Sitting of 12 March 1980

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

    Afghanistan
    Mr. Stoddartasked the Lord Privy Seal what action he is taking to develop further his proposal to make Afghanistan into a neutral State.
    Mr. David Atkinsonasked the Lord Privy Seal if he will make a further statement on proposals for the neutralisation of Afghanistan.
    The Lord Privy Seal (Sir Ian Gilmour): We believe that a declaration by an independent Afghan Government that Afghanistan should be neutral and nonaligned would be in accordance with that country's traditional role; with the needs of the present situation; and with the desire of people of the region for peace.
    Since the concept of neutrality was put forward on 19 February, we and other members of the Nine have commended the proposal to the Soviet Government. We are speaking also to other countries.
    Mr. Stoddart: I am obliged to the right hon. Gentleman for that reply. Does he not agree that a constructive initiative of the sort undertaken by the Secretary of State is far preferable to trading insults across the world? If there is a significant response or gesture from the Soviet Union, will this influence the Government's position on sending a team of British athletes to the Olympic Games?
    Sir I. Gilmour: I very much agree with the first part of the hon. Member's question. Of course an initiative of this
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    sort is better than trading insults. However, I think the whole House will agree that it is for the Soviet Union to create conditions which are suitable for athletes to take part in the Olympic Games, and that means the withdrawal of troops from Afghanistan.
    Mr. Atkinson: How confident is my hon. Friend that his proposal for a neutral, non-aligned Afghanistan is in accordance with the wishes of the people of that country? Is he aware that the only terms for neutrality that the Soviet Union will accept are likely to amount to the "Findlandisation" of Afghanistan, rather than neutralisation?
    Sir I. Gilmour: I am not clear about the exact meanings of the terms that my hon. Friend has used. The suggested neutrality is the best way out of the present serious situation. As my hon. Friend appreciates, there is nothing new about neutrality for Afghanistan. It is very much in the traditions of that country.
    Mr. Spriggs: Is the right hon. Gentleman aware that the autonomous Government of Afghanistan has the independent right to invite any State it wishes to come to its aid in the event of danger within its borders? What right have Britain and America to interfere in the affairs of Afghanistan, bearing in mind that a greeat deal of blood has dripped from the hands of both countries way back in history?
    Sir I. Gilmour: What an extraordinary question. For one thing, it is not clear that the Government of Afghanistan are autonomous or that they asked the Soviet troops to come in. The only people who are interfering in Afghanistan at present are the 70,000 to 80,000 Soviet troops there.
    Mr. Fletcher-Cooke: What hope does my right hon. Friend have of the erection of an independent Afghanistan Government of whom he spoke in his original answer? Are there any signs at all that the Soviet Union will co-opreate in setting up such a Government?
    Sir I. Gilmour: So far statements from the Soviet Union have expressed neither a willingness to carry matters forward nor a rejection of the proposal. If the Soviet forces withdraw, the sort

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    of Government that we have in mind will be likely to appear in Afghanistan.
    Mr. Shore: I see nothing but advance in the concept of a neutralised or nonaligned Afghanistan and I hope that this idea will prosper. Will the right hon. Gentleman say more about how the people of Afghanistan will be able to get a Government of their own choice in Kabul, if this proposal gathers momentum?
    Sir I. Gilmour: There is a distinction, as the right hon. Gentleman will realise, between a neutralised Afghanistan and a neutral Afghanistan. The first indicates that this would be imposed. The second indicates that it would be voluntary, and that is what we have in mind.
    As to the second part of the right hon. Gentleman's question, he will be aware that the democratic processes in Afghanistan are not exactly the same as they are in this country. It is, therefore, difficult to lay down in advance the exact procedures that would take place. Nevertheless, the fact that there are difficulties, to which he has drawn attention, and which I concede, do not invalidate the proposal in itself.
    Several hon. Members rose—
    Mr. Speaker: Order. This matter comes up on later questions.

    Greece
    Mr. Adleyasked the Lord Privy Seal if he will make a statement on British relations with Greece.
    Sir Ian Gilmour: British relations with Greece are excellent.
    Mr. Adley: Is my right hon. Friend aware that there is considerable concern about the record of the Greek shipping industry in relation to maritime pollution? The "Aeolian Sky" and the "Athina B" are merely the latest examples. In view of Greece's forthcoming accession to full membership of the EEC will my right hon. Friend raise with the Greek Government this concern and seek, and we hope obtain, assurances that the standards employed and prevailing in the Greek shipping industry are as high as those in other EEC countries?
    Sir I. Gilmour: As my hon. Friend will be aware, my hon. Friend the Mini-
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    ster for Trade replied to a similar question on 13 February. I can assure my hon. Friend that the Greek Government are fully aware of our concern, and that of other members of the European Community, about the safety record of the Greek fleet. After accession, Greece will he bound by Community instruments relating to maritime safety in the same way as other member States.
    Mr. Newens: If British relations with Greece are excellent, will the right hon. Gentleman tell the House what efforts we are making, together with Greece, to get a reasonable settlement of the Cyprus problem? When does the right hon. Gentleman expect that there might be progress in obtaining recognition of the rights of Cypriots—Greek Cypriots in parparticular—who have been turned out of their homes?
    Sir I. Gilmour: The hon. Gentleman will appreciate that there are questions on that subject later on the Order Paper.
    Mr. Cormack: In view of the good relations enjoyed with Greece, will my right hon. Friend welcome the Greek suggestion that the Olympic Games should henceforth be held in that historic setting?
    Sir I. Gilmour: This is an extremely interesting proposal. In many ways it is extremely attractive. We must obviously await the outcome of Greek discussions with the International Olympic Committee.
    Mrs. Dunwoody: Part of the problem that Greece will face on accession to the Community is the fact that its borders will be open to manufactured goods of other countries of the Community. Will the right hon. Gentleman say what help he intends to give and how he intends to direct funds into Greece to increase its standard of living?
    Sir I. Gilmour: No. That would be distinctly premature, particularly in view of our other problems in relation to the Community at this time.

    Zimbabwe
    Mr. Winnickasked the Lord Privy Seal if he will make a statement on the latest position in Zimbabwe.
    Mr. Ioan Evansasked the Lord Privy Seal if he will make a statement on the arrangements for transferring power to the new majority Government in Zimbabwe.
    Sir Ian Gilmour: Mr. Mugabe has been appointed Prime Minister and has submitted a full list of Ministers to the Governor. Arrangements will be made shortly for the election of the Senate and of a President Elect. The date of independence is being discussed between the Governor and Mr. Mugabe.
    Mr. Mugabe has asked for assistance from Britain in a number of fields, including military and police training, the resettlement of members of the forces of both sides and advice on the machinery of government and on broadcasting. We shall respond positively to these requests. Decisions on longer-term capital aid can be reached only after the new Government have set their priorities. An aid mission will visit Rhodesia as soon as practicable after independence.
    The Government have informed the Commonwealth Secretary-General of Mr. Mugabe's request that Zimbabwe should become a member of the Commonwealth. The proposal has our full support and the Government hope that other Commonwealth members will agree in time for Zimbabwe to come to independence within the Commonwealth. In that event, the necessary adjustments to the Zimbabwe Act and other United Kingdom laws will be made by Order in Council.
    Mr. Winnick: We all wish the new Government and country well. Should not the South African authorities learn the true lesson from recent events, namely that the tide of history and majority rule in Africa cannot be stopped and that it is essential that black people in South Africa, too, get the rights and freedoms that the people of Zimbabwe are to achieve?
    Sir I. Gilmour: That may or may not be so. I do not think that it arises on this question.
    Mr. Evans: Does not the right hon. Gentleman agree that the stand taken by hon. Members on both sides of the House, over a long period, to the effect that there should be democratic elections in Rhodesia to achieve true representation of the people, has been
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    fully justified? Will he give consideration to the suggestion by Prime Minister Mugabe that there should be a period of time before independence is granted?
    Sir I. Gilmour: Of course, I agree with what the hon. Gentleman says about the elections. They have been free and fair elections. We welcome that. I see fully the force of what the hon. Gentleman says about the date of independence. As he may have heard in my original answer, this matter is being discussed by Mr. Mugabe and the Governor.
    Mr. Eldon Griffiths: Since good relations with South Africa are important to the new Zimbabwe in economic and other ways, will my right hon. Friend use his influence to persuade Mr. Mugabe and the other front-line States not to rush their fences, and to allow the South Africans to settle down and get used to the new situation so that, in the end, all may benefit?
    Sir I. Gilmour: What my hon. Friend says is absolutely right. My hon. Friend will have noticed the careful statement, or remarks, made by Mr. Mugabe about relations with South Africa, and he will no doubt have welcomed them.
    Mr. Jay: Does the right hon. Gentleman's answer mean that a further legislative order has to come before the House before independence is formally and constitutionally established?
    Sir I. Gilmour: It merely means there will have to be an amendment by Order in Council, as envisaged under the Zimbabwe Act. There has to be an order creating the independence of Zimbabwe, anyway whether or not Zimbabwe is a member of the Commonwealth.
    Mr. Brocklebank-Fowler: Are there any signs that, as a result of this huge election victory and his overriding majority in the new Parliament of Zimbabwe, Mr. Mugabe will seek to introduce constitutional changes differing from what was agreed at Lancaster House?
    Sir I. Gilmour: So far, no. But it is early days. I cannot speculate. Mr. Mugabe has a majority sufficient to make some constitutional changes but not others, since some parts of the constitution are entrenched and need the 100 per cent. assent of the Assembly.
    Mr. Shore: May I thank the right hon. Gentleman for his original and forthcoming reply? May I also offer my congratulations on the outcome of the whole process of settlement that began in Lusaka and was concluded in Salisbury last week? It has been a major success for Britain and the whole Commonwealth.
    Will the right hon. Gentleman turn his mind more to the urgent need for reconstruction in a war-torn Zimbabwe? Will he look again at the proposals for helping with land purchase for resettlement, mentioned during the Lancaster House conference and a major theme of the 1977 White Paper? That, I am sure, would be of enormous help and would be very stabilising to the new Zimbabwe Government.
    Will the right hon. Gentleman also consider carefully any requests made to the Governor not to terminate abruptly his stay in Salisbury but to consider prolonging it until certain important interim matters have been settled, in consultation with the new Prime Minister?
    Sir I. Gilmour: I am most grateful to the right hon. Gentleman for his kind words. I should like to thank him for the valuable tour that he carried out before and during the election. As was stated at Lancaster House, the British Government would be prepared to help with any agricultural development plan undertaken by the new Government. If an agricultural development bank or an equivalent institution were set up to promote agricultural development, including land settlement, the British Government would be prepared to contribute to the initial capital required and to support the efforts of the new Government to obtain assistance from other Governments. An ODA mission will visit Rhodesia as soon as possible after independence for further discussions on that and other priorities still to be identified with the new Government.
    On the final point, I hope that it was implicit in what I said earlier that we are not rushing these matters. I take account of what the right hon. Gentleman has said. The Governor and Mr. Mugabe are discussing the matter during the next day or two.
    Several Hon. Members rose—
    Mr. Speaker: Order. This matter also comes up on a later question on the Order Paper.

    President Nyerere
    Mr. Whitneyasked the Lord Privy Seal when next he plans to meet President Nyerere of Tanzania.
    The Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Richard Luce): My right hon. Friend has no current plans to meet President Nyerere.
    Mr. Whitney: When my right hon. Friend meets the President of Tanzania, will he take the opportunity to point out that the President's misgivings about the intention of the British Government to conduct a fair election in Zimbabwe were misplaced and, on the assumption that President Nyerere may be as ready to welcome advice as he is to offer it, will my right hon. Friend suggest to him that economic progress, the promotion of human rights and the promotion of democracy in Tanzania are objectives on which the President might now concentrate his attention?
    Mr. Luce: The President is entitled to his opinions, which he expressed to us during the elections, and we are entitled to ours. I am glad to note that a few days ago the President said that he was wrong in his judgment and that he agreed that the Rhodesian elections were free and fair. No doubt the President, along with many others, will note the stark contrast between the determination of Britain to hold free and fair elections in Rhodesia and the invasion of Afghanistan by the Soviet Union.
    Mr. Alexander W. Lyon: Since the President was sufficiently gracious to say that he was wrong in his judgment about free and fair elections, will the Government be gracious enough to admit that they were wrong about President Nyerere and his development programme and allow him the funds to make Tanzania a stable, progressive State, which it is rapidly becoming even without British funds, though it would be helped by them?
    Mr. Luce: It is up to President Nyerere to determine how he pursues his economic policies. As the hon. Gentleman knows, we already give about £20 million a year in economic assistance to Tanzania. That is a subject which is constantly under review, and it is right that it should be.

    Namibia
    Mr. Cyril D. Townsendasked the Lord Privy Seal if he will make a statement on the future of Namibia.
    Mr. Luce: A team of senior officials from the United Nations secretariat is in Southern Africa at present for talks with the parties to the Namibian negotiations, in an endeavour to reach agreement on arrangements for implementing the United Nations plan. Agreement was reached on certain details of the proposed demilitarised zone on Namibia's northern border in meetings between General Prem Chand, the United Nations force commander-designate, and the military authorities in Angola, Zambia and Namibia. After useful and wide-ranging discussions in Capetown with the South African Government last week, the United Nations team is now visiting capitals of the frontline States.
    Mr. Townsend: Following the free and fair elections in Rhodesia, will the Government do all that they can to obtain free and fair elections in Namibia without undue delay? Can my hon. Friend confirm that economic sanctions against South Africa would be the wrong way to proceed towards that objective, because such sanctions would have to be maintained by force?
    Mr. Luce: We are fully committed, as are all parties, to the United Nations plan that there should be free and fair elections held under United Nations supervision. I am sure that the House will recognise that after lengthy discussions over a long period it is important that the parties proceed as quickly as possible to an agreement, but it is only human that, after the events of the past few days in Rhodesia all the parties will want to reflect carefully on the implications for the future of Namibia.
    Mr. Ford: When instructing the British representatives in the contact group, or our representative at the United Nations, on this matter, will the Government bear in mind the infrastructure of civil assistance that has been built up by South African civilian Army specialists in the operational area and which would be endangered by a withdrawal of South African troops? Is the hon. Gentleman
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    aware that Britons could usefully fill that role?
    Mr. Luce: I am grateful to the hon. Gentleman. Britain is still preoccupied with the problems of Zimbabwe, but we are equally concerned to assist the future stability of Namibia. As the hon. Gentleman knows, important discussions are taking place, with the South Africans among others, led by the United Nations team and I do not wish to pre-empt those.
    I apologise to my hon. Friend the Member for Bexleyheath (Mr. Townsend) for not commenting on his question about sanctions. At a time when we hope that there will be an agreement on Namibia between all the parties and we are determined to do our best to help in that process, it does not seem wise, sensible or constructive to talk about sanctions.
    Mr. Nicholas Winterton: Does my hon. Friend agree that considerable progress is being made in the settlement of the South-West Africa problem and that progress towards a more democratic government in that country has already taken place? Will he pay tribute to the part played by Mr. Dirk Mudge and the multi-racial black majority party that he leads in South-West Africa? Does my hon. Friend also agree that it would be wrong to put pressure on South-West Africa and South Africa at this time, bearing in mind that the Government of South Africa must be assessing what has occurred in Rhodesia recently? It could be counter-productive to constructive progress if great pressure were applied now.
    Mr. Luce: I agree in general with my hon. Friend's latter point. I think that it is the view of all parties to the problem that after such a major event as the elections in Zimbabwe, which are bound to have an effect on the future of southern Africa as a whole, it is natural that all the parties will want to reflect. At the same time, it is important that if we are to achieve a settlement in Namibia—which everyone wants and which is in the interests of everyone—we should proceed as rapidly as we can.
    Mr. Rowlands: What are the areas of difficulty and the obstacles to achieving an internationally acceptable agreement for Namibia to proceed to free and fair

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    elections? Will the hon. Gentleman draw the important lesson from Zimbabwe and realise that a flawed and inadequate internal settlement in Namibia will not produce a stable and peaceful settlement?
    Mr. Luce: Since the United Nations team under General Prem Chand and the political team are involved in detailed discussions, the issue focuses on the demilitarised zone and the proposal to provide adequate security to enable free and fair elections to take place. Many aspects of the problem are still being discussed and all the parties to the dispute, not just South Africa, are anxious to clarify many of the aspects of the proposals involved in setting up a demilitarised zone.

    Cyprus
    Mr. Norman Atkinsonasked the Lord Privy Seal if he will make a statement as to the current position of the Cyprus intercommunal talks.
    Sir Ian Gilmour: Dr. Waldheim is continuing his intensive efforts to find an agreed basis for an early resumption of the talks.
    Mr. Atkinson: Does the Lord Privy Seal agree that, judging by recent remarks of Mr. Denktash and from Ankara, the talks will not reach a successful conclusion? If the right hon. Gentleman agrees that the two priorities must be the withdrawal of Turkish troops and the free movement of people throughout Cyprus, could not the Government take an initiative similar to that which they have taken on Afghanistan and propose that United Nations troops should be asked to replace the Turkish troops occupying the island? Will the Lord Privy Seal consider that as a serious proposition?
    Sir I. Gilmour: Talk of a successful conclusion is looking too far ahead. What we want is a successful beginning, or at least a successful resumption of the talks, and that is what we are aiming for and what my right hon. and noble Friend the Foreign Secretary told Mr. Denktash when they met a few days ago. The right approach is to continue with our full support for Dr. Waldheim's efforts to restart the talks and to hope that they will soon be successful. It would be wrong for us or any other Government to try to cut across those efforts. I am sure that they
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    are the best bet for a successful resumption of the talks.
    Mr. Christopher Price: Has the right hon. Gentleman noticed that the attempt to restart the inter-communal talks has coincided with further talk of a unilateral declaration of independence on the part of the North by Mr. Denktash? Could the right hon. Gentleman confirm that if that were to happen it would impinge upon the responsibilities of Britain as a guarantor Power of the integrity of Cyprus under the 1960 treaty? Will he confirm that if that were to happen Britain would take action and condemn any such move immediately?
    Sir I. Gilmour: Any such move would be highly regrettable and I hope that it is unlikely to take place. I do not wish to say more than I have already said. Our immediate aim is to secure a resumption of the inter-communal talks since I am sure that is the only way forward. Wild talk such as that mentioned by the hon. Gentleman is to be deeply regretted.
    Mr. Jim Spicer: Does not the Lord Privy Seal agree that, given the circumstances under which the Turkish Cypriot community lived between 1963 and 1974, their views and their position ought to be given a much fuller airing both in this House and in the world community than it is getting at the moment?
    Sir I. Gilmour: I agree. Not all the right is on one side. It seldom is. The views and the interests of both sides should be given an airing. I repeat that the only way forward that I can see to a resolution of the conflicting interests of the two communities is the resumption of the inter-communal talks.
    Mrs. Dunwoody: Since it is important that the inter-communal talks should begin again and because it is essential that there should be political stability in the island, will not the Lord Privy Seal ask the United Nations to look again at the terms of reference to see whether both parties cannot be encouraged to come to the negotiating table on the basis of wider discussion?
    Sir I. Gilmour: That is up to Dr. Waldheim. The United Nations has immense experience of the problems and its

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    staff are highly expert, skilled and trusted by both sides. I am sure that if those experts believe that different terms of reference are needed they will adjust them. At the moment I am not persuaded of the need for such an adjustment.

    Helsinki Agreement
    Mr. Sainsburyasked the Lord Privy Seal whether he is satisfied with the preparations being made for the Madrid review of the Helsinki Agreement.
    The Minister of State, Foreign and Commonwealth Office (Mr. Peter Blaker): Yes, Sir. Preparations are continuing, though, as I told the House in my answer to my hon. Friend the Member for Aberdeen, South (Mr. Sproat) on 13 February, much will depend on Soviet actions between now and November when the Madrid review will take place.
    Mr. Sainsbury: My hon. Friend will recall the Soviet objections to a proper discussion of the human rights provisions of the Helsinki Agreement at the Belgrade review. Does he agree that it is now the human rights aspects of the Helsinki Agreement that most require attention if we are to make progress on co-operation and security in Europe? Does not my hon. Friend agree that it would be intolerable if the Madrid conference did not include human rights on the agenda? Should not human rights feature as the most important item on that agenda?
    Mr. Blaker: I can assure my hon. Friend that human rights will figure on the agenda at Madrid. It is right that we should discuss all aspects of the Helsinki Final Act. Various parts of it are in the first basket relating to the principles regarding the preservation of peace and we shall certainly wish to discuss that aspect in the light of recent events in Afghanistan.
    Mr. Whitehead: Would the Minister care to comment on a report in the press today that, at the United Nations, Britain has agreed to drop its request for information from the Soviet Union about Academician Sakharov in return for the dropping of a request by the Soviet Union for information about Northern Ireland? Surely if we wish to raise the issue of human rights this sort of trade-off is not the right way to go about it.
    Mr. Blaker: I am glad to assure the hon. Gentleman that there was no such bargain as that he suggests, which was implied in some press reports. The Soviet Union, of its own volition, decided to drop its motion on Northern Ireland, perhaps recognising that it would not be successful. The Western countries agreed to a proposal that the item on Dr. Sakharov—which had been well ventilated—should be placed first on the agenda at the next session of the Human Rights Commission.
    Sir Frederic Bennett: Can the Minister confirm, in regard to the Madrid conference, that if one or other of the Powers decline to attend—for reasons that one can well understand—the conference will nevertheless go ahead, despite the fact that there may be some empty seats?
    Mr. Blaker: It is certainly our intention that the conference should go ahead, as things stand. This is a conference of 35 European countries and it does not depend solely on the volition of one country or another.
    Mr. James Lamond: Since the presence of Turkish troops in Cyprus is clearly in breach of the Helsinki Final Act can the Minister say whether the Government will raise that matter at the conference?
    Mr. Blaker: We shall have to consider as time passes what matters we raise.

    Angola
    Mr. Butcherasked the Lord Privy Seal if he will make a statement on the United Kingdom's relationship with Angola.
    Mr. Luce: Britain enjoys normal diplomatic relations with the Angolan Government and a British Ambassador has been resident in Luanda since 1978. I visited Angola in October and the Angolan Minister of Petroleum visited this country in January.
    Mr. Butcher: Can my hon. Friend tell the House how many Cuban troops are currently deployed in Angola and how does he define their role?
    Mr. Luce: The estimate is that there are about 20,000 Cuban troops in Angola. It is not for me to interfere in the internal affairs of Angola, but no doubt the whole world will note the sharp contrast between the Cuban role in Africa

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    and the British role in bringing about a negotiated settlement and democratic elections in Rhodesia.
    Mr. Robert Hughes: Is not the hon. Gentleman aware of the considerable destabilising activity of the South African Government in their repeated military incursions across the border into Angola? Will not the hon. Gentleman say to the South Africans that the lesson of the recent elections in Rhodesia is that people are willing to fight until they gain their freedom and that South Africa will need to take that into account in relation to Namibia and to its own affairs?
    Mr. Luce: Undoubtedly all the parties will be reflecting carefully on the lessons of Rhodesia. I believe that in the long term it is in the interests of South Africa and Angola to reach a negotiated settlement on Namibia. That, in turn, will have a healthy effect on their relations with each other.
    Mr. Stokes: Would it be possible for the British Government to seek the help of Mr. Mugabe in influencing the Angolan Government to rid themselves of Cuban troops?
    Mr. Luce: I do not doubt that Mr. Mugabe is preoccupied at present with his important duties in Rhodesia. I think that the whole House welcomes the way in which Mr. Mugabe has set about effecting a reconciliation of the communities in Zimbabwe. Perhaps there is an example there to be learnt elsewhere.
    Mr. Rowlands: Since the Government have full diplomatic relations with the Government of Angola will they ensure that they are not involved, directly or indirectly, with any of the forces within Angola that are presently attempting to overthrow a Government whom we recognise? Is the hon. Gentleman aware of the high-level economic mission led by the Bank of England that went to Angola and identified a number of areas of economic co-operation and development between our two countries? Does the hon. Gentleman fully support that mission?
    Mr. Luce: On the latter point raised by the hon. Gentleman, I must say that we attach great importance to increasing the economic ties between Angola and Britain and it is the wish of the Angolan Government that that should be so. Our
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    exports to Angola went up by no less than 30 per cent. last year. A seminar was held recently in which 250 British business men participated and demonstrated their interest in Angola. In the first part of his supplementary question I take it that the hon. Gentleman is referring to the differences between UNITA and the Angolan Government. I hope that the example set elsewhere will be followed in Angola. Perhaps the lesson to be learnt in Angola is that a negotiated settlement might be the best way of bringing about peace.

    Middle East
    Mr. Waltersasked the Lord Privy Seal if he will make a statement on progress towards peace in the Middle East.
    Sir Ian Gilmour: We recognise the urgent need for further progress towards a comprehensive peace settlement. We hope that current efforts will lead to such progress. Meanwhile, we are considering with our European partners how we can best contribute to that end.
    Mr. Walters: President Giscard has recently spelt out very clearly that the right to self-determination for the Palestinians is an essential ingredient for achieving a lasting peace. Does not my right hon. Friend agree that the accepttance of such a principle must form an integral part of any European initiative for peace in the Middle East?
    Sir I. Gilmour: President Giscard was stating what has been the position of the Nine since last Autumn. I agree that Palestinian self-determination must be one element in a comprehensive settlement. Another, as the Prime Minister said on French television the night before last, is that the Palestinian people must undertake to recognise that Israel has a right to exist within secure borders.

  EUROPEAN COMMUNITY

    Council of Foreign Ministers
    Mr. John Evansasked the Lord Privy Seal when he expects to meet his EEC colleagues.
    Mr. Knoxasked the Lord Privy Seal, when next his noble Friend expects to meet his European Economic Community counterparts.
    Sir Ian Gilmour: At the next Foreign Affairs Council in Brussels on 17 and 18 March.
    Mr. Evans: When the Lord Privy Seal next meets his European colleagues will he take the opportunity to inform them that the story that Britain is seeking to join the European monetary system is a wicked rumour put out by the Foreign Office? Will he tell them that the United Kingdom has no intention of joining that European snake?
    Sir I. Gilmour: No, I shall not. The Foreign Office feeds no wicked rumours. We have said that the European monetary system is something to which we are extremely favourably disposed and which we have been considering for some time.
    Dr. Mawhinney: When my right hon. Friend next meets his EEC colleagues will he tell them that their failure to agree, and to agree with us, on a firm response to the Soviet invasion of Afghanistan is undermining the standing of the Community, both in the eyes of the world and in the eyes of the citizens of member countries?
    Sir I. Gilmour: With respect to my hon. Friend, he is being fair neither to our Allies nor to the European Community. When the Soviet invasion of Afghanistan took place there were certain difficulties of perception and reaction. My hon. Friend will have noted that those difficulties have been largely resolved. There is a recent agreement that the European Community will support the bringing of neutrality to Afghanistan. That is a specifically European approach. There has been a remarkable degree of convergence in the European Community in its approach to Afghanistan.
    Mr. McNamara: Will the Lord Privy Seal expand on that statement about the European approach to the Soviet invasion of Afghanistan? Does he believe that the unanimity covers economic matters? Is there a common policy on the selling of foods to Russia at a cheaper price than it is sold to Britain? Are there common policies on trade negotiations, the Olympic boycott and on what our general reaction should be?
    Sir I. Gilmour: I did not hear all that question. There is a common policy on
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    economics, as the hon. Gentleman knows. His question was purely rhetorical. There is no common policy on butter exports. We strongly oppose the export of subsidised butter to Russia. Not all our partners agree. It was agreed that traditional trade flows should continue. Even the United States has not cut all grain exports to Russia—only the additional quotas.
    Mr. Knox: Does my right hon. Friend agree that too often Britain's attitude to the Community appears to be negative and that it is important that it becomes much more positive? To that end what initiatives does my right hon. Friend propose to take at the meeting?
    Sir L Gilmour: I do not agree that our attitude has in any way been negative. Obviously, it has been affected by the question of our budget contribution. I do not wish to go into that now because there are specific questions about that later on the Order Paper.
    Mr. Shore: Is the Lord Privy Seal aware that he is announcing an awful lot of policy agreements of which I have not heard before? He ranged from the apparent agreement of the Nine on the statement about the PLO which President Giscard made in Amman—of which I certainly had not heard before and of which I believe that the House had not heard—to the announcement that there is a common EEC policy on trade and credit towards the Soviet Union, post-Afghanistan. If there are such policies may we have the exact details?
    May we hear more about the sudden announcement about the Government's great enthusiasm for the EMS? That will come as a surprise to hon. Members on both sides of the House. Will the right hon. Gentleman make it absolutely plain that there will be no agreement on the EMS until the Government fulfil their undertaking to lay the matter before us and to organise a proper and full debate?
    Sir I. Gilmour: The right hon. Gentleman is a little over-excited. I did not mention the PLO. I talked only about self-determination, which was implicit in the speech by the Irish presidency at the United Nations last October. Our position on the EMS has always been that we shall join when conditions permit.

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    I am not sure whether that was the last Government's position. It was a long time ago. We cannot tell when conditions will permit us to join the exchange rate arrangements of the EMS. As the right hon. Gentleman should know, we participate in the rest of the EMS arrangements. I can give an assurance that nothing will be agreed without consensus.

    Budget (United Kingdom Contribution)
    Mr. Deakinsasked the Lord Privy Seal if he will make a statement about progress with other EEC countries in the matter of reducing the United Kingdom budget contribution.
    Mr. William Hamiltonasked the Lord Privy Seal what further progress has been made in reducing the United Kingdom's contribution to the EEC budget.
    Sir Ian Gilmour: Some progress has been made, and we look to an agreed solution at the next European Council in Brussels on 31 March.
    Mr. Deakins: When talking of a solution to the problem do the Government mean one that will take account of the vastly increased costs of the common agricultural policy, and hence of our budget contribution, when the three new members, Greece, Spain and Portugal, are admitted?
    Sir I. Gilmour: We aim to achieve a solution that will last as long as the problem. That indicates a certain dynamism.
    Mr. Hamilton: Does the Lord Privy Seal agree that the Prime Minister in particular has blown hot and cold for months on end with singularly little positive result? Does the right hon. Gentleman agree that, in the circumstances, we should take a more robust and aggressive attitude, particularly towards the French Government, who do not understand anything else? To what progress was the right hon. Gentleman referring when he answered the original question?
    Mr. James Lamond: And that is from a supporter of the EEC.
    Sir I. Gilmour: I was talking particularly about the Commission paper of which the hon. Gentleman will be aware. I do not agree that the Prime Minister has blown hot and cold. She has been
    1328
    singularly strong and consistent on this issue. The hon. Member for Fife, Central (Mr. Hamilton) asks for a robust and aggressive attitude. He seems to believe that the quarrel should be conducted as if it were between members of the Labour Party. We do not believe that that is the right way to behave towards our partners. We have taken a strong position. If the hon. Gentleman had read the transcript of the Prime Minister's broadcast on French television the night before last, he would have noticed that she took an effective and robust attitude. We are convinced that our case is right. We are asking for an equitable solution and that is what we intend to achieve.
    Mr. Sproat: In view of the demands from France and Germany recently for Britain to do a deal on her fish contribution to the EEC, will my right hon. Friend make it clear that the Prime Minister's assurance stands—that we shall not do a trade-off in fish, particularly since it is now worth about £700 million a year, year on year?
    Sir I. Gilmour: I am not at all sure that there has been that demand from Germany, although I agree that President Giscard asked for the matters to be linked. I think that my hon. Friend knows our position. We have made clear to our partners that we are anxious to make progress on all Community problems, but that they should be dealt with on their own merit.
    Some of our partners would like to see a number of problems brought together in a single package for decision by the European Council. We note their views, but we believe that it would be in the interest of the Community as a whole to make progress on all these issues and to solve each as soon as possible.
    I entirely agree with what my hon. Friend says about the great importance of fish to this country.
    Mr. Buchan: Does the right hon. Gentleman agree that a very robust and aggressive solution to the policy was given in the resolution passed by the Labour Party in Scotland at the weekend, when it called on us to leave the Common Market? Would not that receive the overwhelming support of the British people now?
    Sir I. Gilmour: It is possible to exaggerate the importance of recommendations by the Scottish conference of the Labour Party. It is plain that the Labour Party did nothing whatever to solve the problem when it was in power. The financial mechanism that it produced in 1975 turned out to be virtually useless, and Labour got nowhere in dealing with our problems with the Community. We are negotiating in our own way, firmly and sensibly, and we do not believe that the uttering of impotent threats is the right way to proceed in negotiations.
    Sir Anthony Meyer: In view of the impact of the French television interview of my right hon. Friend the Prime Minister, in which she combined firmness, patience and courtesy with a clear expression of Britain's intention to remain part of the European Community, and as that has been my right hon. Friend's attitude all along, will he persevere with it?
    Sir I. Gilmour: I am most grateful to my hon. Friend for what he said. He described entirely accurately the television broadcast of my right hon. Friend the Prime Minister. We shall proceed with the attitude that we have been pursuing.
    Mr. Shore: I am sure that neither side of the House would wish the Government to be uttering impotent threats about the budget contribution and the general objective of broad balance. But what about uttering a few potent threats instead? A remedy lies in our own hands. As the Prime Minister said, it is our own money that we are dealing with. Why do we not make it absolutely plain that if we do not get satisfaction we shall jolly well see to it that we achieve a broad balance by our own acts?
    Sir I. Gilmour: That is the sort of attitude that the right hon. Gentleman always takes to the European Community when he is in opposition, but it is not quite the same when he is in government. We must take a responsible attitude. The uttering of potent or impotent threats—more likely impotent—is not the right way to get our way in this matter. We are pursuing our negotiations firmly and robustly, and we have made a certain amount of progress. Much more remains to be done, but the history of diplomatic negotiations throughout the ages proves
    1330
    that the uttering of threats is not the best way to proceed.

    Heads of Government (Meeting)
    Mr. Spearingasked the Lord Privy Seal what will be the likely business agenda for the EEC Heads of Government meeting in Brussels on 31 March and 1 April.
    Sir Ian Gilmour: European Councils have no fixed agenda. But Heads of Government normally discuss the economic and social situation in the Community and other topics of major interest. It is too early to say what these will be, but among them will certainly be the problem of our excessive net contribution to the Community budget.
    Mr. Spearing: Will the Lord Privy Seal give the House an assurance that when that important topic is discussed the Prime Minister will not accept any offers of offsetting grants, even if they fully displace matters that are the proper responsibility of the United Kingdom budget? If grants are offered in respect of roads, tunnels or docks, does it not mean that our money is being sent to Brussels for it to decide what should be spent in this country?
    Sir I. Gilmour: The hon. Gentleman has misunderstood the whole point. If he reads the Community documents he will see that they put forward the sort of broad areas in which Community money might be spent but that this is subject to our agreement. That is what we have been discussing with the Community in Brussels.
    Mr. David Price: Will my right hon. Friend discuss at the meeting the initiative of my noble Friend the Foreign Secretary in respect of Afghanistan, and ask the other eight Governments what they are doing to support that initiative? Could not it be pointed out to the French that it is a very good example of what they are always asking us to do, which is to produce a politique communautaire?
    Sir I. Gilmour: I entirely agree with my hon. Friend. It is a very good example of politique communautaire. I think that our Community partners particularly the Italian presidency, have been supporting the initiative. I have no doubt that the matter will come up next week.
    Mr. Roy Hughes: Apart from dealing with the massive financial contributions that this country is making to the Community, is there not also a necessity now for the Government to tell the Community of this country's need to introduce a policy of import controls to protect our essential industries, or is the right hon. Gentleman prepared for many more of them to go to the wall, with a consequential catastrophic rise in unemployment?
    Sir I. Gilmour: I in no way accept the hon. Gentleman's premises. The matter certainly does not arise on this question.
    Mr. Marlow: As the nasty historic accident of the common agricultural policy does about as much for the longterm prospects of European unity as Carabosse, the Wicked Fairy did for the wakefulness of the Sleeping Beauty, and as in the current negotiations Britain holds all the cards—the markets for European agricultural produce and for its manufactured goods, the fish and the oil —will my right hon. Friend insist at the meeting that an immediate short-term plan is devised for slaughtering this monster, so that we can have financial equity?
    Sir. I. Gilmour: I am very glad to learn that we hold all the cards. If the problem of our budget contribution is solved, that will be enough for one conference.
    Mr. Leighton: I sympathise with the right hon. Gentleman in his predicament. Can he envisage any scenario in which he will be able to give us any good news from the Common Market?
    Sir I. Gilmour: I am grateful to the hon. Gentleman for his sympathy. I hope that in a few weeks I shall no longer need it.
    Mr. Kershaw: Does my right hon. Friend think that there is any chance of the Heads of Government conveying a joint opinion to the Israeli Government that the repeated settlement of Jewish settlers on lands in Jerusalem and the West Bank does not contribute to a solution of that problem?
    Sir I. Gilmour: That is certainly the view of all the Nine, as my hon. Friend will know. Recent news of increased
    1332
    settlement in the West Bank is greatly to be regretted. But I very much doubt whether the matter will come up at the next European Council.
    Mr. Speaker: Mr. Marlow—Question No. 35.

    Structure and Financing
    Mr. Marlowasked the Lord Privy Seal whether he will make arrangements to discuss with his European colleagues changes in the structure and financing of the EEC.
    Mr. Speaker: Order. I think that I should apologise all round. I tried not to call for a supplementary question any hon. Member whose question was likely to be reached, but I have called the hon. Member for Northampton, North (Mr. Marlow).
    Sir Ian Gilmour: No, Sir. We are not challenging the own-resources system of financing the Community. However, at Dublin it was agreed to look for ways of increasing Community expenditure in the United Kingdom and on the need to consider longer-term restructuring of the budget to reduce the predominance of agricultural spending. Discussions on how to achieve this are continuing.
    Mr. Marlow: Is my right hon. Friend aware that if we do not achieve a satisfactory solution rapidly the recent suggestion by the Leader of the Opposition about withholding VAT payments will have a great deal of support on the Conservative Benches?
    Sir I. Gilmour: As I have already told the House, we are working for an equitable solution. We have been putting across our case, and none more strongly than my right hon. Friend the Prime Minister in her broadcast. That is what we are aiming to achieve at the next summit conference.
    Mrs. Dunwoody: Is not the Lord Privy Seal aware that the own-resources system is a crazy system, which works very strongly against our interests? Why is he not considering some other means of financing the Community if he is so determined that Britain should continue as a member?
    Sir I. Gilmour: I do not agree that it is necessarily a crazy system. I am not

    1333
    sure to what degree the hon. Lady understands the system. It does not work in the case of Britain, and that is why we are seeking to adjust it. However, that does not necessarily mean that it is wrong in itself.

    BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 28 MARCH
    Members successful in the ballot were:

    Mr. Robert Rhodes James

    Mr. Michael Welsh

    Mr. John Fraser

WELSH HOMES INCIDENTS (TELEVISION PROGRAMMES)
Mr. Merlyn Rees: On a point of order, Mr. Speaker. I seek your advice on a matter that brooks no delay. I can see no way in which the matter can be raised in the House, but I seek your advice because the event with which I am concerned is to take place tonight.
There is a bombing campaign in Wales against the houses of English residents and the houses of Welshmen with two houses in Wales. I understand that a television programme is to be broadcast on the BBC in Wales tonight that will show bombing devices, and will show a man who claims to take part in the bombings. The report that I have says that the bombers claim that great care is taken not to cause injury to life or limb, but they acknowledge that somebody will be hurt at some time or another.
I ask for an opportunity to hear from the Government what action they propose to take on the matter. Nobody wishes to stop genuine ideas being put forward on television, even from those with whom we disagree. However, this is a matter where people will be hurt. I ask whether some action can be taken.
The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): Further to that point of order, Mr. Speaker. I wish to assure the right hon. Member for Leeds, South (Mr. Rees) of the importance that the Government attach to the issue that he has raised this afternoon. I regret that my right hon. Friend the Home Secretary cannot
1334
be present this afternoon, for reasons that the right hon. Gentleman will understand. I have had a preliminary discussion with him, and he attaches the greatest importance to the intervention made by the right hon. Gentleman. At the earliest possible opportunity I shall convey to him what the right hon. Gentleman has said in the House this afternoon.
Mr. Speaker: The House will understand that there are times when although a matter that is raised is not strictly a point of order it is in the interests of the House to be forbearing.

TELEVISION PROGRAMMES (QUESTIONS TO MINISTERS)
Mr. Cryer: Further to that point or order, Mr. Speaker. The point of order that you have allowed appears to be connected with the question of programmes on BBC Television. When questions are tabled it is customary for the Table Office to say that interference with programmes is not a ministerial responsibility. I quite understand and accept that, but I have tried consistently to raise the question why the BBC is prepared to show a programme of this nature but several years ago banned a programme called "The War Game", which showed the consequences of a nuclear disaster, which, in my view, people should know about.
May I raise this issue with you, Mr. Speaker, in exactly the same terms, so that my concern about the banning of a programme that I believe to be of public importance could also be brought to the Home Secretary's attention?
Mr. Speaker: The hon. Gentleman has made his point. It was a fair point, because I exercised my discretion with the right hon. Member for Leeds, South (Mr. Rees). There are times when the House must exercise discretion on broad national issues. I hope that the House will leave the matter there.
Mr. Stoddart: Further to that point of order, Mr. Speaker—
Mr. Speaker: Order. I have appealed to the House to leave the matter there. I hope that the hon. Gentleman will not seek to pursue the matter, because it is irregular. I did what any Speaker worth his salt would do and

1335
allowed an expression of view that I believed the House wanted to hear.
Later—
Mr. Speaker: I express my gratitude to the hon. Member for Swindon (Mr. Stoddart) for his courtesy.

BUSINESS OF THE HOUSE
Ordered,
That, notwithstanding the practice of the House relating to the interval between the various stages of Bills of aids and supplies, more than one stage of the Consolidated Fund (No. 2) Bill may be proceeded with at this day's sitting.—[Mr. Peter Morrison.]

STATUTORY INSTRUMENTS &c.
Ordered,
That the draft location of Offices Bureau (Revocation) Order 1980 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Peter Morrison.]

HEALTH SERVICE COMMISSIONER (POWERS)
3.38 pm
Mr. Jack Ashley: I beg to move,
That leave be given to bring in a Bill to empower the Health Service Commissioner to investigate matters of clinical judgment.
The purpose of the Bill is to correct the balance of advantage that lies heavily against the individual patient making a complaint and overwhelmingly in favour of the hospital authorities. The aim of the Bill is to prevent the medical establishment from gagging an aggrieved patient by murmuring the incantation "clinical judgment".
The medical profession renders a valuable service to the community. The Bill does not seek to attack that service. It aims to provide patients with an impartial investigation of those complaints, which include matters of clinical judgment.
When people suffer damage or disaster they have a right to know what when wrong and why it went wrong. They have a right to seek the truth. That right is curtailed by the present system. As a consequence, patients are denied the explanation to which they are entitled. Complaints are investigated by the health authorities, but, as they are ultimately responsible, they sit both as defendants and as judges—the classical posture of indisputable authority.
It is misleading and idle to pretend that that such a system guarantees independent scrutiny. It plainly does not. It places the health authority in an indefensible position, because even when that authority acts with great care, its decisions are open to the charge of whitewash by aggrieved patients. There is always the lurking doubt that the medical authorities are protecting the medical establishment.
The present system is justified on the spurious ground that if patients have complaints they can sue. That is nonsense, because only the very rich or the impoverished—who are entitled to legal aid —have access to the courts. The majority risk crippling legal costs if they go to court. They face a powerful and well organised medical profession, buttressed by legal expertise.

1337
It is natural that many patients back away, daunted by the threat from doctors and the legal establishment and by the odds that they recognise are too heavily stacked against them. Many patients, often with legitimate complaints, have no redress whatever. That means that they are denied independent scrutiny.
Many patients complain, because they want to know what happened. Some of them are very anxious to prevent the same thing from happening to other people. I am struck by the number of letters in my postbag from people who are anxious to help others. They say that they do not want what happened to them or their relatives to happen to others. That is a major reason for their concern.
The fear that some people may complain and then go to the courts for compensation leads to the worry by the medical profession about double jeopardy, and that is understandable. It may lead to double jeopardy, but the fear is exaggerated. Double jeopardy already exists in respect of the findings of the Ombudsman, but it simply has not happened yet.
There is also a fear of defensive medicine, but as virtually nothing is known about the extent of clinical error we simply do not know whether defensive medicine will arise. We do not know what defensive medicine—whatever that phrase may mean—will do. Personally, I have more confidence in doctors than has the spokesman of the medical profession. I do not think that doctors would shy away from treating their patients on these grounds. I believe that none of the excuses about double jeopardy or defensive medicine can obscure the fact that patients feel very deeply about the need for impartial investigation.
The letters of complaint that I receive are directed at neglect by doctors, at false entries or omissions from clinical notes, at concealed evidence, and at prejudiced hearings. The complaints may constitute only a tiny minority of patients —I think that they do—but until we have impartial investigations of the complaints we simply do not know whether they are justified. We certainly do not know how many are justified. Irrespective of their numbers, the patients concerned should have a right to an impartial hear-
1338
ing. That right does not exist at the moment if clinical judgment is involved.
The Davies committee favoured independent scrutiny of clinical judgment. The Select Committee, to which I pay a high tribute for its painstaking work, favoured the Ombudsman investigating clinical judgment. That Committee went into great detail and to enormous trouble, and its decision was clear-cut and heavily in favour of clinical judgment being included within the Ombudsman's remit.
According to the magazine General Practitioner the Secretary of State for Social Services went on record in 1978 as saying that he supported such a policy. I am glad to see him on the Front Bench this afternoon. He has since said that he doubts whether the proposal will gain the consent of the medical profession. I do not think that he would be justified in giving the profession the right to veto legislation if it thinks that the proposal will be inconvenient. The moment that he concedes that principle, the same principle must be conceded to dockers, dustman and everyone else. I hope, therefore, that doctors will not be permitted to exert undue interference in the legitimate powers of the Secretary of State.
The right hon. Gentleman has currently said that he is considering alternative proposals by the general consultants' committee. He is wasting his time, because the alternative proposals will mean only that the consultant concerned should discuss the complaint with the patient. If that does not succeed he should discuss it with the regional medical officer. If that does not succeed he should bring in two independent consultants. That sounds fine, until one reads the small print and discovers that the general consultants' committee blandly insists that the names of the two so-called independent consultants shall be vetted by the original consultant. How is that for cheek? It also says that if the two vetted consultants fail to convince the patient, no further action should be taken. That is an incredible proposal for seeking to alleviate the anxieties of people with legitimate fears.
As the British Medical Association's spokesman was forced to admit, these proposals leave the patient with no alternative but to shut up or sue. That is disgraceful. The proposals constitute a travesty of justice, designed simply to get

1339
doctors off the hook. They do not bear examination.
My Bill would ensure that complaints about clinical judgment were carefully and impartially investigated by the Parliamentary Commissioner, who would be advised by medical experts seeking the truth. He would not criticise, with the benefit of hindsight, doctors who had taken actions that proved to be wrong in the light of prevailing knowledge. It is important to make that distinction, because it is all too easy for science to move on and for people to find that they have made a mistake, given the state of prevailing knowledge.
The Bill ought to reassure the vast majority of the medical profession with its very high standards. It would reassure the public, who would have the right to an independent assessment of complaints about treatment that affects their health and their lives.
3.47 pm
Mr. John Stokes: I had expected that many hon. Members would rise to oppose the right hon. Member for Stoke-on-Trent, South (Mr. Ashley) in his attempt to obtain leave to bring in the Bill. However, since no one else has done so, and since the House is not exactly full, I feel that it is up to me to do it and for my voice to be heard in opposition.
I have been a member of the Select Committee on the Parliamentary Commissioner for some months. I have some knowledge of his work, and the greatest regard for it. The question is whether we substantially extend the Parliamentary Commissioner's scope to give him the power to intervene in what are purely matters of clinical judgment. That is a big decision for the House to make without debate. I believe that it would open up a veritable minefield, and the imagination boggles at the muddle, confusion and possible danger that would ensue.
We must, in the main, trust our doctors, nurses and surgeons. I speak as one who has from time to time nearly been killed and has therefore been under their care
1340
and judgment. I am only too aware that doctors, surgeons and nurses are human beings, and, of course, are capable of error, and that they make errors. How can those difficulties be overcome? I do not believe that it is wise or sensible, without the gravest deliberations, to seek to overcome them, by allowing the Parliamentary Commissioner a vast new extension of power in a totally unknown field. As ordinary people, we do not have either the training or the knowledge to question the clinical judgment of the medical profession.
As for enlarging the scope, surely everything in life cannot be under debate and scrutiny. If we are to live reasonably some matters must be taken on trust, unless there are grave grounds to the contrary. I fear that sometimes, today, in a modern democracy, complaints become a sort of disease. If life is to be lived from the cradle to the grave, let us hope that it will not be simply one long complaint.
I believe that it would be wrong, unwise and dangerous for the Bill to be passed at this time, after only a few minutes discussion. I hope, therefore, that it will be rejected by the good sense of the House.
Question put, pursuant to Standing Order No. 13 (Motions for leave to bring in Bills and Nomination of Select Committees at Commencement of Public Business), and agreed to.
Bill ordered to be brought in by Mr. Jack Ashley, Mr. Peter Bottomley, Mr. David Ennals, Mr. Charles Fletcher-Cooke, Mr. Alfred Morris and Mr. Donald Stewart.

HEALTH SERVICE COMMISSIONER (POWERS)
Mr. Jack Ashley accordingly presented a Bill to empower the Health Service Commissioner to investigate matters of clinical judgment: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed.
ORDER OF THE DAY

  CONSOLIDATED FUND (NO. 2) BILL
  Order for Second Reading read.
  Motion made, and Question proposed, That the Bill be now read a Second time.
  Mr. Speaker: Before we start the debates on the Consolidated Fund (No. 2) Bill, I wish to give the House a little advice as to the scope of the various debates. The Bill is a relatively narrow one. The rules regarding debates on Supplementary Estimates, and consequently on Bills founded on such estimates, are set out in "Erskine May", as follows:
  "If the sum demanded by a supplementary estimate is of the same order of magnitude as the original estimate, the chair has allowed questions of policy to be raised upon it which would have been in order if it had been an original estimate; but if the supplementary estimate is merely to provide additional funds of a relatively moderate amount required in the normal course of working of the services for which the original vote was demanded, only the reasons for the increase can be discussed and not the policy implied in the service which must be taken to have been settled by the original vote".
  Topics 1, 2, 8, 13 and 14 on the list of subjects are based on Estimates to provide additional funds of a relatively moderate amount. Thus, only the reasons for the increase should be discussed.
  With regard to topics 3 and 4, the Supplementary Estimate is of a similar order of magnitude to the original Estimate, and matters of policy can be raised—that is, on the questions of the sale of shares in BP and on finance for the NEB. They are the only two topics on which policy questions can, in order, be raised.

  PRISONS (WORKING CONDITIONS)
  3.56 pm
  Mr. Keith Best: I am told that one of the great fortunes of life is to be called first to speak in the debate on the Consolidated Fund Bill. I hope that fate will continue to smile on me, and that this will not be the last time that I shall be so fortunate.
  I wish to raise the matter of the additional burden on prison staff, which is
  1342
  set out in Class IX, Vote 9, where there is provision for an extra £4,085,000 for the payment to prison staff. The reason set out in the Vote is that it is due mainly to additional overtime and allowances.
  I am grateful for your guidance in the matter, Mr. Speaker, and I hope that I shall not stray beyond the bounds of propriety. I am aware that if I do so you will rapidly call me to order. Before I move to the gravamen of what I wish to say, I should like to pay tribute to the prison service. I am sure that my hon. and learned Friend the Minister of State, who is to reply to the debate, will wish to join me in paying tribute to the hard work and effort of the prison officers. I have been in and out of prisons in London for some time. [Interruption.] In view of the approbation from Labour Members, perhaps I should explain that that has been in connection with my work as a barrister rather than as a criminal.
  The reason for the increase in payment of overtime for prison officers—I suspect that people who have visited prisons in London have noted the great burden and strain that is placed on prison officers, not least upon their family lives—is the extra workload that is placed upon them due to the number of persons in prisons who should not be there. I speak of one section—people who suffer from alcohol problems—and I shall confine my remarks to that aspect.
  The number of alcoholics in prison is variously estimated. However, since the Criminal Justice Act 1977 a person cannot be directly imprisoned as a result of drunkenness, although that will not necessarily cut down the numbers incarcerated in prison for drunkenness offences. People who are fined and cannot pay their fines, or who choose not to pay their fines, will be imprisoned in default. People will be imprisoned as a result of other offences that have been generated through the consumption of alcohol. There are a number of crimes, particularly in the burglary or personal damage field, that have been committed while their perpetrators have been under the influence of alcohol. The estimate is that between 30 and 40 per cent. of

  1343
  prisoners have a serious alcohol problem. That represents about 3,000 persons in prisons.
  I should like to endorse that point by a quotation from a booklet entitled "Community Services for Alcoholics" prepared by the Federation of Alcoholic Rehabilitation Establishments working party. On page 49, it states:
  "A survey of Midland prisons in 1969 showed that 45 per cent. of inmates had an alcohol problem. Until October 1976 a unit for alcoholics functioned at Wakefield Prison but closed temporarily because it proved difficult to appoint staff to man it. The unit has not reopened and apart from discussion groups run by probation officers in prisons together with Alcoholics Anonymous groups and the Social Skills experiment at Ranby and Ashwell Prisons, little goes on in this field in prisons. Probation officers would welcome the Prison Department taking a more imaginative approach in assisting alcoholics."
  I certainly endorse that point.
  I reiterate what I said earlier about whether people with alcohol problems should be in prison at all at the vast cost and expense of recruiting extra staff and the resultant need for overtime.
  It may be questioned whether this is a Home Office or a Department of Health and Social Security responsibility. There was a transference of responsibility from the Home Office to the DHSS in 1971. Circular 21/73 was then published. I suppose that it is about the best statement of Government policy still in existence on the problems of alcohol. The circular stated:
  "The Home Secretary announced early last year"—
  that was a reference to the year in which it came out—
  "that it had been decided that departmental responsibility for the provision of facilities for those who are habitually drunk in public places should pass to the Department of Health and Social Security as part of a comprehensive treatment and rehabilitation service for all alcoholics.
  The reluctance of the public to recognise the scale and nature of the problem in their midst is well known and it would be unrealistic to expect rapid, unaided development of community provision by statutory or voluntary bodies on the scale which is needed to meet the needs of all alcoholics in the community at large as well as those of the offender group studied in the report on habitual drunken offenders.
  This Circular offers certain special transitional financial arrangements to help increase and sustain the rate of growth of the voluntary
  1344
  services which is likely to be needed during the initial phase: it will make it easier for authorities, if they wish, to work with local or national voluntary bodies to provide services for this problem group. Authorities are asked to consider the needs in their area and how a start can be made toward meeting them: the plans made should be considered within the machinery of the local joint consultative committees — and should thereafter be reflected in successive revisions of the authorities' '10 year plans'."
  That quotation will have relevance when I speak about the existing facilities—notably, the Leeds detoxification centre.
  Circular 21/73 comes to an end this year. Therefore, we are now entering a limbo period in which, subject to what my hon. and learned Friend may say, there will not be any clear restatement of Government policy. I hope that my hon. and learned Friend will remedy that to a certain extent in his remarks today.
  I was concerned about the attitude of the Departments towards this problem. In fact, in a parliamentary question to the Secretary of State for Social Services, I asked
  "if he is satisfied with current facilities for the treatment of alcoholics who are convicted of criminal offences"—
  Mr. Speaker: Order. I am sorry to interrupt the hon. Gentleman. I am trying to give him a fair run. However, he must link his remarks to the reason for the increases which the House is asked to approve.
  Mr. Best: I fully appreciate that, Mr. Speaker. The question that I put to the Secretary of State for Social Services was about those suffering from an alcoholic problem who are convicted of criminal offences. If they are convicted of criminal offences involving alcohol, there is an extreme likelihood that they will go to prison as a result. That will increase the burden upon the prison staff and necessitate the payment of overtime, which is the sphere that I am discussing this afternoon.
  The answer that I received was:
  "It is the responsibility of health and local authorities to decide, in the light of their resources and priorities, the services which are needed to help alcoholics. My right hon. Friend is including in his consideration of the report of the advisory committtee on alcoholism on the pattern and range of services for problem drinkers, consultation with my right hon. Friend the Secretary of State for the Home Department on the recommendations relating to links

  1345
  with the prison, probation and after-care services."—[Official Report, 6 February 1980; Vol. 978, c. 245.]
  It seemed that the DHSS was saying that this was not its problem.
  I then put a similar question to my right hon. Friend the Secretary of State for the Home Department. He replied:
  "Treatment facilities for alcoholics who are offenders but are not in custody are a matter for my right hon. Friend the Secretary of State for Social Services. With regard to those in custody, in addition to specific facilities for treatment at three prisons, all prisons have medical officers—many of whom have psychiatric qualifications or experience; many prisons have visiting psychiatrists; and most have an Alcoholics Anonymous group." [Official Report, 24 January 1980; Vol. 977, c. 312.]
  It will be appreciated that the additional burden of Alcoholics Anonymous groups in prisons will require extra supervision by prison staff. That must necessarily place an extra burden on those staff and involve the payment of overtime.
  Recommendations for further facilities for alcoholics so as to take them out of the prison population and to alleviate the burden upon prison officers have been made by a number of bodies. I referred earlier to the report by the advisory committee on alcoholism on the pattern and range of services for problem drinkers. That report referred to the 1971 report entitled "Habitual Drunken Offenders", which included a recommendation that
  "special arrangements for detoxification would be indispensable to any future system which attempted to deal comprehensively with public drunkenness".
  It went on to point out that
  "if after two experiments in London and the provinces demonstrated that they were an effective alternative, detoxification centres should be established where they were warranted by the extent and pattern of drunkenness offences."
  That would obviously alleviate the burden on the prison services. The recommendation of the advisory committee on alcoholism was
  "that detoxification facilities could play an important part in a comprehensive pattern of services for problem drinkers."
  Mr. Tristan Garel-Jones: My hon. Friend has raised an important point on the whole question of alcoholism and crime. Does he not agree that the problem of alcoholism extends much further than the narrow effect on crime
  1346
  figures and that it is time that the Government published the Green Paper on alcoholism the publication of which they seem to be holding up?
  Mr. Speaker: Order. The hon. Gentleman is inviting his hon. Friend to stray beyond the narrow path. That is something that I always frown upon.
  Mr. Best: You will be glad to hear, Mr. Speaker, that, though severely tempted, I fall not. I shall maintain myself along the narrow tramlines to which you so properly directed me at the beginning.
  Section 34 of the Criminal Justice Act 1972 enables a police officer, when arresting a person for a drunkenness offence, to take him to a detoxification centre. But that section has not properly been implemented throughout the country, because the detoxification centres are not available. In fairness, I should say that it is because those at Leeds and Manchester are in the process of evaluation to see whether they are indeed one of the ways by which the prison population, and thereby the burden upon prison officers, can be alleviated.
  I ask my hon. and learned Friend to tell me, if he can, what is happening about the evaluation of the Leeds and Manchester centres. When will the Government be in a position to say that that evaluation has taken place and whether it is right for further detoxification centres to be set up around the country, or, if those centres are found not to be the answer, whether some alternative method will be proposed?
  I am not alone in calling for detoxification centres. Only recently the Police Federation, in a memorandum submitted to the Home Affairs Committee on 11 February, stated:
  "I would like to inform members of the Committee that it was the Police Federation which proposed that simple drunkenness should be decriminalised. We took the view that to keep on arresting and locking up a habitual drunkard and sending him to prison for short periods was a totally unsatisfactory way of dealing with a person who is obviously suffering from a major illness. It was the Police Federation, also, which came out in firm public support of the proposals made by the last Government to establish detoxification or drying out centres. I wonder if it is public knowledge that the first legislation for drying out centres was passed a hundred years ago, and nothing was done. The advantages of detoxification centres can be seen at the highly successful centre run by skilled medical and

