Lord does not seem to know whether they are necessary or unnecessary. I consider that they are unnecessary, and that therefore we should take them out. Of course we tried to do something about other aspects of the Bill, but if you fail to do something about other aspects of the Bill then you try to do something about this aspect of the Bill; and this is the narrowest single area in which we could ask for some reassurance. Indeed, at the Dispatch Box a few days ago the noble Lord, Lord Lyell, said something rather nice about the issue of subscriptions when we were talking about exclusions and expulsions. He said that the Government would think again about subscriptions. What we are saying is that it is quite impossible, even if the Government are right that there are other deeply-held personal convictions which should be put into the Bill, other than religion, that even they could say that a refusal to pay the money is a matter of conscience.

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Therefore, I do not feel like withdrawing this amendment.
On Question, amendment negatived.
11.5 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 44:
Page 7, line 25, at end insert ("but provided that an employee holding any such objection pays or is prepared to pay to a registered charity the equivalent to contributions he would otherwise make to the appropriate union under a union membership agreement").
The noble Lord said: This is not such a revolutionary proposal. As a matter of fact, an identical amendment was proposed in another place in Committee by a Conservative Member of Parliament. I have to paraphrase what he said: that there are plain practical reasons behind the closed shop—that is, union membership agreements; that the closed shop is introduced because it is genuinely felt in industry that it improves the atmosphere over all industrial relations and the ability to have collective bargaining. He went on to say that anyone with genuine reasons of conscience who feels that he cannot join a trade union and who benefits from the action of the union should make a payment to charity in return for that privilege. He added that such an individual would not be able to negotiate as an individual with the employer and, therefore, no matter what he wishes, the union will be negotiating on his behalf.
When I moved the previous amendment, I referred to free riders and also said that we all want peace in industry; that we are all after that. I ask that noble Lords will accept the position that on the shop floor nothing inflames feelings so much as the realisation that people are getting benefits from trade union activities and not making any contribution towards the union. May I indicate that this goes far beyond wages? Let us take, for instance, the great efforts of the National Union of Mineworkers to get agreement on pneumoconiosis and the benefits that that agreement has brought to large numbers of people. Union negotiations can deal with such matters as safety provisions, voluntary arrangements, toilets and washing facilities, medical care, canteens and meals, protective clothing, holiday arrangements, welfare provisions—the whole field of conditions of work. We are not just talking about wages.
When people on the shop floor realise what efforts are being made to secure these benefits and that there are people making no contribution, there is considerable bitterness. All that the amendment is suggesting is that those who are acknowledged to have a conscientious objection, and are accepted as such, should make a payment to charity in return. There is usually no trouble on the shop floor with regard to a bona fide conscientious objector. That is why we were so concerned about the other definition. But any bad feelings can be removed if there is the thought that those people with conscientious objections are necessarily making a contribution to charity. In the same way as the Conservative Member in another place emphasised this, I hope that the Committee will agree to this amendment.
The LORD CHANCELLOR: I hope that no one will accuse me either of being a free rider or of objecting to subscriptions to charity. I have never been a free rider. Throughout my professional life I have subscribed voluntarily—because it is not a closed shop—to what was the Bar Council and is now part of the Senate. I resisted all attempts to make it compulsory or to impose sanctions against those who did not pay. But I myself have always paid and paid voluntarily. I think that we have more than 80 per cent. of members who subscribe and I believe that the Law Society, which is, equally, a purely voluntary association, is in no worse position. I think that a union only demeans itself by trying to dragoon people into membership.
What the noble Lord is really saying is that if a man with a genuine conscientious objection (which the noble Lord agrees ought to be provided for in the Bill) gets the sack for not joining a union, he can get compensation or can refuse to join a union only if he pays a compulsory subscription to charity equal to the amount of his union contributions. I think that it is excellent if voluntarily he pays to charity a subscription based on what would have been his union subscription. It will satisfy his fellow workers, of course, that he is genuine in his convictions and that he is not simply trying to avoid having to pay up. I could not approve of such conduct more than I do.

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To say that he shall only get his legal rights if he subscribes to charity seems objectionable in principle. Having said that, I recognise that in the 1971 legislation there was a somewhat similar provision. I make the point against myself that there was such a similar provision about which the TUC said in a lordly fashion: "To unions in Britain money is less important than commitment. The agency shop will create two classes of workers in a particular place: one party to and bound by the union's rules, and the other not party to them and not bound by them: so the proposal was meant to weaken the union's authority".
Now we are asked to go back to the 1971 Act. This is a very strange reversal of roles. If the noble Lord wants to "twit" me for inconsistency, I should have thought that I was able to turn his weapons against himself. On the whole, I think that subscriptions to charity should be voluntary, and I think that if you prove a conscientious objection, you should not have to be made to pay a subscription to charity. I think that it may be a suitable subject for a code of practice, and of course I shall convey what the noble Lord has said, and his arguments in favour of this as a statutory provision, to my right honourable friend and ask him whether he thinks it would be an appropriate insertion to make into the code of practice. But as a statutory insertion, I think that it is going too far.
Lord MONSON: I have a certain sympathy with this amendment; I can understand the feelings that motivate it. I should be inclined to support it if there could be some sort of trade-off; that is to say, if the Opposition, for example, could see their way towards supporting the anti-discrimination amendment (Amendment No. 53) in the names of the noble Lord, Lord Orr-Ewing, and two of my noble friends on the Cross-Benches, that would be a reasonable quid pro quo.
Lord UNDERHILL: I think that we will deal with the amendment on principle as it stands. What the noble and learned Lord says is perfectly correct: there may be a change of view on the part of some people, in the same way that the Government have changed their view from the 1971 Act. But it is something that we
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were looking at frankly from the standpoint not only of the individual but of the industrial relations on the shop floor. The noble Lord who last spoke referred to this. At this time of night, we shall not divide. I hope that consideration will be given to this amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 45 not moved.]
11.13 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 46:
Page 7, line 36, at end insert—
("Provided that in any case where an industrial tribunal determines the question whether it is the practice for employees to belong to a specified independent trade union or to one of a number of such trade unions within the meaning of this section, it shall, for that purpose, take no account of the fact that any such employee is a member of any such union.").
The noble Lord said: This amendment relates to a problem which is of equal consequence to unions and management in union membership agreements: a problem which is arising under the law as it stands now and which will be made worse in relation to the Bill unless an amendment of this kind is included.
The problem arises from the fact—of which no mention has been made this evening—that most union membership agreements and arrangements in fact exclude the obligation of existing employees to join the unions when those agreements come into effect. The recent survey by Mr. Gennard and two colleagues published and provided for the Department of Employment in the November Employment Gazette concluded that where new closed shops have appeared, it has increasingly become the norm to exclude existing non-unionists from compulsion to join the union. The problem to which this gives rise is that the way in which the union membership arrangement can be maintained is if management does retain the right to dismiss, on grounds of non-unionism, a non-unionist who sets about splintering and fragmenting the closed shop in various dissident ways, and it is a right which management wishes to retain when it makes the union membership arrangement. Management has that right only where it is the practice for employees for the time being of the same

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class as the dismissed employee to belong to one or more of the specified trade unions.
Under the 1974 Act the requirement was that all the employees had to belong to one or more of the specified trade unions. Therefore, it was not very surprising that in 1976 the Industrial Tribunal, in the case of the Ferrybridge workers who dissented and would not join a specified trade union, found them to be unfairly dismissed because, out of the 39,000-odd workers in the industry, some 1,000 appeared on the evidence not to be members of the specified union. There was not, therefore, the necessary practice.
In 1976 the words were changed and appear as they appear in Section 58(3) now —namely, that it should be the practice for members of the same class as the dismissed employee to belong to one of the specified independent trade unions. Even so, a decision of the Employment Appeal Tribunal in 1978—the case of Himpfen and Others v. Allied Records—decided that in a case where there were 42 workers in the firm and nine did not belong to what ultimately became the specified trade union, there was not a sufficient practice to allow for a fair dismissal of non-unionists. It therefore appears to be the law, as interpreted by the courts, that the practice has, as the court put it in that case, still to be one where, as a necessary qualification for a practice to he demonstrated as falling within the provision, almost all the employees of the relevant class should, on the critical day, belong to a specified trade union. That is the problem as the law stands today.
If the Bill is passed in its present form every existing employee will have a statutory right to remain out of the union, as opposed to the present position where it is normally the case to bargain on that basis—with, of course, management and unions both keeping an eye on maintaining a sufficient practice—and, once it is a statutory right for each and every existing employee, at the date on which the agreement comes into effect, to remain outside the union, proving the practice may be a very difficult thing to do until a lot more employees are taken on who join the union.
Therefore, it is the purpose of this amendment, again to use the words of the
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noble Lord, Lord Rochester, to find a line of judgment and to say—and I am taking it as a Committee stage operation, accepting a clause I do not like to accept, but accepting that the Government have their way—that if all existing employees have a statutory right to maintain themselves out of the union, then, in order to make union membership arrangements workable in law, it will be necessary to exclude them from the computation of what is the practice required by the Act in terms of fair dismissal. Were that not the case, there would be very few union membership arrangements that were enforceable through the means of dismissal.
11.20 p.m.
Lord MACKAY of CLASHFERN: This appears to be an extremely technical question, and I have tried to follow the explanation of the noble Lord, Lord Wedderburn. However, I find it hard to reconcile his explanation with this amendment, particularly as the amendment finishes up with these words:
"… it shall, for that purpose, take no account of the fact that any such employee is a member of any such union."
I am wondering whether the wording is really what the noble Lord intended. It does not appear to me to make much sense, but perhaps I have misunderstood something.
Lord WEDDERBURN of CHARLTON: The noble and learned Lord is quite correct. The last line should read:
"… the fact that any such employee is not a member of any such union."
The LORD CHANCELLOR: Iolanthe.
Lord WEDDERBURN of CHARLTON: Indeed. The noble and learned Lord the Lord Chancellor reminds me of the Gilbert and Sullivan occasion. It may not be proper, therefore, for me to move this amendment and I shall have to withdraw it since it says the opposite of that which it should say. In withdrawing it, I will take the opportunity to say that we will come back to this matter on Report. Since the noble and learned Lord said that he did not quite understand the point I was putting, may I explain that the point is that if this Chamber were a group of employees and a union membership agreement were coming into effect, and all the noble Lords sitting on the Benches

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opposite decided to leave the union before the agreement took effect, they would probably deprive it of a sufficient practice.
I very much hope that the Government, on looking at this matter, will come back on Report and deal with it, because it is a point which has been noted very carefully in trade union circles and also Labour circles. If the Bill goes through in its present form it will make union membership arrangements unworkable.
Amendment, by leave, withdrawn.
[Amendment No. 47 not moved.]
11.22 p.m.
Lord ORR-EWING Lord ORR-EWING moved Amendment No. 48:
Page 8, line 13, after ("58A") insert—
(" (1) A union membership agreement which came into force after 4th May 1979 and before the coming into operation of the Employment Act 1980 shall be deemed to be null and void unless it has been confirmed by a secret ballot carried out not later than one year after the passing of the Employment Act 1980 and in accordance with the provisions of this section.").
The noble Lord said: This amendment would give the people concerned an opportunity of voting on a union membership. The research in the Charles Hansen and the Helen Jackson paper, which is called the Closed Shop and the Employment Bill 1980, shows that there are 5.2 million people in formal closed shops, and the informal or what some people call the undercover or underground closed shop covers another 2 million workers. This is out of a total of between 22 and 23 million, so we have a total of 7 million out of 22 million covered by either informal or formal agreements.
Incidentally, the informal agreement, which seems to be criticised from time to time as being an underground or undercover agreement, covers the National Union of Mineworkers. That is an informal agreement covering 255,000 people, and I should have thought that it stood for a very long time without being totally unsatisfactory to the mineworkers and the unions. One has to face the fact, though, that in recent months there has been an acceleration of activity to try to force the closed shop before this Bill becomes effective. Therefore, I would seek at this stage to say that where a closed shop has been brought about
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since the Government were elected with a manifesto which clearly showed that they did not accept the closed shop unless a considerable majority wanted it that way, it would then be right that those concerned should be given the opportunity of voting.
I would say, too, in retrospect, that, as we have discussed earlier on other amendments, 20 per cent. is a rather large minority who may be totally against it, but still it is to be accepted under the 18 to 20 ratio which is built into the Bill at the moment. It is difficult to discover how many people have entered the closed shop agreement since May 1979. It could be up to half a million, but there are no figures available and I can only hazard that. Certainly I have some facts and figures for the Strathclyde Council. There they have entered into a closed shop agreement with four unions—NALGO, NUPE, TTGW and General and Municipal Workers. That closed shop was entered into in 1978 without consultation at all. When the NALGO members called for a vote it was interesting that in June 1979—that was after the general election—it turned out that 5,214 were in favour of a closed shop and almost as many—5,028—were against it. Had it been referred to a democratic process it would not have occurred in the way it has.
I may say that this is a council in an area which is taking the matter to the extreme, with illiberal measures, because they recently, against their will, forced into a closed shop very large numbers of lunch ladies, as I think they are called, who do the washing-up for up to three hours a day and are part-time workers who work as little as five hours a week. So it is not every union and every area that is liberal in its approach to the closed shop, and I am sure that the Opposition Front Bench will recognise that there are in the family black sheep as well as good sheep.
Before concluding, I should just like to say that I deplore the argument which we have heard so much, that the closed shop in its present form is convenient to management. I speak for management and have 20 years' experience in the engineering industry, and I think that it discourages managers from managing. It encourages management to decentralise a lot of management—by which I mean

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recruiting, promotion and much else—to the shop stewards. I do not believe that that is the job of the shop steward; it is the job of management. It deters a lot of young, thrusting and, what might be called, awkward squad characters from staying in a firm, because promotion tends to go to the good union man, who is steady, perhaps without very great ambition and without a desire to better the firm and better himself at the same time. So I am not one of those who believe—whatever some managers may think—that the closed shop is good for British industry or for the trade union movement.
I hope that I have, in a succinct speech, shown that what is good in asking for democracy to work in the case of the closed shop from the passing of the Bill, should now be back-dated by this amendment to May 1979. As a result of the manifesto which we put before the nation, and the tremendous vote of confidence from trade unionists, we should back-date it to then and should not condone the rush to closed shops which there was in some quarters, particularly local authority quarters, in the last few months. I beg to move.
Lord ROCHESTER: We have made such good progress that, perhaps, the noble Earl will not take it amiss if I say a few words now. I suggested earlier that, as an alternative to further immediate legislation on the closed shop, it would be better to operate through the code of practice that is promised by the Secretary of State. I cannot think of a better subject for inclusion in that code than the question raised in this amendment of how best to review the support for existing closed shops.
It should be possible, without too much difficulty, to produce such a code well within a year of the passing of the 1980 Employment Act, if that is what it becomes, and we can then see how the situation develops. That approach seems to me to be much more likely to gain support within industry than the imposition by law of ballots, as proposed in this amendment. I regard the amendment as very similar to one which was proposed earlier by the noble Viscount, Lord Colville, on ballots before strike action. He was very wise, having given
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the subject a good airing, then to withdraw it and, maybe, the noble Lord, Lord Orr-Ewing, will in due course consider doing the same.
Lord SPENS: I should like to support this amendment. In fact, when it was first drafted I should have liked to take it very much further back, to 1976, because it was in the years 1976, 1977 and 1978 that the majority of the new closed shops were formed. They were formed very quickly, and not necessarily with the willing acceptance of all members. They were mostly negotiated between trade union leaders and management, and members were then told that they had to join. However, I see the point in taking it back only to the date of the general election, because that keeps it within the Conservative Party's manifesto. For that reason, I support the amendment.
11.30 p.m.
The Earl of GOWRIE: As I hope the Committee will accept, I have considerable sympathy with the concern which lies behind my noble friend's amendment. It therefore rather grieves me that we nevertheless advise that it should not be pressed or adopted. We are aware that some new closed shop agreements have been negotiated since last May, and one would guess that in the circumstances these negotiations and agreements may leave something to be desired. But the most significant instance was quoted by my noble friend; namely, the Strathclyde agreement. As he himself said, this was made before the election and therefore would not be covered by the amendment. We do not have evidence of there being very significant numbers, on the scale of half a million, brought into closed shops since the election.
I would point out to my noble friend that where a closed shop is very new or has been hurriedly brought into existence for some motive or other—perhaps, as in the instances which he gave, for the political or imperfect motive—the employer can break the union membership agreement if he wishes. It seems to us that it is up to employers to renegotiate UMAs in line with the code. Many of the kinds of anxiety that my noble friend brought to our attention would, as the noble Lord, Lord Rochester, realised, come to fruition in the code.