  1347
  social workers in Leeds which has been fighting a threat of closure for more than a year. It has transformed the position in Leeds so far as the alcoholic who is rootless and homeless is concerned. Men, some of them quite young, have been kept at the centre for several days and some of them have gone on to other houses run by the same charity in Leeds, from where they have been able to make a new start. Previously, all that could be done was to keep them on the same futile round of drunkenness, arrest, prison and release to get drunk again. Yet, because of a dispute about the level of support from public funds, it appears that the Leeds centre is still in danger of being closed."
  The memorandum then goes on to mention the hospital-based unit at Manchester and the problems that confront police officers. That leads us on to the problems confronting prison officers which gave rise to the need for them to be paid more because they are not medically trained to deal with the number of alcoholics admitted to prison.
  I had the opportunity yesterday of listening to the all-party penal affairs group which meets in the House, and to Mr. Bill Kilgallon from the Leeds detoxification centre. Also, a recent parliamentary question has shown that since the incipience of the Leeds and Manchester centres and the Salvation Army centre in Tower Hamlets, 3,670 persons have gone through the unit at Manchester and 1,283 have gone through the Tower Hamlets centre. The House will remember the estimate I gave earlier of the numbers of persons in prison suffering from an alcohol problem.
  Mr. Ivan Lawrence: I wonder whether my hon. Friend would help the House by addressing his mind to another problem in this area, which is the demarcation between the Home Office and the DHSS in dealing with matters of this kind.
  Mr. Speaker: Order. The hon. Gentleman was not here when I ruled earlier that this is a narrow debate that must be linked to the reasons for the increases in the Estimate that have been asked for. If I may be allowed to comment, I believe that the hon. Member for Anglesey (Mr. Best) has done a remarkable job in managing to keep his argument linked with them.
  Mr. Lawrence: On a point of order, Mr. Speaker. The relevance of what I
  1348
  said is that the increases might be greater if the Home Office had more responsibility than the DHSS.
  Mr. Speaker: There might be more overtime, but I think it is a fair guess.
  Mr. Best: I am grateful for your comments, Mr. Speaker. I do not believe that my hon. Friend was in the Chamber when I mentioned this possible conflict of interest between the DHSS and the Home Office. It may well be something that my hon. and learned Friend will deal with when he replies.
  I end by asking my hon. and learned Friend two questions. First, what will happen to these centres, particularly the Leeds centre? I know that his Department has offered the centre £16,000, although it actually asked for £23,000. I hope that there will be continuing funding of the centre until it can be proven that there is an alternative and better method for keeping persons out of prison and thus lessening the burden on prison staff. Secondly, what general plans has the Department under consideration for trying to keep those with an alcohol problem out of prison?
  One of the major problems that confront us today is that the increase in the number of persons incarcerated every year in our prisons, for whom society has no answer, is related to alcohol problems. This nettle should have been grasped long ago. Successive Governments have failed to grasp the nettle. We still do not have a comprehensive rehabilitative programme to deal with those who, often through no fault of their own, suffer from alcoholism and who are locked up because society has no other answer. That is an intolerable state of affairs. I hope that this afternoon we shall receive some guidance from my hon. and learned Friend or at least a restatement of the Government's determination to ameliorate this problem as soon as possible.
  4.16 pm
  Mr. Ronald W. Brown: I should like to argue from a slightly different angle from that of the hon. Member for Anglesey (Mr. Best). I want to take the item under the heading
  "Plant, Machinery, Tools and Vehicles, (2) For prison industries."
  I also want to take—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): Order. I am afraid that the hon. Gentleman cannot do that. He must stick to the subject that has been ballotted for, which is the additional burden on prison staff.
  Mr. Brown: With great respect, Mr. Deputy Speaker, that is really what I want to do. I am linking it to the increase in money, which Mr. Speaker said I had to do. I was being helpful. I could have gone straight on and spoken, but I thought that I would help the Minister to understand what I was speaking about. I want to speak about money for prison industries. I also want to refer to page 38:
  "Deduct: AZ Appropriations in Aid, (01) Proceeds of sales outside the Prison Service."
  I hope to show the Minister that much of the time of prison officers is wasted looking into matters that are not their concern. I wish to draw his attention to the prison industries and to tell him that they are being used for manufacturing furniture.
  Apparently, without any form of consultation with anyone, a decision has been taken to spend this increase in money on the provision of sophisticated woodworking machinery in order to set up in prisons an industry for manufacturing furniture—not just chairs and tables but three-piece suites. These three-piece suites are being retailed outside the prisons. That must place an enormous burden on prison officers.
  Does the Minister believe that that is the right job for prison officers? Are they trained in health and safety matters connected with the type of machinery that is being used? Outside people are also being brought in to help to train prisoners, which places an unfair burden upon prison officers. Why does the Minister believe that prisons should manufacture suites of furniture and sell them to the trade outside at half the price for which they can be manufactured locally? Manufacturers in the furniture industry take great exception to this, because they are being put out of business by an industry that has no right to be there.
  My union has always argued that it is prepared to see prisoners properly trained so that when they leave prison they can come back into normal life and take up a
  1350
  card in the union as furniture workers. I represent the Furniture, Timber and Allied Trades Union.
  Mr. Deputy Speaker: Order. I am sorry to interrupt the hon. Gentleman again, but I do not think that the Minister of State will be able to answer his questions, because the debate that we are covering is Class IX, Vote 9. The hon. Member will find that on page 206. It is concerned with the pay and allowances of prison staff and officers, overtime, and that sort of thing, but it has nothing to do with furniture manufacturing—unless the hon. Member connects it to pay and allowances and overtime.
  Dr. Shirley Summerskill: On a point of order, Mr. Deputy Speaker. I think that it is very important that we all get straight what we can and cannot talk about, because both speeches so far have been interrupted and I would not like mine to be so interrupted, and I am sure that the Minister would not like that either—although he probably already has a speech that is totally in order. However, Mr. Deputy Speaker, will you please say whether it is in order for an hon. Member to make a speech that puts forward suggestions for reducing the number of people in prisons at present, in order that consequently the burden on prison staff can be reduced?
  Mr. Deputy Speaker: I think that that will be in order, provided that it is related to Class IX, Vote 9, which concerns additional burdens on prison staff. That is what we are debating. I think that the hon. Member for Hackney, South and Shoreditch (Mr. Brown), who is an experienced parliamentary operator, will be able to keep himself in order within that ambit.
  Mr. Brown: I am very grateful to you, Mr Deputy Speaker. You say that you are referring to Class IX, Vote 9. I, too, am referring to Class IX, Vote 9. I have here a document that I got from the Vote Office, which I take to be the Ancient and Modern version, which has just arrived. It contains Class IX, Vote 9, which was published on the Notice Board as the subject matter that we were to discuss, and it was the prison service. [Interruption.] It may be the wrong book, but I am an Anglican, and this is the Anglican law, headed "Law, Order and

  1351
  protective services," which is exactly what the item was.
  Therefore, I submit that I am totally in order. I know that the Home Office does not necessarily want to answer this question, but I have the opportunity of raising the matter on the Consolidated Fund Bill. It is particularly apposite having regard to the increase in moneys—£2 million in one case and an increase in sales of £1 million in the other.
  What I am raising is a serious issue. This means that there is a burden on the prison staff. Since the Minister of State has not increased the prison staff for this purpose, the burden must fall upon them.
  Since they are now engaged in the manufacture of furniture, surely their rates of pay should be very different. They should now enjoy the productivity rate and something of the £9 million under this Vote—I am told that that sum is being obtained in the year 1979–80—in their pay and remuneration. Clearly, if they are being asked to act as manufacturers of furniture, they must enjoy the benefits and the rewards that come from that.
  Therefore, I want the Minister to explain today when the decision was taken to go in for manufacturing furniture commercially and what discussions took place between the Home Office and the Furniture, Timber and Allied Trades Union and British furniture manufacturers. What were the agreements that were arrived at as to the type of work to be done, and what are the outlets that the Minister feels that he has in order to get rid of this furniture—or is he just dumping it on the market, and consequently having outlets that are the normal outlets of ordinary small manufacturers employing fewer than 50 men, who are now being put out of business-50 jobs going in the process —simply because the Minister has introduced this system into the prison services? I believe that the House is entitled to know.
  Mr. Deputy Speaker: I should be grateful if the hon. Member would not now pursue that line. I think that he has made his point. Will he please return to the main thrust of the debate—the additional burden on prison staff? This is a balloted motion that Mr. Speaker has selected, and we shall stick to that.
  Mr. Brown: I am trying very hard, Mr. Deputy Speaker. However, if the prison staff are employed in their normal disciplinary functions, in keeping law and order within prisons and seeing that a prisoner serves his sentence as determined in accordance with the principles laid down by the Home Office, that is one thing. But now that the Home Office has decided that, in addition to those duties, the prison officer should become a general foreman of a furniture factory, what I am suggesting is that we are placing upon members of the staff an unreasonable burden in asking them to perform a function that has never been theirs. That is the first criterion at which one looks.
  The second matter is the question of when the Home Office entered into discussions about this matter with the relevant authorities, the trade unions and the furniture manufacturers.
  Thirdly, I am asking what training courses the staff have undertaken to fit them for being able to supervise men working with machinery. If there are any accidents—as there will be because of the type of industry of which we are speaking and the dangers inherent in furniture manufacturing machinery—are they properly trained in order to be able to save the lives of prisoners who may be hurt? How many prison officers have been placed on training courses? What are the programmes here, as outlined in
  "Plant, Machinery, Tools and Vehicles,"
  for undertaking the job of uprating the safety standards of these machines?
  Because this is a Government enterprise, these machines are excluded from the health and safety provisions. Is the Home Secretary saying that he is accepting the health and safety provisions for these machines? Who is updating the safety precautions? Perhaps the Minister of State will say when these machines were last inspected, what the standard was seen to be, and whether the Government were satisfied with the overall safety measures.
  That is important, because prison officers cannot be expected to keep up to date with all the issues involved in furniture manufacturing unless they are sent on courses regularly.
  What training colleges are undertaking the training of prison officers in the

  1353
  manufacturing of furniture? I am anxious to know which colleges are running such courses, because under the Prime Minister's proposals local government expenditure is being cut back, and it is likely, therefore, that these courses could fail because of lack of funds. I would not want prison officers, who ought to be properly trained as a part of their normal standard procedure now as furniture manufacturers, not to be trained because there were insufficient courses.
  I think that the Home Office is wrong. It has no right whatsoever to go into the manufacture of furniture. But since it has sought to do this, without consultation, will the Minister now tell me something about these proposals and what he believes to be the total production for the year 1979–1980, in how many prisons these programmes are running, and what his proposals are for 1980–81?
  4.29 pm
  Mr. Robert Kilroy-Silk: The real burden on prison officers and the reason for the unacceptable levels of overtime that they have to work—about which they complain frequently and vociferously—arises from the neglect of the prison service by successive Governments and Home Secretaries of both major parties.
  In 1975, the then Home Secretary, Mr. Roy Jenkins, said that if the prison population rose to 42,000 the situation would be intolerable and we would have a crisis upon our hands, a crisis which would affect very deeply and very intimately the work of prison officers. The prison population rose to 42,000 in October 1976. It increased to 43,000 in November 1979. Today it is at the all-time record level of 44,131. That totally unacceptable level has its origins in the constant neglect of the Home Office and successive Governments. There are consequences flowing from this for prison officers and the work that they are expected to carry out.
  The consequences of the incredible jump in two months to 44,000 men, women and schoolchildren in our prisons are gross overcrowding for prisoners and unacceptable and intolerable working conditions for prison officers. The prison officers have to inhabit the same working conditions as the prisoners. They bear the brunt of the resentment, frustration and
  1354
  bitterness that is inevitably built up in our prison system. Yet we have the nerve and temerity to claim to be a compassionate and caring society. Is it a compassionate and caring society in which we have 44,000 men, women and schoolchildren in accommodation that was built largely in Victorian times and that should contain no more than 35,000 prisoners?
  At any one time there are about 11,000 prisoners accommodated two or three to a cell—a cell built for one in Victorian times. Many thousands of prisoners are locked up for 23 hours out of 24 hours. They are denied proper access to recreation, education and vocational facilities and to the important facilities which, unfortunately, my right hon. Friend the Member for Hackney, South and Shore-ditch (Mr. Brown) chose to attack in a scurrilous, totally ill-founded and unresearched manner. If the hon. and learned Gentleman replies to the arguments advanced by my hon. Friend, I hope that he will do so in the dismissive way that they deserve.
  I have set out the situation that confronts us and the reason why prison officers are expressing their dissatisfaction and discontent. At 25 penal establishments the staff are involved in industrial action. For various reasons prison officers are expressing their dissatisfaction with Home Office policy and prison department administration. They are employing various sanctions. Today is the anniversary of the refusal of prison officers to allow a woman instructor at Leeds prison to work in an inmates' tailoring shop. She has turned up every working day for the past year. Today is her anniversary. She has continued to draw her salary as she has every right to do. The action of the prison officers has meant that she has not yet been allowed to work a full day and to give a full day's instruction to the 60 inmates. The consequence of the prison officers' action is that those inmates are being denied proper education and training facilities.
  I make an appeal to prison officers. The remedy is in their hands. If they feel that the burden that has been described today is excessive, and if they have deep, real and legitimate grievances sufficient to warrant them taking industrial action and imposing sanctions, they should not impose the sort of sanctions that they are now imposing, which have

  1355
  little or no impact upon the Home Office —witness the lengthy neglect and complacency that the Home Office has shown to prison officers taking industrial action. Their action has no impact upon the Government. The public rarely hear about it. If they are made aware of it, they are unconcerned.
  If prison officers have legitimate grievances about which they feel strongly, it would be better for them—it would relieve them of the unacceptable burden with which they are confronted—if they were to say "We shall now take industrial action that will be positive and constructive and will have an impact upon conditions in our prisons and upon our working conditions." If they were to say, for example, "We shall in future refuse to admit prisoners to our prisons once our certified normal accommodation has been reached. We shall not admit anyone over and above that figure", that would have an electrifying and immediate impact on the Home Office, the Government and public opinion.
  At Brixton, the certified normal accommodation is about 690. The present population is about 1,056. If such action were taken by prison officers, it would be legitimate. They would be taking action related directly to their working conditions and the environment that they have habitually to inhabit. They would be taking action that in a sense is implicitly endorsed by the Home Office. After all, it was the Home Office that certified the normal accommodation level that is now being breached in all our local prisons.
  If the prison officers wanted to look after their own interests, which they have a perfect and proper right to do, they should go further and seek to advance the interests of prisoners for whom they are caring and who are in then charge. It would seem acceptable for prison officers to say "From today onwards"—I hope that they will adopt this approach —" we shall no longer take into our prisons those categories of individual for whom prison is a totally inappropriate place." That would include the mentally disordered and the mentally M. It would include alcoholics, who have been referred to by the hon. Member fur Anglesey (Mr. Best). It would include drug addicts and perhaps other petty offenders.
  1356
  We all accept that prison is a totally inappropriate place for the mentally ill, the mentally disordered and alcoholics. Prison officers are not trained or equipped to deal with them. We have no right to expect them to do so, and they have no duty to do so. They have no moral duty to look after the categories of individual who should be dealt with outside the penal system. They could relieve themselves of a massive burden by ensuring that they took action that was positive and constructive for themselves and the penal system. It would certainly cause the Home Office to do what it says it wants to do, but which it rarely implements in practice.
  There are other things that could be done to relieve the burden on prison officers—for example by reducing the gross overcrowding and removing from the prison system categories of individual who are no real threat to the public or the community. We could remove thousands of petty offenders. The British Association of Social Workers estimates that there are about 10,000 petty offenders in our prisons. Naturally the Home Office is more cautious and its estimate is between 2,000 and 3,000. The governor of Holloway gave evidence to the Expenditure Committee last year and stated that about 60 per cent. of the inmates of Holloway at that time were petty offenders who were no danger to the community.
  It is always said that we do not need to have petty offenders—they are sometimes called "social inadequates"—in our prisons. The prison system does not reform or rehabilitate them, or have an effect on their re-conviction rates. It serves no constructive purpose to use our prisons as social dustbins for the inadequates of society who pose no threat to ordinary law-abiding members of the community.
  The Minister of State is sincere about his concern for the working conditions of prison officers and the state of our prisons. He could say today " We shall declare an amnesty for all petty offenders." The hon. and learned Gentleman could increase remission for those with sentences of 18 months or less to one-half of the sentence instead of the present one-third. On my estimate that would immediately reduce the prison population by slightly over 3,000. It would reduce it from the present 44,000 to the

  1357
  apparently acceptable level of 41,000, which would be well away from the intolerable level mentioned by Roy Jenkins in 1975. That could be done. All that is lacking is the political will. I accept that public opinion is a difficulty. However, it could be done, given the necessary political courage.
  On any one day there are more than 6,000 men, women and schoolchildren on remand in our prisons. They are technically innocent. They have not been tried and found guilty of offences. Nevertheless, they are remanded to our prison establishments. In the name of the community, 6,000 men, women and schoolchildren are being held on remand. One accepts that remand is necessary in many cases. People may abscond while on bail and commit further offences. However, it is highly disturbing that of those who pass through the prison system in a year, 75 per cent. of the women and girls and 50 per cent. of the men are eventually found not guilty, or are given non-custodial sentences.
  Every one of those who has been held on remand will have served the equivalent of a prison sentence. They will have experienced overcrowded and uncivilised conditions. It is disgraceful to remand people in custody, to put them behind bars and to force them to serve prison sentences. Many of them are schoolchildren between the ages of 14 and 16. Many of them are found not guilty. Often, someone who has been kept on remand may be found guilty of an offence that does not warrant a prison sentence. However, all those people will have served prison sentences. The majority of them will have been kept on remand for several months.
  It must be remembered that the guilty have a right to be tried. However, three men are now inside Canterbury prison and they have been there for 14 months on remand. I shall not speculate as to whether they are innocent. I do not know. Nevertheless, it should be a matter of concern. Two elderly American women in their sixties are at present in Holloway prison. They have been there for 12 months. They are being held on remand.
  Mr. Deputy Speaker: Order. That case is sub judice at present.
  Mr. Kilroy-Silk: I understand the sub judice rule. According to that rule, I must not name individuals. The cases that I have referred to have been cited in answer to parliamentary questions. The Table Office has allowed me to table questions and those questions have been answered by the Minister. I have said no more today than the Minister has said in answer to my questions. On another occasion we might examine the sub judice rule. I do not understand why we cannot refer to a publicly named person who has already appeared before the courts and who has been charged and committed to prison. The case Las already been made public. Everyone else can talk about it, as long as they do not refer to the merits of the case. We can all refer to "Mr. X" who has been charged with rape. However, we are not allowed to mention such cases in the House. That is ridiculous.
  Prison officers have to face unacceptable pressures. That burden can be relieved to some extent by changing court procedure and by avoiding such long delays between remand and trial. If that were done, fewer people would he held on remand. Perhaps we should adopt the system found in Scotland. If a person is not brought before the court within 110 days, he is acquitted. If the prosecution cannot assemble its evidence within three months and bring a case, the individual is set free. It is unacceptable to keep individuals in prison for 14, 12 or nine months. However, that is now the norm, not the exception.
  The burden on prison officers could be relieved by reducing overcrowding, by giving an amnesty to petty offenders and by removing many of those who are remanded into custody unnecessarily. I am sure that the Minister will be the first to accept that we should take action now. We should reduce the length of sentences. The advisory council on the penal system issued an interim report in 1977. It convincingly showed that there is no relationship between the length of sentence and the harshness of the regime and the rate of recidivism. If shorter sentences were imposed prison officers would benefit, working conditions would improve, overcrowding would be reduced and, importantly, it would involve no extra threat to the community. The Minister will know of the hysterical reaction of the

  1359
  press to that report. However, he also knows that the evidence, not least from the Home Office, is overwhelmingly in favour of shorter sentences. Every country has followed that path—notably Holland—yet we lack the political courage and will to do so.
  If certain individuals were taken out of the system, pressure on the prison service and prison officers would be eased. We should be able to adopt a more useful and constructive regime in the prison service. An offender will not be reformed or rehabilitated if he is put behind closed doors in an unnatural, single-sex, closed and secret community. If an offender is put in a tight little cell with three others, if he is locked up for 23 hours a day and denied the basic human rights of proper sanitation, food, educational, recreational and training facilities, one cannot expect him to return to society some years later as a positive, constructive, and contributing member of the community.
  The ethos of prison is dehumanising and brutalising. It is nonsense to suggest that individuals will suddenly thank the Government, the prison service or the community—in whose name those two organisations act—for the way that he has been treated. It is nonsense to think that a prisoner will come out of prison thankful and determined to become a better citizen and a constructive member of the community. That will not and does not work. No one cares enough about our prison service to acknowledge that fact, or to do anything about it.
  If we wish to reform our penal system so that the burdens placed on prison officers and the need for them to work an unacceptable amount of overtime are reduced, we should take certain categories of individuals out of that system. Certain categories—as a matter of principle—should never have been included in that system. For example, drunks and alcoholics should not be put in prison. On average more than 2,000 drunks are put in prison each year. They are put in prison not for drinking offences, but because they do not pay their fines. However, everyone accepts that they are some of the most vulnerable, disadvantaged and deprived members of our community. By definition they are homeless. They are sick, not bad. They need treatment, not punishment. However, 100 years later a
  1360
  report on inebriates, we still punish drunken offenders. No one says that we should put drunks into prison. No one pretends that prison is an appropriate place for them. We put them in prison because it is administratively convenient. We prefer to use our prisons as social dustbins into which we can dump all the flotsam and jetsam of society. We are not prepared to commit the necessary resources and to provide alternatives within the community.
  A report entitled "Habitual Drunken Offenders" was published in 1971. It attempted to relieve the burden on the prison system. It suggested a national system of care and after-care for alcoholics. It stated that 2,000 hostel places were needed immediately. A target of 5,000 hostel places was set. Detoxification centres were said to be needed throughout the country. The report confirms that prison is not the right or proper place to put such an offender. Nine years later we still imprison the same disadvantaged, inarticulate individuals. Many of them are elderly and are women in their sixties. They have no homes, relatives or friends. They have no jobs and no support. However, we consistently refuse to provide facilities in the community.
  The previous Government set up detoxification centres in Leeds and Manchester, which are now at the end of their experimental period and have run out of funds for that period. Neither is likely to survive over the next few months, let alone years, unless the Government decide to finance them sensibly instead of by joint financing through local authorities and area health authorities.
  That is a clearly defined area where action could be taken. It involves only 2,000 extremely vulnerable men and women, who are no threat to the community and no danger to the public. On the findings of every report over the past 100 years, those people should be treated more compassionately and humanely. However, we still take them through what is described as the vicious circle of arrest, police cell, court appearance and imprisonment, and the same process continues week after week. The removal of alcoholics from the prison system would greatly relieve the burden on prison officers and the overtime that they have to work.

  1361
  We should also consider mentally disordered offenders. A couple of years ago the then Minister of State, Home Office, said in this House that it was no part of a civilised society or civilised policy to put the mentally ill into prison and make prisons receptacles for those whom no other agency in society will accept. Those were fine, almost noble, words, but it remains everyday practice to put the mentally ill or disordered into prison.
  On 31 December last year there were 446 mentally disordered men and women in our prison establishments. They were defined by the responsible medical officer as coming within the terms of the Mental Health Act 1959 and requiring detention in a psychiatric hospital. The 1976 annual report on the work of the prison department pointed out that mentally ill people were entering prisons and borstals in increasing numbers, although their offences stemmed solely from their illness. In the following year the report pointed out that none of "these unfortunates" could receive appropriate medical or nursing care within the prison system.
  The director of prison medical services Dr. Orr, speaking at the annual conference of boards of visitors in 1977, said that the service could not provide the mentally disordered with the degree of medical or nursing care which their condition warranted and which was proper for them. He said that the prison medical service would not even try to do so. If it did, the organisations outside the prison service responsible for those individuals would sit back complacently and accept that the prison service was doing their job. It is a classic "Catch 22" situation, in which the only losers are the mentally ill, some of whom are deeply disadvantaged and, by definition, inarticulate. Those people have a disproportionate effect on the prison service. Their numbers may not be large, but they cause trouble and disruption for the good management and work of prison officers, as any prison officer from a prison where mentally disordered offenders are kept will testify.
  No one would say that it is a good idea to put the mentally ill in prison. No one would suggest that these people are not ill. They should be treated in regional secure psychiatric units or wards in National Health Service hospitals. Never-
  1362
  theless, those 446 people are there, and a further 200 are awaiting transfer from our four special hospitals. As a society we have not provided sufficient alternative resources and we do not use those that exist.
  Prison officers in Brixton are having to deal with disruptive and violent mentally abnormal offenders because, throughout the country, National Health Service hospitals refuse to take those people. It is not because they do not have the space, the beds, the technology or resources. It is because a consultant has decided that those individuals are too disruptive and potentially violent and might upset his comfortable, cosy regime or because the nursing and medical staff have taken similar decisions. More shamefully, members of my labour and trade union movement in COHSE and NUPE have refused to accept those individuals in National Health Service hospitals. It is appalling and disgraceful that individuals who are ill are denied the treatment that is their right. It is the duty of doctors and the medical service to provide that treatment. However, individuals or groups decide that those individuals are too much trouble and do not want to know.
  What would happen if it was decided not to treat accident victims because they were muddy, dirty and covered in blood, or heart or kidney patients, or trade unionists, or old people? There would be a major public outcry, with demonstrations in the streets, and rightly so. However, we treat the mentally ill and disordered in that way and no one says a word. No one complains, and no one wants to know.
  That is one aspect of the problem. We have the resources, facilities and ability to provide for these people, but they are troublesome, difficult and perhaps not very nice as individuals. Sometimes they even smell. We therefore use the prisons as social dustbins. These people are put out of the way of sensitive public opinion, so that our consciences are not pricked and we are not discomfited by seeing them. We do the same with alcoholics and vagrants. We sweep them off the streets and put them out of sight in a secret, closed community. We believe that we can then forget about them and stop caring.
  Unusually, the Government provided money to build regional secure psychiatric units. As long ago as 1974, the

  1363
  Butler committee on mentally abnormal offenders published an interim report that called urgently for the setting up, in each of the 14 regional health authority areas, of regional secure psychiatric units to take the mentally disordered from prisons and relieve the prison service of that pressure. They would also take people from special hospitals, NHS hospitals and from the streets. The recommendation was for 2,000 places. The then Secretary of State, Mrs. Barbara Castle, issued a circular to all regional health authorities soon after the report saying that it was a good idea and that they should be established as soon as possible.
  In 1976, because of the slow progress, the Health Minister in the previous Government decided to encourage regional health authorities by giving them a special revenue allocation, specifically related to building these units. In the first year it was £5 million, and it is now £24 million. Six years after the report, in spite of the £24 million, with a further £5 million or £6 million next week, we still do not have one such unit in the country. The first will not open until the mid-1980s and the remainder in the 1990s.
  About 90 per cent. of the money allocated to regional health authorities has been used for other purposes. Very little has been used to improve mental illness or psychiatric services generally. The South-West Thames, North-West Thames and East Anglia regional health authorities have not yet even submitted plans to the Department of Health and Social Security for such units.
  We have not even been able to deal with that one small group, which has a disproportionate affect on the prison service. We have not taken the proper steps to ensure that the NHS cannot deny them their right to treatment. If those people are ill, they should have treatment. There has not been the local political will to establish regional secure psychiatric units. They are thought of as miniBroadmoors, and no one wants one in his area. Authorities can find more glamorous, popular and acceptable projects on which to spend money, for which there is pressure and for which there are campaigns.
  Whether we are talking about the mentally ill, the mentally disordered, alcohol-
  1364
  ics, vagrants, prostitutes or drug addicts, the fact remains that none of these people should be in our penal system. They should all be cared for and rehabilitated within the community to relieve the pressure on the prison service and prison officers. These people do not have a trade union to lever any political power. They are all deeply unpopular as individuals and groups. They cannot campaign or demonstrate or write letters to their Members of Parliament, yet they are among the most deprived, vulnerable disadvantaged and inarticulate members of the community. For that reason, if no other, this House has a duty to speak for them loudly and clearly, to ensure that their proper rights are acceded to and that they are dealt with in a manner that is befitting of a so-called compassionate society.
  Yet here we are today, with empty Benches all around us. There are no speakers getting up from the Conservative Benches and very few from the Labour side. No one cares, no one is interested. The only interest of people is to put these unfortunates away—out of sight, out of mind. People seem to want longer sentences, more viciousness and more retribution without any recognition of the damage that they are doing to individuals, or of the intolerable and unacceptable state of our prison system and the constraints and pressures put upon prison officers.
  Sir Winston Churchill said a long time ago that one test of a civilised society was the manner in which it treated its criminals and those unfortunate members of it who had no political clout and no industrial leverage. By that test, we have failed.
  5.3 pm
  Dr. Shirley Summerskill: I congratulate the hon. Member for Anglesey (Mr. Best) on being fortunate enough to draw first place in the ballot and on raising this extremely important aspect of penal policy. I shall follow the excellent example of my hon. Friend the Member for Ormskirk (Mr. Kilroy-Silk), who kept entirely within the rules of order and dealt specifically with the burdens imposed on prison staff. We want to and can reduce these burdens by obtaining a reduction in the numbers of people sent to prison.

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  There are two important and valuable reports available to the House which have not been mentioned in this debate. They both throw light on these problems. They are the May report, the commission of inquiry into the prison service, and the report of the Expenditure Committee on the reduction of pressure on the prison system. The members of those bodies are to be congratulated on providing important material for any debate on this subject and decisions that are to be made upon it. I welcome the fact that the Home Secretary has announced his intention to inform us soon after Easter of his decisions on the substantial reorganisation of the prison system. I hope his decisions will reduce the burden on prison staff and will in the long term reduce the number of people in prison. We look forward to debating the proposals, as the Home Secretary has expressed a wish that we should do so.
  The May inquiry was set up by the Labour Government because it was apparent to everyone that all was not well in the prison service. The whole House was united in wanting to see a reduction in the number of people in prison and a lessening of the burden on prison staff. There was general approval of the Government's acceptance and implementation of all the recommendations on pay and allowances. This was clearly a first priority. Perhaps when the Minister replies he will say how the proposed increase in expenditure on prison staff compares in real terms with the increases made during the last few years. Apart from specific pay increases, what other aspects covered under the heading in the Vote will increase in real terms? We hope that the pay increases will have already produced not only an improvement in recruitment of prison staff to relieve the burdens on those in service hut a much-needed boost in morale. After a/i, burdens can be not only physical but mental.
  My right hon. Friend the Member for Leeds, South (Mr. Rees) has already stated that, in connection with the pay and conditions of prison staff, we support the recommendation of the May report that the Home Office and the Civil Service Department should consider returning to a situation in which matters of pay and conditions of service are negotiated directly between the Home Office and the
  1366
  Prison Officers Association. We believe that the responsible Department is the Home Office.
  Successive Governments have found that the greatest limiting factor in relieving the burden on prison staff is financial. Unfortunately, there is little public support for more expenditure on prisons. It costs the taxpayer more than £5,800 a year for every person who is kept in prison, and at the rate at which inflation is soaring the sum will go up considerably next year.
  During the debate we have heard excellent suggestions as alternatives to putting people in prison—secure centres for alcoholics and drug addicts, and secure accommodation for mentally disordered offenders. All these suggestions involve massive expenditure, if not by the Home Office by some other Government Department. My party is pledged to provide more resources for prisons and for the probation service, and we certainly support the Government fully in any increase in expenditure that they may make on law and order in general, and on prisons and their staff in particular.
  During the debate we have heard suggestions as to how overtime in prisons can be reduced. There is no doubt that an excessive burden is placed on the excellent men and women who staff our prisons. It is not fair to ask them to be just custodians who lock and unlock doors. They should have an opportunity to be more concerned with the welfare, education and rehabilitation of prisoners. Perhaps the Minister could tell us of any further steps that are being taken to increase the number of prison officers. Increased recruitment would relieve the burden on the existing staff.
  My hon. Friend the Member for Ormskirk stressed the overcrowding of our prisons. When I was a Minister at the Home Office with special responsibility for prisons in 1974, the average daily population of our prisons was 37,500. Today it is more than 43,000 for only 38,000 available places. As my hon. Friend said, far too many prison buildings are Victorian structures, but, then, so are far too many of our hospitals and schools. We are paying the price for the fact that no new prisons were built in this country between 1950 and 1958.

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  Many new prison places have been created over the years, but the sad, regrettable fact remains that the number of convicted offenders given custodial sentences is increasing at a far greater rate than the expansion in accommodation. If we are to reduce the numbers in prison and the burden on our prison staff, we must keep questioning the benefit of a custodial sentence. A sample of people who were given custodial sentences for serious criminal offences in January 1971 was studied by the Home Office. It was found that by the end of 1976 about 70 per cent. of these people had been re-convicted. This makes a very depressing statistic.
  The reasons for the increase in violent crime have to be analysed if we are to try to reduce the number of people in prison. The reasons are varied and complex. They are faced by many countries. We cannot, and do not, blame the Government for all the social, environmental and educational failings in our society. The whole community is responsible. We must jointly find a solution. That is why I regret the blame put upon the Labour Government during the election campaign last May for increased crime. I believe that this is a community responsibility.
  The Opposition would support any measures taken by the Government to reduce prison overcrowding and to reduce the burden on prison officers. We support the specific proposals in the May report, its suggestions for reducing the prison population its alternatives to prison for petty offenders and its recommendations for shorter sentences and improved prison conditions. There is nothing particularly new about the proposals in the May report.
  Mr. Ronald W. Brown: During my hon. Friend's time in office, I came to see her on many occasions to try to reduce the prison population. She refused adamantly to let out any prisoners on parole that I suggested. She will recall the hassle in which we engaged over her attitude. I find difficulty in understanding why she is now pleading for a reduced prison population when she did so little while occupying a position in which she could have reduced it.
  Dr. Summerskill: My hon. Friend refers to specific cases that he brought to me. I am dealing with general policy decisions that the Government could take that would reduce massively, we hope, in the long run, the prison population.
  Mr. Kilroy-Silk: My hon. Friend, in all honesty, must not be allowed to get away with this. She knows that the previous Labour Government in which she was a Minister were equally responsible as the present Government, and previous Labour and Conservative Governments who all paid lip service to the fine principles that are espoused. None of those Governments did much in practice to implement those principles.
  Dr. Summerskill: I have said already that because there was something seriously wrong within the prison service my right hon. Friend set up the May committee to look into the prison system. That committee has now reported. It is right that this House should have the opportunity to debate the report. We are glad that the Home Secretary will be announcing after Easter his decisions on the basis of that report. That is progress in the right direction. I am sure that the house will agree that it is more sensible to have a proper committee reporting in depth on every aspect of the prison system and for the House to decide which of its recommendations to implement than to deal with the matter piecemeal.
  One of the significant steps taken by the previous Labour Government resulted in increased use of community service orders to keep people out of prison. Their use has been generally welcomed for appropriate cases. They must have helped, to some extent, to relieve the pressure on prisons and prison officers. By 1978, almost 3 per cent. of all offenders sentenced for indictable offences were made subject to more community service orders. I hope that the Government can assure the House that the use of these orders will continue to be encouraged and that they will also be used perhaps for younger people than at the moment.
  The Labour Government also extended the provision of secure accommodation in the community homes system and increased the number of attendance centres for juveniles. Both measures can help relieve the burden on prison staff. We are

  1369
  fighting a battle against a continually increasing rate of violent crime. We are fighting a battle of limits on public expenditure that existed under the previous Government but more so under this Government, although perhaps not in the sphere of law and order. The previous Government were able to take these measures in spite of the difficulties.
  There has been a steady increase in violent crimes in the last 10 years resulting in prison sentences. The problem of alcoholism has been mentioned. In a significant speech recently, Lord Harris of Greenwich, chairman of the Parole Board, said:
  "The relationship between alcoholism and violent crime is one of the most serious issues facing our criminal justice system. Violent crime has been increasing. And the evidence is clear and unmistakable; a high proportion of the offenders are drunk when they commit their crimes".
  Mr. Best: Will the hon. Lady accept that, on my personal knowledge of the courts, although I have no statistics, not only violent crime but burglary has increased massively? The number of burglaries committed in which some element of alcohol abuse is involved is substantial.
  Dr. Summerskill: I am certain that the hon. Gentleman is right. We should be directing our attention to the problem of getting alcoholic petty offenders out of our overcrowded system and tackling the far more difficult problem of the alcoholics who commit violent crimes. That is harder to solve.
  The whole problem of alcohol abuse needs far more attention from this House and outside. Perhaps the Minister will give the House information about any plans there are for detoxification centres and, if not detoxification centres, what are called drying-out centres—a modification of detoxification centres and not so expensive. The question remains whether they would be an adequate substitute.
  A further way of reducing the burden on prison staff and reducing the prison population is to deter serious crime. When the previous Labour Government left office, the police force was 7,500 stronger than when they took office. We hope that the strength will continue to increase steadily. The most effective deterrent to potential crime is the certainty
  1370
  of arrest and conviction. That deterrent can be put into practice by having more policemen and policewomen on the beat.
  We should, therefore, concentrate on reducing crime in the first place, as well as the many measures mentioned during the debate. We should concentrate on attacking the deprivation that allows crime to flourish if we are to reduce the prison population. We must fight against the social injustice and decay in our inner cities and, above all, reduce unemployment among young people, who make up a disturbingly high proportion of the prison population.
  The social and economic policies of the Government, which involve reducing public expenditure in the inner cities and cutting job protection and job creation schemes for young people, could hold back the advances that were being made, albeit slowly, under the Labour Government. Immediate attention must be paid to the specific proposals in the May report and the Expenditure Committee's report. I hope that, after the Home Secretary has made his statement and the House has had an opportunity to debate them, the Government's proposals will be implemented speedily and that some results will be seen, if not immediately, then in the mid term and definitely in the long term.
  5.19 pm
  The Minister of State, Home Office (Mr. Leon Brittan): It is not surprising that a debate on the causes of pressure on the prison system, action that could be taken to reduce that pressure and the consequent financial implications of such action should have ranged fairly wide.
  The debate was initiated by my hon. Friend the Member for Anglesey (Mr. Best) with particular reference to the problems caused in prisons by the presence of prisoners who are there primarily as a result of alcohol problems. I shall, therefore, concentrate my remarks on that aspect, though I shall attempt to deal briefly with some of the other matters that were raised.
  I shall not seek to intervene in the private grief that has been manifested in the disagreements on the Labour Benches. Although only three Labour Members have taken part in the debate, they have found a great deal to quarrel about. The hon. Member for Hackney,

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  South and Shoreditch (Mr. Brown) has not been at one with the hon. Member for Ormskirk (Mr. Kilroy-Silk) and neither has been at one with the hon. Member for Halifax (Dr. Summerskill) who spoke from the Opposition Front Bench. Given that degree of division, it is hardly surprising that the record of the previous Government in these matters does not bear close scrutiny.
  Considering that we are not talking about relieving the prison system by the detection of crime, it was surprising that the hon. Member for Halifax referred to the police service. At one stage during the term of office of the previous Labour Government, as a result of their incomes policy, the police service was in turmoil and only the appointment of the Edmund-Davies committee defused matters. However, contrary to the express recommendations of that committee, the Labour Government did not implement the police pay proposals in full in one go, and it fell to my right hon. Friend the Home Secretary to do so within days of coming into office. References to the record of the Labour Government do not bear much scrutiny.
  The hon. Member for Hackney, South and Shoreditch referred to the production of furniture in prisons. That aspect must be looked at alongside other work of prison industries and I am sure that the hon. Gentleman and everyone who favours a humane and constructive penal system will regard it as being to the advantage of society and prisoners that those in prison should, wherever possible, be engaged in constructive work and not in the mindless toil that characterised the work of inhabitants of our prisons 100 years ago.
  I am sure that we all favour genuinely valuable work being done in prisons. Far from it being a drain on public resources, it provides a saving in the total cost of maintaining prisons and therefore eases the pressure on prison resources if prisoners are able to do work that can be sold because it is of value to the community. That is a wholly constructive development which should be extended rather than deplored.
  Of course, there may be problems from time to time in respect of a particular type of work. I understand that most furniture made in prisons is built for the
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  use of prisons and Government Departments. When prison work goes into the open market the aim is to compete in those areas where the main problem is imports rather than with domestic manufacturers.
  I am told that the trade association has been kept informed of plans for production in prisons and that we have received no representations from the association in opposition to such production. I am also advised that the prison department has a consultative committee, involving both the TUC and the CBI, dealing with these matters. When goods are manufactured for the general market the policy is not to undercut work done in ordinary manufacturing firms but to charge the market price. If the hon. Member for Hackney, South and Shore-ditch has any examples where that policy has not been followed, I shall look into them.
  The hon. Gentleman asked about the training of officers. They receive training —and have usually previously been employed in the industry—and their special training includes attention to safety in relation to any new machinery. I hope that the hon. Gentleman will feel that the work done by prisoners is the right work to be carried out in prisons.
  The hon. Member for Ormskirk made a wide-ranging speech and referred to mentally disordered offenders. He will have heard me say more than once in the House that we are concerned about the presence of mentally disordered offenders in prison who ought not to be there and we are making renewed efforts to see that they can be transferred at a faster rate to proper hospitals that are able to deal with them.
  The hon. Gentleman correctly identified some of the obstacles, and the problem in relation to trade unions is certainly one of the more important obstacles. I hope that the efforts that we are making in conjunction with my right hon. Friend the Secretary of State for Social Services will enable a faster pace to be set, thereby relieving the prisons of a group of prisoners which may be small, but is particularly disruptive.
  The hon. Member for Ormskirk also referred to the length of sentences. My right hon. Friend the Home Secretary and I have, on numerous occasions in the

  1373
  House and elsewhere, made clear that we accept the proposition that for most prisoners and offences the fact of imprisonment, rather than a lengthy sentence, is the major deterrent.
  Of course, in the case of offences of great gravity, particularly those involving violence, a long sentence is inevitable and right, but in many cases shorter sentences could be imposed with safety and that is a matter which my right hon. Friend and I have mentioned frequently. However, it is a matter for the courts to decide. The independence of the judiciary is vital in our constitutional arrangements.
  I detected in some of the hon. Gentleman's remarks less concern for the rule of law than I like to hear from an hon. Member. The rule of law is all that stands between us and anarchy. Any suggestion that it should be impeded ought not to be made lightly or at all by an hon. Member.
  The hon. Member for Ormskirk also referred to an amnesty for petty offenders. That is not a matter which should be lightly considered on an administrative basis. When courts sentence an offender, within the powers that they have, and subject to the remission laid down in advance, they are doing something that they are entitled to do and it is inimical to the concept of the rule of law, except in the most exceptional circumstances, for there to be executive intervention simply on the basis of securing pro tanto a sort of gaol deliverance.
  Mr. Best: I am sure that my hon. and learned Friend will accept that persons of good will on both sides of the House are grateful to hear his views on the rule of law and the shortness of prison sentences. Would he care to express a view on section 47 and whether we shall see a use of the suspended sentence alongside short prison sentences? My view is that that would be an extremely useful weapon in the armoury of the courts.
  Mr. Brittan: We are still considering the effectiveness of the partial suspended sentence. It has obvious penological attractions particularly in relation to pressures on the prison service. The argument that we must weigh against that is the fear that the courts may feel that a dose of prison, leaving the balance of a sentence suspended, could possibly lead to
  1374
  an increase in the prison population rather than to a decrease. Whether that would be so is a matter that we are still considering and I do not believe that I can take that issue any further.
  Mr. Kilroy-Silk: I know that the hon. and learned Gentleman will end his speech with a long list of measures to be taken immediately to relieve the pressures on the prison population, but he has already slid over the important matter of petty offenders. I know of the hon. and learned Gentleman's distaste for executive action and I appreciate that, but I also know that he accepts that there are thousands of individuals in prison who could be loosely described as "petty offenders" and who are not a threat to society. If the hon. and learned Gentleman hopes to reduce the prison population from 44,000 to a more tolerable level the quick and easy way to do that will be to reduce remission from one-third to one-half.
  Mr. Brittan: The hon. Gentleman exceeds even himself by his effrontery in accusing me of sliding over the subject matter of the debate. I am dealing with his points though not necessarily in the order in which he made them. The hon. Gentleman has had a pretty good run for his money and if he is interested in my answers to his questions he should allow me to carry on and deal with the points that he has made.
  The hon. Gentleman talks about the remand system and the plight of those on remand who are subsequently found not guilty or are given non-custodial sentences. I deplore excessively long remands in custody. The hon. Gentleman has cited a particularly notorious example. Such examples are extreme and I do not think it would be right if people outside this House were to regard the hon. Gentleman's observations as accurately describing what normally occurs. We are working toward a reduction in the number of juveniles in custody in prison establishments and the next step in that direction is currently being considered.
  The hon. Gentleman talked about overcrowding in our prisons. Here I come to one of the matters that prompted me to make my observations about his attitude to the rule of law. The hon. Gentleman suggested that, because conditions in prisons were bad, prison officers ought to

  1375
  refuse to admit prisoners over and above the number that could be normally accommodated and that they should also refuse to admit mentally disordered and alcoholic prisoners. That is a dangerous and irresponsible suggestion to which the prison service is far too wise to give any credence.
  The hon. Gentleman seems to suggest that the law should be disregarded and that decisions about who should go to prison should be taken not by the court—administering the law of the land—but on a completely unofficial basis by prison officers. That suggestion is entirely incompatible with the rule of law and with the standards of responsibility that one is entitled to expect from the hon. Gentleman.
  Mr. Kilroy-Silk: Will the hon. and learned Gentleman give way?
  Mr. Brittan: I will not give way.
  Mr. Kilroy-Silk rose—
  Mr. Deputy Speaker: Order. The Minister is not giving way.
  Mr. Kilroy-Silk rose—
  Mr. Brittan: I am not giving way. I have made that clear to the hon. Gentleman. The hon. Gentleman knows the rules—
  Mr. Kilroy-Silk rose—
  Mr. Brittan: Not only is the suggestion of the hon. Gentleman, that decisions about who should be in prison should be determined on an unofficial and informal basis rather than by the courts, completely incompatible with the rule of law; it is completely inconsistent with what the hon. Gentleman said about the mentally disordered.
  The hon. Gentleman said, of mentally disordered prisoners, that it was wrong that hospitals should refuse to accept people who had been properly thought suitable for hospital treatment. I agree that it is quite wrong that trade unions such as COHSE and NUPE—the two that he specifically named—should say that such people should not go into hospital. The hon. Gentleman considers it wrong that hospitals should refuse to take those regarded as suitable for hospital treatment and yet he seriously suggests that
  1376
  people who have been sentenced by the courts should be prevented by industrial action from being admitted to prison.
  If the hon. Gentleman expects the House and the country to take his compassion and his other proposals seriously I suggest that that would be more likely if his views were combined with a greater degree of respect for the rule of law and a greater degree of responsibility about these matters.
  There are three aspects of the problem of alcoholism as it affects the burden on the prison service. First, there is the question whether we can take action to ensure that people do not go to prison as a result of actions caused specifically by alcoholism. Secondly, we should consider what can be done to treat the condition of alcoholics when they are in prison. Thirdly, having accepted that alcoholism often leads to criminal activity resulting in imprisonment, we should seek to treat alcoholism outside the penal system though the matter of treatment for alcoholics outside prison is primarily one for the Secretary of State for Social Services.
  A number of hon. Members have referred to the relationship between the Home Office and the DHSS in dealing with these matters. There are no perfect solutions to the problems and I do not believe that shunting issues between Departments will help. However, relations between the two Departments in dealing with these issues are close and I can tell my hon. Friend the Member for Anglesey that the answer to his point about the implementation of the hospital grant scheme under circular 21/73, "Community Services for Alcoholics", was given by my hon. Friend the Under-Secretary of State for Health and Social Security, the Member for Ealing, Acton (Sir G. Young) on 19 December 1979 in reply to a question from my hon. Friend the Member for Buckingham (Mr. Benyon).
  The Under-Secretary of State said that departmental funding to local bodies was exceptional and must not be regarded as permanent. He said that no new grants would be payable after 31 March 1980. However, he recognised that the Department's pump-priming scheme was due to end at a time of difficulty and he therefore announced a programme of related transitional aid to any voluntary organisation whose grant was due to end

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  between 31 March 1980 and 31 March 1981 and which had been unable to make alternative financial arrangements. The detailed advice on those transitional arrangements was sent out on 1 February 1980.
  I turn now to the question of treatment in prison. The facilities for treating alcoholics in prison are necessarily limited. Many other categories of prisoner, such as the mentally disordered, drug addicts and sex offenders have problems. The heaviest burden falls upon the hard-pressed medical officers in local prisons where drying-out treatment with attention to physical deterioration is all that can be done in the short time available to those serving short sentences. For those serving longer sentences and who are willing to be treated, more substantial facilities are available at Grendon, Wormwood Scrubs and Holloway.
  Grendon prison specialises in dealing with those who suffer from personality or psychopathic disorders and who are likely to respond in an environment in which group therapy has an important role. It takes those with alcohol problems who are suitable for its regime. Most of them are treated in therapeutic groups led by a doctor or a psychologist. Different arrangements apply in Wormwood Scrubs and Holloway.
  In addition, most prisons have a psychiatrically-qualified medical officer and visiting psychiatrists. The initiative lies with the prisoner who has to admit that he has a drink problem and is willing to accept treatment. Nearly all prisons have an Alcoholics Anonymous group which welcomes anyone seeking help with a drink problem. The groups are run by volunteers. The Home Office is grateful for the work that they do. That work does not end when the prisoner is discharged. Help is offered when a prisoner is released to encourage him to remain in touch with Alcoholics Anonymous and to continue to fight his problem.
  Mr. Best: The Minister mentioned the specialised treatment in three prisons. What length of sentence must a prisoner be serving before he can avail himself of those facilities?
  Mr. Brittan: No specific period is laid down. When discussing the long-term treatment in the community one should
  1378
  remember that, under the auspices of the after-care service, there are hostels which provide places and which are often able to help those with alcohol problems. Daycare facilities and support-at-work schemes are run by the probation service. Hostel places, for which we provide grants to voluntary organisations, provide more than 2,400 places for ex-offenders, many of whom have a drink problem.
  I turn to the main brunt of the argument—stopping people being imprisoned directly as a result of alcohol problems. Reference has been made to the detoxification centres and to the change in the law whereby drunkenness is not a cause of imprisonment. In 1978, 2,600 people were imprisoned for failing to pay a fine for a drunkenness offence. We must consider what steps can be taken to prevent such people going to prison.
  The whole question of alternatives to imprisonment for fine defaulters is being examined. It is suggested that community service orders should be extended to deal with fine defaulters. However, one is bound to have some reservations about whether that is a practicable alternative since, to a large extent, the motivation and readiness to co-operate will in many cases be lacking in those who are guilty of fine defaulting, particularly in those who have been involved in alcohol related offences.
  There are other alternatives. Probation and bail hostels can be of help. My hon. Friend the Member for Anglesey referred to section 34 of the Criminal Justice Act 1972 which enables a constable to take a drunk and disorderly or drunk and incapable person to an approved treatment centre for alcoholics instead of placing him under arrest. The intention of that section is to divert as far as possible from the criminal justice system people who have committed no offence but whose drunkenness is a considerable nuisance.
  Since the section came into effect two centres at Leeds and Manchester have been approved by the Secretary of State for that purpose. The Department of Health and Social Security is assessing the value of the two detoxification centres. I understand that the results of its evaluation will not be available until 1981. There is no doubt that even if the

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  centres achieve their goal, they are expensive to operate.
  Statistics from the Leeds centre show that only 20 per cent. of those admitted complete the 10-day treatment programme and that 50 per cent. leave within 24 hours. Similar figures for Manchester confirm studies in Canada, which suggest that drunks need only simple places in which to sober up but from which the few who are willing or able to respond to treatment can be given access to other support.
  It is probably right to recognise that drunkenness requires long-term treatment and that that requires co-operation on an extensive scale. Even the 10-day programme may not be long enough. One must take into account the nature of the conduct that leads to people being taken to a detoxification centre and the fact that they cannot be kept there against their will. We should consider whether the right answer is a combination of the type of hostel and care provision to which I have referred for people in the acute stage of drunkenness who might otherwise be taken to court and fined.
  That view is in accordance with the recommendation of the Expenditure Committee in its fifteenth report on the reduction of pressure on the prison system. The Committee concluded that consideration should be given to the provision of a simpler and less elaborate service of an overnight kind for people who are drunk but not necessarily alcoholics. If a simple form of accommodation could be provided where drunks could sleep off the most anti-social effects of their drunkenness, it may be that we could save not only the prisons but the police and the courts a great deal of time and effort.
  We have been examining facilities already available for homeless people, in the hope of identifying a way in which they could be extended to cater for people with drink problems. Every effort will be made to encourage local authorities and voluntary organisations to make appropriate provision at local levels on these lines.
  Mr. Kilroy-Silk: I apologise for taking the hon. and learned Gentleman back to the question of law and order. I have just
  1380
  been informed that the prison officers at Wormwood Scrubs have made an official public statement tonight that if there is any concerted active indiscipline or disruption at the prison in future they will not obey orders from the Home Office, because they have been deeply disturbed by the neglect of the Home Office. Therefore, on a future occasion they will retire and decide among themselves what appropriate action shall be taken, without any recourse to advice, information or instruction from the Home Office. In the light of his earlier remarks, would the Minister like to comment on that aspect of law and order and the sovereignty of the rule of law?
  Mr. Brittan: Before I gave any such reaction, it would be wise to check the accuracy of the report that the hon. Gentleman has conveyed hotfoot to the House and to consider what it would be appropriate to say, rather than to comment from the Dispatch Box in response to such a telegraphic communication as the hon. Gentleman has been kind enough to assist the House with. Therefore, I hope that he will forgive me if I do not comment now on the information that he has given.
  When the hon. Gentleman intervened, I was dealing with a different matter—one that I am sure he will concede is important—the provision of an overnight service for people who are drunk but not necessarily alcoholics. I said that we were examining facilities available for the homeless in the hope of providing facilities of that kind. We are sympathetically examining the viability of such a scheme. We are also considering the precise way in which it should be financed. I am not in a position to make a formal announcement about such a scheme, but I can say that we are looking at it extremely sympathetically and favourably. I very much hope that it will be possible to move forward on those lines in the not-too-distant future.
  Meanwhile, concern has been expressed about the future of the Leeds detoxification centre. Funding for 1980–81 is assured from a consortium of interests, including Leeds city council, the area health authority, the police and the Home Office. We have put to the organisation running the centre an offer that the probation service regards as workable,

  1381
  and I see no reason for the centre to close.
  As I have said, we have looked at a wide variety of ways in which the prisons can be relieved of pressure. I have concentrated on the points made by my hon. Friend the Member for Anglesey, as he initiated the debate. I am glad to have had this opportunity to consider some of the broader points in relation to other sorts of offenders and more particularly to indicate the direction and shape of the Government's thinking on relieving the prisons of their present burden caused by those who are in prison as a result of defaulting on fines, usually imposed because of offences of drunkenness.
  I think that if we can make the provision that I have outlined, it will relieve the prison system of a substantial burden. That is extremely desirable, for all the many reasons that the hon. Members who have spoken in the debate have described.

  OVERSEAS AID
  5.55 pm
  Mr. Raymond Whitney: I am grateful for this opportunity to discuss the problems arising from the excess of expenditure on Class II, Vote 7—overseas aid. I am particularly grateful for the presence this afternoon of my hon. Friend the Minister for Overseas Development. I assure him that I shall not detain him for as long as my hon. and learned Friend the Minister of State, Home Office was detained in the previous debate.
  An important point of principle is at stake here, arising from the defence of, and justification for, the excess of expenditure offered in the statement of excesses on the Supply Estimates. I refer to House of Commons Paper 435, where the explanation is to be found at page 7.
  On the face of it, we are talking about an excess of £16 million. In these days of cash limits, that sum should not be regarded lightly. Without being in any way malicious, I think that the position is rather worse in accounting terms. The excesses on the year's expenditure to which we are referring do not total £16 million in gross terms. The gross excess was more than £52 million, offset—we are told—by savings of about £36 million.
  1382
  In other words, the complications of the overseas aid budget being what they are —I have some experience of them—we have reached a point where about £88 million is adrift, if my simple arithmetic has brought me to the right conclusion, on one sub-head or the other. It behoves us to look at the state of affairs that brings that about. If we accept £88 million of inaccurate accounting, that is considerably more than 10 per cent. of the net aid budget, in terms of the net aid flows.
  Therefore, I invite my hon. Friend to consider ways of achieving an improvement in the method of running that budget. I do so recognising that this is by no means the occasion to go into more fundamental issues involved in our aid budget. This is not the occasion to discuss the Brandt commission. We shall no doubt shortly have an opportunity to debate it. The commission has a certain amount to offer our thinking in this general area, but it has some banal attitudes and rather challengeable assumptions.
  I should like today to offer a few comments on the present administration of the aid scheme, rather than on a method of the North and South living together in economic terms, as what we might consider to be a more desirable and more effective way of achieving the objective set by Willy Brandt and his colleagues. They are entirely laudable objectives, although the proposed methods of achieving them are challengeable.
  I offer my thoughts on the following basis: for approximately the first 10 years after the formation of the Ministry of Overseas Development I had some involvement, in various capacities and to varying degrees, in the operation of our aid schemes in various parts of Latin America, Southern Asia and the Far East. My last overseas posting was in Bangladesh, where I spent two years. That country is high in the league of recipients of aid, not only from this country but from multilateral agencies and other members of the development aid committee of the OECD. My experience has led me to believe that the complications that we face can be avoided.
  In the document "The United Kingdom Memorandum to the Development Aid Committee of the OECD," produced in 1979, there was a reference to

  1383
  the problems created for the United Kingdom, as for other donors, by increasing lead times, and it referred especially to the problems of rural development—the objective of a major new policy of orientation.
  I accept that a certain happy event occurred on 3 May last year and that to some degree in offering the advice that I am presuming to offer to my hon. Friend the Minister I may be pushing a door that is already steadily opening. However, I hope that my hon. Friend will agree that there is some point in airing these issues on the basis of the accounting discrepancies to which I have already referred. I am sure that my right hon. and hon. Friends are dedicated to using our public resources to the maximum advantage, and we must, therefore, be dedicated to operating a system of cash limits in the public sector. Overspending is a matter of serious concern, but underspending should concern us also. Every decision on budget forecasts means that some other budget has to suffer, and the whole system goes out of kilter if we move too far above or below the Estimates.
  The problem of getting the accounting right has become increasingly difficult, because of the complexity of the method of operating our aid programme. Regrettably, the increasing complexity of operating that programme seems to have increased in direct proportion to the ineffectiveness of not only our aid programme but the aid programme of the whole of the developing world.
  Since 1964 our aid programme has reached about £10 billion. In terms of the world donor community as a whole in 1979–80 we are talking of between £120 billion and £140 billion. Therefore, in terms of North-South transfers—to use the current jargon—we are discussing a matter of fundamental importance. If, as I fear, the disbursement of that aid becomes even more complex, and therefore more ineffective, it will be a matter to which we must pay careful attention.
  In that process of complication, one reason for the excesses is that anno domini has set in among the aid administrators—and none of us is exempt from that. When the Ministry of Overseas Development was formed in 1964—it
  1384
  emerged from that Department of Technical Co-operation—it was fortunate to have at its disposal a corps of people very experienced in the realities of the developing world. I refer primarily to former members of Her Majesty's Overseas Civil Service, who worked for many years in Africa, the sub-continent of India and the West Indies. Those people lived in the villages as magistrates, district officers, or whatever the titles of their particular regimes may have been. They knew what a paddy field looked like, and they knew how to grow sugar. They lived in the countryside and acquired a fund of practical experience.
  Mr. A. P. Costain: Is that the bunch who produced the famous or infamous ground nuts scheme?
  Mr. Speaker: Order. I do not know whether the hon. Member for Wycombe (Mr. Whitney) or other hon. Members presently in the Chamber were here earlier when I gave a ruling. This is a very narrow debate, in which we can discuss only the reasons for the excesses. It is to that that we must confine ourselves.
  Mr. Whitney: I am most grateful for your ruling, Mr. Speaker, which I accept. I am trying to show that some of the problems that have led to the excesses have been the complication of our aid scheme and the steady withdrawal of the administrators of that scheme from the reality of the developing world. My hon. Friend the Member for Folkestone and Hythe (Mr. Costain) referred to the ground nuts scheme. However, I accept that you, Mr. Speaker, will not allow me to pursue that point.
  We have developed a Parkinsonian position, which must happen in bureaucracies. It is a natural phenomenon against which we have to guard—not only the bureaucracy but the Ministers in charge of those bureaucracies. That was fortified by the particular phenomenon pertaining in the Ministery of Overseas Development and other development ministries in other countries. We suffered because we had such a good start with our ex-imperial administrators, who, unfortunately, steadily left the scene.
  We have now bright young men and women who study economics at university and then specialise in development economics. They occasionally take

  1385
  foreign posting to Washington, where they are loaned to the World Bank. Occasionally they visit Dacca or Zambia, but given half the chance they work their way up through the hierarchy in Eland House. I accept that I am being a little cynical about that. However, a career pattern has been established. There are very few officials who have had, or who could have had, the sort of direct experience that was so valuable in the first 10 years of the existence of the Ministry of Overseas Development.
  I believe that the new officials have become increasingly imbued with a grand desire. Whereas the imperial administrator knew the village and the simple economics of increasing crop yield, the new breed of officials are in danger—I put it no higher—of wishing to plan grand designs and concepts. I should be happy to quote a number of examples, but they would not fall directly within the ambit of the discussion, and I would be ruled out of order.
  I am sure that the manifestation of the excesses this year is a repeat of the sort of thing that I began to experience during the period 1973–1977. Development economists get exited about planning. They go to the recipient country and meet other development economists who have been to the same universities—they have all been to Sussex university. They go to seminars at Harvard and they are very excited about planning big projects and about State bureaucracy and patronage. That is the game that has developed. I hope that my hon. Friend the Minister will tell me that it is on the decline, but it has been a phenomenon that has led to the excess on the Supplementary Estimate.
  Mr. Eric Deakins: Is the hon. Gentleman arguing that if there were fewer administrators of various sorts supervising the operation of our aid programme overseas that would be a better means of controlling expenditure and thus keeping it within the original Estimates? It does not logically follow that if there are fewer supervisors a programme will by itself somehow be brought into the sort of control that I imagine the hon. Gentleman wants.
  Mr. Whitney: I am arguing that, and very shortly I should like to come to that point. I understand that what I
  1386
  wish to suggest may be a new concept, particularly to Labour Members who have their own views on the role of the State and of Socialism here and abroad. One of the natural corollaries of the process that I have tried to describe is that it can be said that the sort of aid pattern and programmes that have been built up are a means of exporting Socialism.
  The hon. Gentleman and I will have differing views on the value of doing that. I submit that the examples of Socialism as practised in Tanzania and, perhaps, India—both of which have been large recipients of aid—do not suggest that that is the way in which the people of the recipient countries can best benefit from that aid.
  We now operate a system that leads to these great problems for the Overseas Development Administration over the lead times, particularly on the rural development projects. There is massive overspending and massive underspending, but there is also a system that puts grit in the machine—
  Mr. Frank Hooley: The Foreign Office.
  Mr. Whitney: Perhaps the hon. Gentleman is referring to the Ministry of Overseas Development, which is what it was at the time that I am describing.
  Our young men go to the recipient country with great ideas, which they want to put into operation. In my experience, far from improving relations with the recipient country that makes them more difficult. The other day we were discussing the "nannyist" State, which, sadly, has grown up in this country but is now—I hope— being rolled back. We have exported our nannyism to the re-recipient country, that makes them more political problems are created, in addition to those of an accounting nature. It is highly questionable whether any political leverage is produced.
  Therefore, I wish to suggest a simple scheme to avoid Socialism, nannyism and the complex accounting procedures that lead years ahead. My hon. Friend the Minister probably finds that he is committed to a programme for the next two or three years and that he has no room for manoeuvre. I therefore suggest that year by year we should offer

  1387
  the recipient countries balance of payments support up to a certain level and after that leave it up to them. Of course, it would be tied, but that and the question of local costs are a detail. As a general principle I would offer a line of credit, up to a limit. The countries would make their own decisions, and if they wanted advice, consultancies and training they would be provided on an economic cost basis. We would tell them that when they wanted to buy their equipment for their projects they would buy it from us.
  That would lead to far greater flexibility. The job of accountant in the ODA would practically disappear. Each year we could invite the country in question to tell its people that it was getting, say, £20 million from Britain. We would know that the money was going into the country. Progress would be jointly reviewed each year on the basis of that country's performance—whether it had been helpful to us by way of trade, or in political terms. Let us not beat about the bush. Many elements of the dialogue mean that we have to keep our North-South relationship going, but the major element must be national interest, hov— ever broadly we define it. The recipient countries understand that.
  There must be a radical look a: our aid programme along these lines before we get involved in the fundamental considerations arising from Brandt and the North-South dialogue, and it would release a lot of valuable manpower—expert economists and others—for other work. It would obviate the need for the ODA to ask the House year after year to approve excesses over its budget.
  6.18 pm
  Mr. Frank Hooley: The House is indebted to the hon Member for Wycombe (Mr. Whitney) for raising this matter, because the question of excess spending or underspending on the overseas aid Vote has been a problem for many years and has exercised the minds of many people. I think that his solution would make the Treasury's hair stand on end—although I can hardly say that of the Minister. If I understand the hon. Gentleman aright. he is proposing a massive handout of aid that is totally untied—
  Mr. Whitney: No.
  Mr. Hooley: I do not understand his proposition any other way.
  Mr. Whitney: There is no reason why the aid should be untied. There are already elements of untied aid that may or may not be open to discussion, but I did not suggest, as part of the package, that it should be untied.
  Mr. Hooley: Perhaps I had better not go into the hon. Gentleman's rather weird proposal, since he has not had the time to spell it out in the necessary detail. However, I find it difficult to see how his system would operate unless it was with a global sum, free of any close control over how it was spent.
  To be fair, in considering the question of overspending or underspending on aid we must examine the problem that the ODA has in dealing with between 80 and 90 independent Governments who benefit in one way or another from our aid distribution, quite apart from the numerous multilateral bodies, such as the European Development Fund, to which we contribute.
  The countries concerned vary enormously in sophistication and skill. They range from countries such as India, with a population of 500 million and a highly sophisticated civil service, to a small territory such as Tuvalu—which has recently become independent—with a population of around 9,000 people. We must bear that in mind if we are to criticise excess spending by the Ministry. We must also bear in mind the enormous difficulties and complications that arise from the disbursement of between £700 million and £800 million of public funds for a huge variety of objectives.
  There has been pressure on the ODA to avoid underspending, and it has reacted to that. The pressure to avoid under-spending was proper in the light of cuts that have occurred in the aid programme and the abandonment of proposals for a steady increase in that programme with a view to achieving the 0.7 per cent. target that has been internationally agreed.
  Incidentally, I think that the ODA will find it more difficult to avoid an excess of this order—or of any order—in the light of the massive increase in overseas students' fees, which will pose severe

  1389
  problems if Governments are to meet their existing commitments, let alone new commitments within their budgets.
  It is proper that we should discuss this excess spending problem, as it has been presented to us in the statement of excesses.
  It is important to look at the precise information given under Class II, Vote 7. It is stated that while there were excesses on 10 sub-heads—I am not quite clear what those sub-heads were—which amounted to £52 million, there were savings on another 42 sub-heads amounting to £36 million. By a strange argument, the hon. Member for Wycombe has aggregated the two, and he says that it amounts to mistakes of £88 million. Presumably he is also saying that it amounts to mistakes to within 52 heads of accounts. That is an extraordinary argument. In normal personal expenditure people take it for granted that here and there they may be a bit out on the top side but that there may be the odd saving on the other side. I do not see the logic of aggregating the two figures and saying that the net figure has run to an excess of £16 million. Therefore, it is right to say that the real error was £88 million, a combination of the overspending and underspending. In that respect I find the hon. Gentleman's logic peculiar.
  We are entitled to a little more information from the Minister about the overspending and underspending sub-heads. I am intrigued by the statement that there was some saving—that apparently cannot be applied to the overspending—on international subscriptions. I should have thought that in that field—unless, perhaps, it is an exchange rate problem—we would have had a fairly accurate idea of the commitment. Perhaps the Minister will explain that when he replies.
  I also understood that in the matter of excess spending or underspending—it happens to be excess spending this year—the Treasury had agreed, two years ago, on a certain amount of latitude on the carry-over from one year to another because of the intricate problems of managing a Vote that had to be negotiated in terms of expenditure with 80 or 90 independent sovereign Governments whose sophistication in matters of public accounting varies considerably. It would
  1390
  be unfair to have a debate on an excess that amounts to 2½ per cent. of the total expenditure without taking into account the enormous problems of dealing with so many Governments over whom we have no jurisdiction or control. We can negotiate in good faith, but at the end of the day what they do or do not do is their business, and we cannot control it.
  Another interesting aspect of the statement of excesses is that it refers to
  "exceptionally heavy drawing against bilateral capital"
  That is a reasonable explanation of the reason why we are faced with an excess this year. Capital projects—we have had the experience of Concorde, and so on, in Britain—are notoriously difficult to forecast in terms of cost and escalation of cost, time of starting, length of period to carry them through, and so on. I cannot see why there should be any serious criticism of the ODA on capital outlay. It might find that in any year our commitments—that we are clearly bound to honour—run somewhat higher than was estimated. Revenue is difficult enough to control, but compared with the control of the cost of capital projects in these days of inflation—in Britain it is running at about 20 per cent. and in some other countries at about 100 per cent.—and with widely fluctuating exchange rates, it is not unreasonable to expect that an excess of such a small amount as £16 million in terms of public expenditure may occasionally occur.
  The hon. Member for Wycombe produced a plan for avoiding that, but I shall not attempt to go further into it, because it has all sorts of ramifications. However, other plans have been produced for helping to finance overseas aid. A worldwide progressive tax on a sliding scale related to national income, a levy on international trade, a levy on arms production, and revenue from international property, such as sea-bed minerals, have been suggested. They are interesting ideas, which the House should explore carefully in order to find out whether we can, in this way, finance more effectively and generously the flow of resources from North to South.
  In case the Treasury is alarmed about the suggestion that there should be any sort of automatic transfer of resources over which it would not have immediate

  1391
  or special control, I remind the Treasury that, unhappily, this situation already exists in the transfer of resources from Britain to the richest countries in the world through the various levies that we have to pay to our partners in the Common Market. The idea of some form of automatic progressive tax or levy to finance overseas aid is well worth exploring.
  For the purpose of this debate, I should be interested in the nature of the excesses on these 10 sub-heads. Why did we fall short on international subscriptions? What examples can the Minister give of the large capital programmes that led to heavy drawings rather late in the financial year and gave rise to this modest and, to my mind, worthwhile excess on this Vote?
  6.30 pm
  Mr. Peter Emery: I apologise—
  Mr. Speaker: Order. This may save time. I do not think that the hon. Gentleman was present when I gave my ruling about speaking to the excesses.
  Mr. Emery: I was, Mr. Speaker.
  Mr. Speaker: I apologise to the hon. Gentleman.
  Mr. Emery: I have been in and out of the Chamber. I was about to apologise for not having been present for the whole of the debate.
  I shall detain the House for only a short while. We are considering the cash limit aspect of overseas aid. I want to draw to the attention of my hon. Friend the Minister for Overseas Development the fact that on 4 March this year an entirely new factor concerning overseas aid fell on the Government. Zimbabwe, now an independent country, will need a great deal of assistance in dealing with the ravages of war.
  Appendix 1, from page 28 onwards, deals with the amounts and types of aid that have been underspent and overspent. Will my hon. Friend consider the problem that will arise in Zimbabwe when we are dealing with future cash limits? The 1977 White Paper estimated that £1½ billion, over five years, would probably be necessary for all aid. That is an impossible figure within the United King-
  1392
  dom's cash limits. Therefore, will my hon. Friend consider—as I suggested to my right hon. Friend the Prime Minister yesterday—making an appeal to the Heads of Government within the Commonwealth, to America and to the nations of Europe, that a fund be set up to deal with the major resettlement of more than 200,000 refugees in Zimbabwe by providing finance for low-cost housing, which is the greatest requirement, and water supplies for the development of native agriculture? Such schemes are outlined in the Estimates, but it will be impossible for the British Government alone to meet the cost.
  Can my hon. Friend give any hope to the new Government in Zimbabwe that the British Government appreciate the immense requirements of that country and will look outside their own boundaries in an effort to organise international aid so that Britain does not have to enlarge on the cash limits?
  I am grateful to you, Mr. Speaker, for allowing me to make a five-minute intervention.
  6.35 pm
  The Minister for Overseas Development (Mr. Neil Marten): First, I propose to answer the question raised in this debate, which, as you said, Mr. Speaker, is limited. I shall then take up and reply to the engaging points that have been made.
  The excess Vote referred to occurred in respect of the overseas aid programme for 1978–79 when I, and the Government of which I am a member, had no responsibility for it. I am sorry that the right hon. Member for Lanark (Dame Judith Hart), who was then responsible for it, is not here to make the speech that I have to make. However, I assure the hon. Member for Glasgow, Queen's Park (Mr. McElhone) that I shall do my best to be absolutely fair to the right hon. Lady, because we are now talking about a departmental rather than a party political matter.
  It is unfortunate that, despite very tight control by ODA officials over expenditure—I know from my limited experience that it is very tight control—an excess over net estimate occurred of just over £16 million. In fact, the overspend on the overseas aid cash block was rather lower at £8·9 million—I understand that in Government

  1393
  language "cash block" equals "cash limits". This represented an error of only 1·2 per cent. in relation to the net aid programme for 1978–79 of £722 million. I wonder how many commercial firms with a turnover of that magnitude would get anywhere near 1·2 per cent. on an overspend or underspend. Nevertheless, it is not right for Government Departments to do it when they are not allowed to do it under the Queensberry rules of government.
  As I have found since taking office, there are peculiar difficulties in managing our overseas aid programme. This is where, in a way, I come to the defence of my predecessor, the right hon. Member for Lanark. It involves a large number of Governments—more than 120—most of whom, are now independent and we no longer control them. It also involves a number of multilateral bodies and domestic organisations with which we are happy to work, but over which I have no direct control as Minister.
  Payments to the International Development Association are made by deposited promissory notes. The drawings on those promissory notes are not at regular intervals or on regular occasions. Therefore, it is difficult to get them into line with our own financial year.
  A number of payments are made through the good offices of British embassies and high commissions overseas, an uncertain proportion of which are not brought into account until well after the close of the financial year on 31 March. That is not their fault. It is the fault of the Governments to whom they are accredited. So it is impossible to predict with strict accuracy just how closely out-turn will match the resources voted by Parliament, and some allowance must always be made for margins of error.
  It was with these difficulties in mind that nearly 10 years ago the Select Committee on overseas aid recommended the introduction of special arrangements to allow some roll forward or roll back between financial years in respect of an under spend or over spend.
  Exceptional arrangements of that kind were introduced in 1971 with the agreement of the Treasury—the hon. Member for Sheffield, Heeley (Mr. Hooley) said that it was with the agreement of the Treasury, and I now underline that point—and the
  1394
  House was duly informed of them. At present, I have discretion to roll forward to the next financial year but one up to £15 million of any underspend and, similarly, with Treasury agreement, to set off an overspend of up to £15 million in one year against the provision agreed by the Cabinet for the next financial year but one. So it follows that from 1980–81 we shall, in effect, repay the £8·9 million by which our cash block was overpsent in 1978–79. These arrangements, of course, are subject to the approval of Parliament.
  The degree of expenditure which can be acheived in any particular financial year within the overseas aid programme depends very heavily on the extent of the commitments entered into in previous years, a point to which the hon. Member for Heeley referred. This is because most of our bilateral Government-to-Government aid tends to be slow-spending, and there is often a considerable lag between agreement on our part to support a project and implementation by the overseas Government.
  There is always a danger that, in an attempt to over-correct tendencies towards underspending—the overseas aid programme was almost invariably under-spent in the year prior to 1978–79, the year about which we are talking—too many new commitments may be taken at once, so taking up too large a share of the resources likely to be available in future years. I think that that is what happened in 1978. Indeed the figures in respect of commitments which appear in the recent edition of "British Aid Statistics" for 1978 confirm that view. For example, whereas total bilateral commitments entered into over the years 1975 to 1977 varied only a little—between £400 million in 1976 and £416 million in 1977—the total bilateral commitments entered into in 1978 amounted to nearly £850 million. This represented a sizeable and extraordinary jump and no doubt contributed to the pressure against the approved resources which built up at the end of March 1979. It is because of the substantial commitments entered into in 1978 that much of the action we would like to have taken since coming into office last May in respect of overseas aid has had to be severely constrained.
  It is true that there would have been greater flexibility had we adhered to the

  1395
  previous Government's proposed levels for the aid programme in 1979–80 and 1980–1981. But the targets set for those years were clearly over-ambitious, having regard to the economic state of the country as we found it when we took office. It was for that reason that my right hon. Friend found it necessary in June of last year to cut the planned overseas aid programme for 1979–80 by £50 million.
  Since then my officials have been monitoring expenditure—
  Mr. Christopher Brocklebank-Fowler: I wonder whether I am correct in inferring from my hon. Friend's last remarks that had there been "greater flexibility"—to use his phrase—he would like to have seen the aid programme cut more substantially than he was able to cut it?
  Mr. Marten: That is a wrong understanding of what I said. I said "flexibility" and I meant it. What I meant was the flexibility to move an aid programme from here to there or to give a little more here or a little more there. That is the kind of flexibility I had in mind.
  As I was saying, since then my officials have been monitoring very closely expenditure against commitments and we have had to take some painful decisions, not least the reduction of some bilateral programmes to countries which we are anxious to help. We shall clearly have to continue to examine with particular care all expenditure proposals within the aid programme for some time to come, having regard to the weight of forward commitments entered into under the previous Administration.
  I would, however, assure the House that officials are doing all that they can to keep expenditure within their control. Some of our monitoring techniques were out of date, and since I took over as Minister I am glad to say that we have engaged management consultants to carry out a study on ways of improving our management information system. The results of this study should enable us to monitor expenditure more effectively in the future.
  Mr. Nigel Spearing: More expensively.
  Mr. Marten: I said "more effectively" in future. I am not an expert on managing accounts nor on management consultancy, but I felt that this was something that we had to do. In view of the report on overspending, we wondered whether we were monitoring these accounts in the best way.
  The hon. Member for Heeley raised the question of subscriptions to international organisations. He was quite right when he said that they were usually commited in dollars and that the exchange rate had had its effect on the actual payments.
  My hon. Friend the Member for Wycombe (Mr. Whitney), who initiated this short debate, referred to anno domini—I will come later to his reference to me in that context—in relation to ex-colonials, many of whom are now reaching the age when they are retiring from this line of business. I meet such people as I travel around. They have been wonderful servants both of the Empire and of independent countries after those countries gained their independence. We regret that they are retiring. The position is well known and we are trying to deal with it as best we can. We shall never regain the wonderful experience that those people had to offer to independent countries when they became independent.
  The Overseas Development Administration and its predecessors benefited from the experience of members of Her Majesty's Overseas Civil Service. We were able to recruit from this source, and most of the original staff members of the Department of Technical Co-operation were from the Colonial Office. We now seek to ensure that administration staff have overseas experience. We have a strong team of professional advisers, including economic advisers, most of whom have pursued overseas careers and who have key roles in decision taking. We also draw heavily on the knowledge of our specialised units—for example, the Tropical Products Institute—which operate at home and overseas.
  The young administrators—this, I think, is the important point—have opportunities to serve in our development divisions and some key aid posts in missions. This does not mean the short visit that my hon. Friend the Member for Wycombe mentioned. Sometimes

  1397
  they spend three to five years in a development division in, perhaps, Asia or Africa.
  Mr. Whitney: Is my hon. Friend suggesting that four years' service in Bangkok in a South-East Asian development division is in any way the equivalent of field experience?
  Mr. Marten: I did not confine it to serving in a development division. I was simply giving one example. Sometimes they go out to missions, as my hon. Friend the Member for Wycombe did, and give aid direct from the embassy or high commission to which they are attached.
  These young administrators have opportunities to serve in our development divisions and in some key aid posts. The professional advisers, who usually have a geographic specialism, travel extensively to retain their familiarity with developments in the countries with which they deal. We regret the passing on—not away, but on—of our ex-colonial servants and we are doing our level best to give experience to new members.
  My hon. Friend the Member for Wycombe, made another point with which I shall deal. I think that what he was trying to get across was that we are exporting Socialism.
  Mr. Frank Dobson: To Rhodesia.
  Mr. Marten: I am not certain whether my hon. Friend used those words, but that was the implication of his remarks. Personally, I doubt whether it is a good thing for the world as a whole to export Socialism. What I would not mind seeing is the export from this country of the practitioners of Socialism.
  Mr. Dobson: In a rowing boat.
  Mr. Marten: I shall not enter in to that discussion at this stage of the evening.
  Aid has to respond to the priorities of the recipient countries. They often want external finance to support investments and infrastructure, such as dams, roads, power stations, and railways. Most of these requirements would not attract primary capital any more than they would in the United Kingdom or most other Western countries. Of course, the effect of this Government money being used
  1398
  for these infrastructure purposes in developing countries is to produce the generated power or the roads and communication systems which result in essential benefits to private enterprise when it eventually plucks up the courage to set up business in those countries.
  Now that we have raised exchange controls, there is nothing to stop private enterprise doing that. I hope that private enterprise will be encouraged to get out there in the developing countries and invest and help the people there. But Government-to-Government aid can also be channelled through local parastatal organisations, including the development corporations which provide investment capital for small private ventures. The example is aid provided to the Botswana National Development Bank which makes loans to small farmers—for example, to individual cattle farmers to assist rehabilitation after the effects of foot and mouth disease some two years ago. We also do this sort of thing in India and Pakistan, and in other countries.
  A further channel is the Commonwealth Development Corporation. This body, funded from the aid programme resources, promotes economic development by investing in a variety of projects in association with other public or private funds.
  So those sorts of example are not exactly exporting Socialism, and certainly the Commonwealth Development Corporation is not doing that.
  Mr. Speaker: Order. I am sorry to interrupt the Minister, but he is importing something else. He is widening the debate to the whole question of overseas aid, and the same rules must apply to him—that he justifies the excesses, and does not exceed that.
  Mr. Marten: I apologise if I was wrong, Mr. Speaker, but I was answering points raised during the debate and I assumed that they were in order. Perhaps I may continue, and if I go wrong, Mr. Speaker, I hope that you will correct me.
  My hon. Friend also raised the question of trying to save a lot of money by giving developing countries balance of payments support and saying to them "Here is the cash. You get on with it and make your own decisions." But I really cannot see that that followed through in any logic, because we are here dealing with money

  1399
  which is taxpayers' money being voted by Parliament. To my mind, just to say to a developing country "Get on with this lump of money" would be a most irresponsible way to treat money voted by Parliament.
  My hon. Friend said that we must use aid more in our national interest. I think that this comes out in the statement that I made to Parliament on 20 February:
  "We believe that it is right at the present time to give greater weight in the allocation of our aid to political, industrial and commercial considerations alongside our basic developmental objectives."—[Official Report, 20 February 1980; Vol. 979, c. 464.]
  In that respect, I think that we are doing what my hon. Friend wants.
  I come finally to the speech of my hon. Friend the Member for Honiton (Mr. Emery) about Zimbabwe. He got that in very cunningly. I think that you will agree with that, Mr. Speaker.
  Mr. Speaker: Order. It was not so cunningly. I was a very tolerant Speaker.
  Mr. Marten: What my hon. Friend was really saying was that the job of aiding the revival of Zimbabwe is so colossal that it cannot be done within our cash limits. That is where he was cunning to get it in. I absolutely accept that point, particularly when one looks forward to the next two or three years and at our cash limits. The question of aid for Zimbabwe must be an international effort. A colossal effort has to go into it, but once it is there and has been there for two or three years I think that Zimbabwe has a great future for recovery and could do without aid, perhaps, altogether.
  I think that my hon. Friend had it in mind that we would take a lead in raising this money. One has to look at that matter. I am answering this oil the cuff. I should have thought that the best answer would be for the Government of Zimbabwe, when it is totally independent, to call together—and we could certainly act as whips, as it were—the countries which are likely to give the money, and have a meeting on the spot in Salisbury, under the chairmanship of the Zimbabwe Government. This may well be a way in which they can get pledges of aid of the magnitude which.
  1400
  as my hon. Friend rightly said, will be needed.
  I dealt with the debate in the earlier part of my speech, and, with those few remarks, I hope that the House will be satisfied with the answer which I have given.
  Mr. Speaker: I remind the House that the following two topics afford themselves of a wider debate, where policy may be involved.

  BRITISH PETROLEUM SHARES (SALE)
  6.54 pm
  Mr. Bill Homewood: I must admit, Mr. Speaker, that I am very grateful for the ruling that you have just given, because if it had gone the other way I would have said "Thank you Mr. Speaker" and sat down again.
  Nevertheless, it is with some trepidation that I rise to talk about company shares, because I have never owned a company share and my speculative activities are confined wholly to the time between 2 pm and 5 pm, and the returns will always be found in The Sporting Life, but never in the Financial Times.
  However, in talking about shares I am not concerning myself very much with the speculative thinking of those who paid some £290 million for the 80 million British Petroleum shares that were sold last November and were the concern of the Supplementary Estimates, on page 116, where the expense of the sale of those shares is detailed—which details have aroused my interest.
  I am talking not about the sale of the shares but only about the expense. Frankly, I am of the opinion that we have in no way fully plumbed the depths of the present Government's propensity to produce bankruptcies, and I should think that even an investment in BP, in present circumstances, must involve some risk.
  My concern is with the expense that was incurred in that transaction. My information is that of a total of £14 million involved in the expense, about £7 million went on stamp duty—I have no criticism of that, obviously, because the Government were only paying themselves—but the remaining £7 million was paid in commission to bankers and stockbrokers.

  1401
  Some 2½ per cent. of the total realised by the State for the sale of its public assets was poured into the pockets of private individuals who undertook the handling of the transaction.
  Actually, the taxpayer was lucky, for at four-tenths of a penny per share the commission could have been £12·8 million. One can only assume that some purveyors of the shares failed to cash in on the bonanza because they were unable to push through the 2,500 shares that were necessary to qualify, for I very much doubt whether the employees of BP took up 30 million shares, which would be the figure necessary to account for the shortfall, particularly when it is noted that they were restricted to 137 shares apiece.
  However, £7 million of public money found its way into the pockets of bankers and stockbrokers. Within six months of taking office the Tory Party had repaid much of the debt that it owed to its friends for their unstinting support and had ensured that the Tory coffers would not be empty at the next election.
  There could be still more to come. The Government retain a 46 per cent. shareholding in BP. The brokers, bankers and stockbrokers must be licking their lips as they contemplate the Chancellor of the Exchequer's problem in trying to give tax cuts and at the same time ease the public sector borrowing requirement to a 7 per cent. growth rate. Surely more BP shares will have to be sold despite the Government's categorical undertaking, which I shall ask to be reaffirmed by the Financial Secretary, that no more BP shares will be sold.
  The hypocrisy of the transaction becomes clear when we consider the Government's economic philosophy, or what they claim to be their philosophy. It is their idea that incentives will be created by investment and higher productivity. In what way can the gift to the City satisfy that criterion? The £7 million will change nothing at BP. The same people will take exactly the same decisions. Not one ounce of new oil will be produced as a result of the Government's gift to the City. Brokers, bankers and stockbrokers will be £7 million better off.
  In my constituency, and in Northamptonshire, parents are being asked to pay £800,000 for transport to take their
  1402
  children to school. Nine counties of a similar size could continue to provide free transport for schoolchildren, given the sum that has been handed to the brokers, bankers and stockbrokers that were involved in the BP transaction.
  I understand that the Government do not believe in cosmetic job creation. They claim that job creation must have a functional purpose. I do not know whether that was a phrase used, but that was the intention. What was the functional purpose in creating the £7 million worth of activity in the City that arose from the BP transaction? We can only hope that the Government will not engage in selling oil any more BP shares at such a high cost to the public. That cost is bound to accrue when public assets are sold off to private enterprise. We can only hope that the Government will have a long look at their policy. They must realise that it will be of no help to the public sector borrowing requirement in the long term, even if it has produced a windfall profit this year.
  7.3 pm
  Mr. Bob Cryer: This is an important debate and it raises a number of issues. I am pleased that Mr. Speaker has indicated that the debate may go wider than the narrow title and that we may refer to principle.
  The sale of a national asset to provide tax concessions for the rich—that was the basis of the sale of BP shares when the Chancellor of the Exchequer made his announcement in last year's Budget—did not take place against a background of national insolvency or of national economic difficulties. It was clone to provide tax concessions for the well off and to enable a switch from direct taxation to indirect taxation and the imposition of a 15 per cent. VAT rate. Part of the price of support, and part of the further financial income, was a once-for-all bonanza obtained by selling off a precious national asset.
  According to the prospectus issued in the Financial Times on Monday 5 November 1979, BP is not an unprofitable company. It owns partly or in whole many important oil fields, the value of which increases year by year as our finite oil supplies are used and the world's oil crisis escalates. For example, BP owns part of the Forties field—indeed, in part

  1403
  of the group it has a 100 per cent. interest—13 per cent. of the Ninian field, a 54 per cent. interest in the Buchan field, a 15 per cent. interest in the Beatrice field and a 100 per cent. interest in the Magnus field. The prospectus stated that in 1974 the group discovered the Andrews field, approximately half of which lies in the licence area in which the group has a 100 per cent. interest.
  These national assets were paraded before the public in an attempt to induce them to buy BP shares. The Government were selling off the people's assets to give them a short-term once-for-all financial income. I am sure that the Financial Secretary will tell me that in 1977 the previous Labour Government reduced the Government holding from 68·3 per cent. to 51 per cent. However, the present Government made a share offer that resulted in Her Majesty's Government's percentage being reduced to about 46 per cent. It was claimed that the Government do not intend to sell any more of their present holding in the company. I, too, shall be interested to have that intention reiterated by the Financial Secretary—namely, that the Government do not intend to reduce still further national assets such as BP.
  When the Chancellor of the Exchequer made the original announcement he said that the Government were following a precedent. There were many of us inside and outside the then Labour Government who deeply regretted the decision to make the offer to the public for the purchase of BP shares. We thought that it was wrong. We warn future Labour Governments that they must develop a more democratic system of decision-making within the framework of government that has existed hitherto. In future the 24 or so members of the Cabinet will not be in a position merely to hand out decisions that go against the main thrust of Labour Party policy.
  It is clear that the previous Labour Government did not sell the nation's assets to such an extent that the Government became a minority holder. The Government are now in a minority of 46 per cent. The previous Government were careful to maintain a 51 per cent. holding, which made it clear beyond peradventure that the Government were still in control.
  1404
  Two of my concerns about the Government's reduced shareholding is whether they have sufficient control—they have little legislative provision—and whether the existing directors can alter the memorandum and articles of association in such a way that control may be further diminished. As my hon. Friend the Member for Kettering (Mr. Homewood) said, the sale of those shares cost £14 million, of which £7 million has been spent on stamp duty. That is an extraordinarily high sum. It cost £7 million to raise a relatively paltry sum and at the same time a precious national asset has been sold on a once-for-all basis. One is driven to the conclusion that that sum represents a return for the handsome contributions that the banking and financial community have made to the Tory Party.
  For example, in 1978 the banking and finance community donated £76,270 to the Tory Party. British United Industrialists received £20,375. The Economic League Ltd. received £30,625. Aims of Industry received £1,698. Other companies received £1,350. Those sums total £130,228. That represents a handsome donation to the Conservative Party. I do not have any list of the individual concerns that made such contributions. I should be interested to know whether S. G. Warburg & Co. Ltd., Robert Fleming & Co. Ltd., Lazard Bros. & Co. Ltd., Morgan Grenfell & Co. Ltd., Kleinwort, Benson Ltd., J. Henry Schroder Wagg & Co. Ltd., Mullens & Co., J. & A. Scrimgeour Ltd., Hoare Govett & Co. Ltd., Keyser Ullmann and Rowe & Pitman have made any contributions to the Conservative Party during the past few years. Perhaps they have not made any contributions. However, if they made such contributions, they have been handsomely repaid. They have reaped a rich windfall of £7 million from Government funds.
  They have received the taxpayers' money.
  Even closer links exist. S. G. Warburg & Co. Ltd was the principal bank involved in promoting the offer. It had the benefit of the present Secretary of State for Trade on its board of directors for many years prior to 1972. I do not suggest that there is a direct link. However, if the Government arrange payments that total £7 million to such organisations, they should

  1405
  have no connection with them. The links between Government and private enterprise are so intertwined that one could legitimately argue that the sum of £7 million represents a benefit that was anticipated by those organisations when making payments to the Conservative Party and its front organisations, such as British United Industrialists. Such front organisations pass on money to the Conservative Party year after year.
  The sale represents a paper transaction. I accept that it draws revenue. However, machinery is available to the Government for collecting that revenue without paying the extra £7 million. That machinery is called "the tax system" The Government are obsessed with giving tax concessions to the rich. If they were not so obsessed, they could use that system to gain at least £7 million. They could certainly gain more than was achieved by the sale of BP shares. The purpose of selling off that national asset was to provide tax concessions not to the average family man but to the rich. The average family man receives virtually no benefit, and the rate of interest has lessened any benefit that he might have had.
  The figures demonstrate beyond peradventure that only those in the higher income brackets receive a benefit that will place them above any erosion caused by the current level of inflation. The Government have paid £7 million in order to gain revenue. They have eroded a national asset. They already employ thousands of people to operate a tax system that gives generous benefits to industrialists and to all those who are able to make various claims in the form of tax allowances. Generally, that does not include PAYE workers.
  The sale has not produced any more oil. It has not produced any more cars or machines. It has not improved our exports. It has done nothing. It has provided a once-for-all revenue to the Government. The Government talk about the need to increase productivity. They are prepared to hand over £7 million for the sale of those shares. That has not been criticised by the press. The press usually fastens on to steel workers or car workers. It fastens on to those who turn out the goods and machines that are used by people every day. There has been little criticism of the amount of money that has gone into the pockets of those who
  1406
  raised the share issue on behalf of the Government.
  The Department of Employment produced an earnings survey for 1979. It is an annual publication. It may provide a clue as to where part of that money has gone. Normally emphasis is given to the high earnings of people such as steel workers. My hon. Friend the Member for Kettering knows that the Government attempt to emphasise the enormous earnings of steel workers and car workers. When mine workers put in a claim, it is said that they earn enormous sums of money.
  After medical practitioners and top managers in trading organisations, the survey lists finance, insurance and tax specialists. No doubt that includes S. G. Warburg & Co. Ltd., Lazard Bros. & Co. Ltd. and the other merchant banks. Such people apparently earn £162·70 a week. I understand that that figure represents the average figure and that it is subject to variation. However, it is an under-estimate not an over-estimate. Among the top 30, only three types of manual workers are included.
  When the Government sell shares they should bear in mind that those who benefit are among the top earners in the country. The Government could argue that other workers should improve their rates of productivity and thereby increase their earnings. Why not encourage the steel workers to reach that level of earnings by settling the steel dispute? Out of that top 30, only coal-mining deputies, face-trained coal miners, stevedores and dockers find a place. The Government show concern for wage levels and for productivity. It is strange that they have not investigated the rate of productivity of some of those who have received part of that £7 million.
  Many executives and managers are no doubt well paid in such companies as S. G. Warburg & Co. Ltd., Lazard Bros. & Co. Ltd., Robert Fleming & Co. Ltd., Morgan Grenfell & Co. Ltd. and others. A survey carried out by the Inbucon management consultants estimated the average basic salary of managing directors to be £19,321 per annum. Those are the people whom we are discussing. There are, of course, perquisites on top of that. The Government clearly did not take any precaution in assessing the position when they started selling shares at that

  1407
  enormous cost. Local authority expenditure is constantly being cut. We should consider what local authorities could do with £7 million.
  The House will be interested to know what investigation the Government made into the productivity and efficiency of the organisations that promoted the sale of BP shares? Was there any investigation? For £7 million the Government could have employed a fair number of management consultants and made a proper assessment.
  These people whom the Government have paid so lavishly are not involved in wealth creation. They are mere paper pushers. Many Government Members criticise paper pushers and administrators in local government. The constant theme is more social services and fewer people in offices. I have never heard the Government say the same about merchant bankers and stockbrokers.
  It is extraordinary to pay £7 million for a share issue. Most local authorities and Government Departments would not have needed half that sum to undertake the same exercise. I should be interested to know whether a comparison has been made. The people in these exalted organisations who receive these enormous sums of money are beyond the ken of ordinary people, who do not buy and sell shares, have stockbrokers, or ever come into contact with merchant banks.
  The Government claim that they want to promote ordinary jobs, such as engineering, and improve the status of engineers. Perhaps they should raise their status to that of merchant bankers or stockbrokers. The terms and conditions of employment of the engineer on the shop floor are frequently inferior to those of the typist and clerical worker in the same firm. Workers will wonder what is the point of putting on overalls and getting their hands dirty when they hear of these enormous sums being paid. They will want to get into administration. There are good windfalls in merchant banking and stockbroking.
  It is not by chance that the lusher pastures in Surrey are known as the stockbroker belt. We now know where the detached houses with Rolls-Royces and Bentleys parked outside come from. They come from handling such share
  1408
  issues, passed on to these people by the Conservative Government, who are grateful for their lavish donations.
  The Government fixed a price for the shares, but they made a loss. They must equate supply and demand if they wish to play the market and put a price on a share. I do not know whether the merchant banks and stockbrokers gave the Government advice, for which the Government paid handsomely, or whether the Government did it themselves. Did the Government, with their obsession for supply and demand and monetarist economics, fix the share price, bearing in mind the market? According to The Daily Telegraph on 10 November the shares sold for more than the price put on them. They sold for 364p as opposed to 362p, which is only 1 p difference, it is true. [Interruption.] The Financial Secretary may laugh. As he knows, they were oversubscribed one and a half times, and the Government fixed their price badly. I believe that the principle is bad in any case, but they did not maximise the revenue that they could have earned.
  I am also concerned that the list of directors in the share issue which was announced in the Financial Times on Monday, 5 November 1979, contained some seemingly eminent people—Sir David Steel, DSO, MC, TD, the chairman, and others such as Dr. J. Birks, CBE. This little group of people are operating in a remote clique, away from the ordinary shop floor, where the goods and services come from. The people there have to keep their wages down, be good and not organise into trade unions. They have legislation on their back to try to stop them organising into trade unions. They bear the burden of this Government. Then there are the people at the top—those who connived at this share issue.
  On behalf of the "law and order Government," the Attorney-General told us that new criteria would apply to that little group of people, who are advertised by the Government as being respectable. They headed the share issue prospectus and were there to enhance the prospects of selling shares. The prospectus notes that there was a little difficulty about BP, and that it was partly concerned in the Bingham report.
  They are a law and order Government for the trade unionists on the picket

  1409
  lines. The Attorney-General said at the Dispatch Box that, if the fraud was big enough and if those involved were retired, the Government would not take action. This Government have one rule for those in the board rooms of Shell and BP and another—
  Mr. Deputy Speaker (Mr. Richard Crawshaw): The hon. Gentleman has remained within the bounds of order until now. However, unless he is about to allege fraud against some of these people, I do not believe that the Rhodesian issue is relevant.
  Mr. Cryer: I am grateful to you, Mr. Deputy Speaker, for reminding me of that. We are discussing the cost of issuing these shares, and the prospectus is highly relevant. Paragraph 4(e) says:
  "A report to the Secretary of State for Foreign and Commonwealth Affairs (the Bingham Report) in respect of allegations of evasion of Rhodesia sanctions by major oil companies, including BP, was published in September 1978 and the Director of Public Prosecutions is investigating whether or not any action should be taken in respect of the matters dealt with in the report."
  My claim is that the share issue partly depended on the reputation of the people at the head of the share prospectus.
  Mr. Speaker allowed the general matter of principle to be discussed. The Government are setting two standards—one for BP and another for the remainder of the nation. The former can get away with breaking the laws made by this Parliament. Are those people suitable to maintain the company on behalf of the nation now the Government no longer have a majority shareholding?
  I have in my hand appendix 3 to the Bingham report. Sir David Steel, DSO, MC, TD is mentioned in that appendix. It says:
  "This Annex gives references to evidence which may be relevant when considering whether offences against the Sanctions Orders have been committed."
  The appendix was actually withheld from public view in case these people were criticised. The Government do not withhold the names of trade union members on picket lines. Indeed, they normally give them as much publicity as they can. I am concerned about the provisions now being made by the Government to ensure that the interests of the nation as a whole in the remaining 46 per cent.—a minority
  1410
  holding—are looked after by the Government-appointed directors. On the face of it, it looks as if potential lawbreakers are continuing as directors of BP. The whole thing is, in my view, a sorry mess.
  It is true that the Government can claim that a precedent was created by the previous Labour Government. I am sure that the Financial Secretary will make much of that. He must also know that the trade union movement and the Labour Party were deeply opposed to the sale of BP shares by the previous Government. I believe that the lesson has been learnt. We do not want to give precedents of that nature to any other possible Government. However, I believe that, after the next election, we shall have a Labour Government for many years because the lessons being learnt from this Government are so bitter that people are taking them to heart.
  Even so, the then Labour Government retained a 51 per cent. share, and it can be argued that the memorandum and articles of association can be altered only if the share is below 25 per cent. I am not entirely convinced about that and nor, I suspect, was the Minister who made that argument during the Standing Committee proceedings on the British Aerospace Bill. There are very few legislative provisions—although I accept that there are some—that act as safeguards for all companies. But this remains a very foolish effort by the Government to sell off a potentially appreciating national asset. As oil supplies become more scarce the value of BP is bound to increase, particularly judging by the evidence given in the prospectus, which was issued with the advice and consent of the Government. Certainly the Governor of the Bank of England gave his approval. It seems terrible that the Government should make this decision for such a short-term benefit to hand out tax concessions to the rich. They should not sell off companies in this way.
  Finally, the idea that the Government should sell off these shares at a cost of £7 million is quite extraordinary. Quite apart from the principle, which is fundamentally wrong, the idea of it costing so much seems to indicate a great degree of carelessness on the part of the Government and a lamentable trust in the financial institutions to which they are so close.
  I advise the Government to get as far away as possible from the financial

  1411
  institutions—the merchant banks, the clearing banks and stockbrokers. When they do this sort of deal they should apply the same rigid and somewhat venomous criteria to them as they apply to central and local government systems of organisation. On the basis of the evidence that has been provided so far this exercise is far too costly. At a time when the Government are cutting back on things that people want and need such as meals on wheels, the social services generally, education, nursery provision and school transport, they should not lavish money on this sort of expenditure. In fact, they could, by a fairer system of direct taxation, obtain the revenue much more easily. This is unjust, unfair and extremely unwise.
  7.35 pm
  Mr. Frank Dobson: I shall do my best to keep within the rules of order and, in view of Mr. Speaker's ruling earlier, it should be easier for me to do so on this item than it has been for certain other people. I shall not mention the sanctions-busting activities of BP, save to say that there is a rumour in the City that in an effort to export British expertise, BP, Shell, the Foreign Office and the Department of Energy are getting together to set up a British institute of practitioners in sanctions busting, the expertise of which they will sell around the world.
  Tonight we are talking about the transaction known as the sale of £290 million of BP shares. To get this in perspective we should run briefly through the history of the company and look at its scale. The company was incorporated in 1909 primarily to protect supplies to the Admiralty of fuel oil for the Fleet. The father of this first nationalised industry was Sir Winston Churchill—not a notorious Socialist—who established the company because he was suspicious of Dutch influence in Shell and United States influence over all other sources of oil supplies to this country. That was a reasonable suspicion then and it is still reasonable in relation to the United States.
  Since then BP has grown at a fairly ruthless pace. Originally it depended heavily on supplies from Persia—now Iran—and subsequently Nigeria. Both
  1412
  these resources are now nearly 100 per cent. nationalised and the current major assets of BP are the Alaskan fields and the North Sea oilfields, which guarantee roughly 65 per cent. of BP's current reserves. They are regarded in the oil trade as "politically insensitive crude". That might be applied to me at times, but it means that those reserves are safe from nationalisation. It is believed that the Americans will not nationalise assets in Alaska and that the British Government will not nationalise assets in the North Sea.
  Currently, BP is the biggest industrial concern in the United Kingdom and Europe; therefore it is Britain's and Europe's largest asset. Excluding companies in the United States, it is the largest industrial concern in the world. Traditionally, since 1909 the British Government have never held less than 51 per cent. of the share stock of BP which has ensured theoretical control of the company. I believe that there is a sort of concordat between the Government and the privately appointed directors of BP to the effect that a British Government would never actually control the company. There is an indication of this—perhaps it is part of a measure of reconciliation—in the appointment of Lord Barber, who is not an arch exponent of monetarism, as one of the Government directors on the board of BP. Incidentally, if the Prime Minister can forgive Lord Barber for his role as Chancellor of the Exchequer she can forgive anyone anything.
  In addition to the direct holding there is a 20 per cent. shareholding held by the Bank of England, which it acquired when it took over the assets of Burmah Oil. This was the holding which was part of the security in the Burmah Oil rescue bid, and presently it is the subject of litigation between Burmah Oil and the Bank of England. I do not think that that has been resolved yet.
  As recently as November this House was asked to approve some Supply Estimates. We were asked, in theory, to approve £1,000. What we were talking about, in fact, was an estimated expenditure of £14·2 million, the cost of selling ordinary shares in BP. Provision was to be made for the expense of the sale, including stamp duty and value added tax, amounting to about £6·6 million for the sale of 80 million BP ordinary shares, at

  1413
  25p each, and further expenses were to be included in the £14·2 million.
  We are now asked, in theory, for a further nominal £1,000 because the Estimate, of £14·2 million made as recently as November, has proved insufficient. It transpires that the Government now need £14·3 million to assist them in the sale of selling of shares in BP because
  "payments have been higher than expected".
  That must be the shortest and worst explanation ever provided by the Treasury. It is a remarkable statement. The Treasury would normally complain "like crazy" if anyone else said that he needed more money because payments had been higher than expected. When payments are higher than the Treasury expected it is presumably excused, and it asks the House for a Supplementary Estimate.
  The breakdown of the figures was provided for me in an answer by the Financial Secretary—the hon. Member for Blaby (Mr. Lawson). I am told that the estimate of the costs incurred in the 1979 offer of Government-owned BP shares to the public is not yet complete, but the latest estimate of the outcome is: on VAT and stamp duty, £6·8 million; underwriting, and allotment commissions £4·25 million; legal fees, £450,000; other professional fees, £360,000; preparation of documentation and distribution, £1,030,000; processing of applications and registration, £1,350,000; and registration fee with the Securities and Exchange Commission, £60,000. That brings the current total estimate to £14·3 million.
  The main payments, according to the answer given to me, were made to six underwriting banks, five brokers and four receiving banks. That is apparently a term of trade. I had always thought of receivers as people who dealt in bankrupt stock but, apparently, that is not the case in this instance. Payments were also made for printing, distribution, advertising and professional advice, and to the Post Office, the Bank of England and BP for their expenses in the issue. There were also payments to the Inland Revenue, and payments of VAT to Customs and Excise.
  I have checked further into these commissions paid to people in the City and the circumstances in which these arrangements were decided.
  1414
  The Financial Times on 1 November last year, said:
  "The sub-underwriting institutions will receive the normal fee of 1¼ per cent. of the value of shares to which they commit themselves over the next nine days, amounting to £3·63 million. The five brokers and six merchant banks will share the specially reduced underwriting fee of ⅛ per cent. or a total of £363,000."
  I am quoting from the Financial Times. It is not a description that I would use:
  "The slimness of this fee reflects the fact that the underwriting banks did not underwrite the deal until they had arranged sub-underwriting with investing institutions. S. G. Warburg, the lead underwriters, is receiving an additional fee of £160,000."
  We should be grateful for small mercies if this was a slim fee. When totalled, it still amounts to £4.25 million handed over to City institutions simply to sell these shares.
  The receiving banks mentioned in the reply and also in the quotation from the Financial Times were Barclays, Lloyds, Midland and National Westminster. The other companies involved in underwriting, according to the Financial Times, were Robert Fleming, Kleinwort Benson, Lazards, Morgan Grenfell, Schroders and Warburgs. The Financial Times added:
  "The brokers to the offer, which assembled the bulk of the sub-underwriting are Cazenove, Hoare Govett, Rowe and Pitman, Scrimgeour and the Government broker Mullens. The sub-underwriters include a substantial number of investing overseas institutions."
  It is interesting that no fewer than five of the companies whose names I have read out were recorded in 1978 as having given donations to Tory Party or Tory front organisations. These were the four receiving banks—Barclays, Lloyds, Midland and National Westminster—and Kleinwort Benson. We do not know—perhaps the hon. Member for Blaby will tell us—who were the famous sub-underwriters. I suspect that some of those institutions may well have found themselves giving donations to the Tory Party over the years.
  I should like to know why this supplementary sum of £100,000 beyond an Estimate made as recently as November is necessary. I would have hoped that the figure could be got right in November, and that there would have been no need to ask the House for more money so quickly. One of the reasons why extra

  1415
  money is needed was attributable to the special terms offered to BP staff. The hon. Member for Blaby said on 31 March 1979:
  "Applications from employees of BP and its United Kingdom subsidiaries for shares not exceeding £500 in value at the offer price as well as applications from the trustees of the BP group employee participating share scheme will be allocated in full. My right hon. and learned Friend the Chancellor of the Exchequer made clear in his Budget Statement that the Government's sales of State-owned assets would, besides serving the immediate purpose of helping reduce the borrowing requirement, be an essential part of the Government's longterm programme for promoting the widest possible participation by the people in the ownership of British industry.—[Official Report, 31 October 1979; Vol. 972, c. 523.]
  However, when BP set up its scheme it was not quite what might have been expected, according to those remarks of the hon. Member for Blaby. The scheme required that the staff of BP should have spent four years in the service of the BP group on 1 January 1980 to qualify to buy shares. In addition, employees wishing to participate in the scheme had to vest shares that they already held in BP, or that they were buying, in a scheme established by BP to be run by the trustees of that scheme and not by individual staff shareholders. When the initial shares put in by the employee are held by the trustees, the employees have to put in an equivalent amount, through a sort of membership fee each year, if they are to continue to qualify as members of the BP share ownership scheme.
  This seems a bit of a curiosity. Compared with the provisions of the 1978 Finance Act, on which the BP scheme is based, it would seem that the Act does not require a minimum service qualification from employees before they are entitled to this preferential treatment. Nor does it require employees to place their own shares with trustees in order to be allowed to participate, and it does not require an annually renewable membership fee, either.
  One of the effects of the three obligations imposed on employees by BP before they can benefit from the so-called preferential terms is that they all discriminate against the less well-paid members of BP's staff. That reduces the numbers who can take advantage of the sale of shares. The so-called preferential terms are mainly a perk for the higher-
  1416
  paid members of the company's staff. So much for the encouragement of wider share ownership to which the Financial Secretary referred.
  I have got no further in my efforts to find out why the increase of £100,000 is necessary. Indeed, the total of £14·3 million may not be the end of it. The answer to me gave only the "latest estimate" of the outcome.
  If the Estimates are wrong, it is not the first time that that has happened. When, lamentably, the previous Labour Government decided to sell shares in BP it was estimated in The Times at the outset that that operation would cost £8 million, but a special Supplementary Estimate showed a total of £25 million, of which £12 million represented stamp duty and VAT, leaving £13 million for the parasites in the City who are sucking the blood out of the current share issue. The Treasury and the Bank of England were just as incompetent on the previous occasion.
  The sale of BP shares is part of the Government's general attitude towards public sector assets. We have been promised massive sales of all assets of which the Government can manage to dispose. That will certainly be a bonanza for the parasites in the City. Until I looked more closely at the matter I thought of it as a bonanza for those who bought, but the biggest bonanza is for those handling the goods on the way. Anyone who can get in on one of the big share transactions that the Government are floating can make a lot of money for doing little.
  It is worth recollecting that the Government are committed to substantial sales in British Airways, where the assets total £830 million, British Aerospace—
  Mr. Deputy Speaker: Order. We have enough to deal with in this debate without going through a whole list of possible share disposals that are not relevant to the subject under discussion.
  Mr. Dobson: I do not wish to challenge your ruling, Mr. Deputy Speaker, but in view of what happened in 1977 and what has happened in the past year, we ought to draw the attention of the Financial Secretary to the problems that he, the Treasury and the Bank of England may encounter in the massive transactions that are proposed for the future.

  1417
  I hope that it will be in order to draw those problems to the Financial Secretary's attention and to emphasise the nature and scale of the problem.
  Mr. Deputy Speaker: The hon. Gentleman has drawn that to my attention quite forcefully. I am sure that the Financial Secretary heard what he said. I think that we should now continue with the debate.
  Mr. Dobson: Thank you, Mr. Deputy Speaker. We have had a £290 milion sale of shares, but it is nothing like the size of the sales that the Government are contemplating in other areas. An amazing amount of money has been made in the City out of this relatively limited transaction. I hope that the Treasury and the Bank of England will have learnt a lesson from what has happened, but I do not suppose that they will have learnt anything, because we are discussing the sort of system of which they thoroughly approve. They have lived with it—indeed, they practically invented it.
  The Government are cutting social security benefits and all sorts of projects that are useful to ordinary people, yet if they go through with these massive sales they will be establishing what amounts to a system of outdoor relief for the professional classes in the City. They will be greasing the palms and lining the pockets of City institutions, at little risk to those institutions, for the next few years. It may not be the same receiving banks that have helped Tory party funds. Perhaps it will be other banks and other merchant bankers who give advice and float shares.
  Was it necessary to involve merchant banks and others to whom I have referred? In view of the assets of BP, the extreme pressure on energy supplies and the virtual certainty that BP will wax fat and flourish, you and I, Mr. Deputy Speaker, could have sold BP shares from a stall in Petticoat Lane for as good a price as all the gents in the City achieved when they were shifting £4·25 million of public money into their own pockets.
  Another point of interest is that there is a note in the original and the Supplementary Estimates that
  "Expenditure borne on this Vote is not subject to Cash Limits."
  1418
  This is the Treasury's own expenditure and is therefore not subject to cash limits. It must be a relief to the Treasury mandarins that their activities are not subject to the limits that they impose on others. The two previous debates on the Bill concerned overseas aid and the prison service, both of which are subject to cash limits, which are causing great strain in those areas—as they are in the Health Service—among local authorities and major nationalised industries. The cash limit system is good enough for them, but apparently it is too harsh and wicked for the Treasury to cope with when dealing with transactions in the City.
  We have discovered one welcome aspect in the Supplementary Estimates and the sale of BP shares. Every cloud has a silver lining, and we have one here. The evidence shows that there is a significant Government U-turn on the sale of oil assets. The Chancellor of the Exchequer said, in his lamentable Budget Statement last year:
  "I intend to ensure that the proceeds of sales in the current financial year will amount to some £1 billion and I have taken account of this in the Budget arithmetic. The biggest contribution to this total will come from the sale of a further part of the Government's shareholding in British Petroleum".—[Official Report, 12 June 1979; Vol. 968, C. 249.]
  The Government originally intended to sell a substantial part of BP, possibly all of it, but there is good news, because in the offer for sale document to which my hon. Friend the Member for Keighley (Mr. B. Cryer) referred so effectively we find that
  "H.M. Government does not intend to sell any more of its present holding in the Company, nor is there any intention to sell, other than to HM Government, any of the shares in the Company representing the holding acquired by the Bank of England from The Burmah Oil Company, Limited and one of its subsidiaries…for the foreseeable future."
  So there is a final caveat—the silver lining gets a bit grey towards the end. Nevertheless, the Government have indicated that they do not intend to dispose of more of their BP shareholding than they have got rid of to date.
  I said that Churchill was the founder of this semi-nationalised industry and went on to explain that he founded it for strategic reasons. If there were strategic reasons then for the British Government to ensure that they controlled one of this country's major oil suppliers there are

  1419
  certainly strategic reasons today. There was no great shortage of energy supplies at that time but there certainly is now. I am glad that the Government are not to sell any more of our shareholding in BP and that they appear to have abandoned their intention to sell the British National Oil Corporation, although they are indulging in a bit of forward selling of the oil, thus mortgaging our assets.
  Nevertheless, it is good for the country that the Government have changed their minds and it is a triumph for the case made by the Opposition ever since the Government announced their intention of selling a substantial part of BP. It is bad news for the people in the City, though I regard that as good news. We often hear Conservative Members talking of jobs for the boys, but this debate has amply demonstrated that this sale means cash for the chaps in the City. With a bit of luck, if no further BP shares are sold there will be no bonanza for the City chaps.
  I also hope that there will not be a bonanza for the City from the sale of British Aerospace, the National Freight Corporation and British Airways. It is to be hoped that the Government will see the error of their ways before going further than they have done.
  8.2 pm
  The Financial Secretary to the Treasury (Mr. Nigel Lawson): The debate has ranged widely, and I will attempt to answer the points made by hon. Members who are present.
  I was slow in getting to my feet because I noticed that no fewer than eight hon. Members had indicated that they wished to speak in this debate. We have heard only three of them, so obviously this is not a matter of such great interest as might have been thought at first sight.
  The hon. Member for Kettering (Mr. Homewood) who opened the debate, was under the delusion that of the total sale proceeds £7 million went in the form of fees, underwriting and commissions to banks, merchant banks and stockbrokers in the City. Opposition Members have spoken against those institutions with obvious animus and the debate has been an amalgam of ignorance and prejudice. The hon. Member for Holborn and St.
  1420
  Pancras, South (Mr. Dobson) drew attention to the fact that that figure was not the true one, and that the banks, stockbrokers and others received only £4·25 million. I mention that because it is of interest to recall that at the time of the offer by the previous Administration in 1977 those same City institutions received rather more than £9 million.
  It is therefore taking the conspiracy theory of politics rather too far to assume that the present Government engineered this sale in order to hand commissions to their friends in the City. The previous Labour Government did precisely the same thing though on a larger scale.
  The arguments we have heard are scarcely worth the time of the House.
  The hon. Member for Keighley (Mr. Cryer) pointed out that a precedent was set by the previous Labour Government and that he was concerned about that. The right hon. Member for Plymouth, Devonport (Dr. Owen), who is sitting on the Opposition Front Bench, should perhaps take note. The hon. Member for Keighley made it quite clear that should a future Labour Cabinet try to do what we are doing it would not be allowed to do so. He pointed out that the constitution of the Labour Party would by that time be so altered that a Labour Cabinet would not be able to act without reference to a wider body of the party. Whether that would be the national executive committee or some other element I do not know.
  Mr. Cryer: The hon. Gentleman's remarks remind me of the time when Churchill wrote to Clem Attlee saying that he hoped that the national executive committee of the Labour Party would not have any influence on the Labour Government and Clem Attlee replied that, of course, it would not. I said that a future Labour Government must have a more democratic system of consultation with the people of the Labour movement as well as with people outside.
  Mr. Lawson: I am not sure that that takes us much further.
  The hon. Member for Kettering made a point of substance and asked for reaffirmation of the undertaking given in last year's prospectus of sale about the Government's intentions regarding further sale. I can reaffirm that there is no

  1421
  intention in the foreseeable future of selling any more of the Government's shareholding in. BP.
  The hon. Member for Keighley had the bizarre idea that when the present Government took office they faced no economic difficulties and that therefore, unlike the situation in 1977, there was no excuse or justification on those grounds for the sale of shares. On the contrary, the economic difficulties that we inherited were acute, particularly those caused by the grossly excessive size of the public sector borrowing requirement. It was essential to get that requirement down and that, though not the sole reason for selling BP shares, was one element in this objective.
  The hon. Gentleman also showed great concern about the State losing its holding. There was throughout the hon. Gentleman's speech a confusion—prevalent among the speeches of Labour Members—between the nation and the State. For an asset to be a national asset—as are great corporations such as BP—it is not necessary for the shares to be 100 per cent., or even 51 per cent. owned by the Government. It is significant that those nations that have flourished have had less rather than more of their business enterprises owned by the State.
  The hon. Member seemed to be concerned that now that the British Government would have a minority holding in BP all sorts of dreadful things would happen. He is wholly mistaken in that, as he is mistaken on a number of issues. The British Government have never exercised control over BP since the shares were originally bought by Winston Churchill. The articles of association do indeed lay down that the two Government directors have a power of veto irrespective of the size of the Government shareholding. But that veto has never been exercised. Nevertheless, its power remains unimpaired by the share sale.
  The articles of association can be altered only if the amendment is not prevented by a blocking minority of 25 per cent. The British Government shareholding of 46 per cent. is substantially in excess of 25 per cent. The whole basis of the relationship between the Government and the company is laid down in the Bradbury Bridges letters, to which I note Opposition Members did not
  1422
  refer. That is wholly unaffected by the sale of the shares.
  The hon. Member for Keighley could conceive of the sale only in the context of pork barrel politics. I assume that that is the only kind of politics that he understands. But there is nothing in the sale which warrants such an allegation.
  Mr. Cryer: Is the Minister saying that the veto will be exercised by the two directors and that there will be Government intervention if the Government believe that circumstances demand it?
  Mr. Lawson: I am saying that the position is unchanged as a result of the Government's sale of 5 per cent. of the holding.
  The hon. Member for Keighley—with his great expertise in financial matters—stated that the whole matter had been badly handled. He said that the issue was oversubscribed, that the revenue was not maximised and that the City institutions which were paid commissions got them for nothing. None of those statements bears any relation to the truth. The previous Government went to precisely the same institutions to get their issue underwritten and sub-underwritten the last time round.
  It would have been grossly irresponsible of the Government, needing to be sure of a particular sum of revenue which they had announced to the House of Commons they would achieve by disposals, to have taken the risk that there would be no buyers at the price set. The issue was one and a half times oversubscribed. That shows that there was fine judgment. In 1977 the issue was many, many times oversubscribed. The 1979 sale price of 363p compares with a closing price of 354p today.
  The hon. Member for Keighley and his hon. Friends who say that any fool could have seen that the price would go up and up and that there would be oversubscription are totally wrong. The institutions which underwrote the issue took a risk for which they were paid. They took the risk that the price would fall—it was a near thing in the event—and that they would be left holding the shares at the price that they had agreed in advance. They took the risk in order that the Government could avoid taking the risk that they might not receive the money

  1423
  that they needed. The payment for that risk represented the underwriting commissions. That is standard practice. The terms were fine and narrow. There was no overpayment to the institutions.
  I shall pass over the sleazy attack of the hon. Member for Keighley on BP directors. That was characteristic of him. The House has come to accept it, even though it is impossible to like or admire it.
  The hon. Member for Holborn and St. Pancras, South repeated a number of the points made by the hon. Member for Keighley. The only different point that he made was about his dissatisfaction with the employee share scheme. A substantial number—about £15 million worth—of shares were taken up by employees. I welcome that.
  The BP share scheme operates under the Finance Act 1978 which was passed by the Labour Administration with our support. The hon. Member for Holborn and St. Pancras, South is incorrect to say that there is no requirement that trustees retain the shares of the employee. On the contrary, that is built into the Act. There is a retention period of five years. During that period the employee is unable to dispose of the shares, whatever the reason.
  Mr. Dobson: I did not suggest otherwise. I said that under the 1978 Act there is neither a four-year employment requirement nor a requirement that people who keep their shares in the scheme pay a membership fee each year. Both those requirements apply to the BP scheme.
  Mr. Lawson: The hon. Member made those points, but he also argued the point that I rebutted a moment ago. I am glad that he agrees with me. Giving a slight preference for long-service employees is a matter for the company. It is a reasonable preference to give.
  We did not sell a small part of our BP holding for short-term reasons. As I said earlier, there was a major problem of excessive public expenditure and an excessive budget deficit and public sector borrowing requirement as a result. The country is still suffering from that, although we are gradually putting it right. A contribution from the sale of BP shares was an important part of the asset disposal programme.
  1424
  There was no sound reason for the Government and the Bank of England to hold the majority of BP's equity. Traditionally, successive Governments have not interfered in BP's commercial affairs. We have no intention of doing so. There is no magic about the figure of 51 per cent. Indeed, under a previous Labour Administration the holding went down to 48 per cent. I see that the hon. Member for Holborn and St. Pancras, South acknowledges that. It made no difference to the situation.
  Our sale had two objectives. In addition to helping to overcome the public sector borrowing requirement difficulties which we inherited, it gave the wider British public the opportunity to increase its stake in this important British oil company. The offer of the shares involved the City. I pay tribute to the City. I am glad that my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) is in the Chamber.
  The City was paid at a reasonable level for the services that it performed, but there were no excessive expenditures. A strict control was kept on costs. Competitive tenders were obtained wherever possible. Each commission was paid only after the need for it had been carefully scrutinised. As I have already demonstrated, the costs of the sale were no more excessive than the costs of the sale conducted by the previous Government. The figures are not substantially different. I do not wish to make much of the point, but, as a percentage of the total disposal realisations the amount that went in commissions to City institutions—£4,250,000 in 1979—was slightly lower than in 1977.
  The Bank of England, which was the Government's agency in this matter, had a strict remit to ensure that there was no unnecessary expenditure. Only a tiny minority of Labour hon. Members genuinely believe in their hearts and with their eyes open—looking at the experience of State-owned industries, who could possibly believe?—that public sector interference in BP, which is what the hon. Member for Keighley wants, could bring any benefits to this country. Most hon. Members will agree—and it is the view of previous Labour Governments as well as the present Government—that it would hamper BP and damage

  1425
  confidence here and abroad in this major British oil company, which is a great asset to the country.
  We firmly believe in the initiative and flexibility that private enterprise brings to the oil business, as it does to other sectors of the economy. Where Government checks and controls are necessary, they should be provided generally, as, for example, through the regulatory powers of my right hon. Friend the Secretary of State for Energy over North Sea developments. The dead hand of Government control over our major presence in the international oil business is no way to proceed in the best interests of the United Kingdom. The BP sale was an occasion to widen public ownership of British industry in the true sense, and not in the false sense in which the term is so often used by Labour hon. Members.