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We are trying, where possible, to leave things to managers. Good employers will ask whether union membership agreements are sufficiently popular with their members, and it would be inappropriate for a Government which are trying to stand back, where they can, from the industrial arena, to involve themselves in this way.
My more rooted objection—and it is one which grieves me a bit because I am in sympathy with the motive—is that the amendment has in it quite a considerable element of retrospection. We have castigated noble Lords opposite, who I hear cheering me on this occasion, many times for what we think of as being dubious retrospective activities, and we do not wish to follow their poor example. Another objection is that we do not want to create a potential third category of closed shops; namely, those which took effect between last year's general election and Royal Assent for the Bill. We do not want a sort of Orwellian situation where some closed shops are more equal than others.
Finally, the question of 4th May 1979 would be a hotly disputed date, though I was interested to hear of the Cross-Benches' stern adherence to the manifesto commitments. If there were to be an element of retrospection, it might be more logical to date from the publication of the Bill. As I have said, we do understand the concern which has stimulated the amendment, but it would be out of line with the Bill's general approach. It could introduce, as I have said, a new and unwelcome element of retrospection. It creates what seem to us to be arbitrary distinctions between different types of closed shop, according to the time when they came into operation, and that would seem to us possibly to add to the difficulties of closed shop agreements rather than subtract from them. It also provides less effective solutions to the problems than those which we profoundly believe (and I am sure my noble friend will find this) will be provided by the code after the Bill is enacted. For those reasons, I hope my noble friend will withdraw his amendment.
Lord ORR-EWING: I was surprised to hear cheers from the Opposition Benches when my noble friend suggested
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that retrospection was not good. I thought that retrospection, when it gave people the democratic chance of saying whether or not they liked it was highly to be encouraged. I remember the many hours we spent on the Act dealing with shipbuilding and shiprepairing when retrospection was not taken back to the date of the election; it was the six months period before the general election ever took place, from September 1973 to February 1974. So please do not cheer when my Front Bench mention retrospection, since noble Lords on the Opposition Benches are the architects of retrospection of the most vicious type, not asking for votes on it but valuing assets on a totally false premise.
On the question of whether I accept codes of practice as an alternative—yes, I think my noble friend and the Liberal Benches are right. Again, I am a little sceptical about codes of practices because we have been waiting for four years for a code of practice in Fleet Street. It was first to be drawn up between the two sides —it was in the Employment Bill of 1978. Totally nothing came out of it. We were then going to have a code of practice thought up by Mr. Wedgwood Benn; absolutely nothing happened. We had an election, another year has gone by after the election and absolutely no sign of the code of practice. So I hope we shall be more successful under this Bill with our codes of practice than the Fleet Street code of practice, which has not yet seen the light of day. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.38 p.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 49:
Page 8, line 18, leave out ("80 per cent") and insert ("two-thirds").
The noble Lord said: With the leave of the Committee, I should like to move Amendment No. 49 and speak to Amendment No. 50 at the same time because they are closely related. At the moment the Bill says that in order for a new UMA to be acceptable, there 80 per cent. of those entitled to vote must vote for the UMA. We are saying that that is an extreme provision to require: it is more than is required in a general election. The present

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Government would not be elected if that was the requirement. We are saying, therefore, that it would be reasonable, even for those who support the notion in the Bill, for there to be some reduction of these very severe provisions. We are proposing two reductions. In Amendment No. 49 we are suggesting that the figure of 80 per cent. should be reduced to two-thirds, and in Amendment No. 50 we are proposing something which I should have thought was very reasonable indeed; that is, that the provision "entitled to vote" should be changed to those "voting". So that we are not then putting a premium on those who stay, those who do not turn up, those who are sick or those who are absent from some other reason.
Therefore, if these amendments were acceptable it would be two-thirds of those voting rather than 80 per cent. of those entitled to vote. Of course, the Government may take the view, although they have not said so tonight, that they want to make union membership agreements so difficult that they are impossible. In that case they might as well have said 90 per cent. entitled to vote or 90 per cent. voting. But we are giving them the benefit of the doubt at this moment and saying that they are not necessarily wanting to make union membership agreements impossible in future—not because we know that they like union membership agreements, but because we understand that they accept the argument that workers in the future, as in the past, are going to refuse to work with non-unionists; and if workers refuse to work with non-unionists then the law somehow has to come into conformity with that.
If we insist, as this Bill insists at the moment, on 80 per cent. entitled to vote, then we say very strongly to the Government that they will get groups of workers —it may be not the whole of the bargaining union but groups of workers—who, denied the right to a legal union membership, will refuse to work with non-unionists, producing an industrial dispute and a repetition of the famous case of Mr. Goad and others under the 1971 Act. Therefore, whatever the Government may think about the principle of the closed shop, if they want to avoid industrial disputes they ought to agree to change these very high proportions in the way we suggest. I beg to move.
Lord ORR-EWING: Is it not a rather quaint idea that if people do not want to obey the law you must therefore change the law? I understand there are no black dockers in our country because the dockers do not wish to have recruited to their midst people who are of coloured race, yet we have not amended the race relations law. I have not yet seen many women bus drivers, as they do have in many other countries, but no one has suggested that we change the sex discrimination law. I am not sure we could change the law just because people do not like it.
Lord BROOKS of TREMORFA: I have been a docker and I have worked with black dockers. I do not know where the noble Lord gets his information from.
Lord ORR-EWING: I have been to the London docks when they were more active than they are today, and I must say I never succeeded in finding one. Are women also allowed in the docks?
Lord BROOKS of TREMORFA: The noble Lord should come to Cardiff and he would find many black workers in the docks.
Viscount CALDECOTE: The noble Lord, Lord McCarthy, says that his amendment would increase industrial peace. Supposing there are 100 people in the shop and you have the 80 per cent. requirement, then 80 must be in favour. If you take the noble Lord's figure, and only 75 vote and a two-thirds majority is required, you get 50 per cent.; so you have 50 per cent. of the people in the shop wanting a closed shop. Is that really a prescription for industrial peace? We have found that if you agree to a union membership agreement only when 80 per cent. vote for it that does give industrial peace when one is forced into a UMA situation.
Lord MACKAY of CLASHFERN: The Government's view on this matter is that introduction of a new closed shop marks a very substantial change in the terms and conditions of employment, and it is right and sensible that that should happen only when a very large percentage of those who will be affected by it vote in its favour. The 80 per cent. figure was

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arrived at after the consultations that we had last year. It was considered to be the appropriate level required to impose such a major change in employees' terms and conditions of employment in the light of representations made to my right honourable friend the Secretary of State. I agree that the 80 per cent. figure is quite a high one, but it is deliberately so, in order to ensure that a new closed shop will be approved only where it is genuinely and positively desired by a large majority of those who will be affected by it.
The Government have been accused of trying to stop the spread of closed shops. We readily admit that this provision is designed to halt the spread of closed shops where they are not positively desired by the overwhelming majority of those to be affected. In general and traditionally, closed shops are not established unless there is already a very high percentage of union membership among the relevant employees. The 80 per cent. ballot requirement reflects that. But the Government do not accept that evidence of union membership in itself is sufficient to justify such an important change in terms and conditions. It is clear that when individuals join unions voluntarily they often do so in the knowledge that they can leave the union if they feel they have to. A closed shop cuts off this option, and it is not surprising to find that many voluntary union members object to forced union membership. For this reason, it is right that a secret ballot should test support for the closed shop proposal.
It is surely right also that the vote for a new closed shop should be considered in relation to those entitled to vote. This major change in terms and conditions should be positively approved by the majority of all those concerned. My noble friend Lord Caldecote has just given an example of what could happen on the figures proposed in this amendment, and it is obviously ridiculous that such a tremendous change as a new closed shop should be approved on that kind of basis. Mere apathy is surely not a good ground for proceeding with such a major change. Therefore, it should be those entitled to vote who should be the basis of such a change. We would ask the noble Lord to withdraw the amendment or, if he is not
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prepared to do so, we ask the Committee to reject it.
Baroness GAITSKELL: May I ask the noble Lord where can we obtain the figures which the noble and learned Lord has been talking about? I am not aware that many people would agree with him. Where can I find these figures?
Lord MACKAY of CLASHFERN: The only figures I referred to are those in the Bill, coupled with the example given, which is just a pure matter of arithmetic.
Lord MONSON: As we are speaking to Amendment No. 50 as well as to Amendment No. 49, may I point out to the noble Lord, Lord McCarthy, that the precedent for the phrase, "entitled to vote", in the subsection as it stands was set by Mr. Tam Dalyell in an amendment to the Scotland Bill, and he is a member of the same political party as the noble Lord.
Lord McCARTHY: It is not fair of my noble friends on this side to ask noble Lords on the other side for figures. They are not using figures tonight. They are using anecdotal evidence. They are as unconvincing as ever and I would not wish to withdraw this amendment.
On Question, amendment negatived.
[Amendment No. 50 not moved.]
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 51:
Page 8, line 30, at end insert—
(" (4) No communication concerning or relating to the question in a ballot held under this section shall be made in the relevant period by the employer to any person entitled to vote in the ballot unless he provides to each independent trade union of which any such person is a member a copy of that communication at least two days before he proposes to make or does make that communication.
(5) During the relevant period before the holding of a ballot under this section, the employer shall not make a communication to any person entitled to vote which contains a threat or promise, however expressed, connected with the manner in which such a person may or will cast his vote or with the abstention of such person from voting.
(6) In this section the "relevant period" is the period either between the announcement of the decision to hold the ballot and the

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date of holding the ballot or three weeks, whichever is the longer.
(7) A trade union of which a person entitled to vote in a ballot under this section as a member may present a complaint to an industrial tribunal that the employer has contravened subsection (4) or subsection (5) above.
(8) A tribunal shall not entertain a complaint under this section unless it is presented before the end of the period of three months beginning with the date of the ballot or within some further period as the tribunal considers reasonable in a case where it is satisfied that it was not reasonably practicable for the complaint to be presented before the end of that period.
(9) Where a tribunal finds that a complaint under this section is well-founded, it shall make a declaration to that effect; and, where the trade union seeks an order after such declaration it shall declare the said ballot void and order that a further ballot shall be held under the provisions of this section.
(10) In subsections (4), (5), (6), (7), (8) and (9) above "the employer" includes any associated employer (within the meaning of the 1974 Act) of the employer of persons entitled to vote in the ballot.").
The noble Lord said: It is perhaps rather late to move proving amendments but, in view of the terms the Government's Bill takes in our labour law, it is, in our view, necessary to do so. We explained our views on ballots in earlier clauses, our basic position being that they are sensible when trade unions want them and unions and employers agree to have them.
This clause for the first time introduces a compulsory ballot into the arrangements regulated by law between the employer and his trade unions. In that situation, it becomes important to ask some questions which have been little discussed in this country and which might perhaps be thought relevant to a body which is said to be a revising chamber. The question is, if we are to have a compulsory ballot in collective labour relations, what are the conditions under which it should be held?
We shall no doubt be told that there will be a code of practice which relates to this. Our amendments are put down in a probing fashion, as the only way of seeking the Government's view of important matters which arise. There have been recent ballots at places of work where some employers have put leaflets and other documents into wage packets, and have done so without breaching the law as it stands, and have extended tea breaks and other breaks in order to speak to
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the workers concerned. In some cases, it has been with union co-operation because the unions have been afforded like access. In other cases there has been some disagreement on the matter and the union has been not at all happy. These amendments suggest that at any rate in the Bill the Government should be giving thought to what the conditions of the ballot should be.
If I refer to another jurisdiction, it is only because the noble Earl, Lord Gowrie, said that in doing so I took risks in earlier debates. I refer to a country which has the constitutional right to free speech. In the United States of America, the vote and bargaining arrangements which depend on a ballot for representational agents of unions have a number of restrictions placed on them by law—in that case, under statute. It is, for example, illegal for the employer to address the workforce or approach it in any way before the ballot with a threat of force or reprisal, or promise of benefit. Many representational ballots have been set aside quite recently where an employer has said that the works might be closed down if it were won by the union.
There is also the doctrine operated by the National Labour Relations Board, sometimes known as the "captive audience doctrine", where the board does not allow the validity of the ballot if the employer has treated the employees within the ambit of what is called the captive audience. This has given rise to a great deal of litigation. Such litigation I had hoped we would avoid. Nevertheless, experience in the other country again would not lead us, I hope, to impose its solutions, but I hope that noble Ministers will accept that at least that experience probes some questions. Will the code of practice say whether or not an employer can take advantage of his position in relation to a situation which our American colleagues might call a "captive audience situation", or will it leave the matter at large?
Of course, there are further questions which arise as soon as compulsory ballots are introduced. In parliamentary elections, under the Representation of the People Act, at least there is a law which causes the press to publish all the names of the candidates. At present it is just upheld by a platform of law of a rather

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slender kind. However, as regards union elections, this last month there have been two occasions when a well known columnist in The Times has printed the list of those for whom members should vote, and not referred to any others. A year or two back in the same newspaper, a rather more responsible journalist printed the names of all the candidates for General Secretary of the union, together with their electoral addresses. But the union in that case was, of course, the National Union of Journalists. These questions arise if one introduces compulsory ballots.
I hope that the noble Minister will not take drafting points on the amendments that are put forward. They are put forward on the basis of a line of thinking into which it seems the Government will, willy-nilly, be led by imposing a ballot in this type of situation. The basic question which arises from the amendment is as follows: Will the Government say anything at all about employers' rights of access to the voters, access to the voters' minds, in relation to a ballot on union membership arrangements? I beg to move.
Lord MACKAY of CLASHFERN: We understand the matter that the noble Lord wishes to raise, but we believe that this amendment is not a good one for perhaps two main reasons. First, it imposes conditions on the holding of a ballot which are likely only to give rise to dissention and disruption. As formulated, the new clause dealing with ballots sets few conditions. It stipulates that the persons entitled to vote shall be those in the class potentially to be covered by the agreement, and it stipulates that all those, so far as reasonably practicable, shall have the opportunity of voting in secret. Those are the essential requirements. Other details are for the employer to resolve, usually in discussion with the union or unions involved, and we would hope that the code of practice on the closed shop would be of further assistance on these practical matters.
We do not consider that it is helpful to any party to have procedural details such as those in this amendment set out in legislation. I must say that I should have expected that perhaps to be the point of view of the noble Lord, Lord Wedderburn of Charlton, having regard
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to the general attitude to any form of statutory recognition provisions in this situation.
Secondly, and perhaps this is more important in a way, the amendment seems to presuppose some hostility by the employer to the introduction of a union membership agreement. That seems wrong. An employer is most unlikely to negotiate a union membership agreement with a union or unions and submit it to a ballot of employees unless he supports or at the very least acquiesces in it. It follows that he is highly unlikely to engage in the underhand activities which these amendments are designed to prevent.
But there are also sound reasons why the Government would in any event find this amendment unacceptable. The Government would not wish to put on employers new statutory obligations exercisable by trade unions in connection with the closed shop. We have made clear that we do not like the closed shop and we could not countenance a statutory provision which might enable unions to exercise any pressure or cause any unwarranted inconvenience to employers in this connection. Looking at the noble Lord's amendment, I must say that I was reminded of what he said at column 1315 about being even-handed in these matters.
The amendment appears to be extremely one-sided. A union seeking to impose a union membership agreement is at least as likely as an employer to be tempted to use persuasion in an attempt to influence the result, yet no restraints are proposed on that side of the Committee. Therefore, the amendment does not seem to meet up with the criteria which the noble Lord himself has suggested, and we do not feel that we could accept it in principle in any event. I would invite the noble Lord to withdraw his amendment. If he is not prepared to do that, I would advise the Committee to reject it.
Lord WEDDERBURN of CHARLTON: I am tempted to take issue with the noble and learned Lord, but in view of the hour I shall take his word and ask leave to withdraw the amendment, asking the Government still to consider the matter when we come to the Report stage.
Amendment, by leave, withdrawn.
11.56 p.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 52:
Page 8, line 30, at end insert—
("For the avoidance of doubt it is hereby declared that:

(a) an act done in contravention of section 58 of the 1978 Act, and

(b) an act done in contravention of, or any failure to observe the conditions of section 58A of that Act,

shall not be regarded by reason only of such failure or contravention as the doing of an unlawful act or the use of unlawful means for the purpose of establishing any liability in tort.")
The noble Lord said: This is a much more important and central matter. When a statute is put on to the statute book today it encompasses within itself a number of sanctions, either civil or criminal. However, that is not the end of the matter. That is to say, if something is to be sanctioned by a criminal sanction or someone is given a civil right of action, those are not the only types of illegalities which are knocking around when you get the matter into court.
The principle of law upon which the courts now act has been well-stated this last year by the Master of the Rolls, Lord Denning, who, in a case not concerned with labour law, nevertheless stated the principle which he stated in a case that was about our subject this evening. He said in the case of Carlin Music Corporation v. Collins:
"I take the principle of law to be that which I stated in Torquay Hotel Ltd. v. Cousins [1969] …"—
and the noble and learned Lords who were involved in 1974–76 debates will remember debates about Torquay Hotel Ltd. v. Cousins—
"namely, that if one person, without just cause or excuse, deliberately interferes with the trade or business of another, and does so by unlawful means, that is, by an act which he is not at liberty to commit, then he is acting unlawfully. He is liable in damages; and, in a proper case, an injunction can be granted against him".
On the basis of that now well-founded and clear proposition of law, the problem always arises with statutes—and in particular statutes now in the sphere of labour law—as to whether or not there is a hidden minefield of illegality, because if some contravention of a section occurs, albeit that the section does not appear to give rise to a remedy for particular types of plaintiffs in particular types of action,
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nevertheless on the basis of that principle, as Lord Denning goes on:
"In such a case the person concerned is liable in damages and, in a proper case, an injunction can be granted against him";
that is to say, the breach or contravention of a statute can be unlawful means even if it is not stated in the statute itself to give a remedy to the particular plaintiff if he is directly injured. This is a principle which has been accepted in a whole string of authorities, and in the recent case against Haringey Borough Council was taken by the Master of the Rolls even further, to the point where, when the borough council and the unions agreed to close the schools, because that resulted in a breach of statutory duty by the council, the Master of the Rolls took the view that that was a conspiracy to commit unlawful means.
I repeat these propositions in no critical spirit. I am trying to assess the law against the background to which the Government are enacting the Bill. When we come to the Bill we therefore find a large number of areas in which certain types of sanctions are laid down, but which could be used by the courts as a means of unlawful means, whereby other plaintiffs could obtain a remedy. This matter was debated in another place and the Government's spokesman, the right honourable gentleman Mr. Mayhew, took a distinction between two other clauses of the Bill. I should like to refer to that and then come to the example, and put the point to the Government as an example on this clause.
In regard to Clause 3 it had been put to him—and I quote him at col. 1100 on 11th March:
"A strike to secure the dismissal of an employee held to have been unreasonably excluded from a union would not infringe his right not to be unreasonably excluded. Such a strike would not be held to be unlawful and, hence, unprotected by immunity".
Thus, a strike in consequence of an industrial tribunal decision, where he had been reasonably or unreasonably excluded, would not be unlawful.
He then went on to face another example which had been put to him, in the form of a strike in protest against the contribution which the shop steward, or union, had to pay under Clause 9 of the Bill, to which we shall come, in

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third party proceedings in an unfair dismissal case. In regard to such a strike against the obligation of the union to pay up under such a contribution proceedings, he said:
"But it is quite otherwise in the hypothesis put forward today by the honourable and learned Gentleman. The whole purpose there [in that strike] is to infringe in reality the employer's right to receive a contribution from the union".
I understand the argument in the second case. It is a strike, in a sense, against the decision of the tribunal. Nevertheless, I say to the Government that anyone reading the Bill would not see that that remedy lay. No one would find in the Bill the statement that a strike in protest against the joining of a shop steward in third party proceedings is unlawful. It may be said that that would obviously be unlawful means. It would perhaps be so to a lawyer, but not necessarily to anybody else.
There are much more difficult areas of the Bill upon which this amendment is the first of two occasions upon which we shall raise the matter with the Government. In regard to this clause, suppose that there is a threat to take industrial action in a case where a large number of employees wish to have the works organised on a unionised 100 per cent. basis, except perhaps for two or three people who have been there so many years that nobody minds, because that is the usual situation. Whatever experience other noble Lords may have had, I have had many experiences of discussing this with both managers and trade unionists, where they say, "Of course we have a closed shop, but there is Bill, George, and Joe and they have been here for so long and nobody minds them not joining the union." That is the usual situation.
Suppose the employer then is faced with a demand from the workers before they go through the new process of a ballot, before they formalise anything, "But we really must get rid of Smith because Smith is going around wrecking everything. Not only is he refusing to join the union but in all sorts of other ways he is inflaming passions at the workplace." Suppose in that case there is a threat to take industrial action without going through the process of a ballot for a new union membership arrangement. No doubt if the employer
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submits and dismisses, that would be an unfair dismissal.
On the basis of the judgments of the Master of the Rolls, and of many other judgments in my notes which, in view of the hour, I will not quote, the primary question arises: Is the threat to take industrial action unlawful? That is to say, is it a threat to use unlawful means? If it is, it should be put in the Bill. We have moved an amendment here to say that it is not. We say that it should not be, because the Government have chosen their own remedy in that matter; that is to say, if the employer dismisses he can join the union in third party proceedings.
We say that therefore the logic of that, to which we are coming in Clause 9, is that that is the remedy chosen by the Government; that is a remedy which in certain respects we shall contest because we think that it is undesirable in industrial relations terms as put forward, but, that being the chosen remedy of the Government, it is quite wrong then to enact a Bill which would allow a court to say, "Not only is the union to be joined in third party proceedings and be made liable there, but before anything happens an injunction can be issued by the courts because what the workers have threatened to do is threatening to use unlawful means".
It is on that basis that for the first time we raise with the Government one of the most important issues underlying the words in the Bill. What I have called the "hidden minefield of illegalities" is becoming a major problem in industrial relations law; the hidden minefield of unlawful means. On this occasion we say that the amendment is reasonable within the logic and structure of the Bill, because the unlawful means and sanction they have chosen later, in Clause 9—in this respect not having said that such industrial action is unlawful—should clearly be declared not to be so. If the Government wish to resist the amendment, then, in order to make things clear, they should introduce a new provision on Report saying that such industrial action will be unlawful. I beg to move.
Lord WIGODER: As one who much admires the contribution made by the noble and learned Lord, Lord Denning, to the development of English law, might