  NATIONAL ENTERPRISE BOARD
  8.21 pm
  Mr. Michael Colvin: I wish to draw attention to the section of the Supplementary Estimates on finance for the National Enterprise Board, on page 88. It relates to the provision of public dividend capital to the NEB to refinance loans to British Leyland. I shall be grateful if my hon. Friend the Minister will say something about this arrangement for a further £154 million of taxpayers' money to be pumped into British Leyland. Some of us on the Conservative Benches ask why this additional money is to be spent, especially when there are, perhaps, better investments for the Government to make through the NEB. I shall try to make clear what they may be.
  For example, this section of the Supplementary Estimates raises the topical question of the Government's commitment to the Inmos microprocessor project. Urgent questions need to be answered on Inmos, questions that have a direct bearing on the Supplementary Estimates and the continued funding of that competing recipient of Government funds, British Leyland. Only limited funds can be made available for NEB investment in industry, and the Government will no doubt consider most carefully where the money should go, bearing in mind the best interests of the taxpayer, who provides it.
  1426
  The matter is causing considerable concern in the Bristol area, where right hon. and hon. Members on both sides of the House have buried their party political differences and campaigned jointly on the NEB investment issue. We have done so because we appreciate the need to accept the commercial judgment of the Inmos management and the NEB as regards the siting of the first production units for Inmos.
  Hon. Members will no doubt view the Inmos project with mixed feelings, just as they do British Leyland. We are aware that the nation must establish a foothold in the new technology industries that Inmos represents, while being conscious of the constituency unemployment problems, the problems of companies such as British Leyland and the need to treat the spending of taxpayers' money in such large quantities with the utmost prudence.
  Some of those considerations conflict. It is now surely time for the Government to decide whether they will honour their commitment to fund the Inmos project. That is what we are asking for. We are not asking for more money but are merely asking that what has already been promised should now be made available. We are also asking my right hon. Friend the Secretary of State for Industry to decide whether to grant the necessary industrial development certificate to enable at any rate the first of the two production units to be built in Bristol.
  Perhaps I should explain why I say "the first". It is because Inmos, unlike British Leyland, believes that about 1,000 employees is the right number for one production unit. Nevertheless, because of economies of scale, it is siting two production units side by side on one site. It has chosen Bristol for the first. Then it may well choose another area—perhaps an assisted area—for the next two units.
  There can be few hon. Members who have not heard of Inmos, but may I remind the House, for the record, that this United Kingdom semiconductor company was set up to design and manufacture integrated circuits, concentrating on the fastest-growing and newest sector of the market, which is the high-density computer memories and microprocessors. They are, in fact, whole computers on a single silicon chip.

  1427
  In July 1978 the NEB agreed to finance Inmos. That followed approval of the founder's business plan by both the NEB and the then Secretary of State for Industry. The plan called for total equity funding of £50 million, the first £25 million of which has already been committed by the NEB. The splitting of the investment into two tranches of money is merely due to business prudence. The second instalment was to be paid provided Inmos achieved the initial objective and produced satisfactory plans. These management objectives have now been achieved, and therefore there is no reason why the second tranche should not now be sanctioned, thereby honouring the earlier commitment by the Government.
  As with British Leyland, a great deal of taxpayers' money is at stake in the project, and more still will be invested afterwards. Therefore, we have a duty to ensure that it is a commercial success. Inmos is operating in a very competitive industry, with rapidly developing technology. It is essential that it operates in a highly commercial manner if it is to be successful. If the Government ignore commercial criteria, they will put in jeopardy the substantial investment that is already being made on behalf of the nation, whether it be in Inmos or in British Leyland.
  Therefore, it may be worth mentioning what the Inmos project is not. It is not a job creation scheme, and neither is British Leyland. Neither company should be regarded merely as a means of providing jobs in areas of high unemployment. Those hon. Members who face unacceptable levels of unemployment in their constituencies should realise that the Inmos project, if successful, will—in a relatively short time—repay its initial investment. In addition, it will provide tens of millions of pounds every year through taxation, which can be used to generate further investment in much needed jobs, many of which will be in the assisted areas.
  Mr. Charles R. Morris rose—
  Mr. Colvin: I shall give way in a moment. I am the first to accept that those assisted areas require Government help. We should give further help, if necessary, to British Leyland.
  Mr. Morris: The hon. Gentleman referred to the location of Inmos at Bristol, and said that commercial criteria should be the determining factor of location. What commercial criteria does the hon. Gentleman believe determined the location of Bristol for the technology centre?
  Mr. Colvin: The answer to that question will become clear later in my speech. However, an important point to make is that it is not for the Government to decide the commercial criteria. The company and the NEB should decide the location, and the Government should accept their recommendation, as they have done in the case of British Leyland where they accepted the commercial judgment of the corporation. They should do that with the Inmos company and the NEB.
  I accept that the claims of the assisted areas have been loudest for the siting of this company, but even the previous Administration always made the point that a decision on siting was primarily one for the company and the NEB who, in this case, decided on Bristol.
  Although I am now a committed supporter of the Inmos project, I regret that it should have been necessary in the first place for the NEB to become involved. I regret that the economic climate of the country at that time was not such as to encourage the establishment of a high technology innovative industry without Government help. I regret that, because of the policies of successive Labour Governments which were so hostile to investors, we were compelled to adopt a Socialist solution to finance Inmos in order to enter the silicon chip race.
  Having staked £25 million of taxpayers' money on the project, I hope that the Government will stay with it and honour their obligation to provide the remainder of the money now required, in spite of their commitment to other companies such as British Leyland. It is my belief that the Government will agree to do that. I believe also that they will agree with the management of Inmos that its first production unit should be sited near its technology centre and headquarters in Bristol, in order to create what the company describe as an integrated capability. To split those functions would involve a quite unacceptable business risk.

  1429
  Bristol was chosen by the Inmos management following a survey by PA Management Consultants Limited of more than 200 alternative production sites. I believe that the consultants were asked not to recommend a site but merely to report the facts about the alternative sites and to give a genuine evaluation. In business, time is money. I ask my lion. Friend the Under-Secretary of State for Industry, when he replies, to tell the House first, whether there are any doubts regarding the second tranche of £25 million and, secondly, when the Government will grant the industrial development certificate for the first production site in Bristol at Coldharbour Lane.
  The delay over the start of building the Inmos production plant is reported to be costing the company about £20,000 a day in higher building costs, and a further £300,000 a day in lost future production. It is bad for business, especially a new business, when targets begin to slip. The credibility of the company is called into question. Recruitment suffers if the Government, as the main financial backers, are thought to be dithering. Potential customers begin to have doubts if they read press reports—no matter how ill informed—about the Government having second thoughts.
  Uncertainty is the bane of any business. The uncertainty over Inmos must be removed without delay, otherwise there is a danger that the prospects of the company may be damaged, and, therefore, the taxpayers' investment put at some risk. This is the sort of industry that we should encourage in Britain at the present time, as other industries—such as the motor car industry—face an inevitable decline. We are a nation with a shortage of raw materials, but we are rich in one vital resource, namely, that of skilled and intelligent workers.
  In Bristol we have a wealth of that particular resource. Selecting Bristol as a suitable location for the Inmos technology centre and headquarters has not been an easy task for the company's management. One of the company's objectives is to achieve the highest level of technical creativity. The opportunity to establish academic links and develop positive programmes with the universities of Bristol and Bath as well as with the Bristol polytechnic, which will be opposite Inmos at
  1430
  the Coldharbour Lane site, were factors in choosing our city which, with its superb communications and working environment is obviously just the sort of place to attract the staff required to advance the frontiers of technology.
  There is no doubt that Bristol is the best site for the first production unit. In backing Bristol, Inmos has backed a winner. I now look forward to the Government's decision to back winners—that is, to back Inmos with the second tranche of cash, and to back Bristol as the first production site.
  8.37 pm
  Mr. Alan Williams: I wish first to make it clear that we on the Opposition Benches obviously completely agree that it is essential that the second tranche of finance be provided for Inmos. Inmos will be our first major domestic-based capability in this area. We will not be dependent upon American technology. The NEB therefore deserves congratulations for bringing the project forward.
  I differ from the hon. Member for Bristol, North-West (Mr. Colvin) in his assessment of where the production unit should go. I trust that there is a slight confusion, which I should like to clear up before proceeding to my main argument. The hon. Member said that he thought that the plan was to have two production units side by side. I think that if he examines the project he will discover that there is the initial research project—the technology centre—which already exists, and that the company is asking that one production unit—the first—should go to assurance in the matter. Here I refer Bristol. The company has given a firm to a letter from the deputy chairman of the National Enterprise Board, in which he refers to the
  "publicly declared commitment by Inmos to locate the second UK production facility in a UK-Assisted Area."
  Mr. Colvin: I think that the right hon. Gentleman and I are talking at cross-purposes. I understand that there will be two bases for production, but I understood Inmos to say that there would be two production units at each base. That is beside the point, however. I think that we understand, between us, that there will be two production bases, that the first one

  1431
  will be in Bristol—we hope—and that the second may well be in an assisted area.
  Mr. Williams: Not "may well be", but must be. The question is whether the first must also be in an assisted area. I fully understand the hon. Gentleman's need to argue for his constituency. No one begrudges him that right.
  Mr. Colvin: Is not the right hon. Gentleman arguing for his?
  Mr. Williams: That is just what I am not doing. I expect that my constituents will not quite understand why, as a spokesman on Welsh affairs, I am arguing for a site outside my constituency. I am arguing for the site that was on the short-list that was under consideration by Inmos— a site in Cardiff. I am not advancing a constituency argument. The hon. Gentleman may not be aware—there is no reason why he should be—that in the last Administration I was the Minister to whom the original application for an industrial development certificate at Bristol was made. [An HON. MEMBER: "The right hon. Gentleman approved it."] I did not approve it.
  The reason for my intervention this evening is that I want to put certain facts clearly on the record. I believe that a decision is imminent. We shall be glad to have a decision, at least. I do not want Ministers to be in any doubt. I know the niceties and difficulties that confront incoming Ministers by which they are not allowed to see certain documents relating to the previous Administration. Therefore, I wish to state the background to our claim that there is already an absolute commitment that the first production unit will be sited in assisted areas, as will all production units.
  When the initial application for an industrial development certificate for Bristol appeared on my desk, I said that it was essentially a mobile project, and that the technology centre and the R and D project could be sited in an assisted area. I then received a deputation led by the deputy chairman of the National Enterprise Board, Mr. Dick Morris. We discussed sites in Manchester. The right hon. Member for Manchester, Openshaw (Mr. Morris) argued for sites there. I argued with the deputy chairman that if an industrial development certificate were
  1432
  given to Bristol—because of the American experience of the clustering of the micro-processing industry—the logical sequence would be that I would then be asked to provide an IDC for the manufacturing unit. That is important. At that stage it looked as though it was a logical link, and, therefore, I refused to grant an IDC.
  I was then offered art assurance by the NEB that in the event of a technology centre being sited in Bristol—because there was no such necessary technical link—all four production units, which would employ about 1,000 people each, would be situated in assisted areas.
  I invite the Under-Secretary of State to ask the Department to show him the press announcement that it issued, stating that the technology centre was to be sited in Bristol. It was stated in that announcement that Inmos "intends" to site production units in the assisted areas.
  The then Secretary of State, the Minister of State and I recently took the unusual step of writing to The Times establishing that that commitment had been given. I received deputations led by Mr. Dick Morris more than once There was a final meeting with the chairman of the NEB, accompanied by the deputy chairman and a number of other NEB representatives, with the Secretary of State, the Minister of State and myself. Again, we were given an undertaking that the production units would be sited in assisted areas. I emphasise that because there would have been no question of Department of Industry Ministers approving, or even recommending to ministerial colleagues the approval of the IDC for Bristol had it not been for the specific guarantee that the production units would be sited in assisted areas.
  The Under-Secretary of State for Industry (Mr. David Mitchell): The right hon. Member for Swansea, West (Mr. Williams) referred to a press release that stated that the NEB intended that the production units should be sited in development areas. Is the right hon. Gentleman trying to suggest to the douse that he hangs his argument on a press release that contained the word "intends" and to imply that that is a guarantee?
  Mr. Williams: I was trying to think of a document that showed the clear understanding of Department of Industry Ministers of the nature of the guarantee that we received from the National Enterprise Board.
  Mr. William Waldegrave: Towards the end of the period of the previous Administration, the hon. Member for Nuneaton (Mr. Huckfield), also a responsible Minister, on more than one occasion made statements such as:
  "I am very conscious of the benefits that an Inmos production facility could bring to the Welsh special development areas, and to the assisted areas in general, but the location of these facilities must be a matter for the NEB and the company."—[Official Report, 5 February 1979; Vol. 962, c. 30.]
  That seems to indicate unity between the NEB and the company. Therefore, I hang my argument on what was said by the hon. Member for Nuneaton.
  Mr. Williams: With respect, my hon. Friend the Member for Nuneaton (Mr. Huckfield) was not present at any of these meetings. We had three Privy Councillors, Ministers of State and the Secretary of State, present, all of whom have the same recollection. I suspect that the officials, in the advice that they are giving to the Minister, also have the same recollection.
  Mr. David Mitchell: Will the right hon. Gentleman tell the House whether the right hon. Member for Manchester, Ardwick (Mr. Kaufman) was one of the three? Was the Minister of State at that time one of the three Ministers to whom he referred? If the right hon. Gentleman's nod is an indication that he was one of those to whom he referred, I remind him that the then Minister of State said that Inmos's
  "location is a matter for the company and the NEB, subject to the NEB guidelines."—[Official Report, 29 November 1978; Vol. 959, c. 194.]
  That was what he stated in the House.
  Mr. Williams: I do not know the date of that statement. All I can say is that—
  Mr. Mitchell: 29 November 1978.
  Mr. Williams: By that time the IDC had not been given. At that stage it was still under consideration. It was my decision whether an IDC was given or not. The question of preferences was
  1434
  for Inmos. The question whether the Government endorsed those preferences was a matter for the Government, under their powers in relation to industrial development certificates. If my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) were present I am sure that he would confirm that he and I pressed the company to site within an assisted area. Indeed, both of us received the same guarantee—that the production units would be in an assisted area.
  Mr. Colvin: It is important to get clear whether the undertaking was given to the right hon. Gentleman by the National Enterprise Board or by the company. I have checked with the company and been told that no commitment was entered into by the Inmos management about siting in an assisted area.
  Mr. Williams: The undertaking was given by the NEB, because it was the parent company negotiating on behalf of Inmos. Having seen the documentation that was at that stage produced on behalf of Inmos, I can understand why it did not dare let the Inmos representative loose in the Department of Industry for me to interrogate. However, I shall come to that later.
  When the NEB came to see me—the NEB being the parent company that had to authorise the finance and approve the siting—it also brought along its director on the board of Inmos. I believe that he was a Mr. Dunbar. However, I have a terrible memory for names. We were given—not on one occasion, but on several occasions—a clear understanding of what the situation would be if it got the technology centre in Bristol.
  I am sure that the hon. Member for Bristol, North-West as a new Member, will accept that no one stands at the Dispatch Box or in the House and deliberately makes a categorical statement of the kind that I have made unless be genuinely believes it to be true. All who have respect for the House would not deliberately mislead it. I think that each of us should do the other that credit. I assure the hon. Gentleman that I am trying to be as straightforward and factual as I can about what happened at that time. It was supported by both my colleagues who were Ministers at that time.
  Mr. Gordon A. T. Bagier: Does my right hon. Friend also remember that at the time he was under great pressure from development areas such as mine to obtain a clear undertaking of this nature, especially when the original technology centre was to be based at Bristol? We required—indeed, demanded—from our Ministers a categorical assurance that the manufacturing units would go to a development or special development area. I distinctly recall that we were given that assurance by our Ministers at that time.
  Mr. Williams: I endorse entirely what my hon. Friend says. On several occasions he personally represented the interests of the Northern region. The Northern group of Members of Parliament also pressed the interests of their regions, as did many other hon. Members with constituencies in Wales, Yorkshire and Scotland. There was considerable pressure, and the understanding that we had received from the NEB was made clear in our discussions with our colleagues from the regional constituencies.
  I was sceptical about the arguments then being put forward. I am not suggesting that there may not be a sound argument amongst them, but we had to look very hard for the sound arguments at that time. We were told by the person acting as the spokesman for Inmos that the Severn Bridge might close permanently and that the great advantage of Bristol was that it did not have a faculty at its university. Therefore, we were told, Bristol would be uncluttered with preconceived ideas. I am glad to see that the hon. Member for Bristol, North West (Mr. Colvin) finds that as amusing as I did.
  That top research personnel would go to Bristol was said to be proven by the fact that a survey of school leavers, made in the mid 1950s—these must have been 15-year-olds—had revealed that those young people had shown a preference for living in the West Country as opposed to Wales, Scotland or the North of England. I must say that that document was hilarious. It will be seen why I was less than enthusiastic about the application of certain of the arguments that had been put forward. I am not saying that certain arguments were not sound, but the record shows that certain individuals involved in pressing the case for
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  Inmos will trump up any hairbrained argument, in the hope that it might persuade someone.
  What worries me is that none of us has been allowed to see the PA Management Consultants' report that has been put forward in support of the claims of Inmos.
  Mr. Charles R. Morris: My right hon. Friend has just made a profound statement. He said that as a responsible Minister of State in the Department of Industry in the previous Government he never had access to the PA Management Consultants' report on the siting of the technology centre financed by the NEB and Inmos. That statement provokes intense anxiety, because it was on that report that the siting of the centre was determined.
  Mr. Williams: The report was the result of a study to decide where the manufacturing unit should go and not where the original technology centre should go. Therefore, although it was initially started during the Labour Government's period of administration it was not completed until fairly recently. So we are not the people to whom one would have expected it to be shown. Again there is a story to tell there, but I shall come to that in correct sequence, if I am permitted to. Indeed, this is a good point at which to consider the PA Management Consultants' report.
  Last week, I went to see the chairman of the NEB about the decision on the production unit. I asked a categorical question—"Did the PA Management Consultants' report recommend Bristol?" The chairman's colleague on that occasion answered "I do not remember." Let us bear in mind that it was only in December that the NEB considered the recommendations about Bristol. The chairman said "If you do not remember, why do we not look at the report?", or words to that effect, to which his colleague said "I am afraid there is not a copy available." I then said "In that case, as there is not a copy available for you to consult now or for me to see now, why do you not put an annotated version—annotated so that confidential information has been removed—in the Library of the House of Commons so that all of the regional Members will have an opportunity to see it?" I was then told that this would not be a good

  1437
  idea, because the report might be "confusing" to Members of Parliament. When I said "By 'confusing', what is meant is that it would confuse because it does not agree with the recommendation that we are getting from Inmos," the answer was "I do not remember."
  I would be intrigued to know whether the Under-Secretary has ever seen or read the report. Is it not a fact that Inmos has flatly refused Ministers access to this report? Yet it is substantially on the basis of this report that the decision to allow the production to go to Bristol is allegedly to be made. I ask the Under-Secretary to clarify this matter. I am sure that he has not seen the report. He may need a little time, although I should welcome an answer now.
  Mr. Colvin: Whilst my hon. Friend the Under-Secretary is chewing over that point, perhaps I may try to clarify the right hon. Member's thoughts on the subject. I think that the reason why the report might be thought to be confusing for hon. Members if it were placed in the Library is that it does not make a recommendation. I am told that the PA Management Consultants' report—I question why it was necessary to call in PA Management Consultants to do such an evaluation survey—was purely an evaluation and did not make a specific recommendation: it put facts before the company and left it, as we are doing, to the company to make a decision on the basis of the facts provided.
  Mr. Williams: In that case is it not rather arrogant to presume that Members of Parliament are incapable of reading and studying such a report? Since there is £25 million of extra Government money, making a total of £50 million, to go to the project, is it not at least reasonable that we should have the right to judge where that money should go, against regional priorities, as well?
  Mr. Colvin: No.
  Mr. Williams: The hon. Gentleman says "No." That is his judgment, to which he is entirely entitled, but we must remember that this is NEB money and that the NEB guidelines include priority for regional employment wherever possible, where it is carrying out new investment. Therefore, it is essential
  1438
  that we have a chance to judge whether this project at Bristol is even in conformity with the NEB's guidelines. As Members of Parliament, that is not an unreasonable thing for which to ask.
  Even more so, I should have thought that Conservative Members would be indignant if they knew that their Minister had been refused permission to see the report. I understand that that is so, and that it is not just a matter of Ministers having not read it because they did not want to do so. I realise how full Ministers' red boxes are, and that there is no great wish to see unnecessary paper, but my understanding is that the report is not available to Ministers even if they want to see it.
  Mr. John Butcher: I was not a Member of the House when many of these discussions on the role of the NEB were taking place, but I read many of the reports and I know that there were heated debates on occasions. I seem to recall Labour Members often stating the case for the NEB to be able to behave as an entrepreneur. Listening to the tenor of the right hon. Gentleman's remarks, I would be most fearful of the capacity of Inmos to behave in an entrepreneurial way should his colleagues have been in power after the last general election. One cannot make commercial decisions on the ground that they are socially desirable, because one eventually ends up making penny-farthing bikes in the development areas because that is socially desirable.
  I ask my hon. Friend the Under-Secretary of State to accept that to break the link between the development and implementation of the software and the marketing of the first product at this early, delicate stage would be one of the most dangerous things to do to Inmos.
  Mr. Williams: The hon. Gentleman must be in an inconsistent position, bearing in mind his alliance with the Government Front Bench. If it is utterly wrong to pursue social objectives in promoting industrial policy, the hon. Gentleman must favour the complete abolition of industrial development certificates, which I do not. In fact, that is not favoured by the Government Front Bench. Industrial development certificates exist to add a social dimension to investment decisions.

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  We would have applied the normal regional criteria to the project. The hon. Gentleman said that it would be disastrous to introduce separation. There would have been no separation if Ministers had not been misled in the first place, or if Ministers were not being misled now. The technology centre was provided only because the undertaking was given that the centre could be separate from the production units. It was argued that there was no necessary link. If that argument had not been advanced, the technology centre would not be in Bristol now.
  I do not want to lecture the hon. Gentleman. I know that he is taking a serious interest in this subject. However, what would he feel if someone gave a pledge to a Conservative Minister, only to renege on it six months later? The pledge was given to a Minister. It does not matter whether it was a Labour Minister or a Conservative Minister. A pledge was given to a Minister to obtain a ministerial decision.
  The argument of proximity is fascinating. If proximity is so critical, how was the short list drawn up, which included Bristol, Cardiff and Washington new town. I recognise that it has a strong claim. However, if proximity is a criterion, it seems odd that the other assisted areas of Wales, the North-West, Yorkshire and Humberside could be bypassed and that all the requirements could be met 200 miles away in Washington new town. The argument of proximity does not stand any detailed analysis.
  Another argument presented to me by the chairman of the National Enterprise Board concerned the learning curve problem. It was said that because of new technology it would be essential for a close link to exist between those developing the new product and those about to produce it. If that is so, the commitment should not have been given in the first place. Secondly, it is a short-term link. On the other hand, the 1,000 jobs will be 1,000 long-term jobs. There would be a short-term inconvenience—it is only three-quarters of an hour away—that could easily be accommodated.
  The South Wales claims are strong, but I shall not go through all the arguments. One criterion is the availability of labour. With unemployment in Wales so massively higher than in Bristol, labour should
  1440
  certainly be available. Another argument is the academic infrastructure. South Wales has an academic background that in this instance surpasses that which has been available in Bristol.
  The pledge that has been given on the next production unit is open to question. In a letter to the secretary of the northern group of MPs Mr. Iann Barron, of Inmos, writes:
  "The characteristic of these key people is that they are the elite of high technology, with the most exciting jobs at the forefront of technology. As such, they can command the highest salaries and can chose where they wish to live."
  He adds:
  "This is true not only for now, when the company is new, but also for the future when lnmos has become mature and less exciting."
  How could he have made any promise about the second manufacturing project? The superficiality of analysis that appeared on the first submission is repeated. Within three sentences he contradicted himself by saying:
  "Inmos carried out various studies to establish the preferences of such individuals…We also considered sponsoring a survey of relevant professionals, but this was rejected because we were concerned that the results might offend or even have an adverse effect on some areas of the country."
  On the one hand he says that a study was carried out and on the other that a proper study was not carried out. It is nonsense and arrogance on the part of Mr. Barron to write in such terms to Members of Parliament who represent northern constituencies.
  I tabled a question to the Welsh Office. That question was within its ability. I asked whether, under section 7 of the Industry Act, any financial inducements had been offered to Inmos in order to encourage it to go to Wales. I received a most peculiar letter from the Welsh Office. It said that the question had been transferred to the Department of Industry. However, the Secretary of State for Wales is responsible. As the answer to my question is either "Yes" or "No", a reply should have been easy. However, on the due day—yesterday—I received a holding answer. It said that the Secretary of State would reply as soon as possible. I do not accept that an answer is not available. I believe that an answer

  1441
  is being deliberately held back. There will be another debate on Inmos tomorrow. The Government do not wish to reveal that no section 7 money or regional selective finance has been offered to Inmos in order to persuade it to go where jobs are most needed. I ask the Minister to answer that point.
  The Minister has the necessary powers. He has power, through the IDC system, to stop Inmos going to Bristol. He also has persuasive powers. He has to approve the sum of £25 million for Inmos. I have spoken at such length because this subject is relevant in many parts of the country. Jobs are needed in the North-West, in the North, in Scotland and in Wales. Ministers and Governments should not be treated with contempt by someone who appears to have misled them about his intentions.
  I hope that the Minister will reply fully to the questions that have been raised about Inmos. That might save us the experience of an Adjournment debate tomorrow. I hope that he will say whether Ministers have been allowed to see the report by PA Management Consultants. I asked the Secretary of State a question a fortnight ago to which I have received no reply. Will the Government ask the company to make that report available in the House of Commons? If someone says that such a report is not available but then produces it in support of his case, I become suspicious.
  9.8 pm
  Mr. William Waldegrave: The Supply Estimates refer to public dividend capital. That is the Government's form of equity financing for risk. Risk is the key word when discussing Inmos. I hesitate to differ to any great extent from the right hon. Member for Swansea, West (Mr. Williams). He is a man of great courtesy. However, he admitted that his memory for names was a little poor. My confidence in his understanding of the history of the Inmos project was shaken when he began to speak of "a certain Mr. Iann Barron". That is like speaking of "a certain Mr. Moses in the Old Testament. Mr. Iann Barron generated this project. He invented it and is a dominant figure. He, Richard Petritz and Paul Schroeder are the founding fathers. They brought the scheme to the NEB. The NEB did not invent it. They
  1442
  projected the scheme way back in 1976 and came to the NEB in 1978.
  My confidence was a little shaken in the right hon. Gentleman's memory of events. I accept that his understanding of the commitments was as he said. However, we must also accept the recollection of Mr. Barron and the company that they gave no commitment, and they have put that on paper. It is possible that the members of the old NEB, who resigned for one reason or another, gave such commitments. I align myself with the hon. Member for Nuneaton (Mr. Huck-field) and the right hon. Member for Manchester, Ardwick (Mr. Kaufman). If we are to have an NEB, these decisions must be for the NEB and the companies in it. Had the former NEB agreed, for reasons best known to itself, to site the production plant on the moon, that would not have been a very successful place for it.
  Inmos is facing the toughest competition imaginable. A list of microelectronics companies reads like a roll call of the best companies in the world—IBM, Texas Instruments, Motorola, the great Japanese companies, National, Bell Laboratories and all the rest. We have to compete with these companies.
  Many of us had grave doubts about the NEB venture. However, its objective was social and political—to give Britain the capability in this field to face the future. I do not disagree with the view that for regional and social reasons, in some instances it is right for the Government to have an influence over industry. The purpose here is not regional employment, which in other instances may be a reasonable political objectives. It was to equip Britain with a major new capacity in the big memories and microprocessor fields, which is sufficient of an objective to be going on with without adding other social objectives.
  The right hon. Member for Swansea, West, who unfortunately has had to leave the Chamber, perhaps remembers something of these matters from his experience. I must declare a reverse interest. I worked, and still work part-time, for a company that will be a competitor of Inmos, if Inmos succeeds, as I hope it will. I also have a constituency interest, because the present technology centre is in my constituency.

  1443
  It is an "Alice-in-Wonderland" industrial policy for Ministers, however worthy and well versed in the workings of parliamentary democracy, to burrow about in the files of companies, whether financed by the Government or not; drawing out bits and pieces of recommendations, whether commissioned by consultants or not.
  Those of us who have argued that there is a reason for keeping the NEB see its greatest strength as a protection between sponsored industries and politicians who bring their worthy and honourable political priorities to bear on the problems of industry. In the detailed running of industry, the combination of the two is nearly always disastrous.
  I have had experience of microelectronics in this country and abroad. These companies are perhaps rather more mobile than the right hon. Member for Swansea, West understands. If a dozen people left such a company, it would he a shell, of no further interest to anyone. If that happened to Inmos, £25 million would have gone straight down the plug-hole and we should have nothing left to show for it. If the people in such a company are messed about, they leave. The history of California and Texas is littered with shells of former microelectronics companies, that people have left, usually because the company is taken over by a large conglomerate that mishandles it. They go off and found their own companies. If we drive Mr. Schroeder out of this company because he thinks he is not in microelectronics any more, but that he has become part of the British Government's regional policy, we can say goodbye to the facility in Colorado Springs which is already producing materials for test very successfully and ahead of time.
  These people are mobile; they can go anywhere. We are not talking about the kind of people for whom this House has compassionate feelings—those who are losing their jobs in Wales, in the North-East and the North-West. We are talking about pursuading Mr. Schroeder and his friends to work for us, letting them run their own company in a sensible way in a highly competitive world.
  1444
  It is said that there are perhaps 1,000 senior microelectronics engineers of the first rank in the whole of this country. If it can get off the ground, Inmos will need about 300 or 400 of them. That means that competition will be very hot. It is not enough to mock people who say that it is all a matter of middle class values—whether one wants to live in the Cotswolds or the South-West. If that is what people feel, that is what they will do and there is nothing that we can do to stop them.
  I am not being unpleasant when I say that if we want to draw people from all over the country, and indeed from all over the world, we must realise that this is a seller's market, and find the nicest possible place in Britain to put them. The right hon. Member for Swansea, West, may have a rather more old-fashioned view of industry as something associated with smoke coming out of a chimney, but we are here talking about an advanced technology industry. If we want to attract the right people, we must think of the kind of schools that are available in the area, the universities the theatres and so on. Those are the things we should start thinking about if we want to persuade the Californians to move to this country. We might be able to persuade them to move to the valleys of Wales, but we have not found a way of doing so yet.
  Mr. Donald Thompson: My area, like many others, tried for Inmos. I agree with all that my hon. Friend says, but if he fails and Bristol fails, the Government will be seen to have failed. My area has within 40 miles of its boundaries the universities of Leeds, Sheffield, Manchester and Bradford, as well as many theatres and cultural activities. It also has beautiful countryside and a civilised way of life.
  In my area we have the shells of past industries. We have the shells of our mills from which the smoke came. But that has long gone. The other day I visited the shell of a brand new factory the day before the receiver came in. My hon. Friend and his constituents have a great responsibility. I do not begrudge him Inmos. But if there is a spread from it I hope that it will come to my area. I hope that my hon. Friend is aware of his great responsibility.
  Mr. Waldegrave: Of course. Even my own constituency pride, which is highly developed, would not drive me into saying that Bristol was the only pleasant place in the country.
  Mr. Charles R. Morris: The hon. Member referred to Mr. Schroeder and the desire of some Americans to live in the South-West. Will he confirm that Mr. Schroeder had not visited this country before he came with the Inmos team?
  Mr. WaldegraveMy point about Paul Schroeder is that he is absolutely crucial to the company. If we lose him because he considers that what he thought was an electronics company operating in a commercial way is being used by hon. Members, honourably as an instrument of social policy, he will think that he has come to the wrong shop.
  Of course, there are other places. The Inmos management looked at different places and no doubt had a difficult decision to make. That decision has been made. Some hair-raising comments were made by the right hon. Member for Swansea, West and his hon. Friends about the management of Inmos. I can assure the right hon. Gentleman that Mr. Barron is a crucial member of the team. If he is so incapable of taking a fundamental, commercial decision to do with the foundation of the company, this raises questions about the viability of the project as a whole. I do not believe that the right hon. Gentleman will want to pursue that argument. Hon. Members on the Government Benches, more hawkish than I, may begin to feel that, if these people are so incompetent, the whole project should be examined again.
  It is obvious from the remarks of the right hon. Member for Swansea, West that some kind of commitment was made by somebody, probably a member of the previous NEB, apparently orally, to some Ministers at some point. The intention was published in the NEB report and elsewhere. The word "intention" was used to indicate that the first production facility should go, all things being equal, to a development area.
  Times have moved on. The issue is a little behind schedule, the competition is getting even tougher. Many new developments are on the verge of coming through. Whatever those commitments, even if they were much stronger, we
  1446
  should now be asking whether there are any means by which the path of this company can be made easier, and the company released, if necessary, from obligations that may have been imposed on it, in order to make the survival of the whole show slightly more probable.
  I do not wish to be alarmist. I think that the company has a fifty-fifty chance of success. If used in the way that Opposition Members honourably wish to see, its chances will be much less. There can be no doubt that the company wants to go to Bristol. I have a letter dated 4 February from the secretary and deputy chief executive of the NEB saying:
  "In the view of the NEB Board it would have been indefensible to risk damaging the Inmos project by forcing upon the company's management a different site dictated by regional considerations".
  I cannot put the matter more succinctly. It would be indefensible. It would mean that large sums of taxpayers' money had been put at risk and that those Ministers who took the decision to use the company as an instrument of worthy social and regional policy would have to face the fact that if it failed they would stand accused of having added significantly to its chances of failure.
  9.24 pm
  Mr. Charles R. Morris: My right hon. Friend the Member for Swansea, West (Mr. Williams) has made a crucially important statement on the question of NEB-Inmos. What he has said indicates a breach of faith in the understanding between Ministers of the Labour Administration and the responsible officials of NEB-Inmos in regard to the location of the production units of the Inmos operation. The hon. Member for Bristol, West (Mr. Waldegrave) said that this is a commercial enterprise. No one argues its importance to the economic well-being of the nation. It is an important contribution. It is essential for Britain to have a microprocessor manufacturing capability. I wish NEB-Inmos all success in its efforts.
  I should like to refer to what successive Governments have already done to encourage the enterprise. The previous Government not only undertook to provide £50 million for the establishment of Inmos, but they told Mr. Schroeder, Mr. Barron and some of their colleagues that they would be given part of the

  1447
  financial equity of the company. That commitment was unique in public financing in this country.
  The members of the Inmos team have an undertaking for £50 million and a stake in the financial base of Inmos, but now they want to locate in Bristol not only the technology centre but the production unit. I am not revealing any confidences when I say that I argued in the Labour Government against the technology centre going to Bristol. I argued that it should go to the North-West, the area where there is a high level of technical creativity in the development of computers. That was not merely parochialism on my part. If one is talking of high level of technical creativity in computers, one is talking of the area where we established the National Computer Centre and the area with a unique academic combination of Manchester university, UMIST and Salford university producing 12,500 students with a facility in computer technology every year.
  Yet the technology centre went to Bristol, where the university did not even have a chair of microelectronics at the time. It has established such a chair in recent weeks because the technology centre of Inmos has been established at Bristol.
  I agree with the hon. Member for Bristol, West that there is a risk involved. Surely the location of the production units and the technology centre ought to have been decided on something more substantial than where a handful of technologists wish to live. The lion Gentleman said that that must be one of the determining factors but I was staggered to realise that Mr. Schroeder had no knowledge of the geography of Britain. He had never been here, so how could he conclude that Bristol, in the South-West, was the best site?
  There are graver issues at stake and they arise from what has been said by my right hon. Friend the Member for Swansea, West, who indicated that Ministers in the present Government had not had access to the report of PA Management Consultants. I hope that the Minister who is to reply to the debate will answer clearly and unequivocally that serious statement. Have Ministers seen the report.
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  Hon. Members have spoken about commercial criteria being the determining factor for the siting of the the production unit, but no one has identified those criteria. The companies with existing microprocessing capability are centred in the North-West where the academic expertise is located. It is not unreasonable that they should be there bearing in mind the fact that Manchester university invented the computer. The university invented the first digital storage base that was the forerunner of the Atlas computer—the first computer in the world.
  There is a convincing, logical and almost unanswerable case for the North-West to be considered as the site for one of these production units, but there are more serious arguments and greater anxieties than that. Conservative Members have asked why we should concern ourselves. They have said that this is a unique enterprise and that those concerned with it should be given the opportunity of doing precisely what they will. That attitude is a complete abrogation of political responsibility because this project is costing £50 million of public money.
  There is much use of the new word "de-industrialisation" these days. In the North-West we have seen de-industrialisation on a massive scale. We have seen the decimation of the textile industry, massive redundancies in the engineering and steel industries and contraction in the mining industry.
  A new industry now appears and the North-West is not seriously considered as a location for even a production unit involving 1,000 jobs as a means of bringing new industry to an area of industrial decline. It is not on. I hope that Ministers will face up to the fact that public money is involved, and that the taxpayers who have provided it are entitled to have at least a minimal say in where the production units should be sited. A thousand new jobs would benefit the North-West, particularly Greater Manchester.
  Mr. Bagier: It is clear from this debate that assurances were given to the previous Ministers on this issue. In the light of those assurances, it is now evident that Ministers of this Government are not prepared to use their muscle and

  1449
  their influence but are prepared only to use public money without ensuring that the very points made by my right hon. Friend are taken into consideration.
  Mr. Morris: I hope that the Minister will take up the points made by my hon. Friend the Member for Sunderland, South (Mr. Bagier) because I agree that there has been a breach of faith. The whole basis of the remarks of my right hon. Friend the Member for Swansea, West was that there had been a breach of faith. Public accountability demands that there ought to be a public investigation into the precise undertakings given when the location of these production units was under consideration by the last Administration and by this Government.
  Mr. Thompson: The right hon. Member for Manchester, Openshaw (Mr. Morris) is arguing logically. I attended a recent debate on the Northern region which I was not allowed to take part in because, apparently, I am not a Northerner. Many Labour Members made exactly the same case as that now being made by the right hon. Gentleman. They related the case to their local universities and their own areas in the same logical way. Surely, if decisions have now been made, after the Adjournment debate tomorrow night the House should wish the project god-speed. Whichever way we look at it, it means 1,000 more jobs for this country—
  Mr. Deputy Speaker: Order. I have allowed the hon. Member for Sowerby (Mr. Thompson) to intervene for longer than is normal. The fact that we can sit all night is no reason for not obeying the rules of the House.
  Mr. Morris: I understand the serious comment made by the hon. Member for Sowerby (Mr. Thompson) against the background of what is happening in his constituency. But the fact is that Manchester and Salford universities and UMIST produce 12,500 students a year—more than Edinburgh, and Birmingham universities. Each produces more than any other combination of universities or academic institutions. That is the argument for the North-West and the Greater Manchester area. I do not believe that the production units will go to Openshaw. I am not being that parochial. In the
  1450
  North-West there is an unusual combination of high technical creativity involving computers. That justifies at least some thought being given to its claims.
  I return to the question of the Bristol location. There is an argument for siting the research and development centre in a particular area. However, the development of computers and microprocessing must take place near to industry. I cannot see why Bristol was chosen on that basis. About 50 per cent. of Britain's industry is located within 75 miles of Manchester. That is yet another factor which should influence the location.
  Mr. Arthur Palmer: My right hon. Friend is doing the claims of Bristol an injustice. Bristol is a most important and modern industrial area. The aerospace industry originated in Bristol and Concorde was developed there.
  Mr. Morris: I can fully understand the reasons why my hon. Friend the Member for Bristol, North-East (Mr. Palmer) speaks so highly of Bristol. But, Bristol university had no microelectronic chair before the Inmos technology centre was established in Bristol. It did not produce technologists in anything like the number of those produced by other universities. We are faced with a fait accompli in connection with the technology centre, but the other regions should be given some consideration.
  I do not question the veracity of the statements made by my right hon. Friend the Member for Swansea, West because they were supported by the Secretary of State for Industry and other Ministers at the Department. Those statements and the siting of production units and the technology centre should be subject to a full investigation so that the public accountability is seen to be working.
  9.39 pm
  Mr. Arthur Palmer: I apologise to hon. Members on both sides of the House for not having been here at the beginning of the debate. I had a long-standing engagement outside the House, which I have cut short so that I might be present for the debate.
  I shall not enter into the much argued question of who gave promises to whom. It seems to me to be a tangled web and it is difficult to untangle it. I understand

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  the legitimate local interests of my right hon. and hon. Friends, but I want to say something on behalf of the Labour movement in Bristol, which has also a point of view on the matter.
  My right hon. Friend the Member for Swansea, West (Mr. Williams) argued very strongly against Bristol, but he was in no position to argue generally for the special or assisted areas, because he does not represent all those areas; he represents part of South Wales, and his case was a legitimate one for South Wales but not beyond. It is well known that there is an ancient rivalry between the Saxon and Celtic sides—
  Mr. Alan Williams: I have no constituency interest, because I am not seeking to obtain the project for my constituency. The site is 40 miles from it. I briefly dealt with the Welsh position, but I have tried, throughout the weeks for which I have been fighting the campaign, to fight for an assisted area site—not for a specific assisted area site.
  Mr. Palmer: I think that my right hon. Friend, who has understood interest, would not disagree that he would prefer, out of all the assisted areas, to see the project in South Wales and why not? That is my point: he speaks up for his area.
  I was saying that there had always been a rivalry—I hope not hostility—between the Saxon and Celtic sides of the Severn. That perhaps goes back to the days when the Romans provisioned their fleet in the Avon for the attack on South Wales, when the Silurians fought so bravely against the Roman invaders. The invaders were probably assisted by at least some of the forefathers of today's Bristolians even before the Saxons.
  In modern Bristol we are not a negligible part of the labour movement in this country. In spite of the reverses of the last general election, we still hold a majority of the city's seats. We also increased the Labour majority on the city council in the spring local elections of 1979. In putting the case for Bristol, I am not just expressing my own views or my constituency interests but echoing the views of the Labour movement as a whole in Bristol. Certainly, they are very much
  1452
  the views of the Labour majority on the city council.
  I know that there is a dilemma in these matters, perhaps particularly for Socialists, we recognise the employment claims of the special areas, although I am not so sure that that Labour policy as a whole, looked at historically, has worked out as well as it might have. So we are in some difficulty of principle in deciding our correct attitude but we felt that we had fearlessly to put the Bristol point of view as one of value to the country.
  When recently a deputation was arranged for the Bristol and district Members to talk to the Secretary of State for Industry about the matter, there were on it not only the hon. Members for Bristol, North-West (Mr. Colvin), Bristol, West (Mr. Waldegrave), Gloucestershire, South (Mr. Cope) and Kings-wood (Mr. Aspinwall)—all Conservative Members—but myself, my right hon. Friend the Opposition Chief Whip, who is the Member for Bristol, South (Mr. Cocks) and—very significant, and if anything most powerful of all—my right hon. Friend the Member for Bristol, South-East (Mr. Benn). Those on this side who went to see the Secretary of State represented a spectrum of Labour opinion. It is not for me to say who is to the Right and who is of the Centre, but I can say that the Left was stoutly represented.
  I understand it when other hon. Members plead a case. This is always so, because British Members of Parliament have an obligation not only to their parties and the country but to the people whom they represent locally. I shall not go into any special claim that Bristol may have technically or administratively, but I should have thought that once the administrative software centre had been concoded to Bristol, the argument for having one of the initial manfacturing concerns at least close to it was reasonably strong.
  I do not think that areas such as South Wales and those north of Bristol will necessarily lose. However, they will lose if Inmos does not succeed. When I and other Bristol Members met the Secretary of State for Industry, my worry was that, with his peculiar economic views and his dislike of State intervention, he would say "I am reversing the previous Labour

  1453
  Government's proposals altogether on the matter."
  I have noticed, incidentally, that as much Conservative Members may say in their manifestos and election speeches that they are against State intervention, when it comes to pleading the case for their constituencies they are in favour of State intervention. As we walked away from that meeting, the Labour Members for Bristol enjoyed a little private exchange on that point, as I am sure the House will understand.
  The Bristol case is not a Conservative point of view but a general Bristol point of view. I intend to sum up my opinion in the terms of an amendment to early-day motion No. 135 on the Order Paper, which is distinct from a Conservative amendment. I believe that Inmos should make a decision because it holds the responsibility. There will be intense international competition. It must make a decision about the best site for its industrial unit, certainly taking into account the claims of the assisted areas. It must take into account also the practical need to select an established area of high technology and Bristol can lay claim to that. Bristol is an expanding area, and it is good to have in Britain some areas which are expanding industrially, because they may infect the rest of British industry for the good in the future.
  Mr. Charles R. Morris: Will my hon. Friend address his mind to the problem of regenerating those areas and regions where industrial decline is proceeding? Have we to ignore these areas and accept his arguments that new industry should go to green field sites?
  Mr. Palmer: Bristol is not a green field site. It is obviously a much developed district industrially. My right hon. Friend should visit Bristol occasionally.
  Mr. Morris: I have done so.
  Mr. Palmer: I am glad to hear that. I do not wish to be too locally patriotic, but Bristol was once the second city of the kingdom and, in numbers, the second metropolis of the kingdom. It has remained a great commercial city, and has developed steadily as a modern industrial city.
  I am arguing that Inmos must take into account that part of the country
  1454
  which, in its commercial and technical judgment, suits its purposes. If there is too much outside interference Inmos will not succeed. If that happens not only will the Bristol area be the loser, but I suggest that the whole of the British economy—including industry located in Wales, Manchester and the North-East—will be the losers. The House should recognise that there will be a good deal of profitable subcontracting available everywhere if Inmos proves successful. I have tried, I hope with success, to keep the record straight on the view of Bristol Labour Members of Parliament.
  9.50 pm
  Mr. John Butcher: We shall be here for a long time tonight and therefore I rise simply to place a few sentences on the record. I think that there have been some fundamental misunderstandings of what we now call telematics—information technology—and the way in which investment decisions are made in this sphere. The hon. Member for Bristol, North-East (Mr. Palmer) accused Conservative Members of favouring an interventionist policy only when their constituencies were affected. I should like to declare my position on that. I do not like intervention, and particularly I do not like investment-push intervention. I much prefer the American style of doing things by way of demand pull and the placing of contracts rather than the sponsoring of individual projects.
  An alarming theme has run through the comments of Labour Members. It is that they were prepared to entertain a sophisticated and significant application for money from Mr. Iann Barron and his colleagues. It was risk money, money which perhaps the merchant bankers were not prepared to put up. They therefore came to the NEB. Labour Members must realise that, if they are prepared to trust those three gentlemen with £50 million drawn in two tranches, surely they must trust them to make the much smaller management decisions which will be for the good of the delicate chemistry of that company in its infant state.
  The right hon. Member for Manchester, Openshaw (Mr. Morris) completely misunderstands the nature of this business. Believe it or not, Mr. Speaker, it is a cottage industry. It will be a very large

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  cottage industry, particularly when it comes to software development. It will grow in towns like Norwich, and Newbury, as well as Bristol which is far more than a town, and I shall not insult its status by describing it as such. The software men live where they like and do what they like. They put themselves together in small teams. It so happens that this one will have a production facility grafted on to it in the Bristol area. Its significance is strategic. It does not matter that it is going to Bristol. The important factor is that it will be part of the British list of options in the manufacture of these devices. Other companies such as Plessey, Ferranti, Mullard and GEC are involved. The jobs that Labour Members are looking for will spill around the company in their own way, and that will be when these devices are applied and interfaced with other devices. They can then travel back to the West of Scotland, if need be, or to Manchester or to the area of my hon. Friend the Member for Sowerby (Mr. Thompson).
  We look forward with some interest to the reply of my hon. Friend the Minister.
  9.53 pm
  Mr. Gordon A. T. Bagier: I rise to tell the Conservative Members who have spoken in the debate what activates the thoughts of myself and my right hon. and hon. Friends on this matter. Nothing crystallises the mind more quickly than to know that male unemployment in one's constituency is running at 14 per cent. Nothing activates the mind of a thinking and caring Government—at least, nothing should—more quickly than facts such as that. Therefore, when a large new technological interest wants to establish itself particularly when it wants to use a fairly substantial amount of public money to do so—the Government should try at least to influence where that business should settle down.
  Areas such as mine in the North-East and the North-West are suffering a tremendous run-down of established traditional industries. The Conservatives are arguing the cases of their areas, and I fully understand that. That is natural and logical. However, the logic of their argument is that any new technology of this
  1456
  kind must settle in an area that already has that technology. That means that the run-down in the shipyards, in the mines, in the textile industries and in the various other industries that have been the mainstay of most of the areas that are suffering high unemployment would not be replaced by new industry.
  Mr. Waldegrave: That is not our argument. The right hon. Member for Manchester, Openshaw (Mr. Morris) can make a good case for a great deal of the technology going to the North-West. We are not saying that it must go to areas where there is similar technology, but that we must allow the people involved in the chemistry of creating a new company to make their own decisions.
  Mr. Bagier: I followed that argument well. My point is that the Government of the day—with a considerable investment in that industry—should try to influence decisions. My right hon. Friend tried to influence decisions. Indeed, he received certain undertakings, but they were reneged on. That is a matter that must worry the House. If a large industry of that nature is to be created, we are entitled to ask what the score is. We are entitled to say that we have a problem in the North-East, in Wales, and in the North-West, and to ask whether there is any way in which we can be helped. The Government have the responsibility for the social consequences of what is happening. The hon. Gentleman may wish to argue for a complete free-for-all, but it is not entirely within the licence of Inmos to make that decision. This was a joint concern with the NEB. The NEB, as the major partner, was negotiating with the Government on where the jobs could and would be created.
  Mr. Barron wrote to the North-East in derogatory terms. I take issue with him. I do not think that he can be called an expert on the North-East. However, I believe that Mr. Barron wrote in those terms because he knew that there would be a row. He changed his mind and ratted on a Government decision, and he used those terms in order to take some of the heat off his back. I cannot forgive him easily for doing that, because there is no measuring the damage that a man of such substantial standing in industry could have caused to other potential manufacturers.
  Mr. Colvin: We made the point specifically that Mr. Barron had never given a commitment, so he was not reneging on anything. I remind the hon. Gentleman of not one but seven answers to parliamentary questions given by the hon. Member for Nuneaton (Mr. Huckfield), when he was a Minister, on the specific question of the siting of the production unit. He said that it was a matter for the company and the National Enterprise Board. Mr. Barron may not be an expert on politics, on the North-East, or on South Wales, but he is an expert on microprocessors.
  Mr. Bagier: I accept that. However, Mr. Barron is not an expert on the geography of Britain and the language that he used in his letter inflamed Members representing the North-East. I have the highest regard for my hon. Friend the Member for Nuneaton (Mr. Huckfield), but, with the best respect in the world, he was a junior Minister in the previous Administration. He was not a Secretary of State or a Minister of State. He was not privy to the discussions about which my right hon. Friend has informed the House tonight.
  The Minister may smile, but I hope that he will at least accept the fact that my right hon. Friend said categorically that to his understanding an assurance was given by the NEB. If it had not been given an IDC would not have been granted for the original establishment in Bristol. If that was the understanding, not of a junior Minister—my hon. Friend the Member for Nuneaton—but of the Secretary of State and the Minister of State, it is fair to say that the Government are playing with words. They are trying to find a formula to excuse themselves for an inexcusable move away from the social responsibilities of any Government towards areas that are having a tough time at the moment.
  Mr. David Mitchell: If a Minister in the Department of Industry in the previous Labour Government gave the answers to parliamentary questions read out by my hon. Friend the Member for Bristol, West (Mr. Waldegrave) and those answers were at variance with the views of the other Ministers in the Department of Industry, is it not conceivable that there is some misunderstanding here?
  Mr. Bagier: No, I do not think so. I have not had the opportunity of examining the answers in detail. I believe that the hon. Member for Bristol, West (Mr. Waldegrave), in his short intervention, referred to its being the responsibility of Inmos and the NEB. The hon. Gentleman indicates that he agrees with me. Therefore, the NEB, which was acknowledged as the senior negotiating member of that group, had already given a commitment to my right hon. Friend the Member for Swansea, West (Mr. Williams). That is the point that we are trying to establish. The Minister may make play of the fact that a junior Minister put words in that form, but it still does not take away from the substance of my right hon. Friend's statement that the undertaking was clearly and categorically given by the NEB to get the IDC for the original establishment in Bristol.
  Having established that fact—at least, I hope that we have established it—I hope that the Minister will specifically refer to that matter. I have no disrespect for my hon. Friend the Member for Nuneaton. However, I hope that the Minister will not play on his words in that respect. Does he or does he not accept that, on the best information available to him, the previous Labour Government were given undertakings by the NEB that the establishment of the manufacturing units would be in development areas or in special development areas. If so, has the hon. Gentleman or the Secretary of State changed the direction of the NEB or, alternatively, given in to pressure from Inmos and the NEB combined?
  I hope that in replying to the debate the Minister will be able to justify the situation so that I can explain it to my constituents or to those who hoped to work in the Washington area had we been fortunate in getting the first manufacturing establishment in that area. At the moment, it looks as though the Minister and his colleagues are about to rat on a decision that had social undertones in the face of something that seems to have been determined by the whims of one or two senior executives in Inmos.
  10.3 pm
  The Under-Secretary of State for Industry (Mr. David Mitchell): I congratulate my hon. Friend the Member for Bristol, North-West (Mr. Colvin) on

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  having taken the opportunity that this debate has presented to raise issues of concern both within and beyond the House.
  I shall deal first with the question concerning the Supplementary Estimate. This provision covers the conversion to equity—that is, to public dividend capital—of National Loans Fund finance provided to British Leyland by the previous Administration. As most of the debate has been concerned with the alternative expenditure that the Government might have undertaken in the area of Inmos, I shall now move on to deal with that matter.
  I noted the presence of my hon. Friend the Member for Gloucestershire, South (Mr. Cope) throughout the debate. I know that he is deeply concerned, because the potential site is technically within his constituency.
  I listened carefuly to the points made by my hon. Friends the Members for Bristol, West (Mr. Waldegrave) and Bristol, North-West.
  The future of Inmos in general and the location of its production facilities in particular have attracted a good deal of speculation. I must say at once that I shall not be able this evening to announce any decision by the Government on either the further public funding of the company or the location of its first United Kingdom manufacturing unit.
  Mr. Charles R. Morris: I can understand that the Minister is not in a position to give that information tonight, but can he indicate when the decision is likely to be made?
  Mr. Mitchell: I will deal with that in the course of my speech because it is a matter that was raised by the right hon. Member for Swansea, West (Mr. Williams).
  The right hon. Member for Manchester, Openshaw (Mr. Morris) earlier pleaded the advantages of Manchester, and other hon. Members, including my hon. Friend the Member for Sowerby (Mr. Thompson), referred to the advantages of their areas. Hon. Members who come from areas of high unemployment naturally believe that they have a strong claim, but there are other aspects that have to be taken into account.
  I think that the House will sympathise with me in the task that I have in dealing
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  with conflicting views. I am reminded of the man who asked whether he should be represented by a one-armed solicitor because at least the solicitor would not be able to say "on the one hand" or "on the other hand". There has certainly been a good deal of representation from both sides of the House in respect of the siting of this centre.
  The right hon. Member for Openshaw specifically asked me about the report from PA Management Consultants Ltd. The report was commissioned by Inmos. It belongs to that company and does not belong to the Government. The contents of the report will no doubt arise in connection with the IDC. I will come to that point during my speech.
  Mr. Charles R. Morris: Is the Minister saying that he has not actually seen the report?
  Mr. Mitchell: If the right hon. Gentleman will wait, I shall come to that later in my speech.
  Inmos represents the most important green field investment by the NEB. My hon. Friend the Member for Bristol, North-West referred to it as being technical creativity, and I think that that is a phrase that encapsulates much of what is recognised about this siting. Whilst other plants have been established in the United Kingdom to manufacture standard integrated circuits in high volumes none of the companies concerned is British controlled. Inmos is the only such manufacturer, and I assume that this was the principal reason why the previous Administration considered that it was worthy of support.
  My hon. Friend the Member for Coventry, South-West (Mr. Butcher), who has considerable interest and experience in this area, also referred to the importance of the technological advance.
  Everyone has always recognised that the project is subject to an unusual degree of risk. While the original proposals envisaged a total of £50 million equity funding by the NEB, I understand that the previous Administration accepted the NEB's view that it was essential to review the project at the halfway stage and so decided to approve an NEB equity input of £25 million in the first instance.
  When we took office, we examined the Inmos project carefully in the context of

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  considering the future of the NEB as a whole. We decided that the NEB could perform a useful role in familiarising the capital market with the investment potential of high technology ventures. This was recognised in my right hon. Friend's statement of 19 July last setting out the Government's policy towards the NEB. On that occasion my right hon. Friend said that he would wish to subject the Inmos project to detailed review before agreeing to the second tranche of £25 million expenditure originally envisaged.
  I do not suppose that any right hon. or hon. Member will deny that Inmos is a high risk project. That has been stressed by a number of hon. Members, including the hon. Members on both sides of the House representing Bristol who, if the project receives further money, are anxious that it should he sited in that city.
  It is true that the market for standard integrated cicuits is increasing world-wide, but the company will be operating at the frontiers of the technology and the competition is fierce from well-established and wealthy rivals. Each is seeking to secure a substantial proportion of the world market and success or failure will depend on producing the right product at the right time. In particular, any company entering this field is vulnerable to delays in product development or in establishing production lines, or because of unforeseen technical difficulties or fluctuations in the market requirement.
  I believe that the NEB has studied the prospects for the company most carefully and the application for the second £25 million funding is an indication of the NEB's confidence in its ultimate success. It is significant that the total requirement for Government funding has been held at the figure of £50 million that was identified two and a half years ago when the project was first put to the Government of the day.
  Earlier this year, the NEB sought the Government's approval for the release of the second £25 million funding for the project. Since then, the Government have been giving careful consideration to the issues involved.
  The right hon. Member for Swansea, West referred to delay and indicated that he was anxious to see an early decision, and the right hon. Member for Manchester, Openshaw referred to the same matters. I make no apology for the fact
  1462
  that we have not yet taken a decision on the future funding of Inmos and the application for an industrial development certificate for the location of its first manufacturing unit at Bristol. It is a matter of critical importance for the NEB and the company, and the degree of parliamentary and public interest in the decision is a firm measure of the controversial nature of the issues involved.
  Inmos has not yet drawn about £10 million of its original £25 million of NEB funding, so there is no question of the company being embarrassed financially by the few weeks which we have taken so far in examining it. A decision on the company's application for an industrial development certificate cannot sensibly be taken separately from the decision about the second £25 million. The important thing is to ensure that the decisions—and there are two decisions—when taken, are in the best interests of the company and the country at large, and an announcement to this effect, dealing with both decisions, will be made as soon as possible.
  Mr. Alan Williams: Will the Minister have words with the Secretary of State to ensure that when the decision is taken we have a statement from the Dispatch Box, because there are two issues of great importance: on whether or not there should be the second public funding—we are in favour of it; some Conservative Members are not—and on the question of siting, which excites the attention of hon. Members in most parts of the House?
  Mr. Mitchell: Yes, I am very much aware of the keen interest which is felt by hon. Members on both sides of the House, and I shall convey the right hon. Gentleman's view to my right hon. Friend the Secretary of State.
  As is known, the company's choice of Bristol as the site for the first production plant, which had been endorsed by the NEB, has generated a good deal of discussion. My right hon. Friend has received the views, orally and in writing, of a large number of right hon. and hon. Members whose constituencies are in the assisted areas urging that the plant should be directed to one of those areas. As I have already indicated, the Government have not yet reached a decision on the issue.

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  Perhaps, however, I should deal tentatively—I can do no more—with the points made by the right hon. Member for Swansea, West, who referred to the letter published in The Times from himself and a number of his colleagues. I have to say to him—I am sure that he will appreciate the difficulties—that, of course, there is the accepted arrangement that the papers of a previous Government are not available to their successors. I am, therefore, in some difficulty about the situation.
  The hon. Members who wrote to The Times referred in their letter to wishing to place on record the commitment that they received from the NEB and Inmos. We can find no record of an unqualified commitment. The right hon. Gentleman will be able to help me by saying whether he and his colleagues entered into a commitment to spend £25 million of the taxpayers' money on this expansion without having secured a contract from the company to ensure that it went to an assisted area. The previous Secretary of State could have used the statutory powers of direction over the NEB had he sought to do so.
  Mr. Alan Williams: I think that the hon. Gentleman will appreciate that we had already authorised the £25 million prior to the location decision. We had a series of meetings with either the chairman or deputy chairman of the NEB. Clear assurances were given—this is the recollection of the two ex-Ministers and myself—that the subsequent production units that would arise at a different stage would be placed in assisted areas. That assurance was given to persuade us to grant the IDC that was required for Bristol.
  Mr. Mitchell: I am interested in what the right hon. Gentleman says. He will appreciate the difficulties that are faced by Ministers in the new Government. I cannot find any unqualified commitment of the sort to which the right hon. Gentleman refers. I am bound to say that I am somewhat surprised that a commitment to spend such a large sum was given without any formal contract being entered into on a matter of such enormous importance.
  There is not much that I can add to the delete save to say that the IDC appli-
  1464
  cation was received some weeks ago. Much of the processing is under way on a contingency basis before a decision is made on the second £25 million. The normal IDC application procedures are being followed. My noble Friend the Minister of State will be seeing Inmos shortly.
  Mr. Williams: I believe it is correct that Ministers have not yet seen the PA report. That means that they have not studied it. It is important that they have a chance to study the report before the meeting with Inmos takes place.
  Mr. Mitchell: I am grateful to the right hon. Gentleman, who was a Minister in the Department of Industry during the previous Labour Government, for drawing attention to the importance that he attaches to the examination of the report by my noble Friend. I shall convey the right hon. Gentleman's remarks to my noble Friend.
  The right hon. Gentleman referred to section 7 assistance under the Industry Act 1972. He asked me whether any section 7 assistance had been offered to Inmos. First, we must have an application. We do not go around offering money. As the right hon. Gentleman knows, the system is that applications for assistance are made. However, I can tell him that informal discussions by the Department with the company have ensured that the company has been made aware of the scale of assistance that might be available were it to apply for it.
  I take up the remarks of the hon. Member for Sunderland, South (Mr. Bagier). The Government are keenly aware of the immense social problems caused by unemployment and the deep concern that is present on both sides of the House regarding social problems in areas of structural weakness and high unemployment. We are not divided about that. While carrying out a review of the project, the Government will take full account of all the points that have been raised by the various interested parties.
  We need to take a long and careful look at the prospects and viability of the whole project. If we are satisfied on that point, we must decide how to apply our policy and ensure its greatest success.
  Mr. Williams: I have still not received an answer to the question that I asked about the report of PA Management Consultants. The report has been under discussion for some time. I am not asking

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  whether the Minister will convey my question to his noble Friend. Have any Ministers in the Department read or seen the report?
  Mr. Mitchell: I can speak only for myself. I cannot speak for other Ministers. I have not seen the report. However, that is not surprising as it is not my responsibility to consider the IDC.
  Mr. Williams rose—
  Mr. Charles R. Morris rose—
  Mr. Mitchell: I have been as generous as I can about interventions. No decision has yet been taken. The points that have been raised will be examined carefully by my noble Friend and other Ministers before any such decision. I therefore hope that the House will accept that we are lad that hon. Members have drawn attention to the importance that they attach to this report.
  Mr. Williams: I must press the hon. Gentleman on that point. Another Minister is sitting next to him. I can ad lib until they have finished discussing whether the report has been read. I want an answer, "Yes" or "No". Has the Minister had an opportunity to see or read that report?
  Mr. Morris: Will the Minister give an assurance—
  Mr. Speaker: Order. The first intervention must be answered before another can be made.
  Mr. Mitchell: When my right hon. Friend the Secretary of State makes an announcement to the House or conveys information about the decision, I am confident that he will ensure that an answer to that question is given. Indeed, I am certain that hon. Members will table questions that are designed to discover the answer to that question. I cannot give an answer before any decision has been taken and when full consideration has not yet been given to the IDC.
  Mr. Bagier: That recent exchange has underlined the need for the Secretary of State to make a statement. The Under-Secretary has said that he will convey our opinions to the Secretary of State. However, the Secretary of State will need to
  1466
  bear those factors in mind when making his decision. He should make a statement so that he can be cross-examined, should that prove necessary. I should like an assurance that it will not be made in the form of a press statement, for example, after tomorrow's Cabinet meeting.
  Mr. Morris: Am I—
  Mr. Speaker: Order. The same ruling still applies. An answer must be given to the first intervention before the right hon. Gentleman can intervene.
  Mr. Mitchell: I am trying to help the hon. Member for Sunderland, South. I appreciate the importance of his question and the widespread desire for a statement. I shall convey the exact points that have been made to the Secretary of State. No doubt he will consider them sympathetically.
  Mr. Morris: The Minister has been most forthcoming. I appreciate his indulgence in giving way. The report is vitally important. Will he convey to the Secretary of State the need to publish the report or to make it available in the Library?
  Mr. Mitchell: I take the right hon. Gentleman's point. When he looks at the record tomorrow, I believe that he will find that I have answered it already.
  PA Management Consultants Limited was invited to advise not only on the assisted area sites but on the suitability of those areas within the boundaries of local authorities that had written to the NEB pressing their claims. It does not follow that it was concerned only with the assisted areas; It was also concerned with the non-assisted areas. That is a factor that we have to bear in mind when examining the report and placing reliance on it.
  Our review of these matters has been somewhat lengthy and very detailed, and I make no apology for that. We cannot afford to make expensive mistakes with the sort of sums required for this project.
  I have noted with care the points raised in this short debate. I assure the House that they will not be overlooked and that I shall draw them to the attention of my colleagues.

  SUPPLEMENTARY ESTIMATES AND CASH LIMITS
  10.25 pm
  Mr. John McWilliam: I rise with temerity as a new hon. Member to tackle the broad problem of the reasons for the need for Supplementary Estimates and excess Votes and breaches of cash limits.
  I am a Member sponsored by the Post Office Engineering Union. Although I am not directly affected by the Votes, as a former public servant I am aware of the impact of cash limits on public sector pay and conditions, particularly when an unrealistic view is taken of the likely outcome of negotiations during the year.
  I am concerned about the level of supplementation asked for. Given the stated policy of the Government to keep expenditure under tight control, it is inordinately high. An increase of about 30 per cent. is indicated. It can be partly explained by policy changes, which are listed in Hansard, but much of it is inexplicable.
  It is also partly due to the inherent difficulty of applying cash limits in the way recommended by the Expenditure Committee—the difficulty of making the correct assumptions about the level of inflation. As is stated, if the assumptions are correct, the setting of cash limits merely keeps expenditure within the limit which has been set. If they are wrong, they squeeze the volume of resources within the area for which the Vote was granted. Inflation is running at 18–2 per cent., whch appears to be a reason for asking for that level of excess. The Government's chickens are coming home to roost. Inflation has soared under their management of the economy.
  I am surprised that in the Supplementary Estimates there is not a larger item under the general heading of the Treasury in Class XIII. It would seem reasonable to employ more staff, given the report in the Central Statistical Office's economic review, published last week. That report states that there is roughly £3·6 billion due to tax but not coming in tax receipts. I have searched diligently, and, although the moneys for the management of the economy are increased, those funds are
  1468
  not being directed towards the management of that area of the economy— or of the undisclosed economy. Indeed, the figure that I quote is, by admission of the person who wrote the paper, on the low side. If we believe the statements made by the last Controller of Inland Revenue, the figure that I quote is about half what it should be. Between 7 per cent. and 15 per cent. of public expenditure is outside the control of the Chief Secretary.
  I challenge the Minister to say what he intends to do to improve the way in which these Estimates are made so that such levels of supplementation are not needed in future. What will he do about those who fiddle, while the country burns, to the tune of £3·6 billion to £7·5 billion, so that we do not have to sit up through another late-night debate?
  10.30 pm
  Mr. Michael English: I am grateful to my colleague the hon. Member for Blaydon (Mr. McWilliam) for raising this subject. I am also grateful to the Chief Secretary for coming at this time of night to reply to it. Many Cabinet Ministers leave these matters to their juniors. We appreciate his presence on this occasion.
  I do not propose to go into the details of all the Supplementary Estimates, excess Votes and breaches of cash limits, in which last only two Departments are involved. I am, however, a little amused when in one Vote I see a Supplementary Estimate justified at item F1 on the ground that it was necessary because of faster progress and at N1 of the same Vote that it was necessary because of slower progress. That seems to me to be possibly extremely honest. It might be found somewhere in the region of the Ministry of Defence. Although it may be extremely honest, it does not seem to me that we should get very far by trying to probe into both reasons at the same time.
  I wish to raise the question of what happens if cash limits are broken. This concerns primarily the Ministry of Defence. As the right hon. Gentleman and I have reputations as purists, we should consider what happens if there are Supplementary Estimates at all. In fairness to Departments, it is true that on many occasions there are Supplementary Estimates and overspendings, in lay

  1469
  parlance, which are more than counterbalanced by other sections of a Department having underspent. Indeed, in the previous Parliament the Expenditure Committee tended to criticise Departments for underspending—or perhaps for overestimating—rather than for overspending.
  There was a time, which we all recollect, when public expenditure was very nearly, if not actually, out of control. That happened when the cash limits were introduced. Both the right hon. Gentleman and I wish to preserve the use of those cash limits and the intent behind them, which is basically to control public expenditure. I do not understand how that is to be done. I fail to see how control is being exercised at various levels. We must consider this matter in terms of levels.
  The other day the hon. Member for Knutsford (Mr. Bruce-Gardyne) and I protested at the parliamentary level about the fact that we were expected to vote on Supplementary Estimates without debating them. Those Estimates had been laid before the House for 11 days, and we were expected to vote on them without any discussion. The reasons for that are historic and understandable, but they should be changed. Today, on this Bill, we are allowed to talk about the matters we voted on two days ago. The discussion has come after the event. This would be regarded as very strange in any other legislature.
  Mr. Speaker: Order We are free to discard Treasury control over these excesses, but we cannot have a broad debate now on the House's control over them. That is not the issue before us.
  Mr. English: I accept that, Mr. Speaker; I was merely mentioning it in passing. I was pointing out that there are various levels of control.
  The Treasury and Civil Service Committee of this House, of which I am a member, will shortly wish to consider this issue in more detail, and it will come before the House in that way. I was merely trying to point out that there is more than one level of control. At the parliamentary level, I do not think that our procedures are satisfactory. This has been discussed on many occasions, and I am sure that it will come before us
  1470
  again. The same is true at the level of our new Select Committees. We have only just set them up—they were appointed late in November last year—so they have not really had time to consider this issue.
  We then come to the third and fourth levels—the ministerial and Civil Service levels. The Government have, rightly in my view, said that they wish to keep control of public expenditure. I am not making solely a party point when I say that the Government will not be able to preserve control over public expenditure if such control is exercised only over certain Departments of State and not others. It might be that if a Labour Government were in power they would be more ready to ensure control over defence than over social security. I do not think that it matters whether this would be so or not; it would be wrong to single out Departments. The trouble at present is that the breach of cash limits occurs primarily in the Ministry of Defence. It could be that people in that Department —members of the Armed Forces or the Civil Service or even Ministers—consider that by the very nature of the Department it is likely that a Conservative Cabinet will view sympathetically its requests for money. If that is so, those people should use the proper and authorised procedure. They should go to the Cabinet and ask for the appropriate sum of money.
  Political decisions should be made in the Cabinet. Once those decisions are made, it is the duty of everyone to obey them—certainly everyone in the Executive itself. In this case, the cash limit has been exceeded. I am sure that the Minister has briefed himself in great detail on the reasons for all these supplementary excesses, and I do not want to go into detail on them at this stage. No doubt they will be investigated at the proper time in the proper place. But I wonder what steps the right hon. Gentleman has been taking to make sure that in future the orders of the Cabinet are obeyed. I refer not simply to the technical Supplementary Estimates that may be almost justified and perhaps outweighed by underspendings but to the actual cash limits that are, in effect, the orders of the centre of the Government to all Departments and all sections of Departments. Those cash limits tell Departments what they should spend.

  1471
  Hon. Members debated yesterday the area health authority that was dismissed by the Secretary of State for Social Services. I do not wish to go into that issue. It will be discussed again tomorrow. What is important is that the right hon. Gentleman was justifying the principle behind his action on the ground that he had to enforce the cash limits. That is fine. I said so yesterday. What concerns me is whether there will be an equal measure of enforcement in respect of every Department of State and every subsection of every Department. This must be asked. One cannot have a system that is enforced on one hand and not on the other. If that happens, there soon ceases to be any system of enforcement at all.
  When there has been a breach of cash limits, I would have thought that the matter would be raised first, in this case, by the Secretary of State for Defence coming to the House and explaining whatever reasons existed for it. There may be good reasons, essential for the security of the country. No one came to the House. That was not done. So far as I know, the Ministry of Defence did not spontaneously write—I understand that it was asked, but that is not the same thing—to the Select Committee on Defence indicating the reasons for the breach of cash limits. The Ministry has certainly not approached the Select Committee on the Treasury and the Civil Service to explain why it broke the cash limits. I do not know whether the matter was mentioned to the Cabinet. Presumably the Treasury was aware of it.
  What happens when orders of the central Government are disobeyed? I know what happens in some countries. There was an illustration yesterday of a member of the Cabinet who, accoridng to a judicial decision, was misadvised. No one, so far as I am aware, has yet been proclaimed responsible. I am certain that if a member of the Executive in the United States was badly advised, or well advised, those giving both bad advice and good advice would be known to the public. In the United States, salaries would be increased or decreased according to whether people were efficient or less efficient.
  The Expenditure Committee, of which I was a member, in the last Parliament
  1472
  advocated that the Government should consider the United States system with its much longer salary scales for all levels of the Civil Service. People can be advanced in those scales on an accelerated basis if they are regarded by their superiors as efficient or retarded if regarded as inefficient. No one wishes to sack people. There is, however, no particular reason for paying the same amount to efficient and inefficient people. I know that this scheme is not regarded highly by some Civil Service trade unions. I think, however, that others would take a different view.
  The question remains about what should be done to enforce the orders of the Government in this case, the most important order of all. The basic order given by the Government in present circumstances is that there is a limited amount of taxpayers' money available.
  Taxpayers voted for the Conservative Party partly on the ground that they were paying too much in taxes. My colleagues and I might or might not agree with that decision. As democrats, we accept it. Once in power, the Conservative Government endeavour, naturally, to do something about cutting down public expenditure. They impose fairly severe cash limits on all Departments of State, and all the Departments bar two have adhered to those limits. One is only a marginal breach, the other is moderately substantial. I do not claim that it is immense in the context of total Government expenditure, but it is in eight figures and, as a matter of principle should be considered.
  The simple question that I wish to ask the Chief Secretary is how he intends to enforce the orders that he gives to the rest of the Government machine.
  10.45 pm
  The Chief Secretary to the Treasury (Mr. John Biffen): I welcome the debate and thank the hon. Member for Blaydon (Mr. McWilliam) for initiating it. For the hon. Gentleman to feel that he had temerity in raising the subject shows a becoming modesty, but, as the whole history of the House is about the control of spending and a highly sceptical regard for the Treasury Bench, the hon. Gentleman has demonstrated that, within a short time of his arrival here, he has settled in well.

  1473
  I have been asked about the nature of the spring Supplementary Estimates. They total £837 million. Of that figure, pay and price increases account for £450 million, of which £316 million is sought for pay, including pay awards arising from the Standing Commission on Pay Comparability. A further £110 million is required for transactions within the public sector, which are offsets to revenue, and the remaining £277 million relates to volume increases in certain programmes covered either by offsetting savings elsewhere or from the contingency reserve that is provided within the public expenditure plans.
  I am certain that the hon. Member is right in saying that any attempt to control public spending is seriously impeded by inflation. Inflation claims many victims, and effective control of public spending is certainly one of them.
  The hon. Member for Nottingham, West (Mr. English) apologised for making a party point. When one cannot make a party point in this place, we shall be reduced to a Jenkinsite consensus which I would not wish on anybody.
  If I have to choose a situation in which one could see danger writ large, it was when the previous Government set their cash limits for 1979–80 on the basis of a 5 per cent. pay policy when no one believed that there was much likelihood of that being sustained. Of course, Supplementary Estimates were an inevitable consequence, and all who wish to have discipline in public spending will wish to minimise the significance of Supplementary Estimates.
  The breaches of the cash limits are £64 million in respect of the Ministry of Defence and £6 million on assorted Scottish Votes, somewhat exotic in their character. In order to put the matter in perspective, we should remind ourselves that those figures represent 0·2 per cent. of cash-limited spending. In the 140 blocks that constitute the cash limit arrangements, there were two breaches in 1976–77, two in 1977–78 and four in 1978–79, which is the period that we are considering. In no sense do I wish to be complacent about that, but I think that we might as well register these points so that the debate can be informed rather than hysterical.
  1474
  The Government must react to the breaches of the cash limits, and there are three considerations that I wish to share with the House. The first is the effort that must be made to minimise the overspend that is forecast, because there is still some time to go before the final outturn. By policies of delayed recruitment and purchasing and the consequent operation upon stock levels, it is hoped that the actual breach may be somewhat less than the figures suggested in the Estimates.
  Secondly, there is the consideration of getting to know why all this has come about. The Scottish Estimates have not featured prominently in the debate, but heavy overtime working in the prison service and the aftermath of the disturbances at Peterhead prison had a serious effect upon that particular cash limit.
  The delightful situation of the Scottish roads was mentioned by the hon. Member for Nottingham, West (Mr. English). Because of the good weather, there was better progress than expected and consequently there was an acceleration in payment to contractors. As a consequence, there was an overspend.
  At this stage, there is normally a genera] dissolving into laughter by all and sundry at the absurd way in which the control of public spending is exercised. I do not, of course, refer to such a refined body as the membership of this House. I am talking of audiences outside the House. But that brings home to the House the difficulties of somehow or other finding the magical dividing line between demand-induced programmes and programmes over which the Government are thought to have almost limitless authority.
  Much the most serious breach, however, is that in the Ministry of Defence cash limits. There is a variety of causes for that. I cannot point to anything substantial which would overwhelmingly represent the reasons for such a breach, but the matter is now under discussion between the Treasury and the Ministry of Defence. One factor was the industrial action which affected the pattern of expenditure and receipts for the Ministry of Defence. However, we must acknowledge that this is not the first time that these difficulties have arisen in the Ministry of Defence. We are grateful for the studies and comments of the Public Accounts Committee, which

  1475
  has suggested that there must be ways of improving the estimating, monitoring and financial procedures in that Ministry.
  I think that that takes us on to the question of discipline, which is my third and final consideration. Here we propose that the overspend for 1979–80 will be deducted from the 1980–81 cash limit. That is consistent with the practice of all our predecessors when operating cash limits.
  Mr. English: As the Chief Secretary will realise, the effect of that as a sanction depends entirely on timing. If one deducts something from a cash limit after that limit has been fixed, that can be said to be a sanction. If one says in advance that one will deduct something before one has fixed the cash limit, it would be beyond the wit of man to determine whether that was a sanction.
  Mr. Biffen: Inasmuch as the wit of man is exercised in the Treasury, it will be exercised to try to make the deduction an effective deterrent against overspending.
  The hon. Member for Nottingham, West is perfectly right in saying that one is operating in a difficult area when trying to fashion a sanction that is truly effective. At the end of the day, it must to some extent depend upon a realisation throughout the public service that it is a major breach of one's duties to allow overspending to take place.
  The hon. Member for Nottingham, West said that there might be a two-tier system and privileged spending Departments in Whitehall. In the short debate on Monday, he said:
  "Above all, we ought not to say, as this Government are now saying, that cash limits apply to everybody except the Ministry of Defence and a few others and that no one will ever be allowed to discuss that exception."
  At the conclusion of that debate, my right hon. Friend the Leader of the House said:
  "I agree that the present procedures are not entirely satisfactory … I do not think that I can go beyond that".—[Official Report, 10 March 1980; Vol. 980, c. 930, 933.]
  I assure the hon. Gentleman that there are no privileged spending Departments in any quarter of Whitehall. Some have different problems in controlling their spending. Effective discipline must be secured in respect of each Department.
  Mr. English: The Leader of the House went on only to promise to consider setting up a new Procedure Committee to deal with the financial procedures of the House. It is essential that the Chief Secretary should lend his considerable weight to the proposal to reconsider our financial procedures, as well as those of the Government.
  Mr. Biffen: I am happy to put on record my anxiety that the House should be an ally to the Treasury in securing disciplined control over public spending. That is not a view from either the Right or the Left. Any effective use of the social and military spending priorities can be truly advantageous only if they are controlled. If they are without control, they are as hostile to one side of the House as they are to the other. However, the matter is for my right hon. Friend the Leader of the House. I have no doubt that it will be dealt with.
  I welcome the opportunity to make comments on the excess Vote and breaches of the cash limit.
  Dr. Jeremy Bray: There is a particular problem in the Supplementary Estimate coming under the defence procurement Vote. A large part of the increase must be due to the movement in the exchange rate, which will increase the cost of defence procurement from the United States. How are such eventualities to be safeguarded? Surely it is wrong, if there is a movement in the exchange rate which damages a major defence programme, to make it vulnerable in this way.
  Mr. Biffen: I cannot be precise about that comment. I assume that there must be consequences for the defence Vote from movements in the exchange rate. I speak without a shred of a brief on that topic. I am sure that my fluency is unsupported by evidence. Many other cash limit blocks are effected by volatility in exchange rates. That underlines that while being ambitious about cash limits as a system of controlling public spending we must be modest about exactly what we can achieve. The eternal, unchanging challenge of politics is to tread between the modest and the ambitious.
  From the Treasury's point of view, this evening's debate has been a welcome opportunity to say a little about the

  1477
  Supplementary Estimates. I thank the hon. Member for I3laydon for enabling it to take place.

  GENERAL PRACTIONERS (MEDICAL AND PHARMACEUTICAL SERVICES)
  Mr. Speaker: Before I call the hon. and learned Member for Leicester, West (Mr. Janner) for the next debate, I remind the House of the ruling that I gave earlier this afternoon, when some hon. Members now present may not have been here. That ruling applies to the three remaining debates that are likely to take place.
  The Supplementary Estimates under discussion merely, in the terms set out in "Erskine May",
  "provide additional funds of a relatively moderate amount required in the normal course of working of the services for which the original vote was demanded".
  Therefore,
  "only the reasons for the increase can be discussed and not the policy implied in the service which must he taken to have been settled by the original vote".
  11 pm
  Mr. Greville Janner: I am pleased to have the opportunity to raise the matter in the Vote in Class XI, 2:
  "General Medical Services
  Payments under arrangements made with medical practitioners, &c.
  Increased payments with effect from 1 April 1979 following the recommendation of the Review Body on Doctors' and Dentists' Renumeration"
  and the reasons therefor, and
  "Pharmaceutical Services
  Payments under arrangements made for the supply of drugs, &c."
  and the reasons therefor.
  Apart from reasons of inflation, which afflict all, these increases are due to the burden placed on the general practitioner in the exercise of his skill in his profession on behalf of those who need his help; the difficulties that arise because of the increased complications imposed upon the general practitioner by the increase in the weight of work that comes upon him; the difficulties that he encounters in assisting and working together with other bodies in the field and other agencies; and his difficulties in running his practice
  1478
  properly, having regard to the number of patients with whom he must cope.
  I submit that those reasons are entirely valid but that general practitioners who will benefit from the increase should he assisted to make the best use of the additional funds and of the facilities available to them and should be enabled to co-ordinate their work properly with other agencies in the field. If that is done, the reasons for the additional payment will have been met, the review body will no doubt be satisfied, and the public will have an improved service as a result of the revised provision and the increase thereto.
  If, however, the doctors do not rise to the challenge, if they are not now enabled to do their work better, the result will be not only added difficulty and public dissatisfaction but a series of tragedies of the nature of that of Carly Taylor in the city of Leicester. That is a case with which many hon. Members have been deeply concerned. It was brought to my attention some time ago by Carly's grandmother, who lives in my constituency, by the child minder and by people who had tried theoretically with the general practitioner's help to avoid the tragedy that occurred.
  That case is purely an illustration of the need for the increase that is being voted. It is the clearest illustration, being a clarion call of warning of the tragedy that lies in store if general practitioners do not use the services available and if they are not helped.
  The general practitioner concerned no doubt had a heavy case load. It is he, among others, who will benefit from the increase, one of the reasons for which is to enable such people to do their job properly.
  The report of an independent inquiry about the tragic case of the twin who was battered to death by his mother was published last month. It contains an indictment of the system used by a general practitioner, of which I hope the House will take careful note. I hope that the Minister will assure us that it will be dealt with when considering the increased provision.
  The practitioner saw fit to prescribe a drug called Tenuate Dospan, which is deliberately designed to take away the appetite and to help patients to reduce

  1479
  their weight. That drug was prescribed for the mother of the twins at weekly intervals for about a year. At the same time, the doctor saw fit to prescribe the same drug for the father, along with a barbiturate called Tuinal.
  I know the problems that doctors face with the weight of the burdens which lie upon them in their surgeries. Even so, to prescribe a slimming drug to a woman described in the report as slight, slender and weighing about seven stone is about as vigorous a denunciation of the system that requires more funds for better operation as anything that could happen.
  Somebody describing the continuous prescription of the drug to the inquiry gave—
  Mr. Speaker: Order. I have been generous to the hon. and learned Gentleman. However, his illustration should be brought to a conclusion soon, and he must turn his attention to the excess claim made for payment.
  Mr. Janner: I am much obliged to you, Mr. Speaker. The illustration will come to a close shortly. I am sure you will appreciate that it is a matter of the very greatest concern to the medical profession, to all who benefit from it and to all who are concerned with the revised and additional amounts to be paid to it.
  The problem is how a doctor, with a heavy case load, will be helped by the additional provision to make better arrangements for his patients. It is whether the revised provision is to be given in accordance with the recommendation of the review body, so that doctors will cease to churn out prescriptions for patients because they have no time to consider the consequences. It is whether those who provide the prescriptions for drugs, for which payments will be made in the next Vote, should continue to prescribe without care and without regard to the tragedy that could result, as it did in the case of a woman who weighed only seven stone and was addicted to drugs prescribed by a doctor who was, no doubt, overworked.
  The reason for the Vote is to improve the professional work of doctors and is based upon there being co-operation between the doctor and the health visitor, who is not covered by the Vote. One of the objects of the review body was to
  1480
  ensure that the work of doctors would be more satisfactorily integrated into the overall picture.
  Another reason for the increased payment is to enable doctors to employ appropriate staff. It is to enable them to co-operate—in a way that that doctor did not—with the health visitor, who also did not take note of the state of either the patient or the child. The contact was insufficient. This sort of additional fund must be made available so that it can be fed into a system that is working properly. We also need a full review of the effect that the spending of this public money will have on the service that the public receive in return. The Minister may feel it appropriate, for example, to consider whether some form of computerisation might not be appropriate. In that way, might not the money paid to the practitioner be better spent through the facts of cases such as that of Carly Taylor being properly available to all the agencies concerned?
  One cannot deal with the family practitioner in total isolation. The Review Body on Doctors' and Dentists' Remumeration did not. It recognised that the work of doctors in this area was a cooperative effort for the benefit of the public. In the Taylor case, the cooperation was with the probation officer, with the health visitor, with the housing department and with the Department of Health and Social Security. One possible cause of disaster in a case like this is that people move from one area to another and their doctors are under constant pressure, with which a £16·6 million increase cannot cope.
  The increased amount is aimed at ensuring that doctors are more efficient in their work, to ensure that family practitioners, represented as they were on the review body, will be able to work better in better circumstances. However, they cannot operate on their own. There must be a total review of the way in which the money is spent and the way in which practitioners deal with circumstances such as the persistent prescription of addictive drugs to patients, week after week, month after month and year after year. At the end of the day, those patients, if they do not harm themselves, are liable to cause death and destruction to others, as this unfortunate woman did to her child.
  Mr. Jim Marshall: I am sure that my hon. and learned Friend realises that my intervention arises because we share a common interest in the case he is discussing. I hope that my hon. and learned Friend will not go on to suggest that the addiction to the drug led to the death of the child to whom he has referred. As he knows, a great deal of attention has been drawn to the drug addiction of this individual. I fully accept the need to look into the prescription of the drug to the woman and the over-expenditure which might arise therefrom, but I do not believe that any individual has yet suggested that the death of this infant arose because of the mother's addiction to the drug.
  Mr. Speaker: Order. Before the hon. and learned Gentleman replies, may I say that I have no doubt that he and his hon. Friend are dealing with a very sad case which they both want to bring before the House. However, this is not the occasion for us to go into that case in depth. We must keep to the rules of order and discuss the excessive claims for payment of general practitioners' medical and pharmaceutical services. I know that the hon. and learned Gentleman will co-operate with that appeal.
  Mr. Janner: I am sure that you would not wish me to ignore totally what my hon. Friend has said, Mr. Speaker. I shall deal with it in one sentence, if I may.
  Mr. Speaker: One sentence, then.
  Mr. Janner: Before doing so, may I say how much I appreciate the way in which we colleague MPs in the city of Leicester work together on these matters.
  No tragedy occurs from one cause alone. It arises from a combination of circumstances. If one circumstance were withdrawn, the rest might not exist. The inquiry certainly gives clear indications that this unfortunate lady had not received from a general practitioner the sort of treatment she should have received. She was in a very bad state at the time she committed this awful crime. I do not think that we can separate the effect of drug addiction in an addict who commits an offence from the prescription of the drug at the time. I am grateful to you, Mr. Speaker, for allowing me to say that.
  1482
  The reasons for these increased payments are such that the Government should now institute a full inquiry not only into the sort of case of which the Carly Taylor disaster was merely an illustration but into the whole operation of the family practitioner system.
  I hope that, when explaining the reasons for the grant, the Minister will give the House the assurance that full inquiries will be carried out into the various matters that I have brought before the House and hope to bring before it again on a more suitable occasion—perhaps in an Adjournment debate. It will then be possible to go in more detail into this tragic case, which has worried people not only in my constituency but throughout the country who are concerned with the treatment by family practitioners of drug abuse, child abuse, baby battering and with the disasters that the family practitioner could and should help to avoid.
  Mr. Speaker: Order. The hon. and learned Gentleman did not hear my appeal.
  11.16 pm
  The Under-Secretary of State for Health and Social Security (Sir George Young): The hon. and learned Member for Leicester, West (Mr. Janner) has most ingeniously raised in the debate on the Consolidated Fund (No. 2) Bill a particularly tragic case in his constituency where drugs were a factor. I listened very carefully to what you said at the beginning, Mr. Speaker, and I realise that this is not the time for an extensive debate on the tragic case of Carly Taylor.
  I should like to concentrate on the specific aspects raised by the hon. and learned Gentleman which concern drugs. He explained at the beginning of his speech why, in his view, it was in order to deal with the drug aspects of this particular case. I can confirm that any Minister who reads a report about the death of a child is bound to treat it as a matter of the utmost concern and to wish to ensure that any lessons that can be learnt are learnt and that any necessary action should be taken.
  Putting it briefly in context, during Carly's life her family were visited frequently by health visitors, social workers and a probation officer. Her father and

  1483
  mother appeared to have been misusing drugs during most of the material time, and the home conditions varied from poor to squalid.
  As the hon. and learned Gentleman knows, there was an inquiry, and the report made six recommendations, one of which deals specifically with drugs. The fourth recommendation was that general practitioners should be encouraged to undergo training for professionals in the detection and handling of suspected child abuse and drug abuse.
  The hon. and learned Gentleman raised the question of liaison between the GP and the health visitor. The inquiry report reveals very poor communication between the health visitor and the GP. I can only regret this. Experience has shown that, where health visiting and district nursing staff have been attached to general practice, this has generally encouraged the development of co-operative patterns of working and making the best use of the special skills of the different disciplines. This has improved the quality of service to individual patients. No doubt this is a matter at which the Leicestershire area health authority is now looking.
  The hon. and learned Gentleman specifically mentioned the monitoring of general practitioners' prescribing, which falls under this broad heading. Family doctors in the National Health Service are required to prescribe whatever drugs or medicines they deem to be necessary for their patients, but they may be called upon to justify their prescribing decisions. I think that that is what the hon. and learned Gentleman is looking for in this case.
  The general practitioner services are administered by 90 family practitioner committees in England, each of which is concerned with the arrangements for providing general medical, dental and pharmaceutical and ophthalmic services to the population in its own area. Doctors, dentists, pharmacists and opticians in that area enter into a contract with the committee to provide their services and receive payments. It is the payments which are from the Consolidated Fund.
  In each family practitioner committee area there is a local medical committee, elected by the family doctors in the area and recognised by the Secretary of State under section 44 of the National Health
  1484
  Service Act 1977, which acts as adviser to the FPC about all matters affecting the provision of general medical services in the area and, specifically in this context, as a body to which the Secretary of State may refer any cases in which it appears that a doctor's prescribing costs are excessive.
  Prescriptions issued by every general practitioner in each FPC area during one particular month in each year are examined and costed. The prescription forms are sent by chemists to the prescription pricing authority and the prescribing data are collected from the prescription forms after the pricing function has been completed.
  The average cost per patient is calculated for each doctor and the figures are sent to him in simple summary form through his FPC together with the average cost per patient for the area as a whole. The figures for all the doctors in the area are examined in the Department and, where a doctor's costs are substantially above the average for the area, his prescribing for the month in question is analysed in detail.
  If appropriate, a copy of the analysis is provided to the doctor, who is then visited by a doctor of the Department's regional medical service. The GP's prescribing pattern is discussed in detail and advice is offered. Often a GP's prescribing costs then fall to an acceptable level. Formal procedures provide, where this does not happen, for the matter to be reported by the LMC, which may, if it finds that excess cost has been incurred, recommend, subject to the doctor's right of appeal, that part of his remuneration be withheld. Formal control of prescribing costs rests on these statutory powers.
  Apart from the monitoring of overall costs, as I have just described, the prescribing of individual drugs is also monitored and the prescribers concerned are visited by the regional medical service. The main contact between the Department and the GP is the regional medical service, and it is the attitude of the officers of that service to their tasks which is paramount in determining the nature of the response. The present approach is to eschew reference to the formal procedures and to concentrate rather on impressing the GP with the idea that the Department wishes to give as much support and

  1485
  encouragement as it can to doctors to improve the effectiveness and economy of their prescribing by extending to them the facilities for retrospective study of their prescribing habits and any other information on drugs and therapeutics which the Department is able to provide centrally. This has been done with the agreement of the representatives of the profession.
  I turn briefly to the case raised by the hon. and learned Gentleman to give him some assurance that appropriate action is being taken. It is worth reminding the House that the inquiry team which I mentioned earlier referred the prescribing of the family GP to the FPC.
  The FPC meets on 27 March to decide what more can be done in this case. I understand that the GP has been visited by the regional medical officer to check his prescribing, which was found to be above average but not remarkably so. A subsequent visit showed that prescribing had improved. No complaint has been made by a patient. The FPC has administrative powers to investigate, but it would need the Secretary of State's consent to proceed as this matter is outside the time limit of eight weeks.
  I must tell the hon. and learned Gentleman that it might be difficult now to establish some of the facts to which he referred—for example, the weight of the patient when the drug was first prescribed and whether the GP had broken his terms of service. We shall have to await the report of the FPC.
  The hon. and learned Gentleman raised one or two points about the drug itself. There are fairly strict procedures within the Department for ensuring that only appropriate drugs reach the market and adequate controls are imposed to ensure that those who receive the drugs are safeguarded.
  Under their terms of service, family doctors in the National Health Service have a duty to prescribe whatever drugs or medicines are needed for the treatment of their patients; but only the doctor concerned—who is not an NHS employee but an independent contractor—
  1486
  can decide what is necessary in the individual case. My right hon. Friend the Secretary of State has no authority to prohibit the use of any particular substance or drug.
  Apart from preparations which contain only cellulose or stercula as their active ingredient, all slimming pills are available on prescription only. In addition, most drugs for the treatment of obesity are controlled under the Misuse of Drugs Act 1971 and regulations made under that Act.
  Detailed questions about the application of that legislation fall to the Home Office, but briefly the effect of the Act is to limit authority to possess or supply controlled drugs to doctors and certain others acting in their professional capacity and to patients for whom they have been prescribed and to impose requirements as to record-keeping, prescription and destruction which are designed to prevent their illicit use. I understand that this drug is now under review and is to be controlled when the next Order in Council is made amending the scope of the Misuse of Drugs Act.
  Mr. Greville Janner: I am much obliged to the Minister for all that he has said and the way in which he said it. While we are awaiting the decision regarding this drug, will he take the opportunity to warn both practitioners and their patients of the grave danger of side effects from this slimming drug and from most others that do not consist, as he has said, mainly of cellulose?
  Sir G. Young: My right hon. Friend the Secretary of State has established specific professional committees which are to advise him on this matter. I should like to refer that remark to one of those committees so that we get the right response. Perhaps I may write to the hon. and learned Gentleman on that specific point.
  I hope that there will be another more appropriate occasion when we can have a full debate on the tragic case that the hon. and learned Gentleman has raised, because it deserves the attention of the House.

  SCOTLAND (NATIONAL HEALTH SERVICE)
  11.25 pm
  Mr. William Hamilton: I refer especially to the Supplementary Estimate of about £15½ million for the Health Service and other related matters in Scotland. It is not a large figure when compared with the total of £953 million. I guess that it is about 1½ per cent. However, it enables me to focus attention on one or two pressing problems of which I have given the Under-Secretary of State for Scotland notice. I shall be mentioning other matters while others I shall not mention at all.
  No doubt the National Health Service will be clobbered by the public expenditure cuts. I refer to the cuts already inflicted and those to come in a few weeks' time. We shall be able to discuss the forthcoming cuts in due course. There is a Bill in Committee that we can use as a peg on which to hang some of our criticisms of the Government.
  I draw the Minister's attention to what I regard as a major scandal. I am not making a party point, and I hope that the Minister will not do so. It is an issue that far transcends party politics. My criticism is directed as much to the previous Labour Government as to the present Government. The important thing is to put matters right and to ensure, as far as we can, that nothing of the sort happens again.
  The scandal of the Glasgow Royal hospital for sick children must be brought into the open. The hospital is in the constituency of my hon. Friend the Member for Glasgow, Kelvingrove (Mr. Carmichael). I hope that he will be able to catch your eye, Mr. Deputy Speaker, in due course. I hope that my hon. Friend will recognise that my justification for raising the matter is that it concerns a hospital of national importance and of international repute. It far transcends purely constituency considerations. However, there are other reasons that cause me to raise the issue that I shall disclose in due course.
  My hon. Friend has been active in seeking to expose what went wrong. No doubt he will put his own views on record. My attention was drawn to the matter when it hit the headlines in a two-
  1488
  page spread in the Glasgow Sunday Mail of 14 October 1979. The headline was "Hell Hospital". The hospital was opened by the Queen in 1971, about eight years ago. According to the article, it cost £5 million. At the time, it was supposed to be the most modern hospital in Europe for sick children. The main contractors were Richard Costain Ltd. of London.
  Within a short time of the hospital opening, serious deficiencies began to show. According to the article, the concrete floors in all 12 wards are breaking up and need to be replaced. The entire plumbing system has had to be or is being ripped out. Every window is to be or is being renewed because they cannot be opened wide enough to provide adequate ventilation. The whole roof is leaking and needs to be replaced. The outside walls leak and will be completely demolished and rebuilt. Defective fire walls inside every ward will have to be taken down. All the wards will have to be closed at the same time as the entire seven-storey building is ripped apart and rebuilt.
  In the article, the conditions were described by various doctors as "intolerable", "a shambles" and
  "like trying to run a hospital in the middle of a builder's yard".
  The building is falling apart. It was built by private enterprise at a cost of £5 million. Taxpayers' money has been used.
  I earlier described the story as a scandal. If half of that Sunday Mail story is true, it is a crime. Those responsible must be made to pay. It is estimated that the cost of repairs will be £4 million. We do not know when those repairs will be completed. Perhaps the Minister will confirm the date, given in that article, of 1981. Perhaps he will confirm also the final cost. I expect that it will cost more than £4 million if inflation continues at its current rate.
  Who will pay for the repairs? Costain apparently offered no comment when contacted by the Sunday Mail. I do not know whether that firm has since commented. However, it must make some comment. There is a strange reluctance to talk about this issue. I do not wish to prejudge the matter. However, a public inquiry has been demanded. That demand

  1489
  should be acceded to. The truth, the whole truth and nothing but the truth must be revealed.
  I do not know whether I should disclose the information that I wish to give. However, I shall take a chance. I am a member of the Select Committee on Public Accounts. When I had read the article, I took it to the Committee. I suggested that an investigation might be initiated by the Committee. It invited me to draw up a questionnaire and to submit it to the Scottish Home and Health Department. I drew up a list of 20 questions. They were sent to that Department in mid-January. I received a reply dated 21 January from Mr. Rennie, the chief accountant. He indicated that he would need some time in order to reply to those questions. He said that he hoped to reply within four weeks. I have not received any reply, although six weeks have passed. Perhaps the Minister can inform me when I may expect that reply.
  I understand that extensive costings were involved. I am sure that the Department is anxious to give accurate and full answers. However, I am prepared to suspend judgment until replies have been received and until the Committee has completed its work. The investigation will not end upon receipt of those answers. That is just the beginning of our investigation. The initiation of a public inquiry should not be precluded by the Department. I hope that the Minister will be forthright on those points.
  That hospital building programme is not the only one to give cause for concern, although it hit the headlines. I shall give two other examples. I have not given the Minister notice and I do not expect him to reply tonight. Perhaps he will give me a written reply or some other form of response.
  I refer first to the North Ayrshire district general hospital, where for new works, alterations and additions the pretender estimate was £1·963 million. The revised estimate for 1979–80 was £2·523 million. For the works in progress at that hospital before 1977–78, the pretender estimate was £8·3 million. The revised total cost for 1979–80 is £15·8 million. There may be good reasons for the difference. It may be due simply
  1490
  to inflation. I should be glad of a detailed answer at a later time.
  The second example concerns phase 1 of the Merchiston hospital. The pretender estimate was £3·34 million. The revised total cost for 1979–80 is £5·17 million. If the difference is merely due to inflation, it bodes ill for the future building programme, with the current rate at 20 per cent. Inflation is unlikely to come down in the short term. All the signs are that it will remain at that level for quite a time. That rate of inflation, plus cash limits, is bad news for the Health Service.
  I understand that my hon. Friend the Member for Dunfermline (Mr. Douglas) will touch on other aspects of the National Health Service, and I shall merely mention briefly two other problems that concern me—mental illness and handicap and geriatrics. The Minister knows that I have an amendment down in Committee on the Health Services Bill, which we shall be dealing with upstairs. Suffice it to say that in the next few years of financial stringency the most acute suffering will occur with regard to mental illness and geriatrics. I believe that the Minister accepts that.
  I can cite examples all over the United Kingdom of man's inhumanity to man. If we treated animals as we treat geriatrics and the mentally ill, there would be an uproar. If a donkey is flogged or there is cruelty to sea beasts in Japan, an early-day motion is put down. I wish that we could get as indignant about geriatric patients and the mentally handicapped in our hospitals.
  I received a reply today from the Minister on how much is spent per week per patient on food in psychiatric hospitals. On average it is £5·61 a week, which is 80p a day. Looking at the Minister, I doubt whether he would survive for more than a week on 80p a day. The situation is worse than that. The low figure that the hon. Gentleman gave me was £4·47 a week, which is 64p a day. I should like to know, and the House has a right to know, which hospitals provide for their psychiatric patients in that way. It is not a party point. The answer that I received from the previous Minister was similar. The provision for the inmates of Belsen could not have been much less.

  1491
  In the Daily Record on Thursday 14 February, a couple of weeks ago, there was the headline "Wards of Shame". The newspaper quotes from a report of the Scottish Hospital Advisory Service. It speaks of old men in some of these geriatric hospitals sharing a shaving brush, a bath towel, even underwear. It is difficult to know how they do that, but they do, according to this report. The report says:
  "It is still possible to find the open stall type of WC without a door and with a battery of WCs open to view."
  These are old men and women, eking out the last few days of their lives in the most indecent indignity. We all ought to be ashamed that we tolerate conditions of that kind.
  What do the Government intend to do about such a state of affairs? In a few weeks, they are to cut those services still further. There is a Bill before the House, to which I have referred. What are they doing in that Bill? They are to extend private practice. That will help the geriatrics an awful lot. That will help the mentally ill and mentally retarded an awful lot. They are to allow the area health boards and the local health councils to raise cash by organising bazaars, whist drives, bingo sessions and, perhaps, strip shows and flag days and God knows what. It is spelt out in clause 4 of the Bill. It would be laughable if it were not so idiotic, obscene and irrelevant to the great problems currently besetting the Health Service in Scotland and the rest of the United Kingdom.
  In the coming weeks, in the Budget and the public expenditure White Paper, there will undoubtedly be further vicious cuts in this supremely Christian service. More and heavier charges, perhaps new charges, are more than likely. I do not know how much longer our people will tolerate in silence the continuous onslaught on their standard of living at a time when the Government are talking about spending over the next few years thousands of millions of pounds on nuclear submarines, nuclear defence equipment and the rest. It is the most un-Christian, the most absurd sense of priorities I have ever met in a lifetime of political experience. I hope that the Government are thoroughly ashamed of what they are doing. The people will very soon rise in rebellion
  1492
  against it. It cannot be tolerated a day longer.
  11.43 pm
  Mr. Neil Carmichael: I am grateful to my hon Friend the Member for Fife, Central (Mr. Hamilton) for giving me the opportunity to say something about the Royal hospital for sick children, which lies within my constituency, outlining the problems that have beset this hospital over the years. I have not raised the matter officially with the Under-Secretary who now has charge of health matters in Scotland, the hon. Member for Aberdeenshire, West (Mr. Fairgrieve).
  I emphasise, as did my hon. Friend the Member for Fife, Central, that this is not a party political matter. I received extremely unsatisfactory answers on the issue from my hon. Friend the Member for Stirling, Falkirk and Grangemouth (Mr. Ewing), who was the Minister with health responsibilities in Scotland in the last Labour Government.
  I have visited this hospital frequently and have talked regularly to members of staff, many of whom I know on a personal basis. There is nothing I could say about this hospital, and the building work within it, which would be an exaggeration. The entire standard of building is appalling. I will say that the concept, the design of the hospital and the architectural layout are extremely good. I Dive full marks for that. It is a well-laid-out hospital. The concept is good. However, the building and construction work is absolutely unbelievable.
  Over the years, I put questions to the Ministers in charge. It is interesting to read some of the answers. As far back as May 1977, I received an answer from the then Under-Secretary of State, my hon. Friend the Member for Stirling, Falkirk and Grangemouth, which referred to
  "extensive remedial works which have still to be undertaken and for which the relevant tender documents are now being instructed or are in course of preparation."— [Official Report, 25 May 1977; Vol. 932, c. 1393.]
  I should like to know how far forward is this process and whether all the documents for remedial work have now been produced.
  The question of arbitration and litigation has bedevilled the repairs to the

  1493
  hospital. We have elevated the legal aspects of this matter beyond a joke. It is much more important that we find out what went wrong with this hospital and why there are so many defects than to discover who will pay for them. That can come later. I repeatedly asked for a public inquiry. There must be such an inquiry. I hope that my hon. Friend the Member for Fife, Central, having raised this matter tonight, will help to persuade the Department to hold a public inquiry.
  Until recently, nurses at the hospital were required to carry drinking water. The plumbing was so bad that when the taps were turned on black water came out. Drinking water had to be carried to the patients on the various floors. I saw the exposed drains. The relatively new clerk of works—he has been there a few years now—has pictures and a black museum illustrating what happened at the hospital. There are drains and soil pipes going nowhere. They run down to the ground but do not lead to the main sewer. That would be bad enough anywhere, but in a hospital it is terrible. The plumbing is appalling. The facing of the building is coming off. It was very badly done. It is dangerous and must be renewed.
  Anything that the Sunday Mail said about the hospital was true. This may sound surprising, as tabloid newspapers usually exaggerate. However, anything said by the Sunday Mail about the hospital and the workmanship was an understatement.
  When I asked questions about the matter, I continually received the same answer. The Under-Secretary of State said:
  "I am advised that a public inquiry held in advance of arbitration or litigation could prejudice the Board's chances of recovery."—[Official Report, 15 February 1978; Vol. 944, c. 252.]
  The Minister should examine this matter and say how much longer we must wait for a public inquiry. It is not sufficient merely to go to court. A complete examination of exactly what went wrong is required.
  I understand that the main buildings were accepted serially by the hoard during the period March to August 1971, enabling the first patients to be admitted in October 1971. Formal handing over of all the buildings was completed in
  1494
  March 1972. Surely, the Department did not accept those buildings without certification by the architects and quantity surveyors that they were built to specification, that their standards were up to scratch and that they were perfectly suitable for the work.
  Almost two years ago, I was told that since the hospital had been opened in 1972 48 beds had been out of use continually. Between February 1972 and February 1978, more than 15,000 bed weeks had been lost—and this in a part of the West of Scotland where beds are at a premium. Perhaps at a later date the Minister can tell me whether the number of bed weeks has been further reduced.
  This may be unparliamentary, but I am quite prepared to repeat it outside: there has been considerable neglect by the professional people involved. The architects' fees of £185,000 have been discharged in full, as have the quantity surveyors' fees of £130,000 for work on this hospital. The specific jobs of these people were to see that the client was given full value for money and that the building was properly equipped to do the job it was commissioned for. What were the architects and quantity surveyors doing for the £325,000 they got between them? They were supposed to supervise and see that the job was properly done. I believe that we need a public inquiry.
  I have some knowledge of building work, and I have spoken to many people who were involved in this hospital. I have said repeatedly in the House that every tradesman and every professional man who had anything to do with this hospital had some responsibility for the result. The workmanship was appalling and the supervision was appalling—and that applies to departmental supervision as well. I am sure that the Property Services Agency must have had overall control of this, and it, too, has been negligent in its job.
  I do not know whether the Minister has visited the hospital. Its story is one of utter horror. I hope that the Minister will be stimulated by the debate into taking a look at the hospital and seeing just how bad it is. I raise this matter tonight because we must not let such a thing happen again. Everyone who was involved in this job bears a responsibility

  1495
  —and it is an appalling one. Rather than hide behind the law and say that we cannot have an investigation because it would breach the legal process. I think we should admit that things have gone well beyond that stage.
  Rather than worry about who is to repay the State for the deficiencies in this hospital, there is need for nothing other than a full, public inquiry. This would be for the good of the building industry and for the good of professional organisations in Scotland. I have seen the black museum. There is plenty of evidence to show how appalling was this job.
  I hope that the Minister will forget about trying to recover relatively small sums of money and get on with the job of trying to find out what went wrong. This would perhaps help when costlier jobs are undertaken in the future. While it may be painful at this stage, we could be proud of the fact that we had been honest, had examined the matter without fear or favour and had produced a report that would be a guide to the building industry and to the professional industries in Scotland for many years to come.
  Mr. Deputy Speaker (Mr. Richard Crawshaw): Before calling the next hon. Member, I should explain that not everyone present was in the Chamber when Mr. Speaker indicated that debates on items Nos. 13 and 14 were limited in scope. As the extra money is only a small amount in relation to what was originally granted, the debate does not extend to the whole of the Service. It should be related only to the purpose for which the extra grant is asked. I have allowed hon. Members to mention specific hospitals. I have no knowledge of whether those hospitals fall within the grant. This is not a general debate on the National Health Service in Scotland. I recognise that it is difficult to keep the matter within those confines. I hope that hon. Members will realise that the House is not debating the previous money that was given. The debate relates only to the extra money now being given.
  Mr. William Hamilton: On a point of order, Mr. Deputy Speaker. I have taken part in many of these debates. I looked carefully at Class XI, Vote 4. You are right, Mr. Deputy Speaker. It is a matter
  1496
  of £5½ million, as I indicated. But it covers a multitude of activities. It covers the capital expenditure of the health boards, which affects all hospitals. We could speak on all hospitals in Scotland. We do not know which particular hospitals are concerned with the global sum.
  Anyone, in my humble submission, would be in order in referring to any hospital, because all are controlled by the health boards. There is a specific sum—an increase of about £3 million—for the health boards. Similarly, there are references to other parts of the National Health Service, including research and charges, and the supply of artificial limbs and hearing aids. It is a very wide debate.
  Mr. Deputy Speaker: The hon. Member for Fife, Central (Mr. Hamilton) is quite right. It is difficult to know exactly what is specified. The hon. Gentleman made an attack on the general Health Service more related to the original Estimates. These are additional Estimates. It is difficult to keep within those confines. I think, however, that the matter should be brought to the attention of hon. Members.
  11.58 pm
  Mr. Dennis Canavan: There should be no fear on your part, Mr. Deputy Speaker, about having to call me to order on this matter. I should like to endorse briefly what my hon. Friends have said. I hope that the Minister will say specifically how these extra moneys, if they can be called extra moneys, given to the health boards will affect the Government's plans to increase fee-paying opportunities within the Health Service.
  As the Minister knows, he and I served on the Standing Committee that dealt with the Education (No. 2) Bill, setting out the Government's plans for an assisted places scheme. As the Minister responsible for health matters in Scotland, can the hon. Gentleman tell us whether the Government have plans to introduce a similar scheme of assisted places for pay beds and what effect that would have on patients who cannot afford pay beds? The Minister and the Prime Minister are on record as saying that the Government are not cutting public expenditure on the NHS. They are playing with words.