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I say how encouraged we are to know that he now has the full support of the trade union movement?
Lord WEDDERBURN of CHARLTON: Not support; admiration.
Lord MACKAY of CLASHFERN: The questions raised by the noble Lord, Lord Wedderburn of Charlton, are quite difficult ones. We do not believe that the courts would willingly entertain an action in tort when the individual bringing it had a clear remedy under statute, and that would seem to be the position not necessarily in all the examples he gave but certainly in the general area covered by the amendment. In the case considered by the amendment, both the employee dismissed and the employer induced to dismiss would have remedies under the Bill in Clauses 6 and 9 respectively. The Court of Appeal's ruling in Cory Lighterage v. TGWU is authority for the view that courts are not willing to entertain such claims in tort, albeit that this case arose under the somewhat special circumstances of the 1971 Act. Further support for my belief here is Section 129 of the Employment Protection Act 1978, which provides that the remedy of an employee for an infringement of his rights conferred by the Act—and this includes the rights given by this Bill under Clause 6—shall be by way of complaint or reference to an industrial tribunal and not otherwise. In any event, we would think that a clause for the avoidance of doubt covering so narrow a field as this would, instead of avoiding doubt, create doubt in a large number of other areas, and accordingly I ask the noble Lord to withdraw the amendment or, if he is not prepared to do that, I must invite the Committee to reject it.
Lord WEDDERBURN of CHARLTON: We are very disappointed at that response. The Minister made four points, the first being that tort actions are not available. I only wish the hour were not so late, in which case I would read half a chapter of one of the leading text books which shows the number of tort actions that are available on the basis of unlawful means of exactly this kind. The noble Earl, Lord Gowrie, need not worry; I am not going to read it. I merely state
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that it is available in the Library if he wishes to see it.
The EARL of GOWRIE: I was not worrying. I simply remarked, "The night is young".
Lord WEDDERBURN of CHARLTON: The noble Earl is provocative, but I shall not read it all the same. The Cory Lighterage v. TGWU case on which the Minister relied is clearly distinguishable. If one reads the three judgments of the Court of Appeal, especially that of Lord Justice Buckley as well as Lord Denning, it is clear that the decision there—that a breach of Section 5 of the Industrial Relations Act 1971 was not unlawful—means, because of the construction of that section, that it is not matched by Clause 6. It is quite true, thirdly, that under Section 129 of the 1978 Act the employee is given only the rights stated in the Act and now in the Bill which amends the Act.
As to the fourth point, the employer, he is not excluded, and it could be not only the employer; a third party might take action for an injunction against a strike because if a third party were to be injured by the use of unlawful means, it is now clear on the authorities that he could obtain an injunction. So let us forget the employer and employee; it is clear that a third party who might be injured by, say, a cessation of work, might get an injunction on this ground.
This is a matter on which we feel very strongly indeed in relation to the Bill and we shall return to it on a new clause. After consultation with my noble friends, we feel so strongly about this hidden minefield of illegality that, to register our position (to which, as I say, we shall return later on a new clause) we intend to divide on this amendment because we believe this to be a fundamental question in which trade union rights are threatened by the measure.
12.10 a.m.
On Question, Whether the said amendment (No. 52) shall be agreed to?
Their Lordships divided: Contents, 23; Not-Contents, 89.

CONTENTS

Allen of Fallowfield, L.

Goronwy-Roberts, L.

Parry, L.

Birk, B.

Janner, L.

Peart, L.

Blease, L.

Kaldor, L.

Pitt of Hampstead, L.

Brooks of Tremorfa, L.

Kirkhill, L.

Ritchie-Calder, L.

David, B. [Teller.]

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

Stone, L.

Davies of Leek, L.

Underhill, L.

Elwyn-Jones, L.

McCarthy, L.

Wedderburn of Charlton, L.

Gaitskell, B.

Morris of Kenwood, L.

Wells-Pestell, L.

NOT-CONTENTS

Airey of Abingdon, B.

Gisborough, L.

Mowbray and Stourton, L.

Amherst of Hackney, L.

Glendevon, L.

Murton of Lindisfarne, L.

Ampthill, L.

Gormanston, V.

Orkney, E.

Bellwin, L.

Gowrie, E.

Orr-Ewing, L.

Belstead, L.

Gray, L.

Renton, L.

Bessborough, E.

Greenway, L.

Rochester, L.

Boothby, L.

Grimthorpe, L.

Salisbury, M.

Bradford, E.

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

Sandford, L.

Bridgeman, V.

Sandys, L.[Teller.]

Brookeborough, V.

Halsbury, E.

Savile, L.

Burton, L.

Hankey, L.

Seear, B.

Buxton of Alsa, L.

Hanworth, V.

Selkirk, E.

Caithness, E.

Harvington, L.

Sempill, Ly.

Caldecote, V.

Hatherton, L.

Sharples, B.

Camoys, L.

Henley, L.

Skelmersdale, L.

Chelwood, L.

Hives, L.

Spens, L.

Cottesloe, L.

Hornsby-Smith, B.

Strathcarron, L.

Craigmyle, L.

Killearn, L.

Strathcona and Mount Royal, L

Cullen of Ashbourne, L.

Kilmany, L.

Sudeley, L.

de Clifford, L.

Kimberley, E.

Swinfen, L.

De L'Isle, V.

Lauderdale, E.

Trefgarne, L.

Denham, L.[Teller.]

Lindsey and Abingdon, E.

Trenchard, V.

Donegall, M.

Long, V.

Trumpington, B.

Duncan-Sandys, L.

Lyell, L.

Vaux of Harrowden, L.

Elliot of Harwood, B.

Mackay of Clashfern, L.

Vickers, B.

Elton, L.

Mackie of Benshie, L.

Vivian, L.

Faithfull, B.

Mansfield, E.

Wigoder, L.

Ferrers, E.

Monson, L.

Winstanley, L.

Fortescue, E.

Montagu of Beaulieu, L.

Wynford, L.

Gainford, L.

Mottistone, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 6 agreed to.
12.18 a.m.
Lord ORR-EWING Lord ORR-EWING moved Amendment No. 53:
After Clause 6, insert the following new clause:
"Unlawful discrimination in relation to contracts for the supply of goods or services
(. It shall be unlawful for any person who makes or invites an offer or tender, or who places a contract, for the supply of goods or services—

(a) to discriminate in making the offer or invitation or in the placing of the contract on the grounds that any person to be employed in connection with the supply of those goods or services (whether by the other party to the contract or by some other person) is or as the case may be is not a member of a specified or any trade union; or

(b) to impose any term in the contract which
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is either more onerous or less favourable to that other party than that which would have applied but for that ground.").

The noble Lord said: Towards the end of our previous debate, Lord McCarthy asked for more statistics. The result of that vote was 89 to 23, and that must shame him. I can give him some more statistics. This amendment concerns the civil engineering industry. There are 880,000 who work in the civil engineering industry, and only 250,000 of those are currently trade union members. So it is an industry which is very thin on its trade union membership.
There are coming about some closed shop arrangements by a back door; and, if I may again borrow a phrase, from Lord Wedderburn on this occasion, it is the hidden minefield of illegality to which I want to draw attention. An amendment similar to this was moved in the other place by Mr. Bruce-Gardyne, and this,

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again, was at the request of the Federation of Civil Engineering Contractors, because they are the chief sufferers. In replying for the Government, Mr. Mayhew was very sympathetic, and he saw the problem.
What is happening is that public authorities are increasingly putting into their contracts a demand that no one should go on to the site unless they are trade union members. This is demanding of your contractors, of your tenderers, a closed shop; and this applies to local authorities, public authorities, British Airways—and I can give instances—and the nationalised industries. In particular I have one in my hand concerning shipbuilding. This is an example of the sort of clause which the shipbuilding industry (British Shipbuilders, now nationalised) are demanding. It says:
"The contractor shall ensure that all persons on the works, whether employed by him or by any of his subcontractors, whether nominated or otherwise, are acceptable to all the trade unions represented within the employer's shipyard".
This is closed shop by stealth. I suggest to my noble friend that it is an unacceptable practice. What happens is worse than this because it can adversely affect many individuals. It is an industry which has less than one-third of its work force in trade unions. If a subcontractor wins a contract and assembles his workforce and starts work, he may ask to be released from the obligations if it concerns one or two or, perhaps, 100 of his 1,000 work force. If he is not released (and this has happened in the past) he then is called upon to sack those non-trade unionists and move them from the site. They are not protected by law; they do not earn any compensation; and that is brought about by this particularly vicious clause. I hope that my noble friend will look sympathetically at this. It is a practice which circumvents the democratic principles contained in this Bill concerning the closed shop. This is closed shop by the back door, by stealth. It is a hidden minefield of illegality, again to quote the noble Lord, Lord Wedderburn.
Viscount CALDECOTE: I have considerable sympathy with the amendment proposed by my noble friend Lord Orr-Ewing. I entirely agree that the practice he describes whereby contractors are, in effect, forced into signing contracts with
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union-labour-only clauses is really iniquitous. It is against natural justice; it spreads the effect of the closed shop and it can face the contractor with the most unenviable choice between sacking the non-unionists or getting out of the business. I agree with him that something should be done about it. Therefore, I shall read with considerable interest what my noble friend Lord Gowrie will say in response to this proposal; but I have little doubt that his reply will reflect that of Ministers in another place in response to similar amendments put down there on Report stage. I must say that I see the force of the arguments then adduced by Ministers that to make unlawful union-labour-only clauses in contracts would be unlikely to be effective in practice and would raise, as the amendment does, the difficult question of trade union immunity.
But I wonder whether there is not another way of approaching this problem. To be specific, it seems to me that we might make use of a concept which is already in the Bill in Clause 9, that of joinder. Would it not be possible to extend this so that if a client-employer insisted on applying a union-labour-only clause and as a result an employee of a contractor was sacked unfairly because the contractor has to comply or go out of business, then the contractor should be able to join the client-employer for the unfair dismissal proceeding as well as, presumably, with the union in forcing the union-labour-only clause? This would at least enable financial responsibility for any compensation to be placed where it rightly belongs; that is, with the client-employer who gives in to pressure in applying these very objectional clauses. It may not be the whole answer, but it would certainly be better than nothing and I believe it is an idea which is well worth looking at. I commend it to the Government in the hope that they might propose an amendment later on at the Report stage.
Lord RENTON: In our common law the use of undue influence does in certain well-established circumstances invalidate a contract. The circumstances mentioned in my noble friend's new clause have never been considered by the courts in that context. But, on the other hand, we should surely lean against the use of undue influence in the circumstances which this

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new clause covers. Therefore I should like to join with my noble friends in making a plea to the Government to give this matter some further and sympathetic thought.
Lord HANKEY: I also should like to support this amendment. This sort of action which the noble Lord, Lord Orr-Ewing, has described is thoroughly bad for industrial efficiency and it is not good for getting the contracts which this country is out to obtain for export orders.
12.26 a.m.
The EARL of GOWRIE: These new clauses are directed to the problem of the terms of commercial contracts which require one of the parties to use union labour only on the work covered by the contract. It thus imposes on the employees of the contractor a requirement to be a member of or, if not, to join a union and in this way can spread the effects of the closed shop in what my noble friend Lord Orr-Ewing called a "back-door" fashion. I want to be clear about the Government's position on this. We dislike this practice. It can readily be seen as a way of requiring reluctant contractor employers to impose conditions of union membership on their employees who have no desire whatsoever to join the union. I must regretfully say to my noble friend that I see some considerable difficulties in the solution to the problem—and we share his view about the problem—in the form of his amendments.
As my noble friend Lord Caldecote said, these reasons were fully adduced by my honourable friend the Parliamentary Secretary in another place. In view of the lateness of the hour, I should like to adduce them quickly. It is doubtful in our view whether the proposed new clauses would work as my noble friend intends. It would be difficult for the disappointed contractor to prove the discrimination complained of. On the other hand, someone whose tender had been properly rejected might involve the main employer in costly and unnecessary litigation. That is something which industry in general would not thank this Government for getting it into.
The potential liability under this new clause might also dissuade employers from using contractors at all. That would not help anybody, least of all the contractors
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and those who might otherwise get employment from them. So, however much one dislikes the effect of the imposition of union membership by these means, one can identify a graduation in such matters. Some motives are less acceptable than others.
There is then the vexed question of sanctions. If a union were going to be penalised for taking industrial action in support of its policy in this matter, it would have to be deprived of the immunity conferred by the 1974 Trade Union and Labour Relations Act. This is what the later new clause which forms Amendment No. 53A attempts to do. It makes actionable in tort any interference with the performance or placing of a contract on the grounds that a person who is not a member of the specified union would be involved in the work which the contract entails. That is a pretty wide formulation, in our estimation. It would catch all the examples I have cited and would ignore the graduation of motives which I have suggested may apply in these cases.
Some would say that this would be a good thing. Others would point out—and I would tend to agree with them—that that might serve only to unite opposition to the clause. In its terms, the new clause in Amendment No. 53A would go wider than simply this question of contractors' labour which we have been discussing in relation to my noble friend's first amendment (No. 53). It would also catch disputes about the union membership of a group of workers of the same employer as those taking the industrial action without any outside contractor being involved. Therefore it would catch a whole range of primary disputes about union recognition, demarcation and union membership generally. We should not take action on the union immunity aspect of these proposals in advance of the further Green Paper review of the whole question of trades union immunities which we have promised for later this year.
There is, however, a step which the Government might feel could be taken now. The central purpose of the closed shop provisions of the Bill is to provide basic protections for employees against abuses of the closed shop, and these protections must, of course, be maintained. But the imposition by client

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employers on contractors in a dependent commercial position of "union labour only" clauses in contracts can place contractors who have no other suitable work available for their non-union employees in a very invidious position. Either they lose a contract vital to the continued survival of their business or they dismiss such employees and then perhaps find they have to pay substantial sums in unfair dismissal compensation, as we saw in the earlier debate on the closed shop, and that can go nearly as far as £17,000 today. So the extended protections for individuals in the Bill and particularly the protection for existing employees in the closed shop ballot provision, while absolutely vital, in our view, may, I accept, increase contractors' difficulties in this respect.
So we are anxious to do something to help, and it is in that context that my noble friend Lord Caldecote made an interesting suggestion. If an employee who is not a union member is dismissed in consequence, a contractor who is facing a claim of unfair dismissal might be able to join the client employer in the case, and the latter might be required to pay any compensation awarded. This, in the Government's view, will enable the responsibility for these clauses, and therefore their ultimate financial consequences, to be placed where they belong—with the employers who insist on them—and therefore will provide a strong disincentive for the adoption of such clauses. I should like to consider that issue between now and the Report stage, because there may be a solution to this problem there.
Lord MONSON: The official Opposition have so far remained mute on this amendment. Would it be in order to ask whether they approve or disapprove of the practices described by the noble Lord, Lord Orr-Ewing?
Lord McCARTHY: I think the position is quite simple. We took the view that the Government were going to say what they said in another place and point out that this is a totally impracticable and ridiculous amendment. They seem to be thinking again, so we shall come back on Report. We oppose this.
Lord ORR-EWING: I am sorry that my noble friend on the Cross-Benches—
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perhaps I should say "the noble Lord on the Cross-Benches", although everyone is "a noble friend" at this time of night—has not received a more satisfactory answer. I am grateful to my noble friend for having gone rather further in his reply than the Minister in the other place was able to do when this arose. I do hope he will look at this seriously and come forward with constructive suggestions, because clearly it is a practice which is alien to the whole philosophy behind this Bill and certainly could be very damaging to the civil contracting industry. I beg leave to withdraw this amendment, on the understanding that my noble friend will do something before or during Report stage.
Amendment, by leave, withdrawn.
12.34 a.m.
Lord ORR-EWING Lord ORR-EWING moved Amendment No. 53A:
After Clause 6, insert the following new clause:
"Interference with contract on ground of non-union membership
(.—(1) Nothing in section 13 of the 1974 Act shall prevent an act to which this section applies, from being actionable in tort in any case where a person interferes with the performance of a contract or with the placing of a contract on the grounds that the fulfilment of the terms of the said contract have involved or would involve, at any stage, any person who is not a member of a specified trade union.
(2) Expressions used in this section shall have the same meanings as in the 1978 Act.").
The noble Lord said: I shall try to speak succinctly. This is a similar amendment in that it deals with the printing and publishing industry, which has been beset by closed shop problems over a very long period: hence the difficulty in bringing forward a code of practice for that important area in Fleet Street and elsewhere. The present practice is that the NGA publishes a book called, A Fair List, and any illustrations or any documentation or any print coming forward from any company has to be in this fair list or it is banned. That, again, is a back-door closed shop.
SLADE was acting in a similar but an even more vicious way in recruiting. One of our sons was operating a very small company of only four or five people and he was a victim of the SLADE practice. What was so sad, of course,

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was that when they did eventually recruit the one person who had to be recruited because all their work was blacked they had not got the stickers to put on the work because they had run out of them. A further six weeks of work was therefore aborted and that very nearly sent this small company bankrupt. That must be only one of a number of illustrations of unfair practices.
Here is a book called, A Fair List. It has 220 pages with various names. When one submits work one has to give one's number as printed in this book if the work is to be accepted. Here is a closed shop by both SLADE and the NGA and no doubt by other print unions, which has come into existence or is coming into existence through bad and, I would think, highly uncompetitive practices. I hope my noble friend will look sympathetically at this and see what he can do about it.
Lord HANKEY: I should like to support my noble friend Lord Orr-Ewing on this amendment also. This is a form of censorship which I should have thought was objectionable to all sides of the Committee.
Lord SPENS: I wish to say a few words about this amendment. I want to draw the Minister's attention to what happened some 20 years ago in the Restrictive Practices Court. The Federation of British Carpet Manufacturers were one of the early victims of the court. They were taken to the court, and although the noble and learned Lord, Lord Wilberforce, was one of their counsel he was not able to get them off the charges that were brought against them. One of those charges was that they operated a wholesale list. That list was for responsible wholesalers—I think there were about 120 of them—who would be given a wholesale discount, and the 50-odd members of the federation would not give wholesale terms to anyone who was not on that list. That was decided by the court as being contrary to public policy, and I would say that was a very similar situation to what SLADE is doing now.
The Earl of GOWRIE: I did refer to this amendment and did, I think, deal with it in general terms during the discussion on the last amendment. May I say to the
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noble Lord, Lord Spens—at this time of night I shall probably be referring at any moment to "my noble friend Lord Wedderburn"—that the issue of SLADE will be coming up on Clause 17 and therefore we shall have another go at it then. If he reads what I have said as a general reply to Amendment No. 53, he will see that I have tried to go a little further than was the case in the House of Commons. I hope we can leave it at that for the time being.
Lord ORR-EWING: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 7 [Exclusions of rights]:
12.40 a.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 54:
Page 8, line 38, leave out ("two years") and insert ("six months").
The noble Lord said: The object of this amendment is to take out the provision which allows firms employing fewer than 20 persons to dismiss unfairly for up to two years, and to go back to the situation as it existed before this Government came into office, when the period for unfair dismissal was six months. I take it that this provision is to be justified, as it was justified in another place, by the argument that small firms are particularly hurt by the fact that they are unable to dismiss workers unfairly for two years. It is not clear tonight whether the noble Earl will defend the provision on the grounds of the evidence, or on the grounds of psychology. He cannot defend it on the grounds that they do it already, because this is a new provision. Whatever the reasons, we say that there is no evidence and we are concerned with the psychology of workers in small firms. Therefore, I beg to move.
Lord DAVIES of LEEK: I must come in here for a short while, despite the late hour. There is a fallacious argument here, that the unfair dismissal provisions of the Employment Protection (Consolidation) Act of 1978 are inhibiting small firms. This is not correct and I was delighted to find that the CBI do not agree with it. Consequently, I shall have mercy on the Committee and on myself, and shall not go into this matter in depth.