  1497
  They may argue that they are not decreasing expenditure, but they are certainly reducing the planned growth in the NHS that they inherited from the previous Labour Government.
  When detailed plans are published in the White Paper, we shall see a further decrease in expenditure on the Health Service and on other essential services.
  The Government are not just cutting public expenditure but are redistributing expenditure and the opportunities for social services so that those who benefit most will be those with money to pay for the services. One of the basic principles of the NHS when it was set up more than 30 years ago was that health services should be available to all, irrespective of the money that the patient had in his pocket. It was agreed then that the only criterion for deciding a person's place in the queue was his health priority. The person most in need on health grounds should be at the head of the queue. The Government are undermining those principles in their public spending programmes.
  Mr. Iain Sproat: The hon. Gentleman is being ridiculous.
  Mr. Canavan: The hon. Member for Aberdeen, South (Mr. Sproat) is the biggest witch-hunter An Scottish politics and is probably creating a great deal of fear, not just among the poor people who are claiming benefits but among those at the end of the NHS queues, which are far too long.
  Mr. Sproat: Does not the hon. Gentleman realise that under the system operated by his Government three-quarters of a million people in this country were waiting for operations that they could not get? That is how the NHS deteriorated under his Government, and that is what the present Government are trying to put right.
  Mr. Canavan: I have never been a member of a Government or been in a position to form a Government.
  Mr. Sproat: Thank God.
  Mr. Canavan: I was constructively critical of various aspects of the NHS under the previous Government, but the present Government are making things worse. We should be extending opportunities to people irrespective of their
  1498
  ability to pay. The hon. Gentleman's Government are turning the clock back to an elitist two-tier health service where those with the ability and willingness to pay will get priority of access to treatment and the vast mass who do not have the inclination or the ability to pay will have to wait in a long queue. The queues will get longer, not shorter, and that is completely alien to the principles and traditions of the National Health Service.
  That alienation will be felt even more strongly in Scotland because, whatever the merits or otherwise of the pay bed system in the United Kingdom as a whole, the number of pay beds in Scotland has been very low. It now appears that the Government are trying to increase the number of pay beds, thereby decreasing the opportunities for the vast mass of the population of access to an adequate health service. That is obscene and it discriminates against the people who are most in need. No Government, irrespective of party, can justify that.
  12.6 am
  Mr. George Robertson: This has been a valuable debate, and I commend my hon. Friends the Members for Fife, Central (Mr. Hamilton) and for Glasgow, Kelvingrove (Mr. Carmichael) for bringing the matter to the attention of the House.
  My hon. Friends have concentrated on the problems of the Royal hospital for sick children in Glasgow, and I would not seek to minimise them. I hope that some solution of the problems being experienced there by patients and staff will soon be found.
  Since we are considering the Supplementary Estimates and the money necessary for this part of the public sector, it is all the more relevant that we should highlight the statements of the Minister that the National Health Service is being protected from the swingeing attacks on the public sector that we have experienced in so many other areas of public spending under his Government.
  The Minister and the Government are saying that this protection is something in which they can take pride. The reality is very different. On the surface, the figures suggest an increase in expenditure in the Service this year as compared with last year. That is merely an apparent protection of the NHS not afforded to other public services. However, in the

  1499
  hospitals and in the ambulance service, where it really matters, inflation, encouraged and supervised by the Government, means that the gross amount of money available has decreased.
  The Minister knows that one of the first acts of his right hon. and learned Friend the Chancellor of the Exchequer was to increase VAT. In the short time that it took him to present his first Budget, the Chancellor almost doubled VAT and drove the first nail into the coffin of the NHS by placing an enormous burden on a service faced with existing cash limits.
  Cash limits are now being used to cut back the services to the public, and the Minister can rely on the fact that the wider public do not yet understand the full impact of the cash limits on the National Health Service in Scotland. If the public understood the situation, the Minister's assertion that the National Health Service was somehow being protected from the effects of public expenditure cuts would sound very empty. Administrators in the Service are now experiencing grave difficulties because cash limits have not been increased to keep pace with the inflation that the Government are so recklessly supervising.
  Some health boards are considering solutions that they would not have considered before. The Inverclyde hospital has about 70 beds which are no longer available as a direct result of expenditure pressures. There is open talk in Scotland that some of the beds, abandoned because the health boards do not have the money to use them, will be used as pay beds. That is happening in a part of the country which has not had much experience of private medicine within the National Health Service.
  The Minister will say "Oh, no", but the Health Services Bill gives more than simple encouragement to pay beds in the National Health Service. It is an open invitation to use spare resources to encourage private medicine. The Government are encouraging, openly or surreptitiously, the use by private medicine of such resources as are unused because of cash limits.
  A researcher in the Library asked some of the administrators of the health boards how cash limits were affecting them this
  1500
  year. He spoke to the treasurer of the Highland health board, who said that the health boards were requisitioning cash on a daily basis from the Scottish Home and Health Department about two months ahead. He said:
  "On February 6th the Highland board requisitioned the cash it needed for the remainder of the year up to March 31st. There are some indications that all this money may not be forthcoming."
  That experience is not confined to the Highland health board. It is the experience of many Scottish health boards. The direct consequence is that services are being curtailed and patients are not being treated in the way that medical authorities would wish. The Government are conducting a policy which on the surface appears to protect expenditure but which is cutting the money available to treat patients in medical need. If the National Health Service is weakened, the Government will have a heavy burden to carry when they are finally cast out of office.
  12.13 am
  The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve): We are grateful to the hon. Member for Fife, Central (Mr. Hamilton) for raising the problems of the Health Service in Scotland. We are also grateful to the hon. Members for Glasgow, Kelvingrove (Mr. Carmichael), West Stirlingshire (Mr. Canavan) and Hamilton (Mr. Robertson) for taking part in the debate. It may have gone a little wider than we envisaged, but we are pleased to have had the opportunity to debate the subject.
  The hon. Member for Fife, Central advised me that he wished to mention the Royal hospital for sick children. That part of my reply will be formal for the sake of the record. The hon. Member and his colleagues went a little wider than that in parts of their speeches, and I shall have to comment more politically on those aspects.
  The constant talk about the National Health Service being clobbered goes a little over the score. The hon. Member for Fife, Central knows the history of the Health Service as well as I do. The idea that it is being clobbered is ridiculous. I shall return later to the clobbering that took place under the hon. Gentleman's Government and the lack of clobbering that is taking place under the present Government.

  1501
  There have been references to the remedial work that is having to be carried out at the Royal hospital for sick children, Glasgow, which was rebuilt between 1968 and 1971 to replace the earlier hospital on the same site. As hon. Members know, the subject is at present engaging the attention of the Public Accounts Committee, and my Department is about to submit to the Committee detailed answers to some 20 questions that the Committee has posed.
  The first point that I should make is that the Greater Glasgow health board has now embarked on arbitration proceedings with a view to obtaining restitution of the large amount of expenditure —I regret to say that it is far more than the hon. Gentleman mentioned—that must be undertaken at the hospital. To this end, an arbiter was approved last July, and the present position is that the board's legal advisers are just completing a formal statement of claim. This is subject to extensive consultations between the board and its advisers. The sum being claimed has now been fixed at £7·25 million.
  The cost of remedial work is being met in the first instance from Exchequer funds by way of capital allocations from the Scottish Home and Health Department to the health board. The House may be assured that the public interest is uppermost in my Department's approach to the claim, though the necessary action is primarily for the health board.
  To pursue these matters by means of a public inquiry, as the hon. Gentleman suggested, would serve no useful purpose at this stage, as ii: could prejudice the attempt to obtain restitution by legal means from the parties held to be liable for defects that must now be remedied.
  Mr. Carmichael: I can see the point. I have heard this answer a number of times. The hon Gentleman said "at this stage". We spend much more on public works in Scotland than the £7·25 million. We need more than that; we need to find out what happened and why. Important though the return of the money is, without a public inquiry it is not sufficient. I hope that the hon. Gentleman will accept that.
  Mr. Fairgrieve: I accept it up to a point. When the present arbitration has taken place and the legal position is remedied, when—as we hope—we win our case and obtain restitution, the lessons must be gone into very seriously. But the main point now, for the sake of the public purse, is to obtain the return of the money that has been disgracefully spent in this way. That is the exercise in which we are involved. Thereafter, we must look at the lessons.
  I need say no more about that matter, because it is virtually sub judice. The Department is watching it very closely. We shall look at the whole question of supervision of building materials, quality control and all the other matters that this unfortunate circumstance raises.
  The hon. Member for Fife, Central went on to refer to the description "Hell Hospital". At least, he was honest enough to say that this was under both Governments. He said that it was built by private enterprise. I do not know whether there is any significant point there, but it was put out to public tender, so let us be fair about that. We hope that those responsible will be made to pay. I have already given the figures involved and have spoken about the public inquiry and what we do in the Public Accounts Committee.
  The hon. Gentleman also mentioned other problems with hospitals—for example, the North Ayrshire district general hospital and Merchiston, phase 1. I shall write to him about the questions that he posed.
  In many ways, we have over-democratised our method of building hospitals. When you think—
  Mr. Canavan indicated dissent.
  Mr. Fairgrieve: When you think, if you can think—
  Mr. Canavan: On a point of order, Mr. Speaker. Is it in order for the Minister to ask the person in the Chair if he can think?
  Mr. Speaker: The Minister used the word "you", but I do not think that he was referring to me.
  Mr. Fairgrieve: I shall be more careful of my response in future. Some of the hospitals that are coming on stream could have been started 16 or 17 years

  1503
  ago, when, under another Government, there was a growth in the economy and there was the advantage of lower fuel costs. We expected a continuing higher standard of living and a prosperous country, and the hospitals were designed with that in mind.
  When I said "over-democracy", I meant that our planning procedures for hospitals take much longer than those in other countries in Western Europe and North America. At one time we reached a stage where, before we built a broom cupboard, the cleaners had to be asked whether it was the right size. As a result, many years passed between the conception of a hospital and its commissioning.
  That has happened in hospitals in North Ayrshire, where, if we were planning them today, the design would be quite different from the point of view of fuel consumption, meals service and privacy given to patients. The hospitals would be very different if considered in the current economic climate.
  I turn to the questions of mental illness—raised by the hon. Member for Fife, Central—geriatrics, financial stringency and man's inhumanity to man. The hon. Member raised the emotive question of whether I could live on 80p per day for meals. Could he live on that? I assume that he included himself in his figures. He tabled a question today about the weekly cost of food per patient in psychiatric hospitals and the comparable figure for other hospitals. My answer was quite clear. The latest figures available show that the average provision in a psychiatric hospital is £5·61 per patient per week and £6·62 per week in other hospitals. The averages conceal a wide range of costs to individual hospitals, from £4·47 to £7·49 for a psychiatric hospital and £3·94 to £11·92 for other hospitals.
  The hon. Gentleman knows perfectly well that, when an organisation is catering for many people, to divide the costs and pretend that the result is true for one person is ridiculous, irrelevant and unnecessary. To use the emotive question of whether anybody in the House could feed on 80p per day is a total distortion of the facts. We are talking of the costs of feeding people in hospitals. The hon. Gentleman knows that patients in our hospitals in Scotland are not suffering
  1504
  from lack of food, which is the inverted inference of his remarks.
  I do not think that the hon. Gentleman expects me to talk about wards of shame. He knows of the terrible, frightening, looming picture of the geriatric problem facing this country. It is a problem with which none of us knows how to deal. On balance, we prefer to deal with the geriatric problem in the community rather than in hospital. We are short of the necessary resources. How wonderful it would have been to have come into Government last May as the Minister of Health in West Germany or France, countries which, because of their productive efficiency, have a higher standard of living and can spend more money per head on health and pensions and on longer holidays and better benefits than are available in Britain. But that is the lot with which we currently have to deal. The Government hope and intend to get us out of that.
  Mr. Canavan: They are taking a long time about it.
  Mr. Fairgrieve: Ten months is a better record than the hon. Gentleman's Government's five years, which saw unemployment doubled and the value of money halved, with inflation brought to new and greater levels. Of course, we do not wish to tolerate such conditions and we shall do all we can to change them.
  The hon. Member for Fife, Central, started again on the old theme of the bingo clause—clause 4 of the Health Services Bill, in the Standing Committee on which we are both members—with flag days, the rattling of tin boxes and all that. Is there anything wrong with letting people who want to help their local community do so? It is a permissive, not a mandatory, clause. We are allowing people who so wish to contribute to their hospital or to other causes. The sinister suggestion by the hon. Member that we were clawing away at the principles of Aneurin Bevan's Health Service is baseless, and I think that he knows that. There has been no question of new Health Service charges being introduced.
  In education, housing and health, Labour Members do not seem to be concerned to hit at the rich, the people who can buy their own homes and can pay for their health care and for their children to be educated. They hit at the people

  1505
  who want to make a contribution, at the person who wants to get an aunt into a private ward, to send his child to a school for which he can make a contribution, or to get a mortgage to buy a house. It is Labour Members who are divisive. It is they who want to create two nations—the rich and the poor. They do not like the bridge or the ladder.
  Mr. Canavan: Does not the Minister realise that most people make a contribution to the Health Service? But for the taxes people pay and the contributions that are made through national insurance, the Health Service would not exist.
  Mr. Fairgrieve: I am aware of what the taxpayer pays. I am merely saying that if a person, after having paid his taxes, rent and rates, decides that rather than have a holiday in Majorca he would like to spend his money on health or education, he should be entitled to do so.
  Mr. Canavan: He can buy a place in the hospital queue.
  Mr. Fairgrieve: Consider what is being done by the trade union movement in other countries—in Europe and America. Consider what Frank Chapple has done for his members by taking them into BUPA. If matters such as these were considered by trade union leaders rather than politicking on behalf of their members, which does not necessarily get them very far, wage earners and everybody else in the country would benefit.
  Mr. Canavan: Buying privilege.
  Mr. Sproat: What about you?
  Mr. Fairgrieve: Before I leave the hon. Member for—[Interruption.]
  Mr. Deputy Speaker: Order. We cannot have this conversation going on across the Chamber. The Minister is addressing the House. I hope that hon. Members will pay attention to him.
  Mr. Fairgrieve: I am sorry that I was slow to sit down, Mr. Deputy Speaker. I realise that you had a problem with sedentary interjections on my right and on my left. But I note that, with your usual aplomb, you have the House well under control again.
  I do not propose to comment, in a debate on health, on the final remarks by the hon. Member for Fife, Central about
  1506
  spending on health rather than on nuclear defence equipment. I would make to him the comment that was made to me in reply to a question that I put to the Labour Government when we were in Opposition. If this country would spend the same proportion of its GNP on defence as Russia, I should ask no more, no less. I leave it at that. There is no need to argue that point any further.
  I turn now to the remarks made by the hon. Member for Kelvingrove. I realise that he was concerned basically with the hospital statement. I have not given as long a reply as I might have done on the Glasgow sick children's hospital, but perhaps I may write to him about that matter in more detail, and the hon. Member for Fife. Central, will, of course, get a copy. I am grateful that he made some complimentary remarks about planning under both Labour and Conservative Governments.
  The hon. Member for Fife, Central gave me notice of the matter that he was going to raise, but, as I have explained, we are not dealing with the question of a public inquiry. I have visited many hospitals in Scotland and I shall continue to do so. Apart from my personal interest, if I thought that it would serve a useful purpose—I am in Glasgow fairly often—I should certainly visit the hospital.
  The hon. Member for Hamilton made a political speech—
  Mr. Canavan: Disgraceful!
  Mr. Fairgrieve:—which he is entitled to do, and I am entitled to reply in similar vein. [Hon. Members: "Hear, hear."]
  As regards protection from cuts, the hon Gentleman knows as well as I do that in the current year spending on the Health Service has been maintained but that it has been eroded by three factors. The first is inflation, which is half the Labour Administration's legacy and half ours. The second is the Clegg award, which the previous Administration did not build into this year's financing. The third is VAT under this Government. Therefore, I am being absolutely fair in saying that the present stringency in the economic position of the health boards in Scotland this year is basically the result of the policies of both Administrations, and we have been in office for only 10 months.

  1507
  As the hon. Member for Hamilton knows, we have built in a 2:6 per cent. increase in real terms for next year. Therefore, he must wait to see whether we do what we have said we will do before putting forth any ideas about cuts. The Labour Party, when in office, doubled unemployment, halved the value of money and caused the greatest inflation in the history of this country. So it comes ill from the hon. Member for Hamilton to talk in the way that he did about this Government when we have been in office only 10 months.
  Mr. Canavan: This Government are making things worse.
  Mr. Fairgrieve: As regards the Inverclyde hospital and the Argyll and Clyde health board, we have again heard emotive remarks about the closing of a ward. I remind hon. Members that the withdrawal of that ward merely brings the hospital beds under the control of the board to the same level as the national figure for the rest of Scotland, which is 2.5 beds per thousand population. Therefore, this area now has the same proportion of hospital beds as a result of the withdrawal of this ward as the rest of Scotland.
  A point was made about encouraging private medicine. Is there anything wrong in doing that when people are prepared to contribute, if it takes the weight off the National Health Service, cuts down the waiting lists and makes beds available more quickly? Is there anything wrong in that?
  Mr. Canavan: Does the Minister realise that it does not cut the waiting lists? Introducing an element of fee-paying into the Health Service does not provide one extra doctor or nurse. It merely enables a privileged minority to jump the queue. That is what is so disgusting and obscene about it.
  Mr. Fairgrieve: That is absolute rubbish. When people are taken out of the queue, they do not jump it. The queue is shortened. The hon. Member for West Stirlingshire will not accept that, because he does not like practical facts. He is too taken up with dogma. I do not believe that there is much that I can conclude from the kind of contribution that we have come to expect from him. He again went on about extra moneys and—
  Mr. Canavan: The Minister should go to the House of Lords.
  Mr. Fairgrieve: I do not think that that would be a suitable place for either myself or the hon. Member for West Stirlingshire. There is no question of this Government cutting back on expenditure or of the redistribution of expenditure. The hon. Gentleman knows that.
  During the five years when I was in Opposition, I heard many speeches from Labour Members and never once did I hear anything about the creation of wealth. They continually talked about spending and the distribution of wealth. I only wish that we had the wealth that there is in West Germany or France. In those countries, pensions and wages are higher and the amount per head spent on health is higher. The reason for that is that productivity is higher. I would love to be able to stand at this Dispatch Box and say that the Government will spend more on health, but that cannot be done. Unfortunately, the people of this country do not realise that until we increase our productivity such matters must go by the board.
  As I said earlier, if those within the trade union movement would come out of the political arena and go into the industrial arena, half our problems would be cured.
  Mr. Canavan: Like the miners.
  Mr. Fairgrieve: I have tried to the best of my ability to answer some—
  Mr. Canavan: Which is not very much.
  Mr. Fairgrieve: From a sedentary position, the hon. Member for West Stirlingshire says that my ability is not very much. That may be so. But my ability is a little better that the hon. Gentleman's continued blinkered dogma. He sees nothing more than his own case and he understands nothing other than his own pathetic beliefs about what he thinks is correct. He knows that it is he and people like him who have dragged this country down from the position we were in 15 years ago when we had the highest standard of living in Western Europe. Today, we have about the lowest standard of living in Western Europe.
  I shall be replying in more detail to the question about the Royal hospital for sick

  1509
  children in Glasgow, but I thank the hon. Member for Fife, Central, who has been in the House a good deal longer than others who have taken part in the debate. For the past few minutes he has had his hand under his chin wondering whether we have elevated the debate to the level he would have wished.

  SCOTLAND (MENTAL DISABILITY SERVICE)
  12.40 am
  Mr. Dick Douglas: At this early hour of the morning I refer to the phrase of Dylan Thomas on the death of his father. He said:
  "Do not go gentle into that good night,
  Rage, rage against the passing of the light."
  I do not wish to debate the whole range of expenditure on the Health Service. I shall refer to a relatively small but important item. I plead in aid the report on services for the elderly with mental disability in Scotland, the Timbury report, which was submitted initially in 1978. I think that it first saw the light of day in mid-1979.
  The Minister has sought previously to sustain a case in rather contradictory terms. He has sought to argue that expenditure, in real terms, in 1980–81 will increase. Yet he said that the value of money allocated to the Health Service in total has been eroded by inflation, by under-provision for the Clegg awards and by items such as the increase in value added tax. If that is so, and if expenditure is to be squeezed, we must consider in total terms how priorities will be affected within the service.
  I am discussing a Supplementary Estimate that is small in relation to the total expenditure of £15·7 million. However, it must be considered in terms of the way in which it might effect an element of priority within the Health Service—namely, provision for the elderly, and specifically those with mental disability. The Minister must indicate his thinking on the Timbury report.
  I turn to the touchstone of the report in 1976, "The Health Service in Scotland: The Way Ahead." Paragraph 4.10 states:
  "In view of the increasing number of old people and the many deficiencies in existing arrangements, the Secretary of State believes
  1510
  that this sector must be given high priority for Health Service expenditure over the period immediately ahead."
  I turn to the broad compass of the Tim-bury report. I think that I shall take the House with me when I say that there can be little doubt that the problem of the elderly with mental disability is of major concern in a civilised society.
  I have great respect for the Under-Secretary of State for Scotland. I know that he is a humane and understanding man. However, I hope that to me he will not present any market analysis arguments. That will not be good enough. There is no question of standing in the queue and thinking that provision will be made for this severe problem within our society. Some have a sense of shame and others seek to hide the problem.
  I have had many private conversations with Professor Timbury during the past few months. His sub-committee reported in July 1978 and indicated both the extent of the problem and the method and approach that could be followed in order to meet the growing demand on society. I am sure that the whole House will wish to express thanks to Professor Timbury and his colleagues for their searching and thoughtful report.
  We are dealing with advanced societies in which the proportion of those living longer increases. The mobility of labour in national and international terms places strains on what might be called the extended family. While the population projections of those aged 60 and over in Scotland show a relative stability, at around 19 per cent. or 20 per cent. into the twenty-first century, the breakdown and secular trend of this category can give a better picture of the areas of concern.
  As Timbury points out in paragraph 2.16:
  "At the beginning of the 20th century 4.8 per cent. of the Scottish population was age 65 and over: in 1976 the proportion had increased to 13.4 per cent".
  He adds that during that period:
  "the absolute number in the 65 and over age group had increased more than three-fold from about 215,00 in 1901 to about 698,000 in 1976".
  The projections indicate a rise of only 5 per cent. in those aged 65 and over to 1991. However, within that broad category, the increase will be among those aged 75 and over; the numbers of those

  1511
  aged 65–74 being expected to fall by 6 per cent. in 1991. The numbers in the age group 75–84 are expected to rise by 22 per cent. in that period and those over 85 by 49 per cent.
  Within that overall picture there are differences in the sex ratio. It is relevant to note that of those aged 75 years and over the present sex ratio of 100 males to 214 females in the 75–84 age group will change in favour of males to 100 to 193 by 1991. However, in the 85 and over age group the ratio of females to 100 males will change from 310 in 1976 to 335 by 1991. So much for the equality of the sexes in life expectancy terms.
  I apologise for dealing so much in statistics. I desire to emphasise that we are not dealing with mere statistics and numbers in a report; we are dealing with human beings. Within the broad category of growth in numbers there is a concomitant growth in human problems and suffering.
  When we speak of people in these advanced age groups there is little point in suggesting that when they fall mentally or physically ill their immediate families should step in. We cannot rely on such factors as we did in the past. Life expectancy in those days was relatively short. If someone is 75, or in his eighties, his children may be approaching old age. They may also be ill.
  I shall turn now to the specific areas of the Timbury report and pose certain questions to the Minister. The report says that the major conclusion arising from the sub-committee's considerations
  "is that much of the accommodation and service provided for the group of persons with a diagnosis of senile or arteriosclerotic dementia is unsuitable for present day requirements".
  That is a condemnation of all Governments, not just this one.
  Of the total of almost 7,000 elderly persons with mental disability who require hospital care, about 3,000 who suffer from dementia are currently in mental illness hospitals in accommodation that is overcrowded and of a quality unsuited to the type of care required. Another group of 750 such persons is inappropriately located in acute or geriatric hospitals, mainly because no places are available in psychiatric hospitals. An estimated 1,250 persons who require considerable medical and nursing care are in homes for the
  1512
  elderly, provided by local authorities and voluntary organisations. In addition, a sizeable number of elderly people have unmet needs and probably require additional care.
  We are seeing a misuse of resources, because society at large has failed to appreciate the pressure of this problem. When we are in our constituencies I am sure that many of us visit local authority old folks homes and geriatric hospitals. There we see people in those establishments who ought not to be there. Society in general must deal pertinently and quickly with the problem.
  In examining the 32 recommendations and conclusions of the Timbury report, I am struck by the inadequacy of current provisions. We are dealing with a section of the population who, by their very nature, cannot speak for themselves. I stress to the Minister that there is no point in talking to these people about the ladder or about using resources. By the nature of their illness or disability they are inarticulate. Another voice has to speak for them. Sometimes voluntary organisations do so, but, more appropriately, what can perhaps be called the hard political elements in society must speak for them.
  It is not the glamorous area of the medical profession, which hits the headlines with heart and kidney transplants. It is the hard working, physically and mentally demanding area of the profession, which society avoids.
  The examination by Timbury shows that there are people in local authority homes who ought not to be there, there are old people in local authority homes who should be under closer medical attention in psychiatric hospitals, and there are a large number of people in the wrong mental illness hospitals.
  In paragraph 3.7 the report clearly spells out the requirements and I hope that the Minister will address his mind particularly to this: It says:
  "Having considered four possible solutions for accommodating the elderly with mental disability our view is that only two should be accepted for future planning. The first being the continued provision by local authorities of residential accommodation for the elderly, some of whom, during their period of residence, may become mildly mentally disabled but still be capable of living within the home and not need nursing care. For the elderly with mental

  1513
  impairment (e.g. severe dementia) which would prevent them looking after themselves or being looked after in their own homes or being admitted to residential accommodation, or which required that they be transferred from residential accommodation, continuing care units should be provided both as replacement and as additional facilities for the psychiatric service."
  Within the compass of the report it explains exactly what is meant by "continuing care", although there may be modifications in respect of detailed planning.
  Do the Government accept the strictures of that paragraph? Within the 10 months, how far has the Minister transmitted the recommendations into the future planning policy of the Health Service? That is a fair question. If the Minister says "We have not done so" the House will be able to make a judgment.
  The immediate area of attention is that of identification and assessment. The range of domiciliary services also has to be extended. I hope that I can be contradicted by the Minister when I say that I detect in the body of the Timbury report a lack of liaison between the health services and the social work and housing departments. We have often debated the practicability of splitting housing and social work on a district and council basis. However, the need to plan jointly for the needs of the elderly with mental disability should invoke no petty bureaucratic divisions or empire building. Empire building here should not be tolerated. As Timbury says:
  "closer links between these services and voluntary organisations are essential and different financial arrangements between these services should not be permitted to obstruct reform."
  That is an important consideration.
  I am not in favour of co-ordination purely for its own sake. Co-ordination often involves us in creating another tier of bureaucracy. I do not think that that is what Timbury envisaged. There is a need to ensure effective liaison between a social work department and the health services. I had a pertinent example of the lack of such liaison only today. It is a personal matter and I shall not detain the House with it. It relates to an individual very close to me, who suffers, in my view, from dementia.
  1514
  The personnel involved in these areas have to possess a greater sense of devotion than is normal in the public service if they are to cater for the needs of this section of the population. As well as the nurses, doctors, administrators and volunteers, the general public need to have a greater understanding of the mental and physical conditions of the elderly. This ought to be an aim of community education. We have just had the Year of the Child. I urge the Minister, if he has not already thought of this, to inaugurate in Scotland a week in every year when attention is focused on the elderly section of the population, particularly those with mental disabilities.
  Last but not least I turn to the vexed question of costs. In an earlier reply some allusion was made by the Minister to accepting the general provisions of the report, but it was added that the costs would be astronomical. The ministerial view seems to be that "Timbury is all very well; we should like to carry out its recommendations, but the costs are considerable." The report suggests an urgent start on a major building programme for day hospital places, assessment beds and National Health Service continuing care units for the elderly confused, at a total capital expenditure cost of approximately £44.65 million, mainly in the period 1980–81 to 1984–85, overlapping into the following five years. I have no doubt that these figures have increased since the estimates were made. Perhaps the Minister could tell us at some time—he might write to me—what the situation is in terms of current estimated costs. The important thing is to know how far we have gone in making this urgent start.
  The Government are fond of telling us that we should get our priorities right. The Minister lectured us on how we should be like the French, the Germans, the Americans or the Japanese. We are not like them. I could not get the boys in the Rosyth dockyard to do callisthenics in the mornings. I do not think that the Minister could, either. We do not evoke the correct response by a lecture. We must consider the individuals, who cannot, by their very nature, be self-reliant. If we do not cut expenditure in the Health Service we must secure that in this area, where the need is manifest and growing, we cover that need adequately.

  1515
  Perhaps the most revealing aspect of the Prime Minister's posture was her reinterpretation of the parable of the Good Samaritan. She averred that the Samaritan would not have got very far without the money with which to pay the innkeeper. As a Christian, I reject that interpretation. The innkeeper went much further than mere money service, and so did the Samaritan. If we acknowledge the true meaning of the parable, answering the question "Who is my neighbour?" in relation to the subject raised this evening, society at large has to show mercy and understanding to this section of our population. It is not good enough for the Minister to say that we cannot afford it or that we should allow the market mechanism to work. The cost of that attitude will be unwarranted human suffering—not the less so because it will be relatively silent and non-protesting. The Minister has a report before him pointing the way. I ask him to say how far he is prepared to follow.
  1.2 am
  The Under-Secretary of State for Scotland (Mr. Russell Fairgrieve): With the leave of the House, I shall reply to this debate on the Consolidated Fund Bill.
  I am most grateful to the hon. Member for Dunfermline (Mr. Douglas) for his thoughtful speech. On a previous occasion when you, Mr. Deputy Speaker, had the privilege—or the lack of it—to preside over a similar debate, Scots Members from both sides of the House spoke. The debate had its moments of acrimony. We had one debate, before you took the Chair, when we strayed from the subject and followed devious political routes. Thanks to the thoughtful speech by the hon. Gentleman we may keep on safer ground in this reply. The hon. Member for Fife, Central (Mr. Hamilton), who proposed the previous subject, made his speech, but other hon. Members spoke and I was diverted.
  I should like to comment on what the hon. Member for Dunfermline said. I am grateful to him for raising this topic tonight, as it gives me the opportunity to assure him that he is not alone in his concern for the needs of this particularly vulnerable group within our community. We are conscious of the fact that many of the elderly with mental disability are accommodated in unsatisfactory condi-
  1516
  tions or are in need of a higher level of services than is currently available. We are also aware, as the hon. Gentleman said, that the numbers of people in the upper age groups who are most at risk are increasing rapidly and will continue to increase for some time.
  The problem of geriatrics, with or without mental disability, is like a dark cloud overhanging the future of the mental health service. The Government appreciate that health boards and local authorities have a major task before them in securing the improvement and development of services for the elderly in general and for those with mental disability in particular.
  When the report on services for the elderly with mental disability in Scotland—the Timbury report, to which the hon. Member referred—was circulated in July last year it was made clear that we were not committed to accepting its recommendations and would take no decisions on it until we had fully considered the comments of the various organisations consulted. In the preface to the report the Secretary of State said that he was not committed to accepting the recommendations in the report and would take no decisions on it until he had considered fully the comments from the various organisations. Although we are still awaiting the views of some of these organisations, I may say that nearly all the comments received so far have supported the conclusions and the main recommendations in the report.
  I do not wish at this stage to pre-empt our full consideration of the report's recommendations in the light of the views expressed by Health Service, local authority and other interests, nor do I wish to anticipate what the Government's decisions will be, but we are bound to have regard not only to the importance of the recommendations and the comments that are received but to the wider economic implications of the heavy expenditure that would be involved.
  Of course, as the hon. Member for Dunfermline implied, financial resources will be the critical factor in deciding how far and how quickly these recommendations can be implemented. The financial implications are considerable. Capital expenditure would be about £80 million, spread between the health boards and

  1517
  the local authorities over the next six or seven years and additional revenue expenditure would eventually amount to about £30 million a year at current price levels. When one considers the total spending of about £900 million on health in Scotland and puts the figures into perspective one sees that we are dealing with figures of a fair size.
  There is perhaps no need for me to reiterate the Government's determination to restore order to our economy and, as an essential means to this end, to reduce the overall level of public expenditure. We have also stressed how important it is that services for the most vulnerable groups within the community should be protected and should continue to develop as far as possible.
  The elderly with mental disability form one of several such groups, as hon. Members well know. The hon. Member for Dunfermline pointed out that such people do not have the voice or the strength to make their predicament known, and it is up to others to bring to our notice the problems and disadvantages that they suffer. It is simply not possible for the Government to provide additional finance for the rapid development of all the various services for these groups, much as we would all wish that this could be done.
  The provision and development of these services is the responsibility of health boards and local authorities and I am sure that whatever difficulties they have to overcome they will do their best within the available resources to give priority where the need is greatest.
  There were certain other points that the hon. Member made in his speech. I accept the inadequacy of current provisions. The hon. Member is right to say that this is an unglamorous area, in which we have difficulty in recruiting nursing and other staff. There is a need for residential accommodation, as it is present thinking in health and social work circles that wherever possible such people should be treated within the community.
  1518
  The hon. Member mentioned the possibility of continuing care units. The liaison with which we are dealing in the Health Services Bill, which is at present going through its Committee stage, tries to achieve a closer working in joint or support financing between social work departments and health boards in order to bring this grey area of care more to the attention of all concerned.
  The hon. Member for Dunfermline mentioned possibilities on the lines of the Year of the Child. This is a year for the disabled. The hon. Gentleman is right to suggest that at some time there should be a year for the elderly.
  I have given the cost in local government and Health Service expenditure. I do not wish to refer to the acrimony of the previous debate. As the hon. Gentleman knows, the Government do not have the money available for what they would like to achieve in this sphere. There would have to be an increase in taxes or a transfer of resources. Alternatively, our country has to become wealthier.
  The hon. Gentleman asks how far the Government have proceeded. We have not proceeded yet to implement the Tim-bury report. Comments have been received. It is the wish of the Government as, I believe, of the previous Government, to implement the conclusions of the report as far as possible within the sources available.
  Question put and agreed to.
  Bill accordingly read a Second time and committed to a Committee of the whole House; immediately considered in Committee, pursuant to the Order of the House this day; reported, without amendment.
  Motion made, and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 93 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read the Third time and passed.

  WATER SUPPLY AND DRAINAGE (NORTH DEVON)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Le Marchant].
  1.12 am
  Mr. Tony Speller: The last occasion on which I had the privilege of addressing the House was on the motion of my hon. Friend for Rossendale (Mr. Trippier) on the financial problems of widows. On that occasion, as now, there was not one member of any Opposition party to be seen on the Opposition Benches. Once again, I must become reconciled to addressing the green Benches across the Chamber as I would the green fields of North Devon.
  No doubt every hon. Member has a different set of priorities when seeking to describe his or her activities and duties as a Member. There are those who are so community-activated that they are said to send "Get well" cards to cracked paving stones. There are those who are so busy with global activities that they have little time for their own constituencies. For my part, representing the beautiful stretch of land that extends from the Somerset border to the Cornwall border and back into some of the most valuable farmland in the country, I see my job as seeking to provide a framework within which the people of my constituency can work, grow and develop as they wish and not as I or my peers seek to tell them.
  The security of law and order and the defence of our land are the duties of this House. The provision of worthwhile utilities and their financing is also properly a duty for the House.
  Some months ago, when I was successful in the ballot, I chose as my subject communications—roads, railways and airways—in my constituency. I continue seeking to provide the framework by talking about mains and drains, the works that provide the veins and arteries of a constituency that, with only one mile of dual carriageway in 650 square miles and a tenuous railway link, needs all the help that we can give it in order to retain its pleasant prosperity.
  I refer first to the law. The general duty to provide water is to be found in
  1520
  section 11 of the Water Act 1973, which provides:
  "It shall be the duty of a water authority to supply water within their area."
  The duty to provide drainage is set out in section 14 of the Act, which provides:
  "It shall be the duty of every water authority to provide … such public sewers as may be necessary."
  The water authorities are obliged to comply with valid requisitions, and when capital expenditure is limited that can be done only at the expense of other schemes. To assist in the proper use of resources, any water authority must maintain a close liaison with planning authorities, since where development requires considerable expenditure and the money is not available there must be embargoes on development—and that is the case throughout North Devon at present.
  We have already outgrown our existing capacity for mains drainage and land drainage in our part of the world. As a result, anything more than the standard rainfall, which can be quite heavy in North Devon, becomes a damaging flood. We have had several examples of that even within the past few months.
  We are also running out of water. It is an incredible situation that during the winter months we have a great deal of water and during the summer we often have none. It is good for the tourists but bad for the area as a whole, because we must never go back to the standpipes of a few years ago.
  Over the 20 years from 1957 to what we call the year of the great drought1976—there was only one year when there was not some form of water restriction or regulation along the North Devon coastline. That is unique in the United Kingdom. It culminated in the standpipes of 1976 and conditions that we thought would never be allowed to exist again. Yet by 1983 we shall be short of water for summer requirements and by 1985 we shall be short for our normal requirements. Of course, in the summer the population at least doubles and the water requirement increases accordingly. A reservoir takes not five minutes but five years to complete and involves planning permissions, consents and purchases.
  The Government are responsible for remedial works resulting from flood and

  1521
  similar damage. The local authority has to pay only a fairly small sum, and the cost to the Government is often greater than the loan charges on an amount that would have paid for the remedial works for ever instead of on the present hand-to-mouth basis.
  Mr. D. A. Trippier: Is my hon. Friend aware that water authorities throughout the country own vast tracts of land, some of which could be sold in order to finance the schemes that he is suggesting?
  Mr. Speller: I am grateful to my hon. Friend. He is correct. Many nationalised industries, including water undertakings and the railways, own vast tracts of land. It would be sensible to tell them to finance developments from the sale of assets, as any normal business has to do. I am grateful for my hon. Friend's comments.
  In 1970 a Select Committee decided that an area called Swincombe, on Dartmoor, should not be used as a reservoir site. I believe that this was a mistake, because Swincombe-on-the-Moor was a logical site to cater for the water needs of South-West Devon and, in particular, the city of Plymouth. This is not the area that I refer to now, but because the Select Committee turned Swincombe down it was assumed by the water authority and its successor, the South West water authority, rightly or wrongly—because the Select Committee was not and is not required to give details of the reasons why it disposes—that national parks and moorland were not to be further considered for reservoir sites.
  So a site at Roadford was chosen. Roadford was selected out of 39 sites as the best alternative. It is north of Swincombe and would provide water from one source as a reserve both for South Devon—which is not my problem—and for North Devon, which is my problem.
  Inevitably, whenever one suggests a site for anything there are many objections. In the case of Roadford the objectors have included the Torridge district council, even though in that area water is at present in shortest supply and development is embargoed. Other objectors included the West Devon district council, the National Farmers Union and the Country Landowners Association. The objections were logical, because the
  1522
  site would use relatively good agricultural land.
  I must ask the Minister whether, if we are to say "No" to national parks and moorland and then say "No" to agricultural land in Devon, it rules out the entire county except, perhaps, for the foreshore. That is the problem faced by the water authority. First, it will seek to have the reservoir built at Roadford—I support that—because it is essential that we have water. But there is no chance of completing the reservoir even by 1985.
  None the less, if we had the Roadford site—and the inquiry ended more than two years ago—at least the water authority could go ahead with its plans. If the Government say that we cannot have that site, that is fair enough. I would regret it, but, having said that, at least, again, the authority could seek, plan and suggest alternatives. It would mean one site for the north and one for the south. The Roadford site would be between those areas.
  The essence of this problem is the uncertainty, and I appeal to my hon. Friend the Minister to tell us what we may expect by way of an answer, or, rather when we may expect an answer. I do not wish to see standpipes back in North Devon in a few years' time and to have to tell people that the Government have been making their minds up for a long time. Successive Governments have taken two years over this.
  I turn from water supply to the problem of land drainage. This is the other and equally important side of the same coin.
  In the last few months we have had floods at Bideford, Barnstaple and Ilfracombe. That is because the existing land drains cannot take away the water that falls so bountifully in the season when the tourists are not with us. That is no satisfaction to us. It is incredible that after so long a time we have no way of storing the precious commodity that falls to us from Heaven.
  The South West water authority—a good authority—had planned to spend money on three areas in particular, Bideford-Northam, Colliford and Ilfracombe. Because of floods, some of these funds had to be used elsewhere. I do not blame the authority, and I respect it

  1523
  for the speed with which it was able to switch resources. We must protect the coast, and the same authority must use the same money whether to provide water or to protect the coast.
  We seek tonight not an affirmative answer but the certainty of an answer, "Yea" or "Nay", fairly soon. Without it, we shall not be able to store the vital water that comes from Heaven.
  When I entered the House not many months ago, I was told of the great success and prosperity of North Devon in the past 20 years. That has a hollow ring when I see an area with bad roads, poor and tenuous rail communications, a shortage of water at one time of the year and no way of coping with it at other times. I look to the Minister to reassure us and to indicate how we may make everything better for the next 20 years.
  1.25 am
  The Under-Secretary of State for the Environment (Mr. Marcus Fox): I am grateful to my hon. Friend the Member for Devon, North (Mr. Speller) for raising this matter. Even though the green Opposition Benches are somewhat empty, he has the consolation of knowing that he has an hon. Friend behind him. I was not present on the last occasion on which he addressed the House, so I am not sure whether that is a 50 per cent. improvement on the attendance.
  Regional water authorities were set up in 1974 to be strong, semi-autonomous bodies, with boundaries corresponding to river catchments. They were charged with the duty to manage the water resources in their areas, to supply water and to provide drainage, sewage treatment and all other matters, including control of pollution arising from the control of the water cycle. My hon. Friend is right to say that the problems have existed for many years.
  About 1,400 public bodies had the responsibility before 1974. In the last six years we have made some progress in welding the previously fragmented units into effective bodies. Had the water authorities not existed, I am convinced that the effects of the 1976 drought—which was particularly serious in my hon. Friend's constituency— would have been much more severe.
  1524
  In 1974 the South West water authority inherited particularly acute problems of insufficient water resources which had been recognised by its predecessors, who had taken steps to deal with them but which had not reached fruition. For example, in the 1969–70 Session a scheme was promoted to build a reservoir at Swincombe, on Dartmoor. The Private Bill that gave rise to environmental objections was considered by a Select Committee. Prior to that, the House voted in favour of it. Subsequently the Select Committee concluded that the promoters had not made out their case. I take note of my hon. Friend's views on that.
  Since 1974 the South West water authority has completed its Wimbleball reservoir, which now provides a direct supply to the neighbouring Wessex water authority and regulates the River Exe, thereby ensuring reliable supplies to the Tiverton and Exeter areas. All necessary powers have been granted to permit the construction of a reservoir at Colliford, which, when completed by the middle of the 1980s, will make secure supplies to the whole of Cornwall.
  My hon. Friend referred to the South West water authority scheme for a reservoir at Roadford, at a site located between Okehampton and Launceston. The scheme is designed to augment water supplies over an extensive area of Devon, which includes my hon. Friend's constituency and the city of Plymouth. The scheme was subject to a public local inquiry, which was substantially completed in April 1978 but was reopened in September 1978 to deal with questions on the possibility of reservoir-induced earthquakes.
  There were many objections to the water authority's proposals. The inquiry dealt with them and related matters, including appeals by the South West water authority against the refusal of the West Devon and Torridge district councils to grant planning permission for the reservoir and ancillary works.
  The proposal raises a number of difficult issues. My hon. Friend will know that there are strong objections, particularly on agricultural grounds. He, of all people, will know that these are not matters to be dismissed lightly, particularly in a county like Devon.

  1525
  I have been considering the case for some time now. As my hon. Friend will know from my answer to his question last week, we hope to issue a decision very shortly. I can assure him that we are considering every aspect of the case most carefully, but as the matter is still sub judice he will understand that I can make no comment on the scheme now.
  My hon. Friend is right in thinking that the South West water authority has a particular problem, common to some others but probably the most acute of all —the requirement to cater for large influxes of summer visitors, who, of course, impact heavily on demands for water supplies and drainage facilities. At the height of the season they are estimated to reach at least 500,000—an addition of nearly 40 per cent. to the resident population. About 70,000 of them go to the water authority's North Devon area, which includes the Devon, North constituency and parts of the Devon, West, Cornwall, North and Tiverton constituencies.
  The House should remember that water conservation must also be a factor in considering any future policies. In my hon. Friend's constituency, water supplies have long been derived from several small impounding reservoirs, and these have now been augmented from Meldon reservoir, further south, and by some lesser, more local works. But, generally, resources are not adequate, as my hon. Friend said, to meet summer demands without restrictions.
  I understand that in the water authority's North Devon operations area there have been only four years between 1957 and 1979 when it has not imposed local bans on the use of private hosepipes. The authority is about to bring into service a small new intake on the River Torridge, which, in normal years, will allow some conservation of water in impounding reservoirs against summer demands.
  In the 1976 drought year there was a complete ban throughout the region on the use of water for non-essential purposes, and at the height of the drought the authority obtained five orders under section 2 of the Drought Act 1976, which empowered it to supply water through standpipes. As is well known, and as my hon. Friend reminded the House, standpipes were erected throughout the North Devon and Torridge district coun-
  1526
  cil areas and were in use in some parts for a short period. But this is not a new phenomenon in the area. That points to the particularly serious problem.
  I fear that the water authority inherited many sewerage systems and sewage disposal works that were inadequate and overloaded. I shall deal with restrictions on development in a moment.
  A particular problem area in my hon. Friend's constituency is that of BidefordAppeldore-Northam and Westward Ho!, from which sewage is discharged direct to the Taw-Torridge estuary. The water authority's predecessors were not successful in obtaining powers to construct a long sea outfall. The water authority now plans, as a first stage of a substitute scheme, to re-sewer parts of Bideford and to treat the sewage by primary settlement only for discharge to the estuary. Even this part-scheme is estimated to cost £4 million and is not expected to be commissioned until 1995.
  The expressions of the water authorities' immediate past activities are contained in their annual reports and their future proposals in their annual corporate plans, which are central to the relationship between the Government and the authorities. These plans incorporate their capital expenditure proposals, which are the subject of discussion with officials of my Department and the totals of which form an input to the annual public expenditure survey.
  In drawing up these plans, authorities are expected to pay regard to Govern- ment guidance and policies. Government priorities include the protection of public health and the provision of infrastructure for new housing and industrial development. Additionally, water authorities are required to have regard to structure and local plans and to consult local planning authorities. But there are severe constraints. Not only is it not physically impossible to do everything at once; the House will be well aware of this Government's determination to control and reduce the public sector borrowing requirement and public expenditure in general. To this end, the capital expenditure that each authority is permitted to incur is constrained and, in addition, tight cash limits have been imposed on their external financing. The authorities' internal constraints relate to the levels of charges that they consider their consumers

  1527
  can reasonably be asked to bear and to manpower levels, about which this Government are particularly concerned in the public sector.
  Thus, in the assembly of programmes of work, the determination of needs and relative priorities is vital if the greatest benefit is to be derived from the expenditure of the limited funds available.
  I confirm what has been said by my hon. Friend the Member for Rossendale that it is important that all water authorities, not only the South West authority, should be aware of any assets, especially in the shape of land, that are not necessary for their own use, that they should be disposed of, and that the financial resources created should be used in other ways.
  The assessment of relative priorities and the compilation of a capital programme are matters that only the water authority can determine, and it is the authority's responsibility to do so.
  At the current levels of expenditure, I am assured by the National Water Council that, in general, Government priorities are being met. In particular areas, however, that may not be possible. That is undoubtedly so in the South-West, where the water authority has in some places advised the local planning authorities that water and drainage services have insufficient capacity to cater for additional development. I ask my hon. Friend to recognise the constraints under which the authority is working in its attempts to reconcile these competing claims for limited resources.
  In his constituency, except for the Bideford-Northam area, where, however, the water authority encourages temporary drainage arrangements, and parts of Barnstaple and South Molton, I believe that it is in villages and hamlets that new housing is constrained because of inadequate main drainage, and, these being in rural areas, it is probable that private drainage arrangements would be acceptable. Moreover, in the towns that I have
  1528
  mentioned and in the constituency generally, there are 300 or 400 acres with planning permission on which, as far as water services are concerned, housing could go ahead.
  Industrial development is more difficult. Here the water authority's general advice to the planning authorities is that what are known as dry industries should be encouraged. In using the word "dry" I am not referring to non-brewing activities; I am referring to industries that use a restricted amount of water.
  Mr. Speller: It is worth bearing in mind that the growth of fire regulations in factories has created a dangerous position in the Ilfracombe area of North Devon, where there is a shortage of water and a dry industry but one that requires a sprinkler system. The industry may be doing the right things, but it is not able to meet the required fire precautions.
  Mr. Fox: I take my hon. Friend's point. In terms of fire precaution, that is a serious matter. As soon as it is possible to meet those needs we shall be happy to do so, not only in the South-West but throughout the country.
  My advice to my hon. Friend and to prospective developers is to consult the authority closely and at an early stage. I am sure that it will give the sort of advice necessary.
  In the Government we shall continue to exercise close control over the expenditure of the water authorities and to encourage measures to increase efficiency, leaving the day-to-day management to the authorities, which are the best qualified and able to do so.
  In conclusion, I return to the central point raised by my hon. Friend. The answer that he requested from me about Roadford will be given at the earliest possible opportunity.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes to Two o'clock.

AGRICULTURE, FISHERIES AND FOOD
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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR On the Woolsack.
Prayers—Read by the Lord Bishop of Derby.

THE LORD ARCHBISHOP OF CANTERBURY
Robert Alexander Kennedy, Lord Archbishop of Canterbury—Was (in the usual manner) introduced between the Lord Bishop of London and the Lord Bishop of Durham.
The Lord Brain—Took the Oath.

POSTAGE STAMP FRANKING
2.44 p.m.
Lord GAINFORD: 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 considering any schemes for preserving postage stamps on letters and parcels in view of the increased interest by stamp collectors in British postage stamps.
Lord LYELL: My Lords, this is an operational matter for the Post Office management.
Lord GAINFORD: My Lords, I thank my noble friend the Minister for the downright concise reply. May I ask whether it is true that, although on days such as today, when there is a new issue, great care is shown in franking letters, there exists in the Post Office a device that is nicknamed among stamp collectors the "killer stamp "because it not only franks the stamps well but can absolutely obliterate the design, thus rendering them useless for a collector?
Lord LYELL: My Lords, I was not aware that among the technological inventions of the Post Office there was
1070
something of that name. I should inform my noble friend that the Post Office takes into account, and indeed appreciates, that collectors of stamps very much like to have postmarks which do not fully cover the stamp, and for this reason the Post Office makes a point of providing special hand stamping facilities at a number of offices especially for the use of philatelists. I understand that these facilities are currently being extended.
Baroness VICKERS: My Lords, I should like to support my noble friend's suggestion. For many years I have collected stamps of all kinds and have sold them for charities by the pound weight, and they have made a great deal of money. I should be grateful if those in this House might consider collecting just ordinary ones for England, and I would send them on to my charity.
Viscount ST. DAVIDS: My Lords, is not the noble Lord, as a firm monetarist, aware that the best way of destroying the value of these stamps is to preserve them?
Lord LYELL: My Lords, I shall inform my noble friend, who might fall under the title so aptly put by the noble Viscount. That is the best that I can do. As I said before, this is a matter for Post Office management and not for any other form of management.

TANZANIAN TROOPS IN SEYCHELLES AND UGANDA
The Earl of SELKIRK: 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 Tanzanian troops are stationed in the Seychelles or anywhere else outside their territory.
Lord TREFGARNE: My Lords, there is a small detachment of Tanzanian troops in the Seychelles and a substantial Tanzanian force in Uganda.
The Earl of SELKIRK: My Lords, does that indicate some relationship between the Seychelles and Tanzania of a commercial or political character?
Lord TREFGARNE: My Lords, I believe that the Seychelles Government do admire the Tanzanian Government.
Lord BARNBY: My Lords, may I ask the Minister whether the troops are in Uganda at the request of the United Nations, or of whom?
Lord TREFGARNE: My Lords, the Tanzanian troops in Uganda are there by virtue of an agreement between the two governments.
The Earl of KIMBERLEY: My Lords could my noble friend say how long ago the Seychelles asked the Tanzanian troops to go to the Seychelles?
Lord TREFGARNE: My Lords, the troops in the Seychelles, which are just a few hundred in number, arrived in two parties. The first party I think was in June last year and the second party was in October.
Lord BARNBY: My Lords, could the Minister say who is paying for the Tanzanian troops in Uganda, in view of the fact that we have been giving substantial sums of aid to Tanzania?
Lord TREFGARNE: My Lords, the responsibility for the costs of the Tanzanian troops of course lies with the Tanzanian Government.

BBC EXPENDITURE CUTS: ORCHESTRAS
2.48 p.m.
Lord DONALDSON of KINGS-BRIDGE: 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 aware of the strength of feeling of the musical world, the distress of students of music and the disappointment of listeners at the cuts forced on the BBC, which are to be met in part by cutting the regional orchestras.
Lord SANDYS: My Lords, it is entirely a matter for the BBC governors to decide
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how to deploy the BBC's resources within the total income available to the Corporation. I understand that the governors' present broad proposals, which will be the subject of consultation with interested advisory bodies and the unions, still need more detailed work. I accept, however, that the governors have had to make a number of painful decisions and adjustments.
Lord DONALDSON of KINGS-BRIDGE: My Lords, while thanking the noble Lord for that reply, which was the kind of reply that I feared I might get, may I ask him whether he is aware that the BBC have made, and still make, the biggest contribution to music, and indirectly to musicians, of any broadcasting organisation in the world? Is he also aware that they made their needs clearly known, which were to have not less than £40 for their licence and they only got £34, which is a 15 per cent. reduction on what they wanted, and this has left them in a difficult position?
Secondly, may 1 ask whether the noble Lord is aware that the very highly skilled professional musicians who are particularly affected by the recent decisions—and there is a great scarcity of these musicians—require, above all things, steady employment on annual contracts, and that the BBC has reduced its annual contracts by 172 places, from 551 to 379, as a result of this unsympathetic treatment by the Government?
Lord SANDYS: My Lords, the Government are indeed aware of the problems which the noble Lord raised but, as a former Minister of the Arts, I hope he will not think it impertinent if I tell him that these very detailed matters are much better raised in the form of an Unstarred Question or a two-and-a-half hour debate.
Lord DONALDSON of KINGS-BRIDGE: We will have one later, my Lords.
Lord VAIZEY: My Lords, may I ask my noble friend whether he has thought of approaching the commercial broadcasting and television companies to see whether they could begin to make some kind of contribution to music in this country? The present situation, coupled with the BBC's cuts, is catastrophic, and the failure of these extremely rich com-

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panies to provide anything like adequate support for music is a disgrace.
Lord SANDYS: My Lords, I will pass on to my right honourable friend the Home Secretary the suggestion my noble friend makes.
Lord BOOTHBY: My Lords, as regards the projected murder of the BBC Symphony Orchestra in Scotland, may I ask the Minister whether he realises that this has outraged the entire musical world? In view of the volume of protests, not only from Scotland but from many other countries, may I ask the noble Lord to consider whether the Government might make a formal request to the BBC not to do this, because this act of vandalism—and it is no less—is not only unprecedented but uncharacteristic of the BBC?
Lord SANDYS: My Lords, the Government are very well aware that the proposed cuts have made front page news in Scottish national dailies, as they have in many publications elsewhere in Britain. I will certainly pass on to my right honourable friend the suggestion which the noble Lord makes.
Lord AVEBURY: My Lords, surely one issue of general importance which should not be deferred to the Unstarred Question which the noble Lord, Lord Donaldson of Kingsbridge, intends to put down is the interference by the Government in the BBC's proposal to raise the licence fee. Is it not a fact that if the BBC's request had been granted there would have been no question of having to cut any of the orchestras as they are being cut now? Will the Minister take this one back and reconsider the refusal of the Government to allow the BBC the revenue it needs? Would that not be in accordance with the general policy followed by the Conservatives of loosening the reins of Government and allowing a greater degree of freedom among bodies such as the BBC which hitherto have been subject to too great a degree of Government control?
Lord SANDYS: My Lords, that supplementary question by the noble Lord, Lord Avebury, demonstrates the complexity of this problem. He is of
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course aware that the increase in licence fee which took place in November 1979 and announced by my right honourable friend the Home Secretary was an increase for at least two years. I do not think I can add to what my right honourable friend said on that occasion.
Lord ROSS of MARNOCK: My Lords, cannot the Minister ask the BBC to look again at ways and means of finding the necessary money? There has been—and the BBC Scottish Symphony Orchestra played a part in it—a considerable resurgence of musical life in Scotland. These cuts will be disastrous. Is the noble Lord aware that this is not the time to impoverish Scotland or the regions?
Lord SANDYS: My Lords, I will pass on to my right honourable friend the suggestions which the noble Lord, Lord Ross of Marnock, has made, but the real difficulty is that it is a matter for internal organisation within the BBC.
Viscount ECCLES: My Lords, while I think the sum of £34 for a licence is high enough for the time being, may I ask my noble friend whether it is possible to ask those who are making a great deal of money out of North Sea oil or whisky to pick up, as the Americans say, this tab?
Lord SANDYS: My Lords, my noble friend has made a very helpful suggestion which will be brought to the attention of my right honourable friend.
Lord BLEASE: My Lords, is the Minister aware that in the difficult climate of Northern Ireland another spark of life has been dimmed by these cuts forced on the BBC? Will the Minister use his good offices and influence with his Northern Ireland Ministerial colleagues to encourage efforts to retain the BBC Northern Ireland Orchestra in suitable alternative musical employment in Northern Ireland?
Lord SANDYS: My Lords, the supplementaries on this Question have demonstrated the great importance of this topic, and I will certainly pass on to my relevant right honourable friends a copy of Hansard of the proceedings in your Lordships' House this afternoon.
Lord WIGG: My Lords, would the Government consider, perhaps through the Minister of Sport, approaching both the BBC and the independent companies with a view to the rationalisation of the showing of sporting activities? It would save vast sums of money if they agreed to operate on an alternative basis, so avoiding duplication which the country really cannot afford, not only in terms of money but in terms of the starvation of cultural activities which are very dear to people not only in Scotland but in all parts of the British Isles. All we need is a little common sense and initiative. On this one occasion would the Government show willing in this respect?
Lord SANDYS: I think that is another question, my Lords. The Government are, naturally, willing to receive and examine helpful suggestions in this connection, but I cannot guarantee more than that.
Lord POLWARTH: My Lords, is my noble friend aware that a number of oil companies, American and other, are "picking up the tab "to a substantial extent in support of other Scottish musical organisations, notably the Scottish National Orchestra, of which I was until recently the chairman, and that it would be unfortunate if there was any suggestion that those funds might be diverted away to another source, because these existing organisations are seriously threatened financially as to their existence at the present time?
Lord SANDYS: My Lords, while being aware of what my noble friend said, I can only bear those matters in mind.
Lord IRVING of DARTFORD: My Lords, may I ask the Minister to remind the Managing Director of BBC Radio that less than 12 months ago he said that the very point of public service broadcasting, and indeed its reason for survival, was to nurture musicians? Would the noble Lord not agree that if the BBC were to withdraw from this role it would be disastrous both for music and the nation?
Lord SANDYS: My Lords, I think we are getting into difficult waters because that is rather far from the original Question. While I have every sympathy with
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what the noble Lord said, I do not think I can commit the Government to anything further on this matter at the present time.
Lord DRUMALBYN: My Lords, is my noble friend aware that this is not the first occasion on which the BBC Scottish Orchestra has been under the threat of being disbanded? Is he aware that there will again be very strong pressure indeed for it to be retained on this occasion?
Lord SANDYS: My Lords, the Government are aware that the financial restraints have been very considerable, but the central issue is that the BBC is not immune from the problems posed by inflation, a problem which occurred during the time of Governments of both parties over a period of at least 10 years.
Lord STRABOLGI: My Lords, if the regional orchestras are to be cut, will the Government confirm that they will now not require the Arts Council to cut the already meagre grants to the national orchestras?
Lord SANDYS: My Lords, the noble Lord is making a suggestion which is quite outside the terms of this Question, and I think that it would be quite inappropriate for me to comment at this point.
The Earl of SELKIRK: My Lords, since local radio is now being developed all over the country, is it necessary for the BBC to have four radio channels? Could these not be run by regional radio or, alternatively, by radio which includes advertisements.
Lord SANDYS: My Lords, I do not think that I should be straying too far from my brief if I said that one of the central issues has been the expansion of local radio in extending the services of the BBC during the time of severe shortage of resources.
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES, and FOOD (Earl Ferrers): My Lords, while I accept the fact that your Lordships have a great interest in this subject, I wonder whether I might remind you that my noble friend's original Answer was that this was a matter for the BBC. I think that your Lordships will agree that my noble friend has—to use the expression

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of my noble friend Lord Eccles—picked up the tab for the BCC fairly effectively. Your Lordships may consider that it might be desirable if we moved on to the next business.

INTERNATIONAL DEVELOPMENT: THE BRANDT REPORT
3.1 p.m.
The Earl of LISTOWEL The Earl of LISTOWEL rose to call attention to the Report of the Independent Commission on International Development Issues (the Brandt Report), and to the need for Her Majesty's Government to review their policy in relation to developing countries;and to move for Papers. The noble Earl said: My Lords, I think that it would be generally agreed that the Brandt Commission's Report, to which I am drawing your Lordships' attention this afternoon, is the most important publication on relations between the developed and the developing countries since the Pearson Commission's report in 1969, 11 years ago. It outlines a programme for world economic recovery which has the unanimous support of its members.
This consensus is perhaps the most remarkable feature of the report, because the commissioners came from the rich and the poor countries, and reflected every aspect of the political spectrum, from Left to Right. They were not a bunch of cranks or eccentrics, but some of the world's most experienced statesmen and economists, including, as your Lordships will observe, a former Prime Minister of this country. We certainly owe a debt of gratitude to these distinguished individuals for giving up two years of their time to the preparation of this world recovery programme, which they believe will stop the otherwise inevitable drift towards increasing poverty and international tension. As they put it on page 31 of their report,
" We came to these problems separated widely by our experience and our positions on the political spectrum. But we have all come to agree that fundamental changes are essential, whether in trade, finance, energy, or other fields, if we are to avoid a serious breakdown of the world economy in the…'eighties and the 'nineties, and to give it instead a new stimulus to function in the interests of the world's people".
The main difference between Brandt and Pearson, which stems from a radical
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change for the worse in the world economy, is that the emphasis in the motivation of the North/South relationship, including aid from the North, has shifted from moral obligation to enlightened self-interest. The theme of mutuality of interests runs right through the report. Both sides have to realise that their common economic interests in the long run are much stronger than their admittedly many differences in the short run, and that unless they can establish a long-term partnership based on those interests, the world as a whole will become poorer, more divided, and more embittered.
Industrialised and developing countries these days are not only inter-dependent, but are indispensable to each other, and their economies cannot expand in isolation. It is this mutuality of interests that should revive the flagging, North/South negotiations in the agencies of the United Nations. There will be a better chance that constructive agreement will replace sterile recrimination when the "have nots "no longer gang up to make the maximum demands, while the "haves "gang up on their side to offer the minimum concessions. In future the North/South dialogue at the United Nations should be regarded as an opportunity for partnership in the development of world trade and production.
But if the emphasis in the motivation of aid from the North is shifted it still requires a much greater concern on the part of the wealthy countries for those who live in conditions described by the World Bank as "absolute poverty". The priority which the report claims for the world's poorest inhabitants, the 258 million people who live in the less developed countries in Africa and Asia, is itself a moral judgment, and would entail enormous expenditure on social infrastructure and services before anything like an economic return from investment, or approach to self-sufficiency, could be expected.
When we try to assess the gravity of the present situation, we find that the world's economy is functioning so badly that it damages the immediate and the long-term prospects of us all. In the South 800 million people are living in absolute poverty, and their number will rise with the unprecedented rapidity of the increase in world population. In the next 20 years the world population will increase from

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about 4 to 6 billion, and nine-tenths of this 50 per cent. increase will take place in the Third World. This is bound to stimulate a much greater demand for food, and unless this can be met by an expanding agriculture, there will be a surge in food prices that will put basic foodstuffs beyond the means of the needy. If sufficient is not done in the meantime to raise production, hundreds of millions will have their health impaired by malnutrition, and many will starve.
When we turn from the South to the comparative affluence of the North, we find the industrial countries in the midst of a severe and growing world recession. About 18 million persons—6 per cent. of the labour force in those countries—are now totally unemployed. Allowing for part-time workers and under-employment, roughly twice this number do not contribute effectively to production. In terms of annual potential output there is therefore an enormous wastage of productive capacity. Is it possible to marry the desperately urgent needs of the South to the under-used human and industrial capacity of the North? The report answers this question firmly in the affirmative, and proceeds to outline its proposals in a series of recommendations.
I should like to ask your Lordships to give sympathetic consideration to these proposals. I do so, not on the assumption that they are necessarily valid or practicable, though I hope and believe that they are, but on the assumption that they should be carefully studied by all concerned—ordinary individuals, as well as Governments and institutions, such as the World Bank and the International Monetary Fund, because they affect us all, and none of us can afford to ignore them.
The first, and most important, proposal is for the financing of the recovery programme by a massive transfer of resources from the North to South. This would be comparable to the Marshall Plan which, as we all recollect, restored the shattered economies of Western Europe after the last war. The effect of such a transfer would be to increase global demand and thus to reactivate world trade by stimulating production in both the developing and developed countries. This would
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require a substantial increase in official aid on concessionary terms to the less developed and low income countries, and a similar increase in commercial lending to the middle and higher income developing countries. Such an accelerated development programme would of course generate a greater volume of world trade.
But the essential financial requirement in this connection is that the surplus countries, particularly the oil-rich OPEC countries, should be willing to recycle their surplus earnings so as to stimulate production in the deficit countries, including the Third World. The commercial policy of the industrial countries will be the key to the expansion of world trade.
Developing countries must have the capacity to industrialise if they are to raise their living standards, and to reach the stage of self-sustaining growth. For this purpose they will need access to international markets. It is the industrial countries of the North which will be the main outlet for the expansion of industry in the South. That is already recognised to some extent in the generalised preferences granted, for instance, by the European Economic Community to manufactured exports from developing countries connected with it. To fear that cheap consumer goods from the South will cause unemployment in the North is unfounded, because the loss of jobs from more imports will be balanced by the jobs gained from exports;such as, for example, the export of capital goods. While transitional arrangements during the period of adaptation of the old industries in the North to advanced technologies are permissible, there should be a gradual removal, and certainly not a further expansion, of existing barriers to world trade.
Pressures on Governments from both sides of industry will increase with worsening unemployment and declining profits; but these pressures should be resisted, because a retreat to protection would halt the recovery of world trade and condemn us all to the rigors of a siege economy. Of course, many of the developing countries arc still mainly agricultural, and often dependent on the export of one crop or one mineral. For these countries, and for the industrial countries which rely on their food and raw materials, it is essential to prevent wild fluctuations in commodity prices.

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So the report rightly insists on an enlargement of the number of existing international commodity agreements, and a stabilisation of the commodity price level. There is thus a converging and mutual interest of producers and consumers in the stability of commodity prices.
I will not weary the House with a catalogue of recommendations about methods of finance, monetary reform or energy strategy, important as they all are to the integrated recovery package in the report. But there is one aspect of development finance that I should like to mention, because it has a direct bearing on our own policy for overseas aid. Official development aid from the Governments of the industrialised countries is the principal source of funds for the poorest countries, which of course cannot afford to raise money on commercial terms. The target of 0·7 per cent. per annum of their gross national product was set for a 10-year period by the United Nations, and most Governments, including our own, accepted this target. The average performance of the OECD countries over this period has been disappointing—only 0·35 per cent. per annum, while the performance of this country was 0·48 per cent. in 1978. This reflects particularly unfavourably on the wealthiest industrialised countries, as some of the small European countries have already exceeded the United Nations target.
The Brandt Report now recommends that countries which have not yet reached the 0·7 per cent. target should do so by 1985, and that this annual target should be raised to 1 per cent. before the end of the century. It also wants improvement in the quality of aid, less tied aid, more multilateral aid and more concessional aid for the poorest countries. But the statement on overseas aid policy made by the noble Lord, Lord Carrington, the Foreign Secretary, on 20th February will reverse the direction in which the report believes we should be moving.
Our aid—the aid from this country—will deteriorate in quantity and quality. The amount of our official aid will be reduced, and aid criteria will change in emphasis from development needs to considerations of British commercial and political interests. Of course, we are going through hard times, as the noble
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Lord, Lord Carrington, emphasized in his speech the other day, but times will get even harder if we do nothing to revise our economy. This very recent review of overseas aid policy was nevertheless completed before the Brandt Report had been published, and I sincerely hope that the Government will undertake a further review when they have studied this part of the report.
My Lords, in my Motion this afternoon I am asking the Government to do two things. The first is to make a careful and serious study of the Brandt Report, taking into account before they make up their minds the expression of public and parliamentary opinion, including the debate this afternoon in your Lordships' House, and also likely repercussions on our partners in the Commonwealth. We have only just passed Commonwealth Day, and I think it is a fitting occasion that we should remember our partners in the Commonwealth. I believe that a Commonwealth view, as it would represent both North and South, would be a valuable stimulus to a wider international agreement. It should, if possible, precede the summit meeting between North and South called for in the report. I cannot think of a more fitting item for the agenda of the next meeting of the Commonwealth Prime Ministers' Conference.
In the second place, I should like to ask the Government to review their present policy towards the developing countries, and in particular their policy for overseas aid, in the light of the recommendations in the report. Finally, I think Parliament should be informed as soon as they have finalised their policy decisions on the report as a whole;and perhaps the noble Lord, Lord Trefgarne, will be able to answer me on that question when he replies to this debate.
My Lords, I have tried to keep my remarks short because I have exhorted others to make short speeches and I should not set a bad example myself, but may I say this one sentence in conclusion? The Brandt Report is a challenge to the imaginative statesmanship of the leaders of every national government. They should respond now, while there is still hope for the future and before we have been overtaken by another 1929—and I very much hope that Her Majesty's

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Government will take the lead. My Lords, I beg to move for Papers.
3.17 p.m.
Lord TANLAW: My Lords, I know that we are all grateful to the noble Earl, Lord Listowel, for arranging to have this important report debated in this Chamber so soon after its publication. Because of its very detailed nature, I believe that at this stage I can only make observations, and the observations I make and the criticisms I intend to put forward I would wish to put forward in a constructive way for Her Majesty's Government's consideration. Also, we from these Benches look forward to the maiden speech of the noble Lord, Lord Chorley, later in the debate this afternoon.
At a first glance of the 300-odd pages of which this report consists, one would find it difficult to disagree with either the conclusions or the recommendations contained in it. It was only on a second and perhaps more detailed look at some of the contents that I began to have doubts as to whether the commission was really on the right track after all, because it seems to me that so many of the recommendations seem to have been made before, tried out and found wanting. This makes me wonder whether the same formula on an increased scale will do much better for the world's poor relations than the last time it was tried. Perhaps it is easier to understand these feelings of doubt if I can specify more precisely the areas where the report appears to be at its weakest—the general one being, in my view, that some of the recommendations for the South should first be applied to the North, so that the world's monetary system can survive long enough to provide a stable credit base for the restructuring of industry and employment in the Northern countries. Without such a base the whole question of external aid, it seems to me, can only be academic.
My first and perhaps smallest criticism is that I find the map on the cover rather misleading, because it shows the world divided into two, presumably North and South, by a bold and not altogether straight black line. I assume that all those countries which are placed below the line belong to the South, and are, therefore, in need of the increased aid
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and advice which the Commission recommends;whereas all those situated above the line are designated to belong to the affluent North. I do not think it is quite as simple as this, for it must be inaccurate to imply that the oil-rich OPEC countries, Malaysia, Singapore, Hong Kong and many others are areas requiring external assistance from the North.
From the experience of frequent visits which I have to make to South-East Asia, when, through my lady wife, we do not have the barrier of' language in speaking with or listening to the hopes and aspirations of the people who live in these areas, it would appear that a respect for the work ethic and skill in trade may be the secret of their success, rather than a need for external aid.
I do not wish to dwell on this point, but I really do not see how we in the North, and especially this country with an unemployment figure approaching 2 million and an inflation rate of 17·2 per cent. and rising, with an interest rate to match, should wish to impose these burdens on countries such as Malaysia or Singapore, where the inflation rate is only 6 per cent., the standard of living high, and the balance of payments good. There are many aspects, as I know from personal experience, that do not make these perfect societies, but at least their economies seem to be in a reasonable order without further direction from the North, however well-intentioned it may be. This leads me on to question the conflicting economic theories which are still being argued with some heat by the industrial North, including Her Majesty's Government. I wonder whether they have any relevance at all in those areas in the South.
The main point I wish to make about aid, combined with special credit facilities, to the developing world is that, if it is to be effective, it should be directly linked to specific major capital projects, in order to achieve the maximum effect in the rural communities of the South. The all-embracing nature of a World Development Commission, which has been suggested in the Brandt report, may not be, in my view, the most effective way of disbursing the rather limited largesse the industrial world has to offer at present. This new agency will only succeed provided it can fulfil the role of an international clearing

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house for all external aid agencies and for recycled petrodollars;and then targets its capital lending with maximum efficiency and with the minimum opportunity for misapplication. Regrettably, these goals have not been achieved, as I understand it, by methods used so far.
There are also two serious omissions which I feel I must touch on before dealing with the energy sector in the report. The first is that no consideration appears to he given as to the impact of nuclear power on the economies of the South;and, secondly, the effect of the microprocessor revolution which is destined to take place in the late 'eighties and early 'nineties has been ignored. Omitting to take these major factors into consideration could affect the whole purpose and objectives of the report. Perhaps Her Majesty's Government, when they have had time to study the report, could indicate their views on this last observation.
I now come to the subject of energy, as outlined in the commission's report. I will make some attempt to present a case for showing that this section is inadequate and may have missed a great development opportunity for both the rural and urban populations of the South. The commission portrayed accurately the energy dilemma that exists in these communities, but it did not really come to grips with the kind of society it wants to see created in these areas for the future. The rural poor are, as the report rightly points out, in a Catch 22 energy situation, which is described on page 83 of the report. Because copies of the report were not available at an early date, I should like to quote the relevant passages for the benefit of noble Lords who may not have had time to read them. The report says:
" In most of the countries in the poverty belts, nine-tenths of the people depend on firewood as their chief source of fuel, and in colder mountain regions for home heating. Unrestrained commercial exploitation and increased population have led to soaring wood prices: more and more physical energy is expended to satisfy the basic fuel needs, animal manures are diverted from food production to cooking and the treeless landscape extends further, with disastrous effects on the ecology"…
The diversion of manure for use as fuel leads to a loss of agricultural nutrients, damaging the soil structure by failing to return manure to the fields. The result is a circular trap. As wood scarcity forces farmers to burn more dung for fuel and to apply less to their fields, the falling
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food supply will necessitate the clearing of ever larger ever steeper tracts of forests which then intensifies erosion, which in turn further reduces soil fertility".
I entirely agree with this and it is briefly and succinctly portrayed in those few lines. I agree entirely with the conclusion that it is a matter of urgency to plant more trees to compensate for deforestation. This could be done best through an international agency such as the World Development Fund. The report goes on to say that it is necessary to increase the energy input into the rural communities in the form of oil and electricity, but it does not attempt to say how this can be achieved. Of course, if the country concerned has the energy resources in the first place and the power generation capacity to exploit them by the year 2000, then it will be possible to provide more electricity. However, the cost of oil may be prohibitive by this time, and the supplies uncertain, when all the other energy raw materials will be at a premium. Therefore, the question remains as to whether enough fuel will be available to the South to produce electricity at an economical rate for the rural communities and the cities, which are still grossly underpowered.
I want to go back to the reference in the report about the energy trap and to show how, by bringing electricity to a rural community will not only provide light, heat and power but save waste product fuel for fertiliser, which in turn will increase crop yields. Adequate power will stop deforestation in areas which rely on firewood for heat and will help stabilise the local ecology. Rural electricity can also secure a system of water pumps for irrigation and fresh water. Finally, I maintain that it will make a contribution to reducing the birthrate. Although statistics on this last point are difficult to find, my own personal observations in these countries has confirmed the beneficial effect the introduction of light and power has had on population figures.
If these premises are accepted, then electrification of the rural areas of the South by nuclear power must be the first priority in the emergency programme outlined on page 276 of the report, because in my view it can break the circular energy trap described earlier;yet it has not even been listed in the commission's report or, if it has, I have not been able to find it.

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Perhaps it was omitted because the question still remains as to how it can be done, especially as nuclear power has a number of uncertainties connected with it, apart from the very high capital cost. One of the main difficulties in considering the installation of nuclear energy in the countries of the South is, first, the quality of the technical staff available to maintain the high safety precautions required. Secondly, there is the worry of misuse of nuclear waste from the reactors for military purposes, which will call for difficult and delicate international monitoring. There is a third problem of the massive volume of cooling water required by large nuclear installations, which is not always available in the more arid areas of the South where electrical power will be required. I believe that it is for a combination of these reasons that the Brandt Commission felt they were not justified in pursuing this area as a productive one, for solving the problems of the South, or giving it a higher priority in the report.
It was while considering the difficulties connected with a nuclear contribution to the problems of the South, in conjunction with a report by Dr. Marchetti from the International Institute for Applied Systems Analysis in Vienna, that an interesting solution presented itself. Dr. Marchetti's report was primarily concerned with the problems of disposing of waste heat from a large complex or battery of nuclear power stations, on which I will elaborate in a minute.
Before doing so, there is one other assumption not covered in the energy section of the Brandt Report which would ask to be accepted for the purposes of this debate. It concerns the need to conserve all raw materials for energy production. We are about to have a debate on this subject next week, which has been instigated by the noble Lord, Earl Lauderdale, when I shall make this point in more detail. However, I only wish noble Lords to accept that coal, oil and gas may become too valuable materials twenty years from now to be used in the relatively inefficient process of electricity generation. The only raw material for which there is no other energy use, except to produce electricity, is uranium;thus allowing gas, motor fuel, chemicals and fertiliser to be extracted from all the materials presently used for electrical
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energy conversion. This factor I have mentioned because I believe it to be of particular relevance in the South, where there is a shortage of all energy resources. Therefore, the only remaining possibility for an electrification programme of this size is nuclear power. Solar power and alternative energy strategies can, I am sure, play a part in the more remote parts of the South, but obviously cannot power the cities or large rural communities.
Dr. Marchetti's paper was based on the principle of fast breeder reactor stations, which could be sited on an offshore location. If such a nuclear city were ever built, it could have a number of direct advantages for the purposes of alleviating poverty in the less developed countries. An offshore location in international waters, besides being safer, would also enable such a complex to sell electricity to more than one country, thus transcending national and geographical boundaries. A complex of this kind would naturally have adequate cooling water, and it may even be possible to use the immense waste heat generated by these stations to convert sea water into fresh water, which could be piped on to the shores of one of the dry continents in the South.
By placing these huge stations in international waters, it would be possible to staff, monitor and control the safe production of electricity with an international and representative commission, both from the high technology countries and the consumer countries involved. The other advantage of an offshore location would mean that it would be difficult, if not impossible, for a misuse of nuclear waste for military or other purposes to take place. Finally, if the industrialised countries of the North were prepared to pool their nuclear technology, to create such power complexes, a great deal of sterile competition in the nuclear industry would be avoided. The alternative of individual North countries attempting to sell nuclear power stations competitively to developing countries could lead to just the kind of problems described in the Brandt Report. I would have many worries about the success of this policy. either for the exporting nations or for the consumer nations whom they are intended to assist, and for the world's nuclear industry as a whole.

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The main objection, other than the sheer technical ones, is that of cost. Very few, if any, of the countries of the South can afford to embark on the massive expenditure of a national nuclear industry of their own. However, I do think that it would be possible for them to co-operate individually in a multinational nuclear power station complex of the kind I have described in relation to the amount of electrical power needed for their local consumption. The main bulk of financing projects of this kind could only be done through recycling the pyramid of petrodollars that will have reached unmanageable proportions in the OPEC countries by the end of the decade. Repayment of these loans could be achieved eventually through charging electricity to the consumer countries of the South.
I believe that the present method of repayment of loans for capital projects, by merely establishing further loans, just does not make sense. The kind of capital project I have described may sound both impracticable and almost outrageous in its magnitude. However, I ask that it be given some consideration by Her Majesty's Government within the context of the Brandt Report's comments, because I cannot see any other way in which electrical power can become a reality to the rural and growing city communities of the South, unless projects of this scale are made equally real or alternatives found to them before the end of the century.
Whatever may be considered the defects of this suggestion, the underlying financial considerations are sound in an aid context, in that there is a specific international target for a major capital project, which must be an improvement on the blank cheque approach for individual national projects apparently advocated in the Brandt Report. Furthermore, the present practice of developing countries to borrow long, in order to meet the shortfalls on current account for oil purchase, cannot continue much longer. The whole system of international finance has been put under great stress since the massive increase in oil prices and will be in grave danger of breaking down completely through default. Therefore, alternative sources of energy must be found quickly for the South, or no funds will remain available for the development
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projects they have in mind and on the drawing board today. The new World Development Fund should be set up quickly for this purpose, or, alternatively, as the noble Earl, Lord Listowel, has said, greater use made of the OPEC special fund in order to relieve the burden that oil price rises have caused the South and to provide the capital base for alternative and nuclear energy electrification programmes.
What has not been properly discussed in the report are the consequences of the downside potential, to use the jargon, if the programme for survival, as outlined by Chancellor Brandt, fails. According to the report, the world is lurching from one crisis to another, year by year, in population, food, environment and resources, to name but a few. Many serious speeches will be made under these headings, learned papers will be read and discussed, and at least one more United Nations agency will be recommended. Large office blocks will be put up for new institutions—no doubt in very agreeable locations—to be filled with well-intentioned bureaucrats to ponder on these problems. Individual governments will set up similar organisations, with fine sounding names. In Britain there are already Departments for Overseas Development, Environment, Energy, and Natural Resources, and on the first page of the report is a whole list of other agencies, including some which I regret never having heard of, all with the same object in mind.
However, these problems will never be solved simply by creating new bureaucracies to worry about them. It would, therefore, be interesting if the Minister could give us an estimate of the gross annual costs of all the aid agencies mentioned in the report. Alternatively, could he give an indictation whether the output in aid actually exceeds the input in overheads of these agencies? As I see it, the dilemma that the poor and hungry nations sense when they attend international conferences of the kind recommended in the report—they could be called summits—is that the isolated crisis on the agenda is seen as part of a wider population —resources—development crisis which, unless wholly resolved, will condemn their people for good to the ranks of second-class citizens on their own planet. These problems when discussed in the past

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have appeared too great and too complex for solution. This realisation may have engendered an alarming spread among the developing nations of what could be called the Samson complex—the view that things will become so bad we may as well let the whole system collapse about our ears and start again.
This is a form of cosmopolitan nihilism that has many long-term attractions for those developing nations like the Peoples' Republic of China, India and South America. For these largely decentralised rural based societies will stand a good chance of survival during a period in which world trade, communications and the monetary system have been totally disrupted. This is something which the centralised rich urban nations most emphatically could not live through. Yet the small cultivator in the areas I have mentioned would remain quite unaffected by such a collapse, even if he were aware it had taken place. Therefore, the Samson theory, as I call it, has powerful political reasoning behind it, in that it allows for the collapse of industrial society while at the same time promoting a sound strategy of national self-sufficiency.
This reasoning is well suited to oriental political thought and can be expected to spread unless much more clearly defined initiatives than those outlined in the report are made by the developed nations to deal with the main crisis problems of food, population and rural development. The first step in this direction would be to implement an extensive programme of nuclear electrification throughout the countries of the South, as a matter of urgent priority.
In conclusion, we on these Benches must give warm support to the general concept that lies behind the entire Brandt Report. That is the concept of world government, which we believe may be brought one step nearer if the main objectives outlined in the report can be achieved. It is worth quoting in this context the words of Chancellor Brandt, who said on page 12:
" There must be room for the idea of a global community, or at least a global responsibility evolving from the experience of regional communities".
He went on to say on page 15:
"…we must aim at a global community based on contract rather than status, on consensus rather than compulsion".
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This liberal philosophy is not new. It has been spelt out before now in similar terms, which were that:
" The world should be but one state, the state of mankind, in which all men live in harmony and in unity of heart and mind—world citizenship with one language, complete freedom of movement and choice of marriage partner, the only divisions of men being those of good or evil intent".
This plea was made in a prayer offered by Alexander the Great 2,300 years ago at Opis, before leading his troops up those same mountain passes where today an entirely different army is encamped. There is no philosopher general in command of these soldiers, whose regime will not permit such ideals to be expressed in public, or even in private. Whatever the defects of the report may be, if the underlying philosophy of Chancellor Brandt is not accepted, or if the countries of the South lose patience with the North, then that army, poised in the mountains of Afghanistan, may march southwards, and snuff out those Alexandrine principles, for ever.
3.40 p.m.
Lord GO RON WY-ROBE RTS: My Lords, the entire House will be grateful to my noble friend Lord Listowel for the admirable way in which he has initiated this important debate. As he has said, the Report of the Independent Commission, under the chairmanship of the former Chancellor Willy Brandt, is a document of the utmost importance. It is true that it does not claim to present new facts or new solutions but it marshalls the facts with a new intensity and it presents the solutions with a new authority. That, perhaps, is to be expected from a commission recruited from among the ablest and most distinguished statesmen of the Free World, among them our own Mr. Edward Heath, whose contribution to this report and to the thinking and speaking on international affairs generally, certainly in the last year or so, has given him a quite new eminence.
The report is a state paper for all States. I echo my noble friend's appeal at the end of his speech that not only our Government but all Governments, and not only in the Free World, should study this document with urgent attention. That is the first point to be made about this report. It is a document of urgent

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importance, and the note of urgency is sounded from the very beginning. The sub-title of the report is given as A Programme for Survival—not a programme for prosperity but for sheer survival, no less.
The second point about the report which strikes one is its global approach to the problems it discusses. It does this in a way that its admirable predecessors, among them the Pearson Report, did not quite manage to do. Here we have an approach to the North/South problem in the context not only of the North and of the South but also of the East and the West—in fact, of the whole world. The global approach inspires and is instilled in every paragraph of this notable report. Throughout it there is the insistence that the undoubted dangers, the urgent dangers, as well as the humane opportunities of the situation, are of vital concern not only to the industrialised North and the less-developed South but also to the ideological East as well as to the Free West. There is a new and welcome clarity with which the report demonstrates that all systems—State capitalist, private capitalist or mixed —are threatened by the deepening curse which afflicts the economic, monetary and social arrangements to which all systems in all countries seem to cling.
Thirdly, the report is emphatic that the old adversarial assumptions and attitudes must be replaced by those of mutuality of interest. That is the truth that hurts. It comes up against all kinds of prejudice and selfishness—nationalistic, ideological, even religious—yet, as the report makes utterly clear, unless all States, unless all systems, indeed, unless all religions, accept the fact of mutual dependence, there can be no survival, let alone prosperity, for any of them. All systems go—if they do not come together. I believe that the leaders of these various systems exaggerate their importance. The facts of life, of danger and of opportunity, that link the people of Eastern Europe with the people of Western Europe, like those that link the people of the North and of the South, are far more compelling and important than the persistent patina of the special pleading of the ideologists.
But things are changing. We see it in some of the iniatives pursued by our own Foreign Secretary, in a reaching forward, not for an adversarial advantage but for
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the opportunity of co-operation. The peace of the world, at least freedom from a third world war, shows that co-existence is possible. That is the meaning of the period from 1945 to 1980. Co-existence takes place. Now, it must be co-survival. Co-existence can succeed by restraint;co-survival needs something positive. It needs initiative. This is the third important point made by this report.
My Lords, the fourth point is what my noble friend has so admirably illustrated: that the wider the gap between rich and poor regions, the more likely it is that tension, instead of détente, will take over. If a starving man cannot get food for his children he will come and get it;and somehow he will arm himself in order to get it. Indeed, it was one of the melancholy facts of the last 10 to 15 years that, proportionately, the less-developed countries, the poorer countries, are more clamant to buy armaments, more keen, more insistent on buying armaments, than are the developed countries. There are the tears in this thing: when they need every penny that they can spare to develop the life of their people, somehow they feel they must arm themselves for some contingency.
The report seeks ways to narrow the gap between rich and poor;and some very glaring examples of disparity between the wealth and well-being of North and South are given us. For instance, the developed North has only one-quarter of the population but 80 per cent. of the world's income and 90 per cent. of the world's manufacturing capacity. Moreover, it consumes, often wastefully, 85 per cent. of the world's oil production. Those are the startling facts of the imbalance between the developed and the less-developed world. It must be corrected;the gap must be narrowed—for political as well as moral reasons, for practical as well as ethical reasons.
On the other hand, as we have heard, probably more than eight hundred million people in the undeveloped world live in what the report describes as absolute poverty;that is, well below subsistence levels. Consequently many of them—and many of us have seen this on the spot in these countries—lack the energy, mental and physical, to make the most of themselves and the most of their countries' resources. A kind of persistent lethargy, a hopelessness

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and a haplessness grips an entire community. At the same time, there are in the North some 20 million people, many of them highly skilled, who are unemployed. We have something like £175 thousand million worth of productive capacity lying idle every year. The problem is to activate the idle skill and plant of the developed North, not to make constant donations to the less developed South, but to use it to trigger off production in the South which will create the income and the employment which in turn will create the normal market for these things in the North. One market of course begets the other. The only way we can pay for what we buy is to produce something that the other fellow from whom we want to buy wants to get from us.
There is no doubt that the market is there. Despite this poverty, a third of all the exports of the North go to Third World countries already, and it could be much more given the kind of massive investment by the North in the South which the report urges and indeed endeavours to quantify. The report goes on to suggest a new approach to development finance based on a system of compulsory levies on all countries. For instance, a worldwide progressive tax based on national income, or revenues raised on what is known as global commons—the global domain such as seabed minerals—or a tax on arms production and exports. I think that that is a Swedish concept. It is very attractive.
Less attractive is the proposal—it is not a recommendation but it is given the imprimatur of the report—to tax international trade. One would not expect that one to get very far at a time of looming recession in world trade, when everybody is desperately trying to expand international trade or at least prevent its further contraction by removing as many tariff and non-tariff restrictions as possible. Perhaps that part of the report was written in early 1978 before the hard facts of recessive life were upon us.
Nevertheless, the main thrust of this part of the report is in the right direction. It regards what it calls the massive transfer of resources—I like the word "investment "—in the underdeveloped world by the North in the South not only
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as a moral imperative to rescue hundreds of millions of human beings from deadly crippling poverty, but also as a practical necessity for the survival of the North as well as the rest of the world—perhaps particularly the North, the industrialised North and West, the Free World. It depends so much on assured access to raw materials, including oil and commodities. The mutuality of interest is very clear indeed.
The major engine of development is finance, and the report makes wide-ranging suggestions, as we have heard, about the reform of the structure and the policy of some of the more important international financial agencies, including the World Bank and the IMF. I was interested to read the reference to the IMF which we are told should be a little bit less prone to impose socially restrictive policies on less developed countries as a condition of assisting them. I am sure that this report will be studied with very great interest—with receptive interest—in the IMF.
More promising, perhaps, is the recommendation that the industrialised countries should definitely meet the present targets of 0.7 per cent. of GNP for official aid to developing countries, and to do so by 1985. That will yield about £30 thousand million extra per annum by that date. It will go a very long way indeed to "beef "up—as is needed—this massive investment from the North to the South in the way the report recommends. Together with strong policies on lending, these injections might indeed trigger off a significant development in countries which are now inert: countries dragging out an existence of poverty, ignorance and disease with their potential as sources of raw materials and as markets unrealised. The report also calls for a global strategy on oil, with the oil-producing countries guaranteeing production levels and avoiding abrupt and disruptive increases in prices.
This is one of the most important single elements in the worsening situation economically and financially in the past decade or so. Since 1973 the intensification of inflation, the disruption of the exchanges, and the acute embarrassment of the national economies, can be traced in part at least to the way in which oil prices have, as it were, without warning

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doubled, trebled, quadrupled and quin- tupled. As the report suggests, such a strategy—a new stability in the prices of essential materials such as oil—is vital to both developed and developing countries. One welcomes also the emphasis on world food supply—and I was glad to hear my noble friend Lord Listowel make an important point on this—and, in particular, new international arrangements to ensure the supply and reserve storage of grain. We are all in this together. The first requisite of everybody in every country is food;it is probably of higher priority than oil. We must all have food. They must all have grain in Russia, and the needs of different countries may help the creation of a practical mutuality of interest. Many of the less developed countries are indeed potential sources of food, given the right investment in agricultural technology, training and infrastructure. At the same time, they are the most vulnerable to hunger and to famine.
I often think that the problem of food production rivals that of energy in worldwide importance. Since the Industrial Revolution, for about a century and a half, at least, manufacturers have somehow commanded higher prestige and prices than agricultural production. This is changing and it should no longer he assumed that a naturally agriculturally-based country or region must, for prestige purposes as well as assumed economic reasons, have also a considerable manu-facturing industry.
The report here and there tends to repeat this assumption. One would have hoped for a reasoned argument for the development of many underdeveloped countries on modern agricultural lines which of course entails a very wide range of technology and derivative industry. There is still something to be said for the teachings of Adam Smith from time to time, although my friend Professor Milton Friedman has no idea what it is as yet. This specialisation of regions, dictated by climate and maybe temperament—a variety of compelling circumstances—may indicate the most natural and profitable activity for an area. We should not distort it by deferring to what is very often a sense of prestige—" We must have a motor car industry ", and so on. You need not have. Your own resources and your own circumstances will generate the appropriate industry if you work at it.
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The excellent analysis of the report prepared by the Overseas Development Institute gives this interpretation of this section of the report—and I hope it is correct:
" The central aim is to build up the productive system of the poorest countries through large-scale investment in the development of natural resources and infrastructure."
The report will have done a great service to the entire world, and not least to the underdeveloped countries themselves, if it gets that message across. That is certainly the right approach. There is no need to reproduce Dagenham in Dakar or vice versa. Let countries and regions do their own thing, with comparable prestige and reward and providing complemental markets.
To conclude, my Lords, I have said that the report is a State paper for all countries and all Governments. It is in truth a programme for survival. No one, I hope, will minimise the urgency of the problems it analyses;and it looks to a summit meeting of representatives of Governments drawn from all parts of the world. It does not hold out much hope that the Communist countries will take part, but it is vital that they should. There is bound to be an unreality about the report itself and about any summit that is convened which is not global in composition and intention. While I agree with my noble friend that we should do everything we can to persuade our own Government, and that other countries should try to persuade their democratic Governments, to give the fullest attention to this report, I think we must speak clearly to our prospective partners in Eastern Europe, in the Soviet Union and in China and say: "Here is this report: it analyses the dangers which threaten you and us;it indicates important solutions which cannot be effectively carried out without you and us".
Therefore, with a mutuality of interest which not only binds North and South but also East and West, I think the next step is to talk clearly and constructively to our counterparts in the Communist regions. All countries and all systems face a common threat to their survival. It should be the aim of this report not only to persuade the North to help the South hut also to persuade East and West to work together so that they survive together.
4.4 p.m.
Lord CHORLEY: My Lords, I am fortunate to be able to make my maiden speech on a subject as important as the Brandt Report. Its subject matter has interested me for some 20 years, although my own experience has been rather moreနshall I say?နat the coal face than concerned with international conferences and commissions. if one is to find a text for the report I should rather like to take Browning's:
" Ah, but a man's reach should exceed his grasp,
Or what's heaven for?"
There is running through the report, and particularly in the passage by Herr Brandt, a sense of stretching out for goals that are barely attainable and an idealism which I found extremely attractive. May I add how refreshing it is to read a report which is written in such good English? But, just as important, the report argues, I thought convincingly, that it is just as much in the North's interest to foster development for our own good, both politically and in a global sense, for sound, if currently unfashionable, Keynesian reasons.
As the noble Earl, Lord Listowel, reminds us, ten years ago Mr. Lester Pearson chaired a commission of equal distinction. Their report, which was also widely acclaimed, concentrated rather more narrowly on what might be called conventional aid. In contrast the canvas of this new report is much wider and recognisesနthis, I think, is perhaps the most important pointနthat Third World development depends upon a whole range of other factors, such as North/South trade, the role of multi-national corporations, balance-of-payments difficulties and the world monetary system, to name but a few.
In 1971, following the publication of the Pearson Report, the United Nations General Assembly adopted by acclamation an overall strategy which was to achieve a growth rate in the developing countries of at least 6 per cent. The target per capita was for an annual average increase of 3½per cent. In the event, the estimated growth rate is likely to be at best 5.2 per cent. and only 2.8 per cent. per capita. For the countries that matter, the poorest countries, with 61 per cent. of the population, the per capita growth
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rate was only 1–7 per cent., and in Africa a mere 0.2 per cent., which is effectively stagnation.
The first point I want to make, which may seem a bit pedantic, is this—and I use the forceful words of Mr. Robert McNamara in a recent speech:
" There is little point in establishing overall targets which the poorest countries have no hope whatsoever of achieving".
It is for that reason that I find it disconcerting to read of an UNCTAD estimate, which is referred to in the report, of the external capital need to support a 3½per cent. per capita growth rate for the least developed countries in the next two decades. It seems to me that an understanding of the problems of development and how to resolve them in those countries is not going to be advanced by giving the impression that average growth rates can be doubled in such a short time and, even more, that merely supplying sufficient funds will do the trick. Even to achieve far more modest targets requires, according to the World Bank, very bold assumptions both for the economies of the South and in terms of the growth rate of the OECD countries.
Development is not just a rather mechanical business of supplying funds. It is a much more subtle and complex process in which institutional and human factors are often the dominant constraint. The constraints may be of tradition and religion, land tenure, education, inexperienced public administrations, inadequate managerial infrastructures or inappropriate social and economic policies. Some of these problems take a long time to resolve and tend to limit a country's capacity to absorb funds. All this is much better appreciated today than it was 10 or 20 years ago, and organisations such as the World Bank nowadays pay them a great deal of attention particularly at a project level;hut I must confess that I thought the Brandt Report dismissed the problem of absorbtive capacity rather too lightly.
I should like, if I may, to illustrate the sort of problems that arise in practice by examples from the electric power sector, with which I am familiar. Too often one finds, usually for reasons of ignorance or political expediency, that both the level and the structure of tariffs do not reflect economic costs. Again, it is not uncommon to find that anything between

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30 and 40 per cent. of electricity supplied is not charged for. The reasons are various. For example, apart from the normal transmission losses, one finds that meters have broken down because of inadequate maintenance. Meters are not read and fraud and theft are extensive. In one country I have been to recently I found the little stores depot had no fewer than six different sorts of meters from Iron Curtain countries. It seems to me quite impossible to run a sensible maintenance workshop if you have an array of meters of that sort. This, as I say, is not untypical. It may be argued that it is wrong to apply Western standards to this sort of thing, but I do not think that gets to the point. A poor country simply cannot afford such losses, which often directly impinge on a very weak balance of payments.
Diagnosis of these problems is the easy part;carrying through effective remedies is much more difficult. It is usually a human problem because it involves people's motivations and attitudes—often down to a grass roots level, such as to the people who read meters. Change of this nature takes time so that it is not surprising that projects take a long time to get off the ground, but it is the stuff of development. It is here that technical assistance, provided that it is imaginative and that there is a long term follow-through—two very important "ifs "—can be highly effective, particularly in getting better use from existing investment let alone new projects. I believe that this is a field of great opportunities.
I suppose I should declare an interest at this point since my firm undertakes a considerable amount of work of this sort for the aid agencies and for Governments. If I may be forgiven a personal note, in our own affairs we do just what I am preaching. We have a vital interest in strengthening our offices in Third World countries. We do this by technical assistance, particularly in the form of staff exchanges—in both directions and on a quite large scale.
It is against this background that one needs to view the recommendation that official aid levels need to be more than doubled by 1985. In the present climate, and however strong the Keynesian arguments, this seems to me to be unrealistic.
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The Pearson Commission made the same sort of recommendation in much more favourable circumstances ten years ago and, as we have heard, the actual amount of aid in terms of GNP fell slightly. We now learn that the United States, Germany and Japan have said that they will not significantly increase their aid levels over the next five years. It sounds as though Her Majesty's Government are saying much the same thing. It is important to be realistic. Planning can only take place effectively on that basis.
If these are to be the circumstances over the next five years, what should be done? First, I hope that it is reasonable to assume that official aid will not be reduced. Secondly, much more effort needs to go into tackling what I loosely call managerial and organisational problems through technical assistance. Thirdly we need to develop as fast as possible imaginative arrangements such as those of the LoméConventions;for example, commodity schemes and improved access to Northern markets. Last but not least, the private sector needs greater encouragement. I shall come to that point in more detail in a moment.
However, I believe that there is an even more urgent issue;namely, the balance of payments problem. After the 1973–74 oil price increase, the recycling problem was handled to a major extent by the commercial banks. That was a remarkable achievement, even though in some cases it was not perhaps to the long term good of the recipient countries, nor did it always strengthen a bank's balance sheet. Today, it seems highly doubtful whether the commercial banks will be able to step into the breach to the same extent again. The burden will tend to fall on official bodies, probably the International Monetary Fund, and whether it should be done through existing or new instruments remains to be seen. For some countries debt service ratios are now poor. Therefore, it will be even more important to distinguish between the support needed to adjust to the new situation and the support sought to fund deficits arising from levels of expenditure which, regrettably, can no longer be sustained in the long term. The transition will not be easy and will require tolerance on both sides.

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Before bringing my remarks to a close, I should like to mention two other points. One, which I was glad to see recognised in the report, is the brain drain of skilled managers and professionals to the North. Obviously this is often a question of money —but not always. Often it is sheer frustration. I am sure that many of your Lordships have come across people from the South who, for one reason or another, or through travelling from one post to another, have come to the North. The loss to the countries from which they come, although the numbers are relatively small, is enormous.
The other point which I should like to mention and which I believe the report rather underrated is the role of the private sector. I fear that it is a habit of planners to forget the entrepreneur, whether he be peasant or business proprietor. In the event, he tends to be, at best, not encouraged and, at worst—certainly in some countries—held back so that a major engine for growth is stunted. There are exceptions, but I believe they rather prove my point. I also put in a plea for greater recognition of the role that our own overseas banks and trading companies can play. I am not thinking of co-financing arrangements so much as making better use of their experience in Third World private sector commercial and industrial investment. They have the knowledge, skill and finance to fill in the gaps which the planners often tend to miss.
I began my remarks with a quotation from Browning. In the light of that challenge, my own response may seem to be rather faint-hearted, but that is certainly not my intention. My reservations relate to practical problems which need to be thought about and opportunities which need to be exploited. Progress depends on imagination. I wish the report Bon voyage and I hope that the Government will be able to do the same.
4.17 p.m.
Lord VERNON: My Lords, it is my pleasant duty to congratulate the noble Lord, Lord Chorley, on his maiden speech. He chose a most stimulating subject and acquitted himself with distinction. We all look forward to hearing, him again. With the exception of the
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need to prevent the outbreak of nuclear war, there is no subject more important or of greater urgency than that chosen by the noble Earl, Lord Listowel, today. I wish to express from these Benches our gratitude to him and our thanks for the way in which he introduced the Motion.
This is an urgent matter because it relates to the survival of the human race—not survival in the short term but certainly in the medium term. Some of your Lordships may have seen a letter in The Times on 27th February from Mr. Victor Gordon who said this of the Brandt Report:
" To accept the argument that developed countries threaten the planet with pollution and resource exhaustion, hut at the same time demand intensified efforts to develop the under-developed countries is contradictory, stupid and very dangerous. The developed countries do not know how to run their own economies, and societies—let alone anyone else's
Mr. Gordon concludes by saying:
" Sir, there are no poor countries, only over-populated ones—our own included".
I have some sympathy with those remarks, even though they may be exaggerated. There is a basic contradiction in the argument, and it would be dishonest not to admit that a degree of paradox exists. Where I differ from Mr. Gordon is in the remedy he advocates: namely, that we should stop so-called "aid to Third World countries and leave them to stew in their own juice. I do not think that would be practicable, even if it were desirable. We are now one world and somehow, whatever the difficulties, we must try to solve our problems together.
I propose to confine my remarks largely to that aspect of the report dealing with the link between poverty and high birth rates. A number of sobering forecasts are given. The increase in world population from the present figure of 4½billion to 6½billion within the next 20 years is virtually certain. That is the case because the prospective parents of the new children have already been born.
What happens after the next 20 years is more problematical. It will depend on the decline in the level of fertility, and according to the report we could end up with a world population of anything between 8 billion and 15 billion within 100 years. My own guess is that it will

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be nearer 15 billion than 8 billion, and I think that the report tends towards over-optimism. Bearing in mind the appalling conditions which already exist in many of these countries—the malnutrition, the starvation, the lack of housing, the unemployment, the shanty towns and over-urbanisation—I am only glad that I shall not be alive to witness the social and economic problems which such an explosion will provide.
The report draws attention to the recent welcome trend of fertility decline in some countries. This is certainly encouraging, especially in China which contains nearly one-quarter of the world's population. But I do not think we should be too euphoric. There are still large areas of the world—the whole of Africa, for example—where no decline has taken place, and indeed in some cases the population growth is accelerating. The latest figures that 1 have seen for Kenya show that the population will double within the next 18 years—the fastest growth rate in the world.
When I was working in Kenya about 20 years ago, I remember seeing the Kikuyu women going further and further each day in search of their load of firewood, which they brought back strapped to their foreheads. Women's Lib had not reached Kenya in those days, and I doubt whether it has reached it now. But the time must come fairly soon when there are no more forests for them to plunder.
Last week I asked a Question in your Lordships' House about the alarming rate of destruction of tropical forest. The disappointing reply which I received indicated that the Government were not very concerned. Yes, forest was being depleted, but there was an awful lot left —that was the gist of the reply—and there was not very much to worry about. But this complacency is not shared by the Brandt Commission. They explain, on page 83 and on page 114, the disastrous effects of the present rates of deforestation —this has already been touched on by the noble Lord, Lord Tanlaw—how the firewood crisis of the poor has an indirect effect oil the food supply, because of the diversion of dung from its proper use as a fertiliser, and how the world's ecological system and climate may be gravely threatened. So I hope that when the Government have had more time to
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consider the implications of the forestry aspect, they will take a less negative view.
Then, my Lords, take the cases of India and Bangladesh, and here I move from deforestation back to population, though, Heaven knows, the firewood crisis applies to India as much as it does to any other country in the world. In spite of the most strenuous efforts by the Indian Government—efforts which may at times have been misjudged and for which, to my mind, Mrs. Gandhi has been most unjustly condemned—the birthrate continues at an alarming level. As Richard Wigg, in one of his series of articles from South India in The Times on 4th March put it:
" The doubling of its population over the past 40 years, has been the greatest single obstacle across India's path to progress. The country has ' voted by the genitals ' to negate its own economic gains".
In Bangladesh, the position is even worse than it is in India. Already the most densely populated country in the world, it will double itself within 24 years. What we have to do is to try to ensure that India and other developing countries do not negate in the next 40 years the same economic gains as they have negated in the past. This can be done only by introducing economic development, hand in hand with population policies. One is useless without the other. And, of course, economic development means in this context education and the emancipation of women. It is largely the lack of education in India, especially of Indian women in the countryside, which is responsible for the relative lack of success in controlling population growth in that country.
The effect of education is well illustrated in Sri Lanka, which has a high literacy rate, and which I was fortunate enough to visit last August as a member of the British delegation attending the Parliamentary Conference on Population and Development. It is a small country and an impoverished one, but its record is impressive. It has already reduced its birth rate to 26 per 1,000 which is low by Third World standards. Population control is stressed at all levels, from government departments down to village schools. The British Government have given—and wisely given, in my view —substantial economic aid to Sri Lanka for the Mahaweli dam project. This will bring many hectares of uncultivated land

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into agricultural use. But the Sri Lankans are well aware that more land is not available for indefinite projects of this kind. It will merely give them a breathing space in which to settle some of their surplus population, until such time as they can achieve zero population growth.
What are the lessons for us in the United Kingdom? I believe that there are several. First, we should—subject to one important condition—keep up, and if possible increase, our aid to the developing countries, whether bilateral or multilateral;and here I support strongly what was said by the noble Earl, Lord Listowel. As the Brandt Report makes clear, it is in our own interest to do so. But the condition is that such aid must take account of population policies, or the lack of them, in the countries concerned. Aid to Sri Lanka is an example of aid well spent. Aid to a country which is taking no steps to curb population growth, is money poured down the drain. It is useless and it is an insult to the British taxpayer who has to foot the bill.
Secondly, a higher proportion of our total aid should be tied to population projects. Of the present £706 million given annually in overseas aid, only £7 million is tied to such projects;that is, 1 per cent. Even if this were increased to 2 per cent. or £14 million, it would still leave £700 million for overseas aid in general. I really do ask the Government to consider whether or not some reallocation of resources in this way would be appropriate.
Thirdly, I believe that we in the West have to do more to educate our own people to understand the gravity of the crisis with which the world is threatened. I believe that there is profound ignorance at all levels. The ignorance starts with Ministers and it pervades the whole body politic. It is hardly surprising that the average man and woman in the street has no idea of the transformation in social conditions which must be expected as a result of the doubling of the world's population within a generation.
Within the last two years a parliamentary group under the chairmanship of Lord Houghton of Sowerby has come into existence with a view to stimulating parliamentary interest in Westminster. But, in my view, the process should extend
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well beyond the confines of Parliament. I believe that education on population and development should start in our schools, just as it starts in Sri Lankan schools, and that adult awareness should be achieved in every way possible, including through the medium of television, especially when the fourth channel comes into operation. Surely the Government have a big part to play here. They can give enormous encouragement, if they choose.
The report covers an enormous field and I have covered only one small aspect of it. What is to me important is that it is not the brain child of academics, however brilliant, but the distilled wisdom of some of the world's most distinguished statesmen—statesmen who have practical experience of the issues and the difficulties involved. So I hope that when the Government have had time to digest it—and as it was printed only yesterday they have not had much time so far—they will look very carefully at the recommendations of the Brandt Report. It seems to me that they are so important that it is incumbent on the Government to give them the most sympathetic consideration.
Baroness GAITSKELL: My Lords, before the noble Lord sits down, may I ask him one question? The noble Lord knows that I sympathise with him totally about birth control, but may I ask him whether he remembers that at the Bucharest Population Conference practically every country got up and said, "We do not want just your aid;we want your know-how." That is something we must always take into consideration when we talk about birth control.
Lord VERNON: My Lords, I take the point of the noble Baroness, and I am sure that the Brandt Commission have taken it also.
4.34 p.m.
Lord RITCHIE-CALDER: My Lords, I join your Lordships and the previous speaker, Lord Vernon, in congratulating the noble Lord, Lord Chorley, on his excellent maiden speech. We hope that we shall hear him many times. The Brandt Report is very significant. As the papers very properly say, it is the most important document which has been produced in Britain this year. But it is more than that. It is an historic docu-

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ment, in the ultimate sense of the word. It can either be treated as a Domesday Book in William the Conqueror's sense of the word or it can be treated as a Domesday Book in terms of the Apocalypse. We are assessing here the world's resources and the nature of the world's problems which can be resolved by the handling of these resources—within those resources, naturally I include human resources—and how we can deal, in a chaotic world, with situations which are so out of hand at the moment that, no matter where we live, in fact, as the report makes clear in all its analyses, we are heading for very, very serious trouble.
As I have said, the report is historic. We have had many reports in the past, including the Pearson Report which, as has been pointed out, was an analysis of how we are going and where we are going. This is a completely new look. It embodies what I, from my own personal experience, regard as the lessons of the last 30 years—lessons which have been consistently and very considerably ignored. Thirty years ago through the UN we embarked upon this great experiment in social development.
It was a great experiment in which for the first time in man's history Governments took responsibility for populations other than their own. We moved in with the special agencies of the United Nations;we moved in with the World Bank and the International Monetary Fund;and we moved in with technical assistance to try to transfer our existing experience and knowledge to those who could benefit from it. My experience of the last 30 years has been very trying. When I speak about population, I have to say that I am one of those people who can always put names and faces to statistics;and that is very sobering when you look back and think about the suffering which you have seen and which you thought you were getting rid of and then you see the extension of that suffering simply by people's omissions.
Naturally, I am impressed by the Brandt Report. I am very much impressed by Willy Brandt's personal introduction in which he says what is the hard and regrettable truth about most politicians and statesmen. On page 9 of the report he says:
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" But it is none the less true that, as a head of government, other priorities took up most of my time and kept me from realizing the full importance of North-South issues. I certainly did not give enough attention to those of my colleagues who at that time advocated a reappraisal of our priorities".
As has been said by the noble Lord, Lord Vernon, this is a peculiarly important document in another sense. It has not been produced by eggheads but by experienced statesmen, including our own Mr. Edward Heath. But I think that what Willy Brandt says is probably true of the lot of them; not that they had been disregarding the world at large but that they had been preoccupied with other things which kept them from realising what is now being impressed upon us;namely, the quite enormous significance of this North-South situation, a situation which, as has been said, is in its way as dangerous as the risks of nuclear war—and which may include nuclear war if we neglect it. That is something which we must get to grips with, and I think the report has quite admirably got to grips with it.
It has been said that there is nothing very new or original in the ideas that it contains—that it has all been said before. Certainly it has been said before in the variety of the conferences which I have attended during all these years. But the report is very important in this sense: it accepts, recognises, analyses and gives authority to those who a few years ago would have been regarded purely as "cranky". We have now got authority —when I say "we "I mean the people who have had this intimate and active concern in the actual interventionist sense —and we are now beginning to make our point clear. One of the points which we must recognise in this approach to the development of the world is that it cannot be a "we "and "they "situation.
I think I have previously quoted in your Lordships' House the poem of Rudyard Kipling, Debits and Credits:
" Father and mother and me Sister and auntie say,
All good people like us are We '
And everyone else is ' They '.
And ' They ' live over the sea,
While ' We' live over the way.
But would you believe it,
would you believe it
They look upon ' We '
As only a sort of ' They '? "

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This is no longer a "we "and "they "situation. As the Brandt Report made manifestly clear, we are all in it together. It is not a question of where we are looking for our prestige;and it is not even a question of where we are looking for gratitude. One of the things which I am afraid comes through too often is the fact that we have been treating this as a problem of charity. This is not a problem of charity;it is a problem of investment, and I agree with my noble friend Lord Goronwy-Roberts that in fact we should speak about investment and not about just the sharing of resources. Aid in this sense is the sharing of resources and, as I always say, that includes human resources.
We now have here an analysis, a study, suggestions, substantiations and so forth, of arguments. What we have to do now is to look around and see things clearly at this late hour—and I assure your Lordships that it is a very late hour because of what has failed to happen in the last 30 years. I did a report for the Secretary General of the United Nations on the application of science and technology in the developing countries. I travelled the world to cover it, and when I came to write that report and, finally, to present it, the Secretariat of the UN said, "What are we going to call this report?". I said, "Call it The Years that the Locusts have Eaten "—the years of the lost opportunities, because the evidence had been plain and we neglected the evidence. I may say that we did not call it that;we called it New Dimension and New Opportunities. That is the way in which we now approach the world's problems in general—hoping we have profited from our mistakes.
I say emphatically that this report, to a degree which has not been evident in most studies of this kind, recognises the fact that so often the mistakes we made were made always with the best intentions. There may have been some mischief-making on the commercial side, but in terms of what we, as people, were trying to do, it was with the best intentions. It often went wrong, and it went wrong for a very good reason: that was that we gave them what we knew they needed without ever asking them what they wanted. So nothing could stick: it was a graft that
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would not take. We were imposing our ideas as to what culturally, and indeed ideologically, we wanted and without ever thinking for one moment that they might have different ideas and aspirations and culture from those we had.
This has meant the failure of our work: not just the fact that we were wrong in trying to do it;it just did not work and could not work. So now we have here, I think, a proper appraisal: the exposure of the great, gaping and ghastly wounds that in some cases we have inflicted on the international community in the last 30 years. Because we tried to do this business of saying, "We are so much better and so much wiser than you are". That was wrong because our ultimate wisdom did not even work when it was on the ground;we did not even get the "comeback "from it. This means that we must think again and as this report makes clear, thinking again means that there is no sense in today's world monetary policy. We must find new mechanisms. There is also a great deal of criticism, in which I have certainly joined—with a great many of my friends who are intimate with the workings of the United Nations' agencies —in saying that we must have another look at how the United Nations works. We are not trying to destroy the international order, but are simply saying that after 30 years there are many practical ways in which the organisation can be improved.
One thing is lacking in this report—and this is not a recrimination. I am surprised, in the light of the breadth and depth of the report, how little account has been taken of what in fact is now, I suggest, a major factor in thinking about global problems: the development of the resources of the sea. We are now entering the ninth session of the Law of the Sea Conference and we hope within a year to get a law of the sea convention, but in all the discussions and all the implications of the law of the sea there has to be what this report is asking for;namely, a new approach, a new type of thinking, a new "institutionalising "beyond the narrowness of simply national bargaining.
Bargaining is going on on the Law of the Sea Conference, but in the ultimate what we are really looking for is some kind of order for the oceans which in fact would provide a model for what should he possible in terms of international co-opera-

1113
tion. As I have said, we want an adequate, properly conceived and inspired international seabed authority and we want the "International Enterprise", technologically to develop the oceans as the common heritage. All the things that are going on in the ocean debates at the moment concern all the people we are talking about, including the 40 landlocked countries. In the work that I have been doing on the law of the sea we have been literally, physically and geographically in the coastal countries of Africa, Asia and Latin America, saying "Look what you are taking on. You are taking on the 200-mile limit, you are claiming the resources of the sea bottom, you are claiming to control the environment of the coastal waters, and you are trying to get economic advantage from this, and still saying that you are not going to be exploited in the way that the colonial countries of the 19th century were exploited in terms of the extraction of resources". They want to have a say in what is done.
This is a very big problem because the peoples of the developing countries must acquire the kind of experience which will make it possible for them to cope. They need not just the ultimate technology, but the knowledge how to choose the technology before one even gets into the technology. Otherwise, as will certainly happen in the case of the sea, the whole of the ocean bed development, the mining and everything else, will be taken over not only by the multinational corporations but by congLomérates of them, to the extent that we shall not be able to identify the nationality of the components. What we are talking about here is development through the transfer of knowledge and skills from North to South, and indeed an exchange of resources. All my experience of 30 years has taught me that this is not in fact charity;it is not aid in the narrow sense of giving: it is in fact mutual aid in which we are getting as much back as we are putting in, in all senses of the word.
4.50 p.m.
The Lord Bishop of DERBY: My Lords, there is a danger that we should so concentrate on the details of this report at this stage and begin to criticise them and qualify them that we render the whole report nugatory. That would be disastrous not only for ourselves but for the world
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in general. I should like to reiterate what was said by the noble Lord, Lord Chorley, in his fine maiden speech about the vision of this report and the fact that it is worldwide in its range. It represents to us the interdependence of the different parts of the world and the different races in a moving and challenging way. We need to be facing this challenge with all its urgency.
In the report there seems to be something of the nature of prophecy, seeing the vision, accepting its challenge and then showing the way forward, the path which people need to take if they are to realise the vision. A striking thing about it is that it is completely lacking in the kind of patronage which we and other western countries so easily adopted in generations past. We are shown that we ourselves are dependent on the developing countries, and this is a recognition that needs to be given fully. So I see in this report a great responsibility laid on any who have the well being of humanity at heart, and within this I see a particular responsibility for the Christian Churches and their leaders.
I think that we shall be failing greatly if we do not give this report priority in a great deal of our thinking. But it is also a particular responsibility laid on Members of this House and Members of the House of Commons, and I share the gratitude to the noble Earl, Lord Listowel, for bringing this report at this early stage before the House, because attention needs to be given to it. But within the total parliamentary responsibility Her Majesty's Government, whatever Government may be in office at this particular time, have a special responsibility. Successive Governments have done a great deal, but the stance of the Government in power, as the noble Lord, Lord Vernon, has implied, is of particular importance in determining attitudes and actions in the community in general.
There is one general criticism that some people have made and that is the appeal to self-interest. The criticism is made as though this was something new. In fact, it is a principle on which people act in a large part of their lives, because few actions are performed from utterly pure motives. Self-interest very often strengthens and supports good motives. This is demonstrated continually in the

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way in which people are moved to be honest and speak the truth. But here is more than self-interest;here is mutual self-interest, and mutual self-interest moved by justice and compassion.
There must be many people who find in the report something of an answer to their quest and their deep longing for world peace. How is this to be secured?
There is a fine sentence:
" More arms are not making mankind safer, only poorer.".
This is something which we need to grasp. I do not question the need for weapons of defence, but it is increasingly clear that the main threat to the western position is from subversion, and therefore it is best countered by non-military means. The battle is for the hearts and minds of ordinary people around the world, and this is one reason why the proposals in this report are of such urgent importance.
Another point at which interest and concern in this country could be kindled is the awareness of world hunger. Something has been done to bring this into people's consciousness and the consciousness is becoming more concerned, but a great deal more needs to be done. So the need is for the global food programme—one part of the four-part emergency programme for the coming five years that the report outlines. Along with this go the needs for health and education, and the need for people in other countries in the South to be themselves able to earn a reasonable income. This is part of the way in which our mutual dependence can develop.
The report stresses, and rightly stresses, the quality of aid, and we need to go on stressing that. We need to ask, for example, what tools and techniques are needed by the ordinary worker in other countries if progress is to be made. Doing this would help to avoid the kind of haste which has occurred because of indiscriminate charity and the corruption that exists in some cases where it has been given. We have Intermediate Technology UK, which has been well supported by Her Majesty's Government over the past few years. There is the American counterpart, Appropriate Technology International, but we ought not to ignore the new financial appeal of the Schumacher Centre for Appropriate Technology. This
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country can give a great lead in this field, but we should acknowledge gratefully what has already been done.
We are, however, being asked to double official development assistance. Is this unrealistic? Yes, to some extent it is. The phrase has been used, "the relevance of an impossible ethical ideal ", and we can say the same sort of thing about some things being unrealistic. Here is the kind of unrealistic vision which can be realised, if the people have the will to realise it. Of course, there is a need for an enormous change of mind, something of a conversion on the part of people in general. No Government can do this without popular opinion being ready for this new outlook. But a Government can give a lead. Its own moral convictions and its deeds are important. So I hope that Her Majesty's Government will support this report in its whole world of ideas, but also I hope, as has been suggested already, that it will not cut its present aid, but increase it. I recognise the need for cuts in expenditure at the present time but there must be discrimination. A reduction in what is given to overseas aid would not only be disastrous in itself but would represent something seriously wrong in the whole attitude and understanding of the people of this country.
In conclusion, in these days when the parable of the Good Samaritan is becoming part of the stock in trade of political speeches, perhaps I may be allowed to make some reference to that. The parables of Jesus are not allegories, although they have frequently been interpreted in that manner, so that we cannot argue that the priest and Levite passed by because they were having to cut their personal expenditure. The parable was told in answer to the question, "Who is my neighbour?", asked by the lawyer wanting to vindicate himself. But, as always with parables, the way in which Jesus deals with them at the end is the crucial point, and what he does is to turn the question right round. He does not answer the question "Who is my neighbour ", but asks, "Which do you think was neighbour to the man who fell into the hands of the robbers?" It is always our response to the situation which matters, and not our attempting to decide who the limited group of people are to whom the help must be given. "Go and do as he did" was the result.