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But on both sides there are people who know that we are using legislation by reference and we keep doing it. There is a Lord Chancellor here who, in the old days, objected to the expansion of this practice.
I look at what is proposed here:
"After section 64 of the 1978 Act there shall be inserted—
64A.—(1) Subject to subsection (2), section 54 does not apply to the dismissal of an employee from any employment if"
the employment is less than two years. The Government have put two years into this Bill and we believe that it is unnecessary and unjust.
Without going into the matter in further detail, the maternity allowances, and the way that women have to give written accounts, interfere with the liberty of the individual. There is no purpose whatsoever in extending the period. Consequently, I ask the noble Earl—and so as not to make the Committee bad-tempered, I will sit down after this—why the Government have put in the two years.
The Earl of GOWRIE: That is a very clear invitation, to which I am delighted to respond. We went into the principles of this matter to some degree in the debate on Clause 5 and I am aware that, sooner or later, the noble Lord, Lord McCarthy, is—as was the noble Lord, Lord Wedderburn, when we were debating Clause 5—determined to flush out of me attitudes to evidence about the disincentive effects on small firms of employment protection legislation. The noble Lord, Lord McCarthy, earlier made the point—it was a perfectly fair debating point—that a lot of our evidence was anecdotal. Of course it was our business, in opposition, to consider such evidence, and I must say it was also very much a concern of the Liberal Party at that time. Indeed, so much so was this a joint concern of the Liberal Party and the Conservative Party that, as a result, the last Government saw fit to appoint Mr. Harold Lever, now Lord Lever, to take a special interest in small firms.
As I reminded the House at Second Reading, our fears about the disincentive effects of employment protection legislation were echoed in another place—or pre-echoed would be a more accurate
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way of putting it—by Mr. Lever, as he then was. Surveys were conducted by the Policies Studies Institute and the Opinion Research Centre on behalf of the department. While certain of the replies recorded in the surveys suggested that some employers were not unduly troubled by the legislation, other responses showed that the legislation was a problem. Seventeen per cent. of those who responded to the Policies Studies Institute survey said that employment protection legislation had had a major impact. In the case of the ORC survey, 24 per cent. of those who responded said they would have taken on more people but for the legislation.
Lord WEDDERBURN of CHARLTON: Surely the noble Earl would accept that that statistic was based on a prompted question. On an unprompted question, the figure was almost minimal.
The Earl of GOWRIE: To do justice to me, the noble Lord will know that when we debated this matter on the first orders last summer, and then again a few hours ago here, I talked about the closed shop and expressed my general scepticism about polls and surveys as a method of eliciting information, because so much depends, as the noble Lord has said, on which way you phrase the question. You can prompt the question to get the answer that you want, and that is why I show a certain scepticism in these directions. The noble Lord, Lord McCarthy, has teased me for being frank about this, but I think that at Second Reading the noble Baroness, Lady Seear, shared my view when I said that our feeling was that a lot of small employers did not understand very well employment protection legislation, and probably overestimated it, that this had had a marked disincentive effect on recruitment, and that one cannot survey with any accuracy the disincentive effects on employment on those people who have not obtained employment. In other words, surveys have to be post facto operations.
We are quite happy and secure to rest upon our impression, our political judgment, our manifesto commitment: on the fact that this concern was shared by the two other principal political parties in making these provisions. Where we quarrel with noble Lords opposite is in

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their attempt to show that these provisions damage employees. We see them entirely as correcting imbalance and providing a better psychological atmosphere.
In regard to this particular amendment and the question put to me by the noble Lord, Lord Davies of Leek, we believe that one year is the appropriate qualifying period for firms employing more than 20 employees. The purpose of the two-year period for firms of 20 or fewer is to relieve them of some of the burden of this legislation and to encourage them to take on labour, perhaps to meet a fairly short-term increase in demand. It is firms of this size which find the legislation most onerous because often they have only one tier of management and no personnel specialist. No evidence has come to our attention that small firms are more liable to dismiss unfairly. The rights of employees retain their protections. It is a relatively small issue. As I said earlier, it is the correction of what we feel to be an imbalance.
Lord DAVIES of LEEK: I am afraid that the old-fashioned phrase "cowboys" or "the lump" will be encouraged, and that might cause a great deal of distress so far as industrial relations are concerned.
The Earl of GOWRIE: That is a tax issue.
Lord ROCHESTER: In view of the remarks made by the noble Earl concerning the attitude of the Liberal Party, would he accept that in certain orders which we debated last November I, speaking for my noble friends, anticipated the employment protection legislation which is now being introduced? I said that in my view in terms of rights, such as those we are now discussing, there was not really a case for distinguishing between firms simply on account of their size; and I think I am right in saying that nothing that the noble Baroness said at Second Reading on this Bill differed from what I have now said. I do not want to make a great meal of this. We shall come to the employment protection clauses a little later, but in view of what the noble Earl said I felt that I should say something on those lines just to put the matter straight as I understand and recollect it.
The Earl of GOWRIE: I am happy that
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the noble Lord should underscore his attitudes and those of his political party, although he will understand that I would wish to draw attention to the fact that for many years the Liberal Party have made a great to-do about small businesses, but when it comes to modest, simple amendments to improve the balance in favour of small businesses they tend to qualify their support. So I do not think that is a very creditable stance.
Lord ROCHESTER: I am anxious that we should not have a prolonged ping-pong match. We are in favour of small businesses, of their formation and development, but we have reservations on this particular point in that regard.
Lord McCARTHY: I am afraid I cannot accept what the noble Earl has said. He can say, if he likes, that he does not care what the evidence says, but he cannot say that he has the evidence on his side, and when we demonstrate, as we have done repeatedly tonight, that the balance of evidence is against him he cannot then say that he does not care. He talks about small firms and there being no evidence that small firms are worse in unfair dismissal cases than large firms. The best piece of evidence—and there is quite a lot—comes from the Department of Employment for 1978, which shows that firms with fewer than 20 employees lost 39 per cent. of their cases at industrial tribunals, whereas firms with over 1,000 employees lost only 16 per cent. of their cases.
Finally, the noble Earl cannot say that it does not damage employees. It takes away the legal rights from workers in firms of fewer than 20. Of course it damages them; it gives them absolutely no protection against unfair dismissal. I am afraid we cannot withdraw this amendment.
On Question, amendment negatived.
[Amendment No. 55 not moved.]
12.53 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 55A:
Page 8, line 44, leave out ("associated employer") and insert ("other employer or otherwise working as workers at that same place of work").
The noble Lord said: This amendment involves a legal problem of very great social consequence. As my noble friend Lord McCarthy has pointed out, under the new clause workers will lose their unfair dismissal rights for a whole year, and they will lose those rights under the new Section 64 A(1)(b) unless at any time during the period the number of employees does not exceed 20. To be strictly correct it is if the number of employees added to the number employed by any associated employer exceeds 20. In that formula it is the words "employees" and "associated employer" that give us grave cause for concern. Our formula would, in the strict legal sense, add to the employees employees of other employers working in the same place, and others engaged as workers at the same place.
I must explain why we put that forward. It is because there is in law a distinction which today is frequently not matched in society; that is to say, the employee is someone who in law works under a contract of employment. Many persons who, to the layman, look to be employees, turn out upon closer inspection to be persons who are workers within the extended definition of Section 30 of the 1974 Act but who are not strictly employees. Therefore, it is quite clear that there would be three problems with the clause as it stands.
First, there would be enormous uncertainty because employees in the strict sense might not know whether the person who had been added to the labour force as number 21 was an employee or a worker. I will come back to the distinction at the end of my remarks to illustrate how difficult that would be. Secondly, because of the distinction, it would be very easy for an employer who wished to keep his workforce out of unfair dismissal rights—and the Government's own case is that small employers are afraid of these rights, and therefore on their present psychology, and presumably their psychology under this Bill, where their fears are reinforced, they would be still afraid—to be tempted to keep his employees down to 20 and to take on workers above 20.
Thirdly, that leads to the most serious social consequence, in an industry that concerns many trade unions, which is very badly organised and which perhaps it
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would be agreed on both sides of the Committee is in grave need of reform in all parts of its industrial relations; that is, the construction industry. If these firms employing 20 or fewer workers are construction firms who take workers on the lump, as it is called, or labour supply contracts, then there is every incentive for them to extend the lump. And if ever there was a social evil, in tax terms, industrial relations terms, trade union terms and management terms, that should never be encouraged by statute, it is the lump. Every trade unionist in the construction industry knows that is so. But the lump has extended far beyond construction.
That is why I conclude my remarks—and I suggest to the Government that they might well consider accepting an amendment along these lines—by referring to the facts within the past two years in regard to the distinction between an employee and a worker—that is, a person who is employed under a contract of service, of which the old test was whether the master controlled the servant in the way he did the work, to which has now been added the organisation test (is the employee part of the organisation of the workforce, or is he in business on his own account?), the mixed test, and the ordinary commonsense test. Whenever judges, with great respect to them, revert to the ordinary commonsense test, you know they are really in trouble because there is nothing else left. Indeed there is nothing else left here, because the distinction is becoming very difficult. Are they employees or are they persons who occupy a position under a contract for services, independent contractors or workers under the labour law legislation?
It took a hearing in the industrial tribunal, the Employment Appeal Tribunal, and then a 20-page judgment in the Court of Appeal just a few months ago, in the case of Young and Woods v. West, to decide whether a sheet metal worker at a firm which employed over the course of time between 20 and 25 people, was an employee in the strict sense, or under a contract for services and a worker in the broader sense. It was finally decided by the Court of Appeal—I wish I could cite the details because it makes the point so clearly—that the sheet metal worker was a self-employed person in terms of tax but an employee in terms of labour law.
In a previous case, the Ferguson case, a scaffolder ended up in a different position. In the Massey case of 1978 an insurance agent ended up under a contract for services. These have all gone to the Court of Appeal in the last two years. The chief oboist at the London Philharmonic last year was held to be an independent contractor and not an employee. These cases are food for lawyers all the time. It really is not good enough to leave the cut-off point—the point at which workers lose their rights—as the point where a person is added to the workforce under a formula by which no lawyer can predict the outcome of the case.
Up and down the land people are working on the lump. It is a grave social problem and should not be encouraged by a clause of this sort. As the clause stands, it encourages the lump; it encourages the employer who wants to keep the labour force below the 20 mark to take the extras on under a contract for services, or an independent contract, or as a worker. Surely that cannot be right and surely employees are entitled to know when the number is above the 20 mark by a clear test. Surely there should be no encouragement of the lump? I beg to press this amendment strongly upon the Government's consideration.
Lord MACKAY of CLASHFERN: As is obvious, the reason for requiring employers and associated employers to aggregate their employees for the purposes of this clause is to prevent abuse of the provision by employers. I have no doubt that the noble Lord, Lord Wadderburn, believes that the amendment would widen the scope of the aggregation of employees required by this clause. I would suggest, however, that it is not clear and that the amendment might well have the effect of narrowing the circumstances in which employers would be required to add people in.
Under the amendment, employers would be required to aggregate only those employees or other workers working at one particular place of work, presumably that of the dismissed employee, although that is not absolutely clear from the terms of the amendment. It talks about the "same place of work", but I think there is no antecedent to that.
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Under our provision, an employer running a number of separate but associated businesses from different premises—and that is particularly often true of the construction industry—which is surely how he would be expected to operate, would have to aggregate all his employees and forfeit the exemption if they totalled more than 20.
I should perhaps add that we do not think that employers will be prepared to go to the trouble of contracting out their work to self-employed workers just to secure the benefit of this provision. I presume preventing this abuse to be the purpose of the insertion of the phrase "or otherwise employed to work", in the original form of the amendment.
On the question of extending this to include workers, I presume that it might be an extension of the clause, although otherwise the amendment is a restriction. We think it hardly right to extend the provision beyond employees where the obligations in question are owed by the employer. No such connection or obligation exists with workers who are self-employed or employed by employers elsewhere.
In the circumstances, although I see plainly the point the noble Lord is making, we consider that the clause as drafted is preferable to what it would be with his amendment, and I would ask him to withdraw the amendment or I would advise the Committee to reject it.
Lord WEDDERBURN of CHARLTON: I take the noble and learned Lord's point. There would be an argument about drafting but I shall not make it. I think there is an alternative explanation which shows that it does not narrow the clause. Nevertheless, I take the point on the drafting. We are most disappointed about the point made by the noble and learned Lord on the lump. We would ask the Government to think again. To register that on the record we shall not divide, but we shall attempt to carry this.
On Question, amendment negatived.
1.4 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 56:

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Page 8, line 44, at end insert:
("and
(c) the dismissed employee was on being engaged informed in writing of the effect of this section.")
The noble Lord said: This is an amendment to put back into the Bill a paragraph which the Government, in their wisdom, included in the first draft of the clause which they put forward. This is a new section to be added to the 1978 Act which, after all, takes away workers' rights.
In Standing Committee in another place on 4th March and 6th March, both the Secretary of State and his honourable friend Mr. Mayhew, said that the Government thought it was—to quote the Secretary of State—
"an important point to include in the section, paragraph (c)"
which our amendment seeks to restore to the Bill, that is to say, that when an employee is engaged by one of these employers who is not under the same obligation as other employers not to dismiss him unfairly, he should be told so in writing.
There is, of course, the problem of the existing employees. We considered putting down an amendment which would go wider than the Government's original paragraph to include existing employees. If the Government invite us to do that on Report and so cover the entire workforce, we shall happily do so. Indeed, it should be considered. However, we thought it right to probe again the Government's very own words which we put to them, because no explanation was ever really given as to why they were withdrawn. They were withdrawn on Report on 24th April, at col. 651 of the Official Report when the Secretary of State said:
"At that time"—
that is, in Committee—
"we still maintained that, on balance, it was probably right to keep the notification. We have thought about it a great deal since then, and I have been aided by my hon. Friend the Member for Basingstoke … who is Under-Secretary of State for Industry. I have never met anyone who is more persistent over a point. If he serves small businesses as well as he has badgered me over the past few weeks, there will not be much wrong with small businesses."
No doubt the noble and learned Lord's right honourable friend is badgered in
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many parts of Whitehall, but the mere fact that he is being badgered is no reason for withdrawing from a Bill a paragraph which he previously said was very important.
Surely there is no reason for withdrawing the notification to the employees. The only suggestion of a reason on Report was that it would be too big a burden upon the employer in the small firm. But that surely cannot be right. He must keep a record of how many employees he has, otherwise he will not know when he can and cannot dismiss an employee, with a risk of unfair dismissal litigation in the tribunal. Presumably he keeps a record, so when he is still employing new workers below 20, why should he not just give them a slip saying, "Under Clause 64A your unfair dismissal rights do not run until the later period." That really does not seem to be too big an onus. The Government are out for balance. They keep talking about striking a balance. To strike a balance between a piece of paper which the employer has to give the worker and the loss by the worker for a whole year of his rights on unfair dismissal really does not seem excessive. I beg to move.
Lord LYELL: The noble Lord has criticised the Government in fairly round terms. He castigated small businesses and had a good political dig at my honourable colleague down the corridor. He mentioned badgers and other strange animals. However, I would suggest that he and his noble colleagues, and indeed the Committee, might consider that really no small employer could benefit from the extended qualifying period for unfair dismissal in respect of any employee, unless in this particular case he had notified that employee on engagement, when that employee first signed the contract of employment, or was taken on, that he, the employee, would have to serve an extra year before acquiring the right to make a complaint of any unfair dismissal.
In the particular case that the noble Lord is stressing, notification would be a condition of securing the extended qualifying period. If the employer had not told the employee that he would have to serve an extra year before he acquired the right to make a complaint of unfair dismissal, and the employee went ahead and made a complaint, then the employee's

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complaint would be heard, and perhaps be upheld—provided, of course, that he, the employee, had served the normal one-year period.
We can well understand the objections of noble Lords opposite to the fact that we decided to accept an amendment deleting the notification requirement. I acknowledge that to the noble Lord, Lord Wedderburn, this seems to be a controversial point, and certainly the arguments on both sides are fairly finely balanced. But we felt that the overriding consideration must be that the purpose of Clause 7—that is, especially to relieve the small firm of some of the burden of unfair dismissal provisions (and we had a fairly lengthy debate about this earlier this evening)—should not be defeated by the inclusion of this one requirement to notify. We know that small employers of the particular type about whom we are talking in this clause do not necessarily have the time or the ability to acquaint themselves instantly with what is popularly known as the small print of the law.
Inclusion of the notification requirement would, we believe, be very likely to result in substantial numbers of small employers suddenly finding that they could not benefit from this provision because of ignorance of what they might regard as a technicality in the law. The benefits of the provision would then be seriously undermined and it would not achieve its purpose of encouraging employers to expand and to take on extra workers.
On this side of the Committee some hours ago when the sun was high in the sky we were castigated about employment. Certainly we think that this is a particularly relevant point. We do not believe that the practical effect on employees of deleting this particular notification requirement will be at all significant. I would concede that it is desirable in principle that employees should be aware of their position under the law. But there is no other provision which places on the employer the obligation to inform a prospective employee of his rights. Furthermore, what employee will refuse a job—and I would ask the noble Lord, Lord Wedderburn, whether he, indeed, would refuse a job—which had been offered to him simply because he might at some future date be unfairly dismissed by his employer and
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would not be able to make a complaint to a tribunal unless he had worked with that employer for two years rather than one year? That is the point at issue in the amendment raised by the noble Lord. We would suggest that both employees and employers in this particular line of business simply do not think like this. It is for that reason that I wonder whether the noble Lord would reconsider his amendment.
Earl DE LA WARR: I should like to add a point to what my noble friend has said. I am a very small employer in that I am a farmer employing eight men. It is a grotesque idea that I should take someone on and write a letter to him telling him what might happen if he was to be dismissed. This is just not how things happen—not on farms anyhow, and I would hope not in any other business. If I could use the technical words, it does not pass the test of practicality, good sense or commonsense.
Lord WEDDERBURN of CHARLTON: I hope that the noble Earl, Lord De La Warr, observes his statutory obligations in giving his employees written particulars and statements of their terms and conditions of service; and in doing so it would seem not very excessive to ask him to put two more lines on that piece of paper which he is statutorily obliged to give to his workers, saying, "You fall within this section".
The only arguments that the noble Lord, Lord Lyell, seems to have advanced is that small employers are ignorant, which the noble Earl, Lord De La Warr, plainly proves they are not; secondly, that they cannot write on a piece of paper; and thirdly that small firms cannot get information. All my noble friends immediately said to me: "Of course they can; they do it all the time; they get information from chambers of commerce and all sorts of other people". Of course, small firms are sent information about this.
As for the fact: would the worker take the job with the small print on the piece of paper? My goodness, he would take the job. What with the economic policy of this Government there are too few jobs going around at the moment, and in that sort of context, not even to tell the man what his loss of rights will be seems

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extraordinary and excessive. We shall not withdraw the amendment.
On Question, amendment negatived.
[Amendment No. 57 not moved.]
1.15 a.m.
Lord PARRY Lord PARRY moved Amendment No. 57A:
Page 9, line 6, at end insert:
("(3) Subsection (1) shall not apply to the dismissal of an employee to whom section 117 of this Act applies.")
The noble Lord said: The Committee will have noted that there are three amendments standing to my name and to the names of my noble friends Lady David and Lord Davies of Leek. They will have noted, too, that these supplementary amendments can well be taken together because they all relate to Section 117. The effect of Section 117 is that where a employee is employed by one party but in fact by virtue of some statutory provision paid by another party, the paying authority bears liability for any redundancy payable to the employee upon his dismissal by reason of redundancy. There is, however, no existing provision to the effect that continuity of employment of an employee continues to run even though, despite a change of employer, the paying authority remains the same.
The problem is exemplified by the case of a teacher employed in an aided school. Your Lordships will know that an aided school is a church school in which the religious worship and instruction are under the care of the management, the governors, and must be in accordance with the trust deed and of a denominational character. Where a teacher takes up employment in a new aided school where fewer than 20 staff are employed, he or she would not have those employment protection rights which are covered by Clause 7 of the Bill for two years following the first employment of staff in the new aided school.
The great majority of teachers are now employed in the service of local education authorities generally, rather than at a particular school and are technically subject, within their contracts, to transfer from school to school. In their context, the context of the teachers' employment,
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the "undertaking", as that term is used in Clause 7, must refer to the local education authority's education functions as a whole. Teachers who are employed in maintained schools other than aided schools would therefore not be covered by Clause 7 regardless of the size of any new school to which they are allocated.
Teachers employed in aided schools would therefore be in a disadvantageous position compared with their colleagues in other schools in the same area despite the fact that they will be paid from the same source, and are generally subject to the same conditions of service. The employment of teachers in aided schools by the managers or governors of these schools is little more than a legal technicality for the purpose of giving to the Church authorities an employer's control of teaching staff in aided schools.
The position of teachers in aided schools would also contrast unfavourably with that of many of the non-teaching staff in aided schools who are employed directly by the local education authority in its wider undertakings. These non-teaching staff would not be covered by Clause 7. Section 80 of the Employment Protection (Consolidation) Act provides that where a teacher in an aided school is dismissed by the governors or managers in pursuance of a requirement of the local education authority under the Education Act 1944, the provisions of the Act relating to unfair dismissal shall have effect as if the local authority were the employer.
Section 80 does not, however, apply to redundancy payment entitlement. The effect of this must be that the teacher in a new aided school with fewer than 20 employees, dismissed within two years from the first employment of staff in the new school, would be protected if dismissed upon a requirement of the local education authority, but would not be protected if dismissed by the managers or governors acting independently. The concern of teachers in general and of teachers' associations—the NUT for example—particularly, arise in this connection. The purpose of Clause 7 appears to be that an employer engaged in a new venture should have time to achieve stability without the risk of potential liability for unfair dismissal.
I am not going further into the details

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except to say that when the arguments I have just used were deployed—almost in the same words—in another place by my right honourable friend Mr. Harold Walker, they were well received by the Under-Secretary of State for Employment, Mr. Patrick Mayhew. Members of this Committee will find his sympathetic statements at columns 1,000 to 1,007 of the report of Standing Committee A on the Bill on 6th March. Further assurances were given by Mr. Mayhew in a detailed response in a letter to my right honourable friend Mr. Barry Jones. I have a copy of that letter. Assuming that the noble Earl, Lord Gowrie, will be giving similar assurances, I will not go on to his ground here, but I would reserve the right to reply, if it should be necessary, to one of the points that I hope he might make on the legislation now pending and its effect on the assurances that he might be able to give. Naturally, I should be only too glad if the Minister were able to give assurances to the Committee and, through the Committee, to the teachers in aided schools that, if that legislation is not successful in achieving its desired end, the Government will themselves take legislative measures.
The Earl of GOWRIE: I must first apologise to the noble Lord, Lord Parry, because I came into the Committee during his third or fourth sentence, rather than his first sentence, which I should have done, and I am therefore not clear whether he was speaking to all the amendments in his name or just the first one.
Lord PARRY: I was speaking to all of them.
The Earl of GOWRIE: As the noble Lord anticipated, the Government have given this and the two subsequent amendments careful consideration and we are sympathetic to the intention behind them. The legal advice available to the Government suggests that it would not be wise to amend the legislation at the present time, since a case awaiting decision in the Employment Appeal Tribunal may bring about the results desired by the noble Lord in the following way: if the court establishes that the meaning of the expression "associated employers" in the Employment Protection (Consolidation) Act 1978 should be less narrowly interpreted than it has been hitherto, teachers in aided schools might well be
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unaffected by the small firms provisions, since the governors of church schools and the local education authority might qualify as associated employers. The employees of an aided school would then have to be aggregated with the other employees of the local education authority in question, if not with those of all local education authorities, thus taking the aided school out of the scope of the special provision in Clause 7(1).
The Government will, however, keep the issues raised by this and the other amendments in mind and, if case law does not develop in a way which solves the problem for teachers in aided schools, we shall give serious consideration to introducing amending legislation. We could do that under Section 149 of the Employment Protection (Consolidation) Act as amended by paragraph 21 of Schedule 1 to this Bill; in that provision there is power to achieve the aims of the first two amendments by laying an order subject to Affirmative Resolution by Parliament. I hope that in the meantime the noble Lord will take my words as an earnest of our good intentions and recognise that we are anxious to solve this problem.
Lord PARRY: I am grateful to the Minister for that helpful and forthcoming response and, subject to the agreement of my co-sponsors and the Committee, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 58 not moved.]
1.23 a.m.
Lord SPENS Lord SPENS moved Amendment No. 58A:
Page 9, line 10, at end insert:
("(3) The 1974 Act, the 1975 Act and the 1978 Act shall cease to have effect in any case where the number of employees employed by the employer does not exceed five.")
The noble Lord said: On Second Reading I said I wanted to have another look at the effect of the employment protection provisions in relation to small businesses. I also wish to take up a point made by the noble Lord, Lord Lyell, when he was replying to an earlier amendment. He said we had heard too much about the preservation of existing rights of trade union members and nothing at all about incentives for getting

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more people into employment. Surely at this time of huge unemployment, which is forecast to increase very considerably still, incentives to get people to start up new businesses must be important. We have also heard—the noble Earl, Lord Gowrie, has said this—that a number of small businesses are frightened of the employment protection Acts. Indeed, when one has five or fewer employees, the administration involved in relation to the employment protection Acts becomes a burden, and it is a burden despite anything the noble Lord, Lord McCarthy, may say.
This is a very simple amendment. I am suggesting merely that the Employment Protection Acts should cease to have effect in cases involving firms with no more than five employees. I want the Committee to consider this matter in particular in the light of the large number of redundancies which are taking place in businesses all over the country. Former employees are now out of work, but they have redundancy money which could be made available to set up an enterprise by themselves or in conjunction with one or two of their pals. This is the kind of incentive which might help them to do that, rather than to sit on their backsides and wait for someone else to come along and provide jobs in their home town. I beg to move.
Viscount HANWORTH: I wish to support the amendment for the same reasons as I gave earlier in the evening. If one is setting out in a new small business one is taking a considerable risk, and of course no one will receive compensation if the company does not succeed. With unemployment at its present level I believe that the balance falls on encouraging the employer to take on as much labour as he can, and I do not believe that anyone for one moment does not realise the risks involved in joining a small firm. So on balance I think it right to support the amendment, as providing more employment than would be possible if small firm are circumscribed by these regulations.
1.27 a.m.
Lord LYELL: We should like to thank the noble Lord, Lord Spens, for putting forward the amendment so succinctly and so clearly at this late hour, and we also wish to thank the noble Viscount, Lord
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Hanworth. I believe that the Committee would wish me to make it absolutely clear that the Government fully support the concept of protection for any employees against unfair dismissal, in firms of all sizes. When the Government of this party introduced the unfair dismissal provisions in 1971 we provided that they should not apply to firms with fewer than four employees. As your Lordships' Committee will be aware, that provision was subsequently changed by the Labour Government's 1975 Employment Protection Act. We do not think that it would be right to return to the exclusion of the very small firms from the unfair dismissal provisions.
Clause 7(1) of the Bill provides for an extended qualifying period for any complaints of unfair dismissal in firms of 20 or fewer. We believe that this provision strikes the right balance between the need to protect the employees and the need to relieve small firms of some of the burden of the unfair dismissal provisions, and to encourage them to expand, as is desired by the noble Lord, the noble Viscount, and indeed all of us.
The extended qualifying period will enable small firms to respond in a flexible way to comparatively short-term increases in the demand for their products by taking on any extra labour without any fear of a tribunal complaint should it become necessary to lay off any of the workers. At this point we believe that a figure of 20 employees is the right cut-off point, because we wonder whether a firm with fewer than 20 employees would be able to devote separate resources to personnel management.
At the same time we do not think that it is right to make provision for any permanent exclusion from the important right to make a complaint of unfair dismissal. We would acknowledge that we have made special provisions elsewhere in the Bill for firms of five or fewer who might find it difficult to fit back into the workforce an employee returning after maternity absence; we shall be covering that matter later. However, we ought to note that this special provision does not constitute an exemption, except where an employer can show that it really is not reasonably practical for him to take back the returning employee. This provision is in no way analogous

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to the exemption from the unfair dismissal provisions which we believe are proposed in this amendment, because it cannot be, as it is put in the amendment, not reasonably practicable, however small the firm, to avoid dismissing an employee fairly.
We are a little unclear as to the intention of this amendment, but it has been mildly clarified by the two noble Lords. If indeed the intended effect of Amendment No. 58A is to make the unfair dismissal provisions which are now consolidated in the Employment Protection (Consolidation) Act 1978 not apply to any firms of five or fewer employees, then we believe that this is really not acceptable to the Government; and for that reason we would ask the noble Lords to consider withdrawing it.
Lord SPENS: The intention behind this amendment was much more than unfair dismissal. There are many other sections of the Employment Protection (Consolidation) Act which we think are too burdensome on small firms. There is the mere fact that they have to give a written contract of employment; the fact that they have to make redundancy payments, and so forth. There are a number of different problems facing them; and one has to remember that, whatever one does over employment protection, the small firms will already have to he burdened with the PAYE operation, which in itself is quite enormous. However, having said that, I can see that I have made no headway with the Government, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 7 shall stand part of the Bill?
Lord McCARTHY: We wish to oppose Clause 7. We have not heard that there is any case for restricting the rights of firms employing fewer than 20 employees and for allowing them to dismiss unfairly up to two years. No protection has been given for lump labour, though we moved an amendment to that effect. We have not moved one of our amendments (because of the time of night) which dealt with the fact of moving to a fixed-term contract and reducing it to a period of one year. For all those reasons, I do not think we feel like voting for this clause this evening.
On Question, Clause 7 agreed to.
1.33 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 59:
After Clause 7, insert the following new clause:
Amendment of section 153 of the 1978 Act.
(" . At the end of section 153 of the 1978 Act shall be added the following subsection:—
"(8) For the purposes of this Act a contract of employment shall be regarded as a contract for a fixed term notwithstanding that the date of its expiry is uncertain at the time when the contract is made where the parties have determined that the contract shall expire upon the occurrence of an event, the date of which is to be determined by the employer or any person acting in his behalf".".)
The noble Lord said: I shall move Amendment No. 59, with the leave of the Committee, speaking also to Nos. 60 and 61. These amendments concern what have come to be known in the labour law world as task contracts. They usually take the form of a task for which the employee is employed by the employer, and nothing more. Rather curious examples were given in the other place and in other discussions—examples such as an employee employed to index the books in your library, or to cut down the hedge in your garden. But, of course, they can be much more serious than that, and they are becoming quite common in industry. They are different from contracts of employment terminable by notice, and they are different from fixed-term contracts. They are a new beast in the zoo of employment contracts, and they are causing a great deal of trouble.
The effect of these amendments would be to include the expiry of a task contract as a dismissal under Section 153 of the 1978 Act; to allow for the exclusion of rights of unfair dismissal under Section 142 in a task contract only if it lasted for two years; and, in Section 2 of the 1978 Act, to include in the statement of particulars a description of the task. The task contract is already known, vaguely, in the 1978 legislation, in Section 143; but unless the noble and learned Lord wishes to make a point on that section I will not go into it in detail. It is a section which marginally recognises the task contract for certain purposes.
Similar amendments to these were resisted in the other place. This is a complex area of law. However, the response was not complex at all. The response was, in the words of the Under-Secretary of State on 6th March (at col. 1006) that they would be a patent anomaly. The reason he gave was that self-discharge by preformance of a task cannot be dismissal. That may sound good in logic and as an abstract proposition; but it cannot be a correct argument in terms of the law, not a knock-down argument under the 1978 and previous legislation. If that were right, the expiry of the fixed-term contract would also be a dismissal only as a patent anomaly; and a fixed-term contract expiry has, under the legislation of both Governments who have dealt with unfair dismissal, been treated as a dismissal. Therefore, we are saying—and this is the most important point—that where the task contract expires by the performance of the task it should presumptively be treated as a dismissal. I add that, of course—and I hope that there will, be no time lost about this—in the average case that dismissal will not give right rise to any claim for unfair dismissal; that is to say, employed for one task and one task only, the task ends, and even if it is dismissal it is plainly not unfair dismissal. The trouble is that in industry today the task contract is being used for, as it were, task after task after task. The case of Stewart in 1979 was the case of a ship repairer, taken on for many years for job after job after job. But each one was no dismissal and so he had no unfair dismissal rights. This year, the Court of Appeal was faced with a hybrid case—so that now there is a fourth animal in the zoo—a cross between the two: a fixed-term contract with a task element. It was a teacher, Mrs. Guy, employed by the Wiltshire County Council to teach for each academic year, by year-term, but to teach only the courses which they required. When the courses ran out, she was not required any more that year. The Court of Appeal had the difficult task of deciding whether that was a fixed-term contract, the expiry of which was dismissal; or a task contract, the expiry of the task being no dismissal. These problems arise in any legislation, problems of the line. They decided, with the nose for justice that members of the Court of Appeal sometimes have, that this was a fixed-term contract and therefore a dismissal.
But they raised the question of what would have happened if they had said it was a task contract. The fact that Mrs. Guy had been employed for many years by Wiltshire County Council should not have made her legal position for unfair dismissal and associated rights all that different merely because it was described in terms of task rather than year. Incomes Data Services for May, 1980, at page 3 of Issue 181, talked about the Appeal Court decision in the Wiltshire County Council case as having "highlighted another loophole in employment protection legislation". It is a long passage and I will not quote it except to say that the IDS commentary ends with these words:
"The Court of Appeal are correct in law at the moment by holding that such contracts, that is, task contracts, are not for a fixed term and are terminated on discharge by performance, but they do leave certain categories of worker naked of unfair dismissal and redundancy pay rights. What, for instance, is the position of construction workers taken on until the power station is built or research officers engaged to produce a report on a specific topic? Did those who drafted the statutory definition of 'dismissal' intend to exclude those categories of workers from statutory employment protection?"
I think the truth of the matter is that those who drafted the legislation did not really think about it because the task contract was not then common in industry.
The task contract is very common in industry today. It would be a gesture at least of goodwill by the Government towards workers who are engaged on jobs that they cannot get otherwise than by terms of task definition, if the Government said, "Yes, we will at least keep the legislation up to date and bring the task contract in where it belongs, within employment protection." I beg to move.
1.40 a.m.
Lord LYELL: May I attempt to explain what we believe are the effects of the amendments to which the noble Lord, Lord Wedderburn, has just spoken. They would amend the Employment Protection (Consolidation) Act so that an employer who engaged an employee for a task which would be completed at an unspecified time would be—and this is the nice word—deemed to be taking the employee on a fixed term contract. Thus, if the contract expired without being renewed, the employee would be deemed to have been dismissed and so he or she would have the right to complain of unfair dismissal and

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be entitled to a redundancy payment unless he or she and the employer had agreed to waive the rights.
May I summarise quickly the position on the waiver of rights. Lord Wedderburn mentioned Section 143 of the Employment Protection (Consolidation) Act. If I may mention Section 142(2) of the Employment Protection (Consolidation) Act, this provides that an employee may waive his rights to a redundancy payment if he is employed on a fixed term contract of two years or more, and Clause 7(2) of the Employment Bill amends Section 142(1) of the Act so that an employee may waive his rights to complain of unfair dismissal if he is employed on a fixed term contract of one year or more. That is a fairly brief summary of the position on the waiver of contracts if they are fixed term. So far we have not come yet to the fixed task contract.
The first new clause (Amendment 59) would enable employees to waive their employment protection rights upon the expiry of "fixed task" contracts of over two years and I take it this is meant to I apply to both unfair dismissal and redundancy rights. But I think this clause might benefit employers. I do not know whether noble Lords opposite would wish this. It would allow the employers to offer a series of fixed task contracts and insist on a waiver.
This is what the noble Lord is complaining about. We think that his clause would enshrine this and make it worse from his point of view. The second new clause (Amendment 60) complements the third new clause (Amendment 61) by requiring the employer, when taking on employees on "fixed task" contracts, to specify when (in the sense of the relation to what event) the contract will expire. So far we have had no representations about this alleged problem. The noble Lord, Lord Wedderburn, mentioned that this was a new animal and referred to what I might call the "jungle" of legislation—indeed, the jungle of industrial relations. He has some new animals that he has brought back tonight. He has mentioned the case of Mrs. Guy and the Wiltshire County Council. It seems that the Court of Appeal found that she was employed on a fixed term contract because both she and her employers knew that her employment would come to an end at the end of the summer term—courses or not.
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So we do not quite understand why noble Lords opposite wish to continue to discuss this amendment. Do they have any further examples of employees who have suffered because they are employed on fixed task contracts? We are not entirely clear that employment protection of this type is necessary or desirable in the cases of fixed task contracts. The legislation that we have before us points out that there is a dismissal where a fixed term contract expires without being renewed. This is a fixed term contract; the time is quite clear and all of us will be clear on that point.
So far as a fixed task contract is concerned, there cannot be a renewal because the task is finished. There lies the difference. Fixed task contracts are more like contracts for service for which one is paid a fee much more than contracts of employment. We believe that that is the difference and we hope that that will show that these three clauses are not necessary to achieve the purposes of the legislation and especially in view of what I pointed out in Amendment 59.
Lord WEDDERBURN of CHARLTON: I am utterly astonished by the Government's response to this. In regard to Amendment No. 59 they seem to have no answer, and in regard to Amendment No. 60 they say it would allow an employer not to insist upon a waiver if the task contract went on for two years or more. That is true, but at the moment the employer does not have to insist on any waiver because a task contract does not get the worker any rights. All we are saying is that presumptively a task contract should give the worker some rights unless he waives them. So to say that it gives the employer the advantage of a waiver is no argument against giving the employee the option of whether to take the job and waive his rights. At the moment if he takes the job he does not get any rights anyway.
Lastly, on Amendment No. 61, it says you have to specify the amendment. Of course: that is part of the particulars of the contract. Then it is said, "The Wiltshire County Council v. The National Association of Teachers in Further and Higher Education was decided in favour of Mrs. Guy." Of course it was, because it was a hybrid case, as I tried to explain.

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The fourth animal in the zoo—not in the jungle—is a hybrid case in which the court has to work out whether it is a fixed term contract or a task contract. The fact that Mrs. Guy won her case was due to good luck, good advocacy and good judgment; but she might have lost it on a ludicrous technicality. Then the Government say they would like a contract for services, not for service. That is most extraordinary. I have never heard of a task contract where the employee paid his tax on a self-employed basis. If the Government have, I should like the evidence of it. Then they say: "We have received no representations." I can assure the Government that they will.
This is a practice which is spreading throughout various parts of industry. There have been five or six cases in the last year or two in the courts. I was very sparing with my references. If the noble Lord would like to look at the case of Ryan v. Shipboard Maintenance in 1980 and the case of Stewart v. Craig in 1979, as well as the Wiltshire case and a number of others referred to in those cases, he will find it is becoming a cause of quite unnecessary litigation. If the Government want to benefit the legal profession and give brief fees to lawyers, well and good. But if they want to look after the interests of employers and employees then they will seize this problem before it becomes a matter of big representations from everyone. Why not be a forward-looking Government for once and actually anticipate a problem we all know is there? The literature is telling us it is there, everybody is agreed that it is a problem and everybody is agreed on a sensible solution. I shall not withdraw the amendment: we shall register our attitude in the normal way.
On Question, amendment negatived.
[Amendments Nos. 60 and 61 not moved.]
Clause 8 [Basic award]:
Lord McCARTHY Lord McCARTHY moved Amendment No. 62:
Page 9, leave out lines 20 to 22.
The noble Lord said: If I may, I should like to take Amendment No. 62 along with Amendment No. 64, since they both aim in a complementary way to do the
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same thing. Clause 8, as we know, is the clause which cancels the entitlement to a basic award and provides that the amount may be reduced where the employee has unreasonably refused an offer of reinstatement, or because of his conduct. It says that in the Explanatory and Financial Memorandum. What it does not say there is that the clause also, as a result of lines 20 to 22 and lines 1 to 8, which we want to leave out, proposes to allow a tribunal to consider the conduct of an employee who is before that tribunal, which took place before the dismissal, and conduct which was not necessarily considered by the employer when deciding whether or not to dismiss the employee. That is to say, they can consider conduct before the dismissal other than conduct taken into account under subsection (7) of the 1978 Act. That subsection provides that the tribunals can take into account the employee's own action which contributed to his dismissal in assessing his compensation beyond the basic award.
What the new provision means is that they can take into account other behaviour of his which does not necessarily contribute to the size of his compensation, or to his own actions in relation to the dismissal and which was not necessarily known even to the employer at the time the decision was taken. The Minister in another place said that this must be misconduct of some kind—misconduct which was not known to the employer when he was dismissed. In other words, the tribunal is entitled to punish the man twice—once for what was known by the employer when he dismissed him and then for things which were not known at that time. We think this is quite unfair.
Lord MACKAY of CLASH FERN: I should like to remind your Lordships that the basic award that is here in question for unfair dismissal is separate from any compensatory award that may be made, and is payable automatically upon a finding of unfair dismissal. The basic award is calculated, like a redundancy payment, by reference to the age and length of service of the employee. Currently it is reducible in cases of contributory fault only.
The purpose of subsection (7B), the scope of which has already been narrowed

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in another place, is to allow tribunals to reduce the basic award to the extent that it seems to them just and equitable to do so in the light of conduct on the part of the employee which did not contribute to his dismissal. In effect, this means misconduct which was not known to the employer when he took his decision to dismiss, but which came to light between the dismissal and the tribunal hearing. Let me give an example of the type of situation we have in mind. Certainly I would not consider it likely to arise often. An employee in a shop has stolen on several occasions from the till, but his employer is unaware of this. His employer dismisses him for rudeness to customers and the employee makes a complaint of unfair dismissal. The employer then finds out that the employee has stolen from the till. The tribunal finds that the employer dismissed the employee unfairly; that is, because he dismissed him summarily, let us say, on the word of a customer without attempting to establish whether the employee really had been rude.
Under the present law, despite the fact that the employer found after taking the decision to dismiss that the employee has been guilty of theft, the employee would still receive a full basic award. Subsection (7B) gives the tribunal discretion to reduce the basic award by such amount as it considers just and equitable in the light of the employee's subsequently discovered misconduct. In these circumstances, it is surely not right that the employee should still receive a full basic award from his employer.
Lord WEDDERBURN of CHARLTON: Will the noble and learned Lord give way? I am much obliged. May I ask him why he is taking that example when in the next paragraph the Government are about to abolish the basic award altogether?
Lord MACKAY of CLASHFERN: I have chosen this example for the simple reason that it illustrates the point we are trying to get at. I am taking this in order to illustrate the nature of the conduct that is in question, which can be used to reduce the award. That is the reason I have taken this particular example. The important point I want to make is
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that the nature of the conduct which is in question is conduct of this kind—misconduct which is not known at the time the employee is actually dismissed but which comes to light before the tribunal hearing. What we are saying is that that misconduct can properly be taken into account in reducing the amount of the award.
It is the basic award we are talking about at this stage. It is the minimum basic award that is being affected by subsection (5). We would say, as I think I have already said, that it is not right that the full basic award should be paid in these circumstances. Lord Diplock said—I am sure noble Lords opposite will remember—when commenting on the analogous case of Denis v. Atkins, which has inspired this provision, that for an employee to receive a full basic award in these circumstances would be to convert the compensation provisions for unfair dismissal into a veritable rogue's charter.
The noble Lord, Lord McCarthy, in moving this amendment, suggested that this involved two punishments for the same thing. It is nothing of the sort. It is reductions for two different things; the one for the conduct which was known about, and the second for the conduct which was not known about at the time the dismissal was decided upon. I ask the Committee not to accept this amendment.
Lord McCARTHY: In view of the lateness of the night, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Amherst of Hackney): I believe that the next amendment should read:
"Page 9, line 22, leave out from ("conduct") to end of line 23."
1.56 a.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 63:
Page 9, line 22, leave out from ("conduct") to end of line 23.
The noble Lord said: I should like to take Amendment No. 65 with this amendment, and it will take only one moment.

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The aim of the first amendment is to reinstate the basic award. No defence for this change has been given. Presumably, it has something to do with small firms, because the Parliamentary Secretary in another place said that the village shopkeeper could not afford to give two weeks' pay to a man who had contributed to his own dismissal, and had not mitigated his loss. We are not convinced by this. I beg to move.
Lord MACKAY of CLASHFERN: It is perhaps as well, in view of the intervention when I was speaking last, that I should make it plain that what we are seeking to do by the parts of the clause challenged in this amendment is to abolish the minimum basic award, not to abolish the basic award. The Government can see no justification, in principle, why an employee should receive a minimum basic award of two weeks' pay, when he is not entitled to do so by reason of his age and length of service, or on those rare occasions when his actions have been such that it is just and equitable that his award should be reduced below this point. We cannot see any good reason why there must be a minimum basic award, when he is not otherwise entitled to it. Therefore, we invite the Committee to reject these amendments.
Lord McCARTHY: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 64 and 65 not moved.]
Clause 8 agreed to.
Clause 9 [Contribution in respect of compensation]:
1.58 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 66:
Page 10, line 27, at end insert—
("( ) Where any trade union or person is to be joined under subsection (1) above the tribunal shall afford such trade union or person the same opportunity as the employer to present to the tribunal arguments concerning the question whether the employer's dismissal of the complainant was unfair.")
The noble Lord said: We now come to a clause which, despite the lateness of the hour, must surely give us pause for consideration. This is the clause—and I am
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encouraged by the noble Earl, who told us just now that the night is young—which introduces an entirely new procedure, and which, as it were, crosses the wires of the individual regulatory employment protection law which has been introduced over the last few years, and collective labour law in the sense of the liabilities of trade unions.
This is the clause which allows an employer to join a trade union, a shop steward or any other person, who has induced him to dismiss—not just in a closed shop but in any other situation—the complainant in a tribunal, by reason of industrial pressure on the ground that he was not a member of a particular trade union. I say that in preparation for the amendments, the first of which I shall move very briefly indeed.
The first, therefore, is to try to spell out in the Bill that in such a situation, where the union, the shop steward, the official of the worker is joined as a third party, he has equal right to argue the question of the unfairness of the dismissal, with the employer or anybody else. It is meant to give some right to the third party joined—union, shop steward or worker—to have the right not to see the employer simply give up the case and say: "Yes, I did dismiss unfairly. Now I will get the compensation back from the third party."
I appreciate that a reply which can be given is that Rule 7 of the industrial tribunal regulations might well already allow the industrial tribunals to allow the third party to address it and produce evidence on any issue before the tribunal. I understand also that it is true that the industrial tribunal regulations are in an advanced stage of reconsideration and reform, and it may be that the new regulations will spell this out more clearly. However, whether or not this be so under the regulations, surely there can be no objection to calming fears on the matter by enshrining in the Bill the simple proposition that the third party which is joined has the right to address the tribunal on all the issues. On that small amendment, I beg to move.
Earl DE LA WARR: Is it really necessary to dot the i's and cross the t's? I know very little about the law, but if somebody is joined as a co-defendant is it not something that, as night follows day,

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will happen: that any court will find it to be its duty to examine these people just as keenly as though they were the defendants? I cannot see the point of this, because it seems to me to be so much a part of natural law as hardly to need stating.
Lord MACKAY of CLASHFERN: The view which my noble friend has just expressed is essentially the view that we hold with regard to the amendment. As noble Lords will recall, we amended this clause to make it clear that where another party is to be joined it must happen before the hearing of the complaint. That is in order to ensure that the person who is joined will have an opportunity to participate in the hearing. Once the person is joined before the hearing, it seems obvious that he must be entitled to be heard on any matter which affects his interest. The decision on whether or not the dismissal was unfair is a matter which directly affects the interest of the person who is joined. So our view is that it is unnecessary for this to be added to the Bill.
Lord WEDDERBURN of CHARLTON: I should have been much happier if the noble and learned Lord had added an assurance that this would be enshrined more clearly in the revised industrial tribunal regulations. However, in view of his response, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
2.3 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 67:
Page 10, line 38, at end insert:
("Provided, however, that the tribunal shall not hear evidence concerning or otherwise determine any question relating to that pressure until the question of the fairness of the dismissal has been determined in accordance with Part V of this Act.")
The noble Lord said: This is a much more serious matter. It is something which goes to the heart of some of the procedures and difficulties in the Bill. It goes to a matter upon which there is considerable trade union feeling and already a great deal of worry in some areas of industry.
There are two major problems which are not really dealt with in the Bill and which this amendment would try to
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resolve. The amendment wishes to add to subsection (2) of Clause 9 a formula whereby the issue of unfair dismissal is dealt with first and the issue of industrial pressure and contribution is dealt with second, with the evidence on the second not being taken until the first issue—unfair dismissal—has been dealt with. There are a number of reasons for that. The first reason is one which presumably must commend itself to the Government. Unless the evidence and issues are treated in that order, and strictly in that order, Section 63 of the Employment Protection (Consolidation) Act 1978 is, by a side wind, in effect destroyed. Section 63 is one of a number of sections which have not been controversial in our labour law until now.
To put it broadly, on the basis of the 1968 Donovan Report's recommendation in paragraph 576, they recommended that what I might call collective labour law issues or, as my noble and learned friend Lord Elwyn-Jones said previously, collective labour law and trade union law issues, should be kept out of the industrial tribunals, especially issues of industrial conflict. Therefore Section 63 of the 1978 Act, re-enacting sections from the previous Acts, states that industrial pressure is not to be taken into account in determining the fairness or unfairness of the dismissal of any particular individual. Unless I have misread the Schedules, the Government are not amending Section 63 of the 1978 Act. Therefore the Government must intend that the fairness or unfairness of the dismissal should be dealt with before any evidence is heard as to the industrial pressure, because the tribunal is not to take into account evidence of industrial pressure in determining fairness or unfairness. Section 63 says so precisely in those terms.
For the same reason strikers who are dismissed en masse do not have any unfair dismissal rights unless there is victimisation. It is a price they pay for keeping industrial conflict out of the industrial tribunals and out of the Employment Appeal Tribunal. So that the industrial tribunal does not have to determine the reasonableness or the equity of a strike or a lockout or other industrial action; and I say this, ending the first point of the argument, that the danger of the course on which the Government are embarked in these new proce-

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dures is that it may well destroy the confidence which the industrial tribunals and the Employment Appeal Tribunal have built up on both sides of industry.
I do not say that there will be side members of tribunals who will withdraw but I do not say that there will not. There will be some who will say: "We were not put here to deal with strikes; we were put here to deal with issues between a worker and his boss, and we are here as a tripartite group to do that". Coming from Section 63, which means that the issues must be heard discreetly and distinctly, unfair dismissal first, industrial pressure second, under these new and dangerous procedures for the industrial tribunals that would have worked. Indeed, that was what the right honourable gentleman Mr. Mayhew, on the 24th April at col. 664 rather suggested must necessarily happen. When challenged about the likely joinder of parties by tribunals it was suggested to him that the employer could just say: "I join the union", and the tribunal would say, "All right". Mr. Mayhew replied:
"No tribunal would act upon a claim and accede to the request that the person who the employer claimed exercised the pressure should be joined until the employer made good that claim by bringing forward evidence".
That is to say, his argument there, and at other places on the same date and in the same debate, was that the joinder would take place only after the tribunal had heard evidence as to the unfairness of the dismissal and the industrial pressure: a prima facie case allowing the joinder.
But then, of course, only 15 lines later in the same column 665, the Government moved thair amendment which totally destroyed that procedure—a sensible amendment in many ways because it deals with other difficulties into which I need not go because they will not divide me from the noble and learned Lord. They then introduced the amendment which allows the employer to join the trade union, or shop steward or official, before the hearing. That is to say, when the employer is sued for unfair dismissal he simply says, before the hearing, as the noble and learned Lord said in response to my previous amendment, "I join the trade union"—or the official. I can see the reason for that. There are difficulties about just how to manage the
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joinder question. Indeed, they illustrate many of the problems and the dangers of Clause 9, but the hour is late and I will not go into those although I should very much like to, and perhaps we should mention them on the Question that the clause stand part.
But, having allowed the employer to join the trade union before the proceedings start, one cannot then keep the issues distinct because, as the noble and learned Lord said in response to my previous amendment, any party which is before the tribunal will, especially with the informal tribunal procedures, be allowed to address the court on the issues as they come up, and it is really asking too much of a tribunal to introduce any great formality into its procedures without clear statutory guidance, when you are saying that all three parties are there, joined from the beginning, and you have to determine unfairness of dismissal and industrial pressure. That will be the case unless, that is, you introduce an amendment to the Bill. And, fortunately, happily, we have come up with the salvation for the Government in the shape of a solution to the problem into which they ran themselves in Col. 665 on 24th April.
We are happy if the Government will take this away and look at it on Report, but the essence of our solution in Amendment No. 67 is that the tribunal shall not hear the evidence or determine the question of the pressure until the fairness of the dismissal has been determined in accordance with Part V of the Act. Part V includes Section 63, which the Government do not wish to amend. An amendment of that kind will produce a workable procedure which does not offend the rest of the 1978 Act.
If the Bill does not include any such amendment two things will follow: Section 63 will be destroyed by a side-wind, but, much more importantly, there will be those in the trade union movement and around it, who at the moment have confidence in the tribunals, who will begin to lose it when they find that this issue which has been undisturbed for many years—that industrial pressure is not an issue in unfair dismissal proceedings as such—is being undermined. When those two get tangled together, the confidence in the tribunals will begin to break, and that cannot be an objective on the Government's part. I beg to move.
Lord MACKAY of CLASHFERN: The situation is that Section 63 of the 1978 Act is not intended in any way to be interfered with. Accordingly, the procedure is that all three parties, the complainer, the employer, and, let us say, the union, will be present at the hearing. One would expect the complainant's evidence to come first, the employer's evidence to come second, and the case for the union to come third. In coming to its determination, the tribunal will pay attention to Section 63, and in determining the issue of unfair dismissal it will not have regard to any evidence about pressure. The tribunals are very much respected, and we believe they are perfectly capable of considering the evidence relevant to the question and ignoring evidence which is not relevant to that question. Then when they come on to the second question they will look at the evidence relating to that.
Surely it is not difficult for the tribunals to separate out the questions in that way on the basis of the evidence as a whole. According to the amendment, the evidence would be split, and this would involve introducing two hearings in place of one, because they have to determine the first question and then have a second part of the hearing where evidence is laid on the second question. We can see no reason for that. We believe this is a procedure which the tribunals will be perfectly able to give effect to, and we see no reason why giving effect to this procedure should in any way damage their standing. Indeed the more difficult the questions they have to determine, if they determine them satisfactorily, the higher their standing will be for the future. I would invite the noble Lord to withdraw his amendment.
Lord WEDDERBURN of CHARLTON: With the greatest respect, in some manner the noble and learned Lord has not fully understood the full complexities of the problem. He accepts that Section 63 is not to be in any way amended, but he then says the complainant's evidence will come first, the employer's evidence second, the trade union's third, and then the tribunal will take into account those parts of the evidence that are relevant to fairness on the fairness and those parts that are relevant to pressure on the pressure.
Why on earth give the tribunal the job of sorting out the evidence thrown at it
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as a kind of unbaked cake, and then make it split the cake and get the portions right in two different ovens. It would not require two hearings; there is no question of two hearings. They will all be there on the same day. These cases are usually short, except in complicated cases when dates are always difficult for witnesses to attend. But if it is an ordinary case, they will all be there on the same day. The tribunal hears the first question first. It bakes one cake first and then goes on, if it needs to, and if it is unfair, and bakes the second cake, and it knows the ingredients it must put into it.
We are being told again and again that we are right on the points we are making, but that the words we want to add need not be added to the Bill. I do not share the noble and learned Lord's confidence that this would not increase complexity. The amendment would reduce complexity. The Bill, without amendment, would increase the number of appeals before the employment appeals tribunal because somebody is going to say, all the time, "Oh, you took a wrong bit of evidence into account on the wrong issue when it was all thrown at you at once." Why not divide the evidence into two parts and have the two issues heard separately? It astonishes me that the Government will not accept that, but they will not. We cannot divide the House, but we shall express our opinion on the matter in the usual way.
On Question, amendment negatived.
2.17 a.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 68:
Page 10, line 42, leave out ("and may constitute a complete indemnity") and insert ("but such contribution shall not exceed 85 per cent. of the said compensation.")
The noble Lord said: This amendment goes to the ability of the tribunals under the proposed clause to give complete immunity to the employer and to make the whole of the sum to be paid in compensation to be paid by the unions: to give total and complete indemnity. We are suggesting that it is not necessary or required and that it is unjustified. We have therefore put in a figure which is arbitrary, to test the Government's mind on this. We are saying that the contribu-

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tion of the trade union should not exceed 85 per cent. In other words, it leaves 15 per cent. to be paid by the employer.
There are many reasons why we shall be opposing this clause, but I want particularly to urge this amendment upon the Government because it has been accepted by all those involved in issues of this kind that a considerable degree of advantage goes to employers in a situation of this kind: that they get benefits out of a situation of this kind and that it would therefore be quite wrong if it were considered appropriate to join the union in respect of compensation and to make a union, in a case of unfair dismissal, pay the whole of the compensation.
Lord MACKAY of CLASHFERN: It would obviously be a fairly extreme case in which the tribunal would feel that the whole responsibility for an unfair dismissal should ultimately be passed to a union, but that such a case could arise is obvious and the Government cannot see the justification for an arbitrary limit to be set to the proportion of compensation for which a joined party should be responsible. Accordingly, we cannot see any logic at all in this amendment and we invite the Committee to reject it.
On Question, amendment negatived.
On Question, Whether Clause 9 shall stand part of the Bill?
2.20 a.m.
Lord WEDDERBURN of CHARLTON: Something needs to be said as to whether this clause shall stand part of the Bill because of the enormous importance and novelty which it introduces—novelty, that is to say, except for its predecessor in the 1971 Act. If I make this remark in advance of the three points that I wish to make, it is not in any sense a criticism other than my own surprise at being in a position in which I have never been before; that is to say, being in a revising Chamber at 2.20 in the morning discussing what will perhaps be one of the most important innovations in British labour law in the next few years, which may well give rise to very unfortunate consequences in terms of the relationship between law and industrial relations. It is unfortunate that this
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should come at this point. However, we no doubt take our share of the blame with everybody else in that regard.
This is an alarming clause, not only because it reflects precisely almost to the letter those very parts of the 1971 Act which caused such difficulty. Having said that, I must at least outline and make out my case on that point. The noble Earl says, "Hear, hear" and I shall, therefore, do so. Section 33(3)(a) of the Industrial Relations Act 1971 made it an unfair industrial practice to take industrial action knowingly to induce an employer to infringe certain rights of workers. Among those rights were the right to be a non-unionist and also the right not to be dismissed on various unfair grounds. The next step taken in Section 33(3) was to extend that to unfair dismissal generally.
The parallel with Clause 9 of this Bill is made precise by way of Section 105(1) of the Industrial Relations Act 1971, because, interestingly enough, and perhaps rather sensibly within the logic of the measure, only the employer could sue under Section 105. There was a great deal of litigation about that and, in the second case involving Mr. Langston, it was found that there was another way in the Act by which Mr. Langston could sue the union direct. But that, I think, was rather fortuitous and it was said to be the intention of the Government of the day to allow the employer, as it were, to join the union or to take proceedings against the union consequent upon a pressurised unfair dismissal, although slightly wider, because here, of course, we have the element of pressure being applied to force him to be in the union. But with that limitation the procedural and substantive parallel is precise and an experienced practitioner in the tribunals expressed the opinion to me that this was the most alarming clause of all in the Bill so far as he was concerned.
The first point was worth making simply because it was the very basis of a large number of industrial problems in relation to the national industrial relations court. So Section 33, together with Section 96, of course, is the basis of the proceedings which ultimately involve imprisonment.
Secondly, those problems led to a legal issue to which at that time the framers of

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the Bill and Act in 1971 did not see fit to address themselves. A few of us criticised the Bill—and I thought that it would be a disaster, but I must be honest and say that I never brought this point up in debate —and did not foresee that one of the real difficulties for them was the doctrine of vicarious liability. But it was soon revealed in the litigation. As soon as we got into the courts we really saw what it was about. Although the non-lawyers think that that was not so, it frequently is the case that once one gets into court the mind is concentrated wonderfully in case one loses, which is as near to death as a lawyer likes to come. In the case of Heatons Transport (St. Helens) v. Transport and General Workers' Union which ended up in the House of Lords in 1973, the issue arose four-square on whether the union was liable for what its shop steward had done; that is, liable vicariously on the basis of the common law doctrines of vicarious liability which had been developed and applied in the realm of master and servant, employer and employee and principal and agent, such that the master or employer is liable for that which is done by the employee, servant or agent, in the scope or course of the employment or agency.
It was found that that common law doctrine was extremely difficult to apply to a trade union case. The issue whether the shop stewards acted within their implied authority for the union—raising the question, what is the union?—caused the courts enormous difficulties. In the case of Heatons Transport (St. Helens) v. TGWU they were held to have acted within their implied authority and, therefore, the union was liable. In a case a year or two later, General Aviation Services v. TGWU, in 1976 in the House of Lords, other shop stewards at London Airport on very similar facts were held not to make the union liable because they had not acted within the scope of their authority.
The unreality of the case law was that one was applying principles that were relevant to companies and organisations of business, but which just did not fit trade unions. Therefore, when I saw what the Government were going to do this time—again to use the same procedures and make trade unions liable in a new form of civil liability —1 thought that they would do something to define the areas of vicarious
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liability. But they have not done so, and I wonder why not. It is quite clear from the case law that even from their own point of view it might have been sensible to do so. It is not at all clear when the employee joins the union on what grounds the union will be able to say, "Oh well, it was not done on our account or on our behalf, or with our authority, or within the scope of the authority of the stewards." It is still not very clear just how that will apply. Indeed, in my submission, it is quite wrong that the ordinary vicarious liability principles developed for business agencies—and quite clearly so since 1912 at least under the English case law, which is a turning point—and which clearly apply to commercial agencies, are clearly not applicable or very apt to trade unions, which are organisations for people and not of capital and business and of people.
Thirdly, in this connection, plainly this issue arises because this is an evasion of the basic principle of English law since 1906 that, other than breach of contract and breach of trust and associated liabilities, such as restitution and equitable liabilities, trade unions are not open to suit in the civil courts because the other areas are known as the area of the law of tort. Just as the 1971 Act invented a new area of civil liability for unfair industrial practice, this Bill invents a new area of civil liability by the joinder procedure, and the Government must understand that the trade union movement is extremely disturbed that this may be not only some novelty in itself, but a harbinger of what is to come in the Green Paper which has been constantly referred to in this debate. It has been confirmed again and again that there is more to come.
The last point which has also not escaped attention is that oddly enough the trade union movement might be better off in some situations under the common law than it will be under this Bill. In the case of Morgan v. Fry in 1968, in which a group of dock workers split off and tried to form a breakaway union, there was a threat to strike. This was said to be unlawful in terms of interference with contracts, intimidation and so on. But the Court of Appeal said, "Yes, it normally would be under the common law, but these people who split away were such troublemakers that

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the union was totally justified in the common law in what it did". It does not seem that that is very likely to happen under the joinder provisions; some contribution because of the pressure seems almost inevitable and, therefore, the union will not be faced only with a new civil liability but possibly with an even worse situation than some areas of the civil law of tort would render it liable to. Therefore, we must register on the record our disapproval of this clause and, more particularly, the direction in which it points.
Lord MACKAY of CLASHFERN: It seems plain that in view of the provisions of Clause 6 of the Bill, a provision of the sort that we have in Clause 9 is essential, and it appears right in principle in any case where a union or other person takes action which has the result of forcing employers to dismiss people unfairly, that those who take such action should bear at least part of the responsibility for it. In our view, the clause goes no further than is necessary for this purpose and provides a simple procedure with one hearing and so on, as we have discussed already, in which to determine the matter.
So far as the principles of vicarious liability, and so on, are concerned, these are not dealt with in the clause. The question of the extent to which they should apply in any particular circumstances must be a matter to be gone into by the relevant tribunal. Some reference was made to a Green Paper. Well, this is what we are dealing with at the moment. The Green Paper is for another day. I would invite the Committee to agree that this clause shall stand part of the Bill.
Clause 9 agreed to.
[Amendment No. 68A not moved.]
Clause 10 [Notices to employer]:
[Amendment No. 69 not moved.]
Lord McCARTHY Lord McCARTHY moved Amendment No. 70:
Page 11, line 37, at end insert ("which statement shall be in a form to he prescribed by the Secretary of State after consultation with the Advisory, Conciliation and Arbitration Service and with the Equal Opportunities Commission.")
The noble Lord said: We now come at
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this time of night to maternity. We are discussing Clause 10, and the amendment I wish to move would see that the request for confirmation of return which the Government propose to introduce would have to be placed on a prescribed form. What we say is at the end these words should be inserted:
"which statement shall be in a form to be prescribed by the Secretary of State after consultation with the Advisory, Conciliation and Arbitration Service and with the Equal Opportunities Commission."
In other words, it could not be on any old bit of paper. The employer could not write in some ambiguous way so that the individual was not aware of the fact that she had to do anything about this at all. He could not write and say, "I refer you to the Employment Act 1980", and so on, without saying precisely what he wanted.
It was said in another place that a form of this kind might be a useful thing but it was another piece of bureaucracy and another piece of trouble and difficulty. I am not sure whether people mentioned small firms or not, but anyway we were told that it was a piece of bureaucracy. I suggest that in fact it would be much easier for firms if forms of this kind were available on request either from one of the job offices of the Department of Employment or somewhere else. Most employers who handle large bundles of forms from the Government and send them out for large numbers of purposes would rather appreciate having a simple form which they could send to their employees; a prescribed form asking for confirmation of return. I beg to move this modest amendment.
The Earl of GOWRIE: The Government have already amended the Bill to ensure that an employer requesting confirmation of intention to return must clearly explain to the woman that if she fails to reply to the request she may forfeit her right to return. We do not wish to go to the extreme of insisting on using a particular form. Businesses—especially small businesses—have enough forms to deal with in the modern world without us adding another one. The Government have accepted the main point—that the employer, in asking the employee to confirm her intention, must let her know clearly what her position is. As long as

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that is made clear, it is not sensible in our view to tie it to a particular form of words. This could lead to absurd situations where the employer had made the position clear to the woman, but because he had used the wrong words, his right to receive confirmation was lost. In such a situation, although he had assumed that the woman's silence indicated that she no longer wished to return, and had made his plans accordingly, he would still be faced with the obligation of reinstatement. The Government will of course do all they can to make clear to all employers, in any guidance and advice issued, what they should say in their requests for confirmation. I therefore do not think that the noble Lord's amendment is necessary, and I hope that he will withdraw it.
On Question, amendment negatived.
[Amendment No. 71 not moved.]
2.35 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 72:
Page 12, leave out lines 3 and 4.
The noble Lord said: I will, with permission, speak at the same time to Amendment No. 73, which is in a sense consequential. This relates to the postponement of the right of a woman to return to work. I hope not to incur the wrath of the noble Earl when I mention that there has recently been a survey. It is in the February number of the Industrial Relations Review and Report, No. 217; it is in two parts and the second part is in No. 218. I refer him to it and I draw from it one very simple fact, which is fully substantiated, from a survey which covered 1 million workers. It was an extraordinary piece of work and a most remarkable survey. What I draw from it is the basic response from employers who were surveyed, in that 83 per cent. of them said that the present maternity scheme, including the right to return to work, is working well. Therefore, on that ground, there is a presumption that the Government cannot be right to interfere too much with the scheme.
Secondly, on that basis, the amendment tries to introduce an equalisation of rights as between the employer and the employee. There is no limit on the reasons the
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employer can give to rely on a postponement of a return to work by the woman, whereas the woman can postpone only in certain circumstances, like interruption of work. The woman is required to confirm in writing that she wants to return to work. Surely the employer ought at least to give his reasons for postponing her return to work, notifying it in writing, and that is why we say "written notice". We understand why an employer may want to postpone a return, and up to 28 days is acceptable so long as the women's rights are not imperilled; but surely she is entitled to written notice on her side, just as she has to give him notice well in advance if she wishes to postpone.
As Section 47 of the main Act stands, the employer can postpone the very night before she returns to her job. She may have made all sorts of arrangements, for example, for the baby to be looked after, and there may have been all kinds of domestic difficulties which she will have had to resolve. Goodness knows! it is difficult enough to find baby minders and créches, and the survey goes into that as well in terms of the small number of employers who provide facilities of that kind. It also shows that only one in six of the women who might be taking up maternity return-to-work rights are taking them up, and there are many reasons for that, including those I have mentioned.
The changes proposed in the Bill will make worse all those difficulties for women workers. If the 21 days which we suggest is considered to be the wrong period, the Government can suggest something better on Report. The amendment is a basic piece of justice for women workers, an equalisation of rights, and the maintenance of a system, within the context of the Government's other changes to it, which is basically working well. I beg to move.
The Earl of GOWRIE: I am delighted to he able to agree with the noble Lord that generally the scheme and the legislation for maternity protection is working well, and I am not in the least surprised that the survey to which he referred, of 1 million, or even 2 million, workers, produced that answer. The whole emphasis of these very minor changes to the existing legislation is to remove the disincentive effects on employers, particularly

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very small employers, of taking on new women. That must be a matter of judgment and it is hard to quantify that. I agree that there seems some equity in asking the employer to observe some written procedure within time limits when one is asking that of the employee. But the employer's right is strictly limited to postponing the woman's return for up to 28 days, whereas the employee's right preserves her right to return for up to 40 weeks.
The right of employers is to provide for the sudden unexpected event within the context of their business which makes it impracticable to take the woman back on that particular day. To formalise notification in the way which appears superficially equitable to the noble Lord would, in fact, rob the employer of this flexibility, and in any case the advantage is weighted, quite rightly, in favour of the employee in this context. We do not think that the amendment is necessary, and we ask the noble Lord not to press it.
On Question, amendment negatived.
[Amendment No. 73 not moved.]
2.40 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 74:
Page 12, line 4, at end insert:
("(4) In subsection (1) of section 35 of the 1978 Act (calculation of maternity pay) there shall be added the words: ("and where an employee works for more than one employer, the maternity pay to which she is entitled shall be reduced in respect of each employer by the proportion of that allowance which bears the same relationship to the full amount of the allowance as her week's pay payable by that employer bears to the aggregate amount so payable to her by her employers.")
The noble Lord said: This amendment is an attempt to introduce a very minor piece of law reform, of justice for women, which has been occasioned by recent decisions. The problem is as follows. Maternity pay is calculated—I need not go into the details—and after it has been calculated there has to be deducted from it the social security maternity allowance, which at the time of the case in question was £15.75, and I think that it is still the same amount, though that is subject to correction—
The Earl of GOWRIE: It is now £18.50.
Lord WEDDERBURN of CHARLTON: It has gone up a little, after all. The case concerned is Cullen v. Creasey Hotels in 1980 before the Employment Appeal Tribunal. It involved a woman who had two employments. I am told that this problem has arisen on a number of occasions. Various practices were being adopted, and this case to which I refer was regarded as a test case. The woman earned £15.48 from one employer and £15.75 from another employer. She therefore asked for maternity pay from each employer, to which she was entitled. The first employer said, "No, you are not entitled to maternity pay because I deduct the maternity allowance and you don't get very much." The second employer said "I can deduct the maternity allowance as well". In other words, the full maternity allowance was deducted from the wage packets of each of the two employers. In my brevity I have not put the problem very well, but the noble Earl is well aware of it.
The purpose of the amendment is to provide that where a woman has more than one employment, the maternity pay shall be deducted proportionately from each wage packet according to the proportions borne to the total aggregate of her employment wage packets. This seems to be an elementary piece of justice. We very much hope that the Government can accept it, or at least can give an assurance to insert it in the Bill on Report. I beg to move.
The Earl of GOWRIE: I am indeed in sympathy with the intentions of the noble Lord, Lord Wedderburn of Charlton, in tabling this amendment. There is an injustice here. As the noble Lord very clearly said, where a woman qualifies to receive maternity pay, she is entitled to receive from the employer nine-tenths of a week's pay less the amount of maternity allowance, which currently runs at £18.50 a week—a figure on which I corrected the noble Lord. Where the woman qualifies for maternity pay from two employers, both of the employers must subtract maternity allowance, although she obviously is in receipt of only one maternity allowance, not two.
The noble Lord's amendment sets out an ingenious way of correcting this anomaly,

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but I fear that it is at some cost; and it is really the cost factor that convinces me that we should resist the amendment. For the amendment to work it would almost certainly require every employer due to pay maternity pay to confirm whether there was another employer, and if there was, for employer A to check whether the employee qualified for maternity pay with the other employer, employer B, and finally, if the employee did qualify, to ascertain how much she was earning.
All of that would take place before the employer was involved in the inevitably complex mathematics of ratios and fractions that arise in all social security payments. This extra work, at a time when the Government are striving to simplify the administrative procedures of maternity rebate, would be dedicated to correcting an anomaly that affects only very few women. Indeed, the department has received no complaints about this issue, even after the Employment Appeal Tribunal case which confirmed that both employers had to deduct maternity allowance.
But I said that there is indeed a notional injustice here, and I wonder whether I would meet the noble Lord if I give the undertaking that if this becomes a serious problem, we would consider remedying it by legislation. At the moment we simply do not see that the problem exists on any scale that would justify the costs, and particularly the complexities of the noble Lord's ingenious but, nevertheless, as I say, rather complicated amendment. I do not know whether the noble Lord would find that acceptable.
Lord WEDDERBURN of CHARLTON: I am obliged to the noble Earl. Perhaps I may make two comments on what he said. We are not far apart in analysis, and perhaps it may be that his department will discover that there are rather more cases of this sort than he has suggested, because the number of part-time women workers with more than one job is almost certainly increasing and is likely to increase, bearing in mind the social situation in which we are. So far as the extra work is concerned, I had thought about it. I did not dare to draft it at great length because then it would be said to be a legalistic and very long draft; but it did seem to me that the complexities could be cut through by the
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woman having to produce to the employer the total wages that she was receiving from any employer, in which case the proportion borne by his wage packet to the aggregate could then immediately be worked out on a very simple calculator on the desk. It really does not seem to me to involve a great deal of complexity; but I am obliged to the noble Earl for his assurance. I rather hope that he will have perhaps a slightly stronger look at it to see whether something could not be done in this Bill at Report stage. After all, as we know, even at this hour of the night parliamentary time is short. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Amherst of Hackney): I should point out that in Amendment No. 75 there is a misprint. In the last but one line, "clause" should read "claim".
2.47 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 75:
Page 12, line 4, at end insert:
("(4) In subsection (3) of section 64 of the 1978 Act, there shall be inserted after the words "inadmissible reason", the words: "or to a claim under section 60 of this Act (dismissal on ground of pregnancy).")
The noble Lord said: My noble friend asked whether I had any notes, and I said, "No, but I will do it without". This is a very simple amendment. There is in the relevant subsection a protection for the woman in terms of (if I am correct without my notes) "inadmissible reason". What we are saying is that a claim in respect of a dismissal for an inadmissible reason should also have added to it a claim under section 60 of the 1978 Act on grounds of pregnancy. We make the case that after the decision of Thurley v. Alders Department Stores, which said that a woman dismissed on grounds of pregnancy could not bring a claim under the Sex Discrimination Act (on the rather curious ground that there was no male equivalent of a pregnant woman; no doubt a good ground in law, but socially a rather odd ground for excluding the operation of the Sex Discrimination Act) and accepting that that is right in law, there arises a grave problem in this connection.
The Equal Opportunities Commission, as the Government know, is extremely concerned about this matter of women who are sacked after a short time where they are said to be or are thought to be or are known to be pregnant, and the effect of this amendment, if I am not mistaken, would be to render a woman able to bring such a claim without the need for the normal qualifying period. I beg to move the amendment.
The Earl of GOWRIE: The amendment seeks to remove the qualifying period for unfair dismissal where the reason for the dismissal was pregnancy. I should have thought that the qualifying period of 52 weeks offers quite adequate protection to the woman employee who is expecting a baby. Employers could be understandably anxious at the prospect of employees with no service being able to bring claims for unfair dismissal, and I do not think that this would be in the interests of women, because employers would be even more reluctant to take on young married women, and it is to correct those disincentives that we are amending the legislation. The last Government found no reason to distinguish between this sort of dismissal and the generality in terms of qualifying period, and we for our part see no reason to disagree with that judgment, which is why I would resist the amendment.
Lord WEDDERBURN of CHARLTON: I have now found my notes, but I will not weary the Committee in replying to the noble Earl except to say that of course that was at a time when the Sex Discrimination Act was thought by many to cover at least some of the types of case which have subsequently arisen. Now it is clear that the Sex Discrimination Act does not apply to a case such as the one which has come to light recently, of an apprentice electrician on a six-months probationary period who was sacked after five months because her employers discovered that she was pregnant. That may or may not have been unfair dismissal; but she had no qualifying period even before the Government changed the period from six months to one year.
So there are difficulties here and the argument that women will be worse off if they have more rights is the old argument
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that protection legislation should not be given to women workers and that there should be no sex discrimination. I know that that is not the noble Earl's intention, but he will recognise the link with the argument that if you have sex discrimination and women-protection laws then people will not take on women workers. In this particular case that is not very likely to operate. There is not much evidence of that; but there is evidence that in some cases women are unfairly dealt with on dismissal by reason of pregnancy. We hope that the Government will think about this before Report stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 10 shall stand part of the Bill?
2.52 a.m.
Lord McCARTHY: I will not delay your Lordships for very long, but we have to oppose this clause. The result of this clause is a whole series of barriers which women must get through in order to return to work after maternity. The situation is, first, that the notification must be in writing. It is not clear who tells the woman this or what happens if she forgets or does not know it. If it is not given in writing, she has not got over the first hurdle. She must specify the date of confinement. It is not clear who tells her this or whether she has to buy a copy of the Act, or what. She must confirm that she wants to return 49 days after the estimated date of pregnancy. In our amendment we have tried to get the Government to say that there should be some standard form. The Government say, "No. That would be bureaucracy." Therefore, there is no way of telling whether the woman can understand the request made of her. There is no clear way of knowing what would happen if she did not get the reminder, or if it was sent to her, or if her letter was lost in the post.
There is no way in which, with all these qualifications and the extension of the period of time before she needs to say that she wants to return, that we can say that we can accept this clause. There is no justification for restrictions of this kind. The evidence is that considerable numbers of women who are entitled to take up their rights in respect of maternity

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do not do so. There is evidence in the ORC surveys and so on to show that they do not know what their rights are, and there is considerable evidence that people are not getting maternity benefits and are not exercising their rights of return. We cannot accept that the situation needs to be changed in this way.
Lord DAVIES of LEEK: Before the noble Earl replies, the term "49 days" is obscure when applied to industry. Is it 49 working days? Are Sundays excluded? It is a point which needs to be cleared up.
Lord ROCHESTER: May I, in turn, say that my noble friends and I also have a number of reservations about this clause? I will not go into them. They were largely covered by what the noble Lord, Lord McCarthy, has said; but I do not think I should let this go by without registering that point of view.
The Earl of GOWRIE: One of the most instructive things that one can do—and I recommend this to any noble Lords who have any doubts about what we are doing in this respect—is to write down on one side of a piece of paper what are the women's rights under the existing legislation and then on the other side of the paper to write down the changes that we are proposing. The quantitative changes under Clause 10 are very small indeed. I should have thought a more pungent way of getting at the Government might be to say to them: Are changes on this scale worth while? In Clause 10, 21 days before absence begins, the employee must inform the employer in writing that she will be leaving, the date of expected confinement and when she intends to return. Under the present legislation, the employer can request this to be in writing, so it is a relatively minor provision.
Then there is the issue raised by the noble Lord, Lord Davies of Leek, that not earlier than 49 days after the expected week of confinement an employer may make a written request for confirmation of the woman's intended return to work. He can write her a letter and she must give written confirmation, she must answer the letter, within 14 days, but then we add:
"or as soon as reasonably practicable thereafter."
She might have moved to Hull or there might have been an upset, or whatever.
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That is a minor provision, too. The noble Lord, Lord Davies, asked: "Why 49 days?"
Lord DAVIES of LEEK: No. With due respect to the noble Earl—it is the first time that I have known him get it wrong—I asked, "What do the 49 days mean in industry?" Are they 49 working days, excluding therefore Sundays and sometimes Saturdays?
The Earl of GOWRIE: My understanding is—I could be wrong, but I think not—that it is seven calendar weeks. Therefore it would include the holidays. We chose that number because it was a length of time that seemed reasonable to the Equal Opportunities Commission, and what was good enough for the commission was certainly good enough for the Government.
Then under the existing legislation the woman has a right to return at any time before the 29 weeks from the week of confinement. There is no change there. Under the existing legislation, the woman must give seven days' notice of the proposed date of return. We have extended that to 21 days' written notice of the proposed date of return, which I should have thought would be an improvement. Under present legislation, the employer may postpone the date of return by four weeks, and there is no change there. These changes are small and anyone who represents them as a monstrous attack on women's rights is assuming that ladies who have babies cannot answer a letter, and that simply will not do.
Clause 10 agreed to.
Clause 11 [Right to return.]:
2.59 a.m.
Lord McCARTHY Lord McCARTHY moved Amendment No. 75A:
Page 12, leave out lines 6 to 20.
The noble Lord said: We come once again to small firms. The object of this part of the Bill, which we are seeking to delete, is to create a situation in which firms with five employees or less can renege on their return rights in respect of maternity cases if they can argue that it is not reasonably practical for them to

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adhere to them. What we want to do is to leave out lines 6 to 20.
This notion of exemption of small firms has been denounced and criticised by an unusually large variety of groups. It is not just the NCCL, it is not just the Low Pay Unit; it is not just the EOC, it is business groups. One of the best arguments against this particular aspect of the Bill has come from the Institute of Personnel Management. There is no evidence, there are no surveys, which show that maternity as such, as against whatever evidence there may be from surveys of unfair dismissal, inhibits small firms from taking on labour. All the evidence we have is that this particular aspect of the present Employment Protection Act is not affecting small firms in any significant way. It is quite shocking that there should be a two-tier system drawn at this point, and for that reason I beg to move this amendment.
Lord ROCHESTER: I should like to support the noble Lord, Lord McCarthy, in what he has just said. I am not sure that at one o'clock in the morning, when challenged by the noble Earl, Lord Gowrie, I was altogether coherent in endeavouring to show why it was that, despite our support for small businesses, we could not go along with the Government in this regard. If I may try just once more, it is that we do not see why, simply because there are distinctions in the numbers of people employed in different firms, there should be different rights. I do not propose to say more than that now, but our position seems to us to hold good in respect of this amendment, and therefore I support the Labour Opposition on this occasion.
The Earl of GOWRIE: Turning first to the point made by the noble Lord, Lord Rochester, I think that probably one of the difficulties is that there has accrued round the word "rights" a feeling of constitutional liberties of a deep-seated character. These, of course, we would be very sensitive towards, but when you look at this thing in practice, what I think many people fail to appreciate is that there is not a blanket exemption here: this is not an institutionalised two-tier system, as the noble Lord, Lord McCarthy, suggested. The very small
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firm—and by that I mean an outfit of fewer than six employees—is relieved of its obligations only where the employer can prove—and he has to prove—that it was not reasonably practicable to offer the woman either her original job or a suitable alternative.
Under the existing legislation before this "savage attack on women's rights", the woman must be given back her job under the original contract of employment unless it is not practicable for redundancy reasons—unless in fact the job is no longer there. So really even the last Government recognised that there might be situations where practicability of this right—and that is why I rather object to the word "right"—simply did not exist. But, having said that, I acknowledge that this has been the most contentious of our proposals on maternity and that some of the organisations we consulted were totally opposed and some were unreservedly in support. I am afraid this was somewhat of a politicised measure but we were trying to be practical and sensible. Many people told us that the safeguards were meaningless and that what we have done is to create a total barrier to women ever getting their jobs back in small firms. On the other hand, there are those who say that we have been so intent on safeguarding the position of employees that we have made the job of the employer claiming exemption far too difficult. We believe we have got it about right.
This provision is a compromise between desirable objectives which pull in opposite directions. We do not wish to diminish the rights of women to return to work; yet we wish to safeguard the opportunities of women to be offered work in the first place. The aim with this provision is to make employers feel that taking on young women does not saddle them with an intolerable burden—which it does not. They have, in our view, every incentive to take them on. We believe that this relief which has been given to very small firms, and only then to very small firms who can prove to a tribunal that it was not practicable for them to take back a young woman, will not have the effect of creating two classes of employee but certainly of making it that much more likely that the very small employer will be prepared to offer work to young women.
Lord BROOKS of TREMORFA: Before the noble Earl sits down, may I ask him this: how does the position affect an employer with more than six—perhaps 26, 46 or 106—women where they are in small groups of two or three? Are they affected by this legislation or are they not?
The Earl of GOWRIE: No, my Lords. They would be covered by the law as it stands.
On Question, amendment negatived.
3.5 a.m.
Lord WEDDERBURN of CHARLTON Lord WEDDERBURN of CHARLTON moved Amendment No. 75B:
Page 12, line 13, after ("practicable") insert ("for a reason other than redundancy and other than that her job has been filled by an employee engaged to do her work during her absence on maternity leave").
The noble Lord said: In moving this amendment, I wish to speak also to Amendment No. 75C. Amendment No. 75B is another attempt to reduce the incursion into women's rights which is being made in this Bill in the small firm, in this case where the number of employees does not exceed five. I pause to say that the remarks we made on Clause 7, where the cut-off point was judged in terms of employees, arise here, too, and the technicality of the number of employees employed by her employer immediately before her absence began may well cause a woman a great number of problems and the Government might wish to reconsider the formula. That is a technical point.
This does introduce a two-tier system into employment. The noble Earl, Lord Gowrie, is right in saying that the previous law recognised that there would be a situation where the employer might prove that it was not reasonably practicable. That, of course, was the situation of redundancy. That is why, in our Amendment No. 75B, we have put in the phrase,
"for a reason other than redundancy".
In terms of a small firm of fewer than five we do not understand why the woman should suffer in the case of redundancy whereas she will not in the larger firm. When there is no evidence whatever that job creation will be affected, and there really is not—none that we have ever heard or found—then not to allow the woman her rights in a redundancy situation simply because she works at a place where immediately before her absence
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there happened to be a drop from seven to five employees really does not seem a very sensible or just system and is certainly a two-tier system.
When the noble Earl says that some people criticise the Government for being too pro-employer and some people criticise them for being too pro-women's rights, I understand their difficulty, but to end up in such a situation, halfway between right and wrong, does not necessarily mean that the Government have got it right. We think they have got it wrong, especially in regard to Amendment No. 75B, to which we add the further proviso that it should be for a reason other than that her job has been filled by an employee engaged to do her work during her absence on maternity leave.
This was argued in another place. Briefly, the Government's answer was broadly—and I wonder if it would be the same tonight—that there was a fear that the industrial tribunal would accept an argument that it was not reasonably practicable to reinstate because of a replacement, but that it was improbable that the industrial tribunal would accept that. Surely it is not all that improbable, and it seems to us better to put this in the Bill. Of course, parallel arguments then apply in regard to the ordinary situation of the larger firm under Amendment No. 75C.
Of these amendments, it seems to me that the one that sticks out as really just—and very unjust for the Government to resist—is the denial in the small firm of five or fewer of the redundancy rights which the woman worker would have otherwise. It may be that people criticise too harshly, but the noble Earl must not be surprised that, when a consideration of that sort is rejected from the Bill, people say, "Well, this really is rather cutting into women's rights in an unjustified way".
The Earl of GOWRIE: On the last and general point, women's rights are a highly important, but also somewhat emotive subject at this moment in history—
Lord McCARTHY: No.
The Earl of GOWRIE: They are. The noble Lord, Lord McCarthy, and I use language in very different ways.

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What I mean by "emotive" is that people feel very strongly about them. We have a number of bodies, many of which, as Minister responsible for women's employment affairs, I sit on or chair, and we all beaver away at this subject. Indeed, I spend much of my time trying to encourage girls of the ages of 12 and 13 to take the necessary 'O' level options, to enable them to get into non-traditionally female kinds of employment. So we are all thoroughly involved in improving the stake of women in this economy, and none of us would dissent from that.
But it is simply not good enough, though it is politically understandable, to try to use very minor provisions of this kind as an effort to show, for electoral or other reasons, that the Government are trying to roll back women's rights. All one has to do to disprove that is to look at the existing law, look at what the Government are proposing under this Bill, and you will find that the gap is very small.
In the case of the noble Lord's amendment, yes, it is indeed true to say that our response would be rather similar to the response in another place. But I could add that the tribunal can be left to consider what is reasonably practicable without the noble Lord's amendment, and it is to be expected that the employer would have to show that it was not possible to make other arrangements. We are putting the onus on an employer to prove to a tribunal that it is not reasonably practicable for him to engage in reinstatement, and we would not expect tribunals to look lightly at that.
As I said earlier, under existing legislation, under the legislation in which I understand the noble Lord was a powerful influence, women must be given back a job under the original contract of employment. But then there is a qualification: unless it is not practicable for redundancy reasons. We have increased that qualification, but it is a very small increase. We believe it is important that the tribunal should not be prevented from looking at questions that turn upon the engagement of the replacement of the woman. That is what this part of the clause is involved in, and we do not that see the amendment is necessary.
Lord ROCHESTER: I do not think the noble Earl really meant it, but he gave me the impression that he thought that
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those of us who felt differently from him were in some way trying to make some political capital out of this. I accept that there is room for a genuine difference of opinion here. That is all that I, and, I expect, people on the Labour Opposition were endeavouring to explain.
The Earl of GOWRIE: I take that correction. I am sorry if I sounded rather tetchy. I think it was a personal response. I work very hard on women's employment issues and I have always rather resented the fact that this Bill is thought to be anything negative in that regard.
Lord WEDDERBURN of CHARLTON: I can understand the noble Earl's resentment and we all appreciate the work that he does. But he asked for a piece of paper and, oddly enough, the other day I typed out a piece of paper which I am holding, on which the changes are listed. On Clause 11, the present position with regard to the woman being given back her job occupies four lines, while the position under the Bill occupies 20 lines. It is true that it is a little verbose, but the number of conditions she has to satisfy is very much greater. It may seem small to the noble Earl, but it is rather a large matter to the women workers involved. The one which I think we would really wish the Government to reconsider in terms of Report is the redundancy one.
I take the point about the industrial tribunals, although again, as a final comment tonight, we have been given, all the way through the Bill, the answer: "Don't worry about this; the tribunals will see that everyone is all right". Now we are told, "Don't worry; the tribunals will see that the women are all right ". I hope that that is so. However, the redundancy point seems to us to be unreasonable, and we wish to register, with the noble Lord, Lord Rochester, our disagreement with the Government, particularly on that point.
Lord BROOKS of TREMORFA: Could it be that the noble Earl is not prepared to accept that when God created man She made a terrible mistake?
On Question, amendment negatived.
[Amendments Nos. 75C, 75D and 75DA not moved.]
3.16 a.m.
On Question, Whether Clause 11 shall stand part of the Bill?
Lord McCARTHY: I really do not know how we are to please the noble Earl. If we ask for minor things he says they are minor things and not worth having. If we ask for major things he says they are far too significant to give to us because they go to the heart of the Bill. If we say that we merely want to declare for him, in a clear way, what we think he intends, he says it is there already. Unless, of course, it is for the small firms: he can always put it in and make it as precise as the very dickens for the small firms, but not for the women, small or large, and not for the small shopkeeper.
So we have Clause 11. What does it do? It provides a series of excuses for employers to renege upon women's rights. The small firm is told that if it is not reasonably practicable for it to offer suitable, appropriate work, then women have no rights. If it is a larger firm, it is told that it must offer something which it considers to be a suitable alternative, and if the woman unreasonably refuses, she has no rights. I know that the noble Earl does not like people to think that he is against women, and I know he does not like people to think he does not do enough for them. But apart from Clause 12, which we shall be coming to, this clause, and Clause 10, from the point of view of women, is downhill all the way.
The Earl of GOWRIE: I must say that it gives me great pleasure, at the end of a very stimulating, interesting and, in the main, extremely well-tempered day of this Committee stage, to be able to correct the noble Lord, Lord McCarthy—something which I never expected to be able to do. My noble friend Lord Lyell has been most useful to me as a guide, in that he was one of the pupils of the noble Lord, Lord McCarthy. I should never have expected that either he or I would ever correct the noble Lord. However, when he says that the clause provides a series of excuses for employers to withdraw women's rights, that will not do. As I explained, probably to the boredom of the Committee several
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times during the maternity debate, all that is happening is that a tribunal must attend to reasonable practicability, as it has to attend, under the present legislation. And we have slightly increased the practicability qualification.
On Lord Wedderburn's amusing correlation of how much you erode rights by wattage of lines, may I point out to him that the second qualification we make is that the woman must be given back the job under the original contract of employment, unless not reasonably practicable for other reasons. Nevertheless, suitable alternative employment has to be offered. Then there is an "or", so you can strike five lines off his total of 20, because she remains at work under that definition. So there are there two small issues of fact on what is a rather small amendment. However, it does, I acknowledge to the noble Lord, Lord Rochester, and to others, attach at a sensitive area—perhaps that is a better word than "emotive" which is of very large importance to my mind and to that of the Government. That said, I look forward to the further stages of the Committee. In fact, we shall be kicking off with an altogether new right for women that was not in the last piece of legislation and of which I must say I am rather proud.
On Question, Clause 11 agreed to.
House resumed.

  MEANS-TESTED BENEFITS
  MEANS-TESTED BENEFITS
  DATA PROTECTION
  DATA PROTECTION
  MOSCOW OLYMPIC GAMES: PUBLIC FINANCIAL SUPPORT
  MOSCOW OLYMPIC GAMES: PUBLIC FINANCIAL SUPPORT
  THE TENERIFE AIR CRASH
  THE TENERIFE AIR CRASH
  PLASTIC BAGS: ASPHYXIA AMONG CHILDREN
  PLASTIC BAGS: ASPHYXIA AMONG CHILDREN