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Charity, love of neighbour, expresses itself corporately in justice which is brought about by a mutual sharing of resources, and this in general and in particular is what this splendid report urges us to do.
5 p.m.
Lord TAYLOR of GRYFE: My Lords, the congratulations of this House are due to two noble Lords. First, they are due to the noble Earl, Lord Listowel, because I believe that this is the first legislature that has debated and discussed this important international document. We are, therefore, indebted to him for having given us the opportunity of a "first". Secondly, the congratulations of the House are, of course, due to the noble Lord, Lord Chorley, who spoke with such distinction and knowledge of the subject that is before us.
We are fortunate in the House of Lords to be able to assemble a fair range of expertise, knowledge and experience when we address ourselves to problems of this kind. Of course, it has been said by almost every speaker who has participated in this debate that, unless we face and deal with the issues which have been raised, we shall not survive. Perhaps we say it so often, and have been saying it so often, that it tends to become rather meaningless and a cliché. However, if we look at the fabric of Western society or of the world community we can see that it is already shredding here and there. We see the uncertainties, the difficulties and the insecurity which are threatening the future of our society.
When I read the Brandt Report, two personal experiences came back to me. The first was when, during the war, London was suffering bombing, I made my way to a flat in Regent Square where there was a very wise old man with great prophetic wisdom. He sat amidst the ruins around him in Regent Square and contemplated the future of mankind. He said: "As a biologist, I have studied how species in the animal world survive or disappear. Those that disappear have been incapable of adapting to the environment in which they live. "Mr. H. G. Wells, contemplating the post-war world, and looking at the ruins around him made the same judgment on us. He said: "Unless we are able to create international
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institutions with authority recognising the fact that we have become one world "—and that is our environment—" and unless we adapt to those circumstances, mankind will perish. "It is interesting that in 1980 the Brandt Report repeats that judgment.
The other experience which came back to me on reading the Brandt Report is one which I share with the noble Lord, Lord Galpern. He and I entered the Glasgow City Council in the 1930s. At that time the infantile mortality rate in the East-end of Glasgow was 103 per thousand live births. In the West-end of Glasgow it was 23 per thousand live births. We were living in that city in a sense in the same situation as depicted in its much more extreme forms—the disparities are much greater—in the Brandt Report. We realised that there was no security, no community of spirit and no morality in a city which permitted these disparities. Because of our growing social awareness and because of growth in wealth-production, we were able to iron out some of those disparities and to create a better social environment for the children of Glasgow to live in. In a sense the Brandt Report paints that picture on a global scale. There is one part of our world living in affluence and another part living in mass poverty, and they are doing that within what we must recognize as one world community.
Nowadays there is no escape. I visit some parts of the world where there is great affluence and where people try to escape from responsibility. But there is no escape. We are interdependent and to the extent that we ignore the claims of the developing world we, in fact, shall suffer too. The central message of the Brandt Report is the mutuality and interdependence of the North and South.
The right reverend Prelate the Bishop of Derby who has just spoken, quoted the question asked by the lawyer in the parable;namely, "Who is my neighbour?". That was the challenge. Our neighbour is no longer the fellow next door or the other chap in Glasgow where I live: our neighbour is in other parts of the world. Our concern for our neighbour is the important point of the Brandt Report.

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It has been said that the Brandt Report arises at a most unfortunate time and that perhaps we should have paid attention to the Pearson Report of 10 years ago when we were not operating in an atmosphere of public spending cuts, cutbacks and so on. I do not believe that that is so. I believe that the Brandt Report has arrived at a most appropriate time—at a time when the world is looking for new directions, and the basis of modern Western society is being questioned and challenged. Any society which runs out of its momentum, its dynamic and its growth is difficult to justify. But if we look around the world today we can see that investment is slowing down, unemployment is increasing and the basic justification of our society, which was a growth society which contributed to the creation of increased wealth in the world, is now being questioned.
Is this not the time to try to inject new directions and even inject some idealism into the situation which is becoming dark with depression? I think that we must face these matters realistically. I mentioned that the basis of our society is being challenged. The uncertainties are there for all to see. Those of us who operate in the financial world will appreciate the great uncertainties that exist in the world's banking system. As has been said by the noble Lord, Lord Chorley, on the last occasion we were able to recycle the petro-dollars—a great achievement of the world banking system. We did it by various devices and notably the substantial development of the Eurocurrency markets.
If we look at the present situation of United States banking, which is central to the whole world's banking situation, we see that more than 50 per cent. of United States bank assets are now held in fixed interest stocks in a period of rising interest rates;that substantial commitments are at risk in Iran; that substantial loans are also at risk in the developing countries and that we are now engaged in international competition on interest rates. In order to combat its own internal inflation, one country after another is pushing up its interest rates day after day, and even with our higher interest rates today, there are suggestions that we may go even further. These are frightening prospects because if interest rates are
1120
pushed up to that extent, it becomes increasingly difficult to invest. That is bad for the West and for the growth of the economies of the West, but it is even worse for the developing countries who have to borrow substantially in international markets in order to finance their necessary progress.
The uncertainty in world financial markets is causing the OPEC countries to think again and to ask: "Where will we put these petrodollars if they cannot be recycled? "In that event they may be attracted to keep the oil in the ground, because it is an asset that will survive if it is kept there. A cut-back in oil production of the OPEC countries could certainly contribute to a general slowing down of the whole world economy. That is the threat that is before us. We are in a situation where we must move in new directions if we are to justify the existence of the kind of society that we all cherish and enjoy.
I should like to say a few words about investment and the importance of investment. I agree with the noble Lord, Lord Chorley, about the importance of private investment in developing countries. This may sound less morally justified than outright aid, but outright aid will never solve the problem of growth in the developing countries. Aid is extremely important, but the great and substantial influence for growth in the developing countries must come from encouragement of private investment. However, private investment must see that investment not as a rip off in old colonial terms;it must see that investment as a partnership and must provide for equity participation of the countries concerned in the growth of the economy and in the development of their material resources.
Therefore, there must be an attitude on the part of private investors to develop the partnership and have the exchange of personnel which the noble Lord, Lord Chorley, mentioned, and the exchange in technology. Partnership and not simply investment is the key. Private investors can live and develop for mutual advantages in these countries. The trouble about investment so far has been that these countries, because they are in a high-risk situation, have had to borrow short-term in order to finance long-term investment, on which there is a slow return

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and a delayed pay back. I am always fascinated by the fact that there is great excitement in British industry about going to China to sell power plants and other major capital items, or lining up to enjoy the excellent terms for supplying capital equipment to Eastern Europe and the Soviet Union. They feel that in these countries there is a degree of safety in long-term investment;these Governments tend to he around for a long time.
However, there is less certainty and, therefore, less enthusiasm in investmentof the developing countries. Perhaps the new international institutions about which the Brandt Report speaks can provide some kind of security and protection for private capital investment in some of these developing countries. The ECGD can only cover its normal insurance risks, but we must have a much greater protection if private capital is to be sufficiently encouraged to take the long-term views which are essential in the developing countries.
I should like to make one final point, and I apologise for speaking so long. There is one area that has not been discussed at great length in the debate so far, but to me it is a critical area. It is in relation to armaments. The figures quoted in the report state that we spend 450 billion dollars per annum on arms and that we spend 20 billion dollars per annum on aid. Surely that is an imbalance;surely we should realise that the mere pumping of arms into these areas creates the uncertainty and insecurity which we seek to avoid. Surely there are opportunities for initiatives in this direction. I read in the Financial Times yesterday that Uganda—poor old Uganda, suffering from a post-Amin hangover—will this year spend 23 per cent. of its budget on defence and 7 per cent. of its budget on agriculture, on which its economy depends. Its whole economy is based on agriculture, yet 7 per cent. only will go to agriculture but 23 per cent. to defence. It is that imbalance that we must help to correct and this is an area where we can take initiatives.
Finally, I come to the queston of aid, which has been mentioned. We are far short of the 0.7 per cent. which is the agreed target. We are far short—and I have quoted this before in this House—of the I per cent. of our GNP in this country which we gave in aid at the end of
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the last war, when this country was bombed and seriously disrupted by the years of war and destruction. We then gave I per cent. of our GNP for the reconstruction of Europe and the world. Those who believe that Communism can be contained by simply multiplying arms should read the figures quoted in the Brandt Report, which says that the United States gave 4 per cent. of its GNP to Marshall Aid, and it was Marshall Aid that was a major contributor to the defeat of the spread of Communism throughout the whole of Europe. Therefore, in addressing themselves to the challenge of the Brandt Report, I hope that the Government will look at the areas in which they can take initiatives. They will earn the credit they deserve throughout the world if they are shown as pioneers in responding to the challenge of the Brandt Report.
5.18 p.m.
Lord HOUGHTON of SOWERBY: My Lords, I join with other noble Lords in thanking my noble friend Lord Listowel for introducing this debate and the noble Lord, Lord Chorley, for contributing his maiden speech to it. The noble Lord, Lord Chorley, is obviously well informed and has given a good deal of thought to this matter. I think that we shall need him in the future, and I hope that we shall hear from him on this and other subjects again.
I am really concerned with attitudes towards this problem because, unless we can change attitudes, we shall get nowhere. I do not know whether your Lordships read what I thought was a remarkable leading article published in the Sunday Times of 17th February, which was a splendid introduction to this debate. With your Lordships' permission, I should like to quote the first paragraph:
" The most important event this year was the release last week of a small paperback book of 300 pages. It surfaced only briefly in the headlines, rapidly submerged by Mark Thatcher and his mother, Arthur Scargill and his bully boys, Kevin Keegan and his manager, and tremors from Teheran to Lake Placid. That in itself is part of the problem. The book has more real meaning for all our lives than any of the clamour which routinely assails us. "
What a lot of truth there is in that. Indeed, I am sure that many noble Lords will have had the experience I have had from time to time when friends have come

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over from Asian countries and visited Westminster to listen to our debates. They go away reflecting on the politics of affluence. They think that we are afflicted by some form of congenital discontent. The higher the standards of living rise, the more the grievances multiply over relativities, fair comparisons, and differentials. Now as we face cuts in public expenditure the air is thicker still with grievances. Some of the cuts foretold cause pain and anguish, and send thousands of people on to the streets when they feel deeply about some threat to their sectional or personal interests.
But one cut which may well pass almost unnoticed at all times is a reduction in overseas aid. Even where poverty is very real this bit of saving, marginal saving on overseas aid, can be made without upsetting the man in the street. The Labour Government did it on one occasion, and this Government did appear to be doing it themselves. It may not be a chop, it may be a slice with a razor blade, but the wound nevertheless will be there. We may yet see some further cutback in our overseas aid in the White Paper on public expenditure. That would be the economics of shame. The economics of reality and of self-interest would surely be to put overseas aid on the defence budget, because that is where it really belongs. It is the peace of the world as well as the survival of the world with which we are concerned.
The Brandt Report—a remarkable document—tells us that one quarter of the world's population has 80 per cent. of the world's income, and 90 per cent. of its manufacturing capacity, and consumes 85 per cent. of the world's oil production. How can we hope for a peaceful future on a formula like that? This is the recipe for revolution, chaos, and war. There is no doubt about it. How much longer will the greater majority of the world's population tolerate the maldistribution of the world's resources? If these wide differences between wealth and poverty existed in this country we should say that this is a moral issue, and we would apply all our political, economic, and social morality to getting some improvement in the situation. But to many people in this country the morals of this problem stop at the boundary of our country. The nation state is an issue unto itself.
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The great thing about this report that we have had from Willy Brandt and other distinguished members is that it spells out the writing on the wall. A lot of it we have heard before. A lot of it is so true that it will have to be repeated time and again. But we have to regard this as yet another warning to the peoples of the world. Our own distinguished Edward Heath was a member of the Brandt Commission. While it is not unusual to turn to former holders of political power for our wisdom and vision—especially our vision—we want these matters also to engage the attention of those who hold political power at the present, because it is their responsibility.
What qualities of statesmanship emerge when Ministers are released from the bondage of office! It is astonishing, and welcome, because politics is too often the pragmatic response to short-term pressures. The media take the political temperature every few weeks to warn Governments not to go in for long-term solutions of anything that might prove unpopular, and this is really what governs the length and breadth of the vision of a country under a democracy unless it is stimulated to understand the problems that have to be dealt with, and education endows it with the intelligence to pursue them.
No intelligent and far-sighted view of the future can be taken by any country anywhere without studying population trends both at home and elsewhere. If world population is growing by 1 million every five days, what will another 2 billion people mean to us in the next two decades? There are already hundreds of millions below the poverty line, and if this number grows and grows where does the breaking point come? When is the ultimate reached? When comes the real threat to world order and civilised living?
The noble Lord, Lord Tanlaw, referred to some of the problems of the energy shortage that faces the world in the future. How long will it be before the insatiable demand for energy of the industrial nations drives oil starved nations to grow grain, crops, and sugar for alcohol fuel instead of food? What price starvation then when the distillers of the world unite, rather like the OPEC countries, in order to send up the price of the new-found energy?

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Many of the points in the Brandt report are not new, and unfortunately they make little impact upon millions of people throughout the world, in the better off countries as well as the others, because they are concerned with their everyday affairs. Living to many people is a full-time job, and they are not able to cast their minds over a wider perspective of world conditions and become aroused by it. What we need in this context is more emotion; more feelings of the morality of the situation. If more of our moralists could get sex off their minds and devote their deep feelings about what is decent in the world to looking at destitution and poverty and the ghastly conditions elsewhere, then it might be a better world to live in.
We shall not get public opinion aroused easily over this, but we have to do our best. Above all, it is the political will, and the political leadership of men and women of determination, with a sense of national duty, who feel as strongly about this as they feel about security and defence that is needed. I believe that our political leadership need the reinforcement of the numbers and voices of Members of your Lordships' House and of another place to encourage them, and to give them the feeling that they are doing what it is wise and desirable to do.
The noble Lord, Lord Vernon, in an interesting speech, was kind enough to refer to me and to the British Group on Population and Development—a member of the International Group of Parliamentarians on Population and Development—which came into being two years ago. It is a remarkable creation in parliamentary activity. Only two years ago was this movement started throughout the world, and the initiative was provided largely by a few able Members of both Houses of this Parliament. At the Colombo Conference last September, at which Mr. Edward Heath spoke among many other notable people from many parts of the world, 58 delegations of countries with a parliamentary system came together to join in one common declaration on one common purpose, and noble Lords were supplied in large numbers with what has been called the Colombo Declaration.
If I may be permitted a parliamentary commercial, I beseech noble Lords to give
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attention to this group and to join it because the noble Earl, Lord Listowel, the noble Lord, Lord Vernon, and the noble Lord, Lord Oram, who is yet to speak, are members of this group. We believe that throughout the world people are looking to the British group for leadership and initiative in this field, and it really would be disgraceful if our prestige were to be undermined at this particular time by the Government's unimaginative approach to public expenditure. I wish Cabinets could get rid of this schoolboy mentality that they are not able to save any money unless every Minister shares in the misery; I have seen it happen myself. There should be some courage which enables Ministers and Cabinets to discriminate between one form of saving of public expenditure and another.
What we are looking to the Minister to give us is as firm an assurance as he can that by 1985 this country will reach the target of the proportion of GNP to be devoted to overseas aid that we set ourselves to accomplish this year, and we are only half way there. I sincerely hope that that at least can come from the Government. I believe it would be quite shocking if Britain pleaded poverty to the destitute of the world and said, "We are sorry, but we cannot afford it". They know we can afford it, and we can. What a mockery in The Year of the Child to know that in the poorest countries one child in four dies before the age of five, and I conclude with a parting shot to the House, to the Government and to anybody else who is listening: that alone should put some of the worries of this week in better perspective.
5.33 p.m.
Lord ALDINGTON: My Lords, I wish all of us could show the capacity for exporting fervour to others as the noble Lord, Lord Houghton of Sowerby, has shown us today and on other days. I agree with him. We have a job to do in the country as a whole to make people understand this problem, and I join with others in thanking the noble Earl, Lord Listowel, for initiating this debate, even though he knows that I found it difficult to get through the report in time for this debate, bearing in mind that it was published so recently. I also join noble Lords in congratulating my old friend,

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if I may call him that, the noble Lord, Lord Chorley, who for many years was an auditor of a great international bank of which I was chairman, and who displayed a mastery of the problem about which he spoke to us so well this afternoon, as well as an awesome and perhaps wholesome strictness about figures. I wish also to thank the noble Lord, Lord Goronwy-Roberts, for what he said from the Front Bench opposite and, if I am allowed to do so, on behalf of my right honourable friend Mr. Heath, I should like to thank him for what he said, I believe most deservedly, about his contribution to this discussion. I hope his noble friends will pass on those thanks to the noble Lord, Lord Goronwy-Roberts.
I asked myself, as I prepared for this debate, besieged as one is by the problems of today, running one's business, looking at the problems of the economy and the problems of Europe, besieged all around, why it was that somebody like myself —and there are plenty of others like me—should wish to take time off from those things and join your Lordships in a discussion of this great problem and of solutions to it that seem to run counter to everything we read in our morning newspapers about cut, cut, cut and to everything we read about the impossibility of having growth in the standard of living and the earnings of people.
My answer is quite simple, and it is the same as the answer given by several of your Lordships. It is simply that the world is one;one world, an idea of today just as important as the idea of our ancestors of 120 years and more ago when they had to explain to our countrymen that we were one nation. It is this global vision of the Brandt Report which has brought me here this afternoon and persuaded me to inflict myself on your Lordships about overseas aid policy for the first time for about 10 years;in fact, on the last occasion my noble friend sitting next to me, Lord Home of the Hirsel, was answering the debate.
As Chancellor Brandt wrote, it is precisely in this time of crisis that basic world issues must be faced and bold initiatives taken. At this stage in the debate there is no need to rehearse the report's analysis of the facts about the
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world. These facts are horrifying and the certainty is that all these things will get worse if we go on as we arc, despite the very praiseworthy steps that have been taken by many countries and their Governments, by international institutions, the World Bank, the United Nations, food organisations and so on, despite the enormous increase in private international lending to developing countries, in recent years particularly, and, I think we should add, despite the very significant steps that have been taken by a number of countries of the developing world to improve their own situation in recent decades. I would mention Kenya and India and, more recently, South Korea, and to me the thriving success of some others, Singapore and Taiwan, is not a reason for doing nothing but a sign of what can be done.
It must be said about this report that it is in every way a balanced document as well as a comprehensive survey of the world situation. Frankly, I do not detect in the report the shortcomings mentioned by the noble Lord, Lord Tanlaw, speaking from the Liberal Benches. He mentioned two—energy and conservation—and I turned up the pages, carefully indexed, and I found exactly the points covered which he said were not mentioned, and I will return to one of them shortly.
The report reminds us of the steps taken by international agencies even right up to last year. It reminds us of the great benefits to many of the developing nations that have followed from the activities of the private sector in the North and particularly from the activities of what are called trans-national companies, and it reminds us of the fears which some peoples have of them. The report also reminds us that the developing nations of the world have themselves a vital role to play and want to be self-reliant. Again, in answer to a point made by the noble Lord, Lord Tanlaw, it certainly does not seek to set out the kind of society which the developing countries should have. It specifically says that they must decide that, and on this occasion I am on the side of the report, not on the side of the Liberal Benches in this House.
I should like to ask the noble Lord who is to speak for the Government a more simple question than was asked by the noble Lord who preceded me. I should merely like to ask him whether the

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Government accept the analysis in the report of the present world situation and of the consequences of the world going on as at present. If the answer is, Yes, I think the noble Lord will get the right answer to his question, too.
The great theme in the report is the theme of mutuality;the theme that there is a mutual interest shared by the North and the South, and that this mutual interest is the cement that should bind us together in tackling the problems. It is this mutual interest that is the basis of the recommendations that are made, and, I think, the basis of the hope of the Commissioners that more action will follow more quickly than has followed other reports, which perhaps stressed more the duty that we have—and it is a duty, as the right reverend Prelate reminded us—arising from common humanity to eliminate poverty and suffering, and to give opportunities to the developing world.
Some Members of your Lordships' House—I do not think many among those present today—may, like some outside commentators, nurse the suspicion that a document signed by 18 prominent commissioners drawn from so many parts of the world, and from the whole political spectrum of the world, must be the product of some unholy alliance, devoid of vital principle. This unworthy suspicion perhaps explains the barely concealed hostility to the report that was shown by at least one question in your Lordships' House, and by some questions in another place, when Government Statements about development policy were made on 20th February. There is one comment to which I want to refer, made by one of my noble friends, who warned my noble friend the Secretary of State that:
" While the Brandt Report may be good bedside reading, it is full of clichés and much of the evidence seems to have been brought from a period in which the atmosphere is quite different from today's in terms of productivity.—[Official Report, 20/2/80;col. 753.]
Actually on 20th February the report had not of course been published, and clearly my noble friend had not read it. Certainly there were summaries in the newspapers. But those of your Lordships who have read it will, I think, join with me in saying to others that it is only by reading it fully that most of us can get
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a full comprehension of the problems, of the commission's very balanced attitude, and of the need for the commission's recommendation. My experience shows me that it is certainly far from being good bedside reading, whatever that may mean. It is certainly not full of clichés, and it is most certainly right up-to-date and very sensitive of the problems of last year and this.
I am reminded of an old advertisement—I think it was a Guinness advertisement—which some of your Lordships may recall seeing. It was a picture of a man gazing at a bottle of Guinness and at a glass full of it, and saying,
" I do not like it. I have never tasted it! "
Perhaps without being accused of having no soul, nor any humanity, I might now turn to the arguments—or some of them—of mutual interest;and I think that on this occasion I do so with the blessing of the right reverend Prelate. First, there is the question of the available resources of the North and the urgent needs of the South. The report makes these clear in stark reality. There are 18 million people unemployed in the OECD countries, and there is a crying demand from the South for the products which might result from their being employed again, and which are worth between 250 and 400 billion dollars a year. There is straight proof of spare resources and need for them. As the economist puritan of The Times put it in a leading article:
" It makes sense to raise the living standards of the poor to stimulate trade and economic growth."
Nor should we be unmindful of the fact that 60 per cent. of the world's exports of the major agricultural and mineral commodities, other than oil, originate from the Third World;and there is plenty of evidence that further exploration and better agricultural methods could enormously increase the production of these commodites. All these things would be to the benefit of the world as a whole.
In these times of inflation and recession, surely the Northern countries can see the value to them of an increase in world trade generally, in world wealth generally, that comes from better markets in the developing countries and more exports of commodities and, yes, manufactured goods, too. Then there is a mutual interest (is

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there not?) between North and South in helping the South to avoid conditions in which peace and ordered government are impossible because of shortage of food, bad health, bad living conditions, overcrowding and lack of work—situations in which terrorists grow and thrive.
It is against that background of mutual interest that I shall now refer for a few minutes to some of the recommendations. The report calls for a massive additional transfer of resources, rising to an additional 60 billion dollars a year in 1985. Of course, we know that in this country we are short of resources, or we feel that we are. We are forced to use more of our resources on defence, or we feel that we are;and over recent years we have transferred several billions of dollars, in addition to that which we used to transfer, to the oil-producing countries as a result of the increased price in oil. Happily that situation is beginning to be balanced. We should remember that we are trying to slim ourselves down so that we may be a more productive nation.
But, surely, none of these things is necessarily a bar to maintaining, or even increasing, the level of our aid, which in relation to our gross national product is, I believe, less than what it was eight years ago. Indeed, there is much to be said for fulfilling statements of intention made to the world to raise the level of our aid to 0·7 per cent. of gross national product. If we did so, we should not destroy our economy, any more than we do by increasing our defence expenditure, or any more than we did by having to pay more for our oil. We might put ourselves under a little strain, but if as a result of more aid our trade goes up, that might help us to achieve other economic objectives;for instance, more jobs.
Of course, the Government have to make a balanced judgment of priorities and the consequences. Of course, I understand that;and of course I know that you do not strengthen the weak by weakening the strong. But, my Lords, this is not a case of expenditure being better carried on by the private sector. That is not an alternative. Banks and industry play their part, and will go on playing their part, in relation to loans and production in the developing world, but they cannot do very much more than they have
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been doing, unless the developing world's infrastructure is strengthened by governmental aid and world institutional support. As we have been reminded in the report, and by some speakers this afternoon, there are poor countries where private industrial aid without governmental support is just not possible. I certainly agree with much of what the noble Lord, Lord Taylor of Gryfe, said about private investment.
There are other recommendations for increasing the funds available to the developing world. The World Bank are, I know, looking at all the recommendations in the report which affect them, including the increase in their borrowings and their borrowing powers. Knowing the quality of that institution and its leadership, I do not find it surprising that they are already examining closely each one of those recommendations.
Then there are the proposals about special drawing rights, which I need not go into, other than to say that the report specifically deals with the charge that these might be inflationary in the world. This is to be conducted in a way that will not be inflationary. The new type of recommendation in this field is that more funds should be raised from automatic sources, or in an automatic way. The commission examined a number of possibilities, including levies related to international trade, military expenditure, arms export and some other things. Immediate fright has been taken to the possibility of such levies by some commentators and some industrialists. The commission does not rely upon this new automatic source in the immediate future, for the next five years;but the report does claim that a system of universal and automatic contribution would help to establish the principle of global responsibility, to which they attach a lot of importance, and could be a step toward co-management of the world's economy. Surely, in principle, we would all agree with that as an aim.
In principle, I find it hard to see how a levy of, say, 0·5 per cent.—because that is all they are talking about—even on international trade, would harm or in any way obstruct trade—and here is the one difference I have in the whole speech made by the noble Lord who spoke from the Front Bench opposite. We are used to

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far larger percentages of levies on home trade, and even on some parts of international trade, admittedly for national reasons, but nobody can say that they greatly block the arteries of trade. The one doubt I have is the doubt expressly stated in the report;that is, that a levy on international trade will impinge very differently on some of the rich countries who import little. But that funds have to be available to the South there can be no doubt, and I say again that private funds will flow if the basic structure in each country is secure, and only if it is secure—and that is the importance of governmental aid and of the support of world institutions.
There are some other recommendations which I have no time to mention, other than that on energy, to which I attach enormous importance. The energy problem in the developing world is dealt with very fully;and then, in addition, there is the problem of the oil-producing countries, with the vast amount of dollars that are transferring to them from the rest of the world. All this has been dealt with very well by my right honourable friend Mr. Heath in an article written in The Times, to which I hope your Lordships have paid some attention, suggesting a kind of concordat between the rest of the world and the oil suppliers. I see great hope if that idea is pursued.
The noble Lord, Lord Tanlaw, referred to the importance of nuclear energy. Who am I to deny that?—because I am still the chairman of the National Nuclear Corporation. But I have to differ from him in thinking that nuclear power would solve the problems of energy in the poorest countries. It most certainly would not. Nuclear power is economic and useful where the demand is high, and nuclear power is most economic in big dollops, if I may put it like that. There are other sources of energy—solar energy —which are very relevant from the point of view of many of the developing countries. My Lords, I have taken rather too long.
Lord LLOYD of KILGERRAN: My Lords, I am sorry to interrupt the noble Lord, but he referred to cliches, he is now directing himself to energy, and he had the kindness to say that he was not on the side of the Liberal Benches. Would the noble Lord agree with the Liberal Benches that
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more technological assistance, apart from funds, should be given to the developing countries?
Lord ALDINGTON: Yes, my Lords, I do. If I mentioned every point on which I agreed with the report—because that is in the report—I should be here, not for 20 minutes, which is much too long, but for about 60. So the answer is, Yes, my Lords, and I should now like to bring my speech, which I hope has lacked nothing in fervour following the noble Lord who preceded me, to a conclusion. I hope very much that Her Majesty's Government are going to give a lead to other countries, including the Eastern bloc, in supporting this report—the facts, the conclusions and the recommendations. Certainly it is possible to pick holes in the details of a number of individual recommendations, but I agree with the right reverend Prelate that what those who have the power of leadership should concentrate on is the theme of the report, the attitude of it and the package of recommendations, and I hope that that is what we shall hear from Her Majesty's Government this evening.
5.55 p.m.
Lord BROCKWAY: My Lords, I am glad to be following the noble Lord, Lord Aldington. It is a new experience. The spokesman from that Bench and the spokesman from this Bench generally represent the extreme opposites in this House;and therefore, tonight, it is particularly welcome that he has delivered a speech with which those on these Benches are in almost entire agreement. We very much hope that Her Majesty's Government, who pay more attention to that Bench than to this, will seriously consider the appeal which he has made that priority should be given by the Government to the problems which are raised in the Brandt Report.
In previous speeches and in publications I have tried to put forward, broadly, the economic measures which are necessary in order that the gulf between the rich North and the poor South can be bridged. They have been based, mostly, on the proposals of the group of 77 (now a group of over 100) nations in their new international economic order. But tonight I do not wish to speak in that context. Instead, I propose to try to

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paint the background of the North-South confrontation, and to suggest the attitudes which may, instead, lead to co-operation.
It has been a saddening experience over the last six years to see how, at conferance after conference between the North and the South, there has been deadlock. The UNCTAD conferences, the Paris North and South dialogue, the conferences of all the agencies of the United Nations —yes, a little agreement here, but deep differences regarding an approach to these problems. I believe that the report of the Brandt Commission will break through this deadlock. Its membership was quite extraordinary—distinguished figures from all the Western countries and distinguished figures from Africa, Asia and South America. They came from completely opposite ideologies, and yet they came to these quite extraordinary conclusions. Britain was represented by an ex-Prime Minister belonging to the party opposite, Mr. Edward Heath.
I want to pay a particular tribute to the chairman of the commission, Willy Brandt. I regard him as the greatest world statesman of today. His introduction to this report is a masterpiece in analysis, in direction and in inspiration, and I hope that his contribution may be only a beginning to contributions towards world settlement in the sphere of war as well as in the sphere of economic differences. The world is now in a very deep depression. No one can see the end of it. It is graver than any depression has been before. It affects not only the North but also the South. Indeed, the South is in an almost permanent depression, but in recent years the gulf between standards of life in the North and standards of life in the South has actually grown.
In this report attention is drawn to the fact that the United Nations Childrens' Fund, UNICEF, estimates that in the South in the one year, 1978, more than 12 million children under the age of five died of hunger. The last recession in the West was in the 1930s. It is significant that every economist analysing that depression stated that it was due to the deepening poverty of the peoples in Africa and Asia. That depression was ended not by constructive planning but because this country and the West,
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indeed the world, moved towards rearmament and war.
It is ironic that war, despite all its destruction and death, brought more prosperity to the common people of this country and, even more, a common purpose, a readiness to serve and to sacrifice, more than we have ever yet achieved in peace. After the war great reconstruction, aided by the Marshall Plan, meant that we went for some years without depression, but now there is recession again. I want to emphasise to this House that the present recession is more serious than we have ever had before. Few economists believe that the policies of the present Government will solve it and bring prosperity. Even if their policies were correct domestically they would fail because this recession is a world depression and has world causes.
Unlike the late '30s, rearmament and war are not going to end our present recession, because war today with its nuclear weapons would end us all;but unless the recession is ended a disaster almost equal to war will occur. I do not think we have yet begun to understand these possibilities. I mean the disaster of chaos in the world. The first dim warnings of this are already being sounded. What do I mean by the disaster of chaos? Millions unemployed;destruction of welfare to the point of actual want;ill health, even death;mounting economic catastrophy;and that to be followed by mass revolts which will pay little attention to law and order. The danger today of our depression is that it will end in a revolt against any social order itself.
If you think this view is extreme, turn to the introduction of this report by Willy Brandt:
" We are aware that this Report is being published at a time when rich countries are deeply worried by the prospects of prolonged ' recession ' and the diminishing stability of international relations.
We believe that these difficulties are more serious than those of past recessions and economic crises. It would be dangerous and insincere to suggest that they can be overcome with the conventional tools of previous decades."
He adds this:
" War is often thought of in terms of military conflict, or even annihilation. But there is a growing awareness that an equal danger might be chaos—as a result of mass hunger, economic disaster, environmental catastrophes, and terrorism."

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It is the greatest indictment of our time that mass hunger exists in the world when technical advance would enable us, if it were properly organised, to feed, clothe, house and educate within the period of a decade every human being on earth. What is the reason for our failure? I suggest it is the poverty of the millions on the earth. Without their demands for goods the factories close. When demand is reduced to a trickle, as it is now, recession comes and it continues until demand grows.
The Brandt Report is not only a measure of cheer to the poor of the South;it is a message of cheer to the unemployed of the North. It is a document which promises our return to full employment and human welfare equally with the emancipation of the South. It is a charter of hope to the world. We have seen that one way to increase demand is rearmament and war. Are we really going to accept that as an alternative to ending poverty? Armament-making provides work and also increased consumption through wages, but the product is sheer waste or annihilation. The world's expenditure on armaments could end poverty in the world within a few years.
I should like to quote the Brandt Report again:
" One half of 1 per cent. of one year's world military expenditure would pay for all the farming equipment needed to increase food production and approach self-sufficiency in food deficit low income countries by 1990."
My Lords, one half of 1 per cent. of military expenditure could end the hunger for food in the world. We have fewer than 20 years to go before the end of this century. The aim of all who care for humanity must be to end both war and poverty by the year 2000. I believe it can be done.
This is a mad world but there are more sensible people in it than there have ever been. That number will grow. In the next few years there will be a mass movement throughout the world of peoples who will say, "We will have no more war and we will end poverty". I welcome this report because it is a beginning of that kind of approach. It will have to go very much further, but, although it may seem impossible to those who are
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listening to me, I believe we are on the eve now of a great crusade, a great revival, a great enlightenment of the peoples of the world which will seek to achieve the ends of this report and the end of war and of poverty.
6.15 p.m.
Lord BROOKS of TREMORFA: My Lords, I should like to begin by offering an apology to your Lordships for not attending the early part of this debate. I arranged that I should speak rather late in the afternoon because I had to attend an important meeting which I could not possibly avoid. I think it is inevitable that if I were to make a speech at length I should be repeating much of what has gone before. I am extremely grateful to my noble friend, Lord Listowel, for arranging this debate, but I am most pleased that I was here to listen to my noble friend, Lord Brockway. I have been listening to him and reading him for more than 30 years, and whenever I listen to him the words of Conrad come to me. He said that mankind was forever walking on a thin crust which was likely to open up and engulf him at any time. I think the time is drawing near when something like the kind of proposals contained in the Brandt Report must be put into operation if our world is to survive.
My noble friend, Lord Houghton, referred to the leading article in the Sunday Times of a few weeks ago. I think the heading to that article might be a sub-title to the programme for survival, because it says: "How to avoid the Third World War". That goes to the essence of the problem facing not only this country but the whole of the human race. I have listened with great interest to Mr. Edward Heath, both on television and on a radio programme recently when he appeared on Radio Wales. What struck me about Mr. Heath's approach to the Brandt Report was the realism of that approach. Throughout the whole of the interview he stressed that it was in our interests as well as in the interests of the poorer people of the world that there should be a coining together and a mutuality of interest.
In a debate which I introduced in the House recently on the social and economic problems of Wales, I was pleased to call

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the Sunday Times article in aid, because Wales is mentioned in the article. It says—I repeat what I said a week or so ago:
" What is more eccentric, one might wonder, than having a steelworks in Llanwcrn lie idle while India laments a shortage of steel? "
There, in a nutshell, is the essence of the mutuality of interests. I am bound to confess that when I listen to Mr. Heath and when I read the comments on the Brandt Report—here may I say that I am extremely grateful to my noble friend, Lord Listowel, for sending me a summary of it, because I have not read the report—part of the politician in me wonders whether it is possible to get the message over to people that the Brandt Report may be the last hope for the whole human race.
How does one say to redundant steelworkers, "It is in your interests to help the people in the underdeveloped world "? But the attempt must be made. We all have a responsibility and a duty to say to our people, whatever their problems in this time of economic crisis for ourselves, that if they think they arc suffering poverty they do not know the meaning of the word. The real poverty in the world. the poverty which is brought closer to us as a result of television, is aching, poverty, poverty which we in this country never experienced even in the 'thirties, when I was brought up.
My Lords, 1 referred earlier to my great respect and admiration, even love, for my noble friend Lord Brockway but I had not read his book, Tomorrow, Tomorrow. and I took advantage of your Lordships' Library to do so. It is a wonderful book and if any Member of your Lordships' House has not read it, I commend it. He pays this House a great number of compliments. He says in a chapter, "Going to the Lords ", how impressed he was by the experience of many of your Lordships. However, he pointed out that perhaps there was a gap in this experience and that there was little experience here of actual poverty. I myself do not claim to be a special case in any way;but I was born in a period of depression in a depressed area. I lived through the whole of the 1930s, which led to the most horrible war in our history, a war which was
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ended by the most horrific weapon that mankind has yet devised. Since then, we have all lived through a period of increasing tension in the world, of increasing suspicion in the world;and if we survive to the end of this century it will he more by luck than by design.
It is my belief that we in the Western world, the affluent world, however difficult we think our circumstances are, must take this report seriously. My noble friend Lord Houghton of Sowerby has said that there is a group of your Lordships who are already active to this end. May 1 say to him that if my puny efforts can help in any way I shall be pleased and anxious to join them? The report calls for a world summit this year to consider an emergency programme. It lists the priorities as: a global food programme, a worldwide energy strategy, a reform of the international monetary system and a huge transfer of funds to the poorer countries. I shall be extremely interested to hear the response of the Government to this invitation, because somebody—an American, I believe—said that Britain had lost an empire but had yet to find a role. It is here waiting for us.
6.23 p.m.
Lord HOLDERNESS: My Lords, it is a pleasure for me to follow the noble Lord, Lord Brooks of Tremorfa. I should like to add my gratitude to his to the noble Earl, Lord Listowel, for not only initiating the debate but giving me the chance to assure him that even very new Peers are well aware of the service that he has rendered to your Lordships' House in the past and are also aware of the work that he did in various parts of the Commonwealth during the two decades that followed the last war. Scientists, although not always entirely unanimous, are at least in agreement that the planet on which we are now making our temporary home has existed for quite a long time. I believe that it is generally thought to have existed between three billion years and five billion years. They also agree, I understand, that human beings have made their own appearance on this planet comparatively recently. I fancy that the historians of the future are probably going to add that, over the few centuries during which the actions of individuals, or of collections of individuals, have had an impact on the

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whole world, or on a considerable part of it, mankind has managed to sow very real doubts as to the capacity of the human race to survive very far into the third millennium after Christ, which we hope to enter in about 20 years' time.
Thus, while scientists are judging this planet on which we live to be at about the middle of its useful life, we have a score of distinguished and, as has been emphasised, most experienced men, considering man's ability over the next few decades so to shape the course of the world that we can avoid destruction within a few decades. I should like to express my agreement with the noble Lord, Lord Taylor of Gryfe, who remarked that he thought that the Brandt Report has arrived at a very opportune time. I should like to add also how greatly I relished the vigorous welcome given to it by the noble Lord, Lord Brockway, whom it was, for me, an enormous pleasure to hear again.
The prospects ahead certainly demand strong nerves and call for courageous decisions. There are the problems of overpopulation, of grinding poverty, of starvation, disease, vast unemployment—all on a scale that various speakers during this debate have pointed out that we can hardly imagine--and, over all else, the desperate, death competition of the arms race, which the noble Lord, Lord Brockway, in particular has mentioned. On some of the looming problems of the next few decades, even the leadership of archangels could hardly make an impression. I doubt whether there is anything except disaster itself, or the unlikely abstinence of billions of young and fertile couples, that can now prevent a world population of about 6 billion in the year 2000 A.D. That means more human beings on this planet then than the sum total of all who have lived since the world began.
I believe this to be perhaps the fundamental problem of all;and, if I may say so, few people in this country have as great a right to speak about it with authority as the noble Lord, Lord Houghton of Sowerby, who has done so much in this field. Mercifully, however, there are areas in which the existing representatives of the human race are not completely powerless in the face of doom;although the present prospects of constructive co-operation to
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prevent it are not what one might call dazzlingly bright.
It is conceivable, although not immediately probable, that East and West might agree to calm the race for arms. The commission, as I think the noble Lord, Lord Taylor, has clearly implied, has pointed to the enormous social benefit within easy reach if arms production throughout the world could be halted for even 24 hours. Fortunately, too, we can still avoid what the Brandt Report described as the irreversible destruction of significant resources or of the environment;although the commission warns us of our present nearness to that danger in many parts of the world. But it is clear to me that we can avoid that irreversible destruction of resources only if the excessive demands which we make on a reasonably bounteous earth and sea are reversed before it is too late. Meanwhile, despite these well-founded warnings of possible disaster, to an observant visitor from another planet this basic problem of our planet must seem delightfully simple, and its solution is surely not beyond the wit of man or of a visitor from Mars.
This has been well described by my noble friend Lord Aldington and others. Here are two-thirds or more of the world's population, hungry, sick, illiterate, badly in need of the goods produced by the richer North and the technical skills at our command. Meanwhile the North, at present rather less affluent than it was, is dreaming of an effective demand for which goods could be produced by 18 million at present unemployed. This was well brought out by the noble Lord in his speech just now. It should not be impossible for the world to provide the South with purchasing power to make effective at least part of its immense potential demand. For the South, this would offer the hope of progresss;for us and other industrialised nations it would open up economic possibilities of almost infinite scope and value.
My noble friend Lord Aldington and many other speakers have stressed the mutuality of interest between North and South, out unfortunately I think we suffer from one small disability in the way that we refer to the assistance that the North gives to the South. The word "aid ", with which I have some connection, unfortunately, suggests to a great many, and a

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great many who are critical of the aid programme, the idea of a handout with the absence of any obligation on the recipient to make any corresponding effort in return. Even to many of the supporters of the aid programme, aid appears to be the mere execution of the clear obligation of the relatively affluent to the poorest nations. Even overseas development, which is, to my mind, an improvement on the concept of aid, suggests a contribution towards the economic advancement of poorer nations which the critics would argue—probably superficially—that we in Britain managed to do without at the early stages of our own development about 2,000 years ago.
But rather than the concepts of aid or overseas development, the idea that I should like to convey and which I think is in line with the thinking of the Brandt Commission is that any future aid provided by Britain or any other members of the OECD should be what I would call an investment in the future of the world, a contribution towards the prevention of the collapse of the human race which is unhappily not unthinkable and which would undoubtedly wound Britain and the industrial North no less grievously than the poorest of the developing countries. Of course, the noble Earl, Lord Listowel, my noble friend Lord Vernon and many others who have spoken in the debate are absolutely right that the present and past investment by the North is too small, and the inability of Britain and other comparatively rich nations to invest in the world's future more than a small fraction of 1 per cent. of our gross national product is a sad commentary on our present scale of values.
I share the blame, and my noble friend the Foreign Secretary and other Ministers, having accepted the objective of the Pearson Report, are presumably equally dissatisfied by our present performance. They will, no doubt—and rightly—point to forms of investment other than the official aid programme and to other means of generating purchasing power in order to make this pent-up demand effective. If, for instance, developing countries had been in the past and were now at this time more receptive to private investment of all kinds and ready to offer such outside investors reasonable security, then it is hard for me to believe that their economic
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prospects would be quite as sombre as they are today;particularly, I believe, because there are many skills, and especially managerial skills, which are more easily imparted through private investment than by the flow of official aid. No one made clearer than the noble Lord, Lord Chorley, in what I believe to be a most perceptive speech, that it is skills (and I believe the noble Baroness made this point also), technical mastery at all levels, which are among the major needs of developing nations and which are, at the same time, the most important potential contribution which the North can make, both through private industry and through official sources.
There remains the still larger question of the wide creation of purchasing power, on which I am far too inexpert to dare to be in any way dogmatic. But if the political will exists—and this is what we are talking about this evening—to overcome the obstacles, a number of international financial vehicles are available for a rapid and significant expansion. On the other hand, caution may prevail. The experts may say that this just cannot be done, and the industrial nations may decide to move in exactly the opposite direction by erecting a protective barrier in a narrow and vain attempt to guard their future. In that case, in my view, we shall not only sow but rapidly propogate the seeds of our imminent destruction.
Meanwhile, at this crisis in the world's affairs the richer nations are seriously handicapped by their disunity. Bridge building between the North and South is far more difficult as long as a curtain divides East and West. Co-operation between the two in Third World investment would be a vast gain;but far greater would be the opportunities offered by a halt or even an abatement in the crescendo of armament. This is why my noble friend the Foreign Secretary is obviously so right to continue to search for a lowering of tension and the removal of suspicion that divides us.
To me the deepest tragedy of recent events is the added incentive that they have given to increased and continuing armament and the receding prospect of co-operation between the most powerful nations in a joint effort to save the world. In the world's past the human race has many times had to rely on the triad of

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misery—war, hunger and plague—to solve problems less formidable than those which now face us. Today no one other than a madman wants again to invoke their aid. But one or other may come to appear as the only escape for the rest of the human race unless, before it is too late, we can agree on more civilised solutions.
6.40 p.m.
Lord PITT of HAMPSTEAD: My Lords, may I begin by thanking my noble friend Lord Listowel for introducing this debate. I apologise to him for not being in my place to hear his speech. I received a call just before coming here and had to visit a patient. That explains the apology I need to give the noble Lord, Lord Vernon, because I had to get the patient into hospital and had to slip out during Lord Vernon's speech to make the appropriate arrangements. I hope they will forgive me. I can assure both the noble Earl, Lord Listowel, and the noble Lord, Lord Vernon, that I will read their speeches in Hansard tomorrow with the utmost interest. I should like also to congratulate the noble Lord, Lord Chorley, on his very remarkable maiden speech. I take it for granted that we shall hear from him on many occasions and that he will be able to make real contributions to the debates in this House.
The problem of how we bridge the gap between the "haves" and "have nots" is the biggest problem confronting the world today. What the report has done is to put the issue in perspective, put it straight before us as it is, and point out to us the mutuality of interests and the fact that it concerns both North and South that the gap should be bridged—because the North stands to gain as much as the South by the bridging of the gap and the North stands to lose as much as the South over any failure to bridge the gap.
That is the whole theme of the report. It says that we must recognise that this is one world and there must be international solidarity. It also says that we must open our eyes and recognise that there is some enlightened self-interest in doing the things that are suggested. It says that we must accept, and not merely pay lip service to, this principle of inter-dependence, and that the search for solutions is not an act of benevolence but a condition of mutual survival.
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This commission was composed of many eminent citizens, most of whom in fact have held political office. We had three ex-Prime Ministers of developed countries, a former President of a developing country, together with several former finance ministers and, in one case, a current finance minister. In addition, we had the Secretary-General of the Commonwealth, who has, from the time he took office, recognised this point of one world and the absolute necessity for the two areas of the world to recognise their mutual interests and come together to deal with their mutual problems.
I remember well the part he played in bringing together the Asian, Carribean and Pacific countries in the first negotiations between these countries and the EEC. In fact, it is because of Sonny Ramphal that the ACP became a united organisation and were able to negotiate together. At the time, I remember we were all certain that that could not happen, because the French have always been able to get their former colonies to go with them;but that was one occasion when they met their match and Sonny Ramphal was able to organise them in that way.
This commission has made some very important recommendations which we hope the Government will accept, and I should like to join the noble Lord, Lord Aldington, in asking the Minister whether the Government accept the analysis of the Brandt Commission and are prepared to play their part in making sure that these recommendations are met. Her Majesty's Government are in a good position to make a major contribution in this matter. As part of the EEC, we have through the Lome Convention played a minor—I regard it as minor—role in the bridging of the gap, in that some of the former colonies of the EEC countries have been able to get some protection and some help, so that in fact they can develop. What I hope the Government will feel obligated to do, having read this report, is to revise to some extent their own approach to the Lome Convention. I was very sad when I read that it was Her Majesty's Government who were dragging their feet about the increase in the fund which the ACP countries were asking for. It was Her Majesty's Government who were saying, "Not a penny more".

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Eventually a little more was granted but not as much as was required.
I therefore hope that, having read this report, Her Majesty's Government will now go back and study their own attitude to Lome and see that they adopt a more liberal approach so that the Lome Agreement can benefit both the EEC and the ACP countries much more than it has done so far—because a liberalisation approach by the EEC can have tremendous consequences in terms of gains for both sides. I also hope that they will again raise with their partners the question of generalised preferences, so that a more liberal approach will be made than what I have read in the Press is likely to be the approach at the present time.
Her Majesty's Government also have a very important and useful instrument through which they can play a major role. I am referring to the Commonwealth in this connection, and I invite your Lordships to remember that it was the Meeting of the Heads of Government, held in Jamaica in 1975, which set up the Commonwealth Group and which did a certain amount of stimulating in trying to get some agreement between North and South. Again, in 1977 it was as a result of discussions at the Heads of Government Conference here that Her Majesty's Government changed their attitude to the common fund. Although the common fund is nothing like what it ought to be, the fact is that we have now agreed to a void.
What I now hope Her Majesty's Government will do, having studied this report, is to take a more liberal approach to that particular fund, so that the fund can play the important part which most people who have studied this issue think it can play. Of course, Her Majesty's Government have important voting rights in the IMF and the World Bank and can therefore play a leading role in trying to get both bodies to take the kind of line that the Brandt Report has suggested they should be taking.
We know that example is always better than precept. Therefore, we want an example from Her Majesty's Government. The obvious example is for the Government to commit themselves to reach an aid figure of 0.7 per cent. of GNP in
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respect of official development assistance by a specific date. They should state firmly, as requested by the noble Lord, Lord Chorley, that the present level of aid will not be reduced, but will be steadily increased until the figure of 0.7 per cent. is reached. One hopes that, as requested by the Brandt Report, they will continue to increase that sum until a figure of 1 per cent. of GNP is reached. That would be the commitment.
I agree with the noble Lord, Lord Aldington, that if we accept the analysis of the Brandt Commission, then in effect we should be in a position to accept these suggestions. This would be a way of indicating Hcr Majesty's Government's commitment to the implementation of these recommendations. I agree with the right reverend Prelate the Bishop of Derby and other speakers in this debate that the Government must carry the people with them in this task. Both Houses of Parliament have a role to play, not only in pressuring the Government, as we are trying to do, but also in supporting the Government once they take the right decisions. The Government certainly will need to be supported.
However, we must do more than that. We must ensure that the people of this country get the message. It is not easy to get that message over, but we must do all in our power to do so. The man in the street must understand, as the noble Lord, Lord Brooks of Tremorfa, said, that there is a co-relation between the fact that steelworkers are out of work in Wales and the fact that some people in the world are too poor even to buy steel anyway. The man in the street must realise that something must be done to bridge that nap. Workers should be willing and indeed anxious to see that something is done.
The Brandt Report sets a challenge that we must accept. If we do not do so, I believe that we shall forfeit the right to any respect. I invite your Lordships, and even more so her Majesty's Government, to make a start in accepting that challenge.
6.53 p.m.
Lord NOEL-BAKER: My Lords, I wish to pay my tribute to my noble friend Lord Listowel, who opened the debate. I also wish to congratulate my noble friend

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Lord Chorley on an admirable maiden speech. I had the privilege of knowing the first Lord Chorley when he was a brilliant rock climber on the hills of Cumberland. I followed him and admired him. I am glad to admire the present Lord Chorley for his brilliant contribution to the debate, and I hope that we shall hear him often in this House.
This has been a notable debate, particularly for the great wisdom and eloquence of contributions from all parts of the House. One could mention in that context every speech made by my noble friends. I wish to single out the contributions of my noble friend Lord Houghton and Lord Brockway, who surpassed their own achievements in persuading your Lordships to accept their view. I also wish to pay a special tribute to the speeches made from the Government Benches by the noble Lords, Lord Aldington and Lord Holderness. They added to the power and weight of the message which I hope will travel throughout the world—not only to No. 10 Downing Street and to our own Foreign Office, but to other continents and capitals.
The noble Lord, Lord Holderness, spoke of the four elements of world poverty—shelter, disease, ignorance and hunger. We all know of preventable slums that exist in the world—the appalling tragedy of shanty towns and mud huts that exist in so many countries. A week ago my son was in an Indian village in which a thousand people were trying to live a civilized life. They had no wood, stone or metal. Their houses were made of mud, bricks and nothing else. We all recall the tragedy that occurred only 3 years ago in Kerala where a tornado destroyed mud huts and with them 15,000 human lives. Not one person escaped. If those people had lived in proper houses not one of them would have perished.
Preventable disease—malaria, leprosy, yaws, trachoma—impose an appalling burden of suffering and economic loss every year on the Third World countries, but they could all be abolished by the World Health Organisation within a short period of years and at a cost of only 500 million dollars. If your Lordships do not believe that fact, one has only to remember that in the last six years WHO has wiped out smallpox in 32 countries in which it was endemic on an epidemic
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scale. That organisation spent 83 million dollars on that task—less than the cost of a single B1 bomber.
The most tragic and important element of poverty is preventable ignorance and illiteracy. There are 1,200 million people in the world who cannot read or write, and 400 million children for whom there are no schools. They face darkness of the mind. Many face the cause of material poverty—hunger. My noble friend Lord Listowel emphasised the fact set out in the Brandt report that 12 million children under five years of age died of hunger in the year 1978—I repeat, 12 million!
I have been very close to hunger. I worked for Fridtjof Nansen when he was raising relief for the Russian famine of 1922. Dreadful things can happen when starvation stalks the land. On the Volga and in the Ukraine there was cannibalism;human flesh was sold on the market place;corpses were dug up and boiled for food, mothers ate their babies. The hunger of 800 million people, the absolute starvation of hundreds of millions, is a wrong that ought to stab the conscience of every one of us by day and by night throughout our lives. I agreed profoundly with my noble friend, who said a few moments ago that it is a shame of our affluent, advanced nations that we do not understand the poverty, the misery, the cruelty that are inflicted on these suffering peoples of the other continents which we call backward.
There is a twin evil causally connected with world poverty. It is the menace of which the noble Lord, Lord Holderness, spoke: the danger that civilisation will disappear. In the Final Document of the Special Session of the UN General Assembly which was devoted in 1978 to disarmament, there were seven separate warnings that the issue at stake was the extermination of mankind and there is no eminent scientist, no great soldier, who would seriously deny that that is the present menace which faces the world.
The Final Document of the Special Assembly, faced with these twin evils, faced with the danger of total disaster, proposed a policy of total change. I summarise it as briefly as I can. The document began by saying that armaments no longer defend. The exact words are:

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"The accumulation of weapons today constitutes far more a threat than a protection to the future of mankind".
It went on to propose that the only true solution is general and complete disarmament of all the nations of the world. It defined what that means—reduction of armaments to the level proposed by Franklin Roosevelt in 1940 in his Four Freedoms speech, and proposed by our colleague Selwyn Lloyd in his speech to the UN General Assembly in 1959;reduction to the level at which aggressive war is impossible, because no nation has enough armaments to fight it;reduction to the level required for internal order only, and the contribution of manpower to a UN force.
The Final Document said that the release of the vast resources that would then be available should mean the reallocation of our wealth from war and armaments and conflict to human welfare, to social justice in our own advanced countries, but, above all, and in large measure, the reallocation of resources available to the poverty stricken countries of the Third World. It means a redistribution of wealth between the affluent and the poorer nations. Are we really frightened of a redistribution of wealth by Government action?
It is only 44 years since I fought a by-election in the city of Coventry. I went to visit my constituents who were still living in huts put up for munitions workers in the First World War, 20 years before. They were horrible dwellings with no proper roads. A lady lifted a mattress on a bed and said, "Look, that was new a month ago. "It was mildewed with damp. She said, "The children are never well. They are up to their ankles in mud before they get to school."
I went to a school to see the children, and in a certain class I saw them doing sums. Nearly all the children were getting the sums right, but there was a group on one side sitting together who not only got the sums wrong, but did not know whether they were trying to add up, to subtract or to divide. I asked the teacher "Why is there this great difference? "And she replied, "I put those children over there by themselves. I call them the little dunces, but they are not dunces really. They do not get enough to eat at home."
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In 1933 Lord Bruce of Melbourne, and a great colleague in this country, drew up a League of Nations report on minimum diet for maximum health. By their test, they showed that one-third of the population of Great Britain were getting less than was required to keep them well. They were mal-nourished. They were hungry. There were hundreds of thousands of building workers who were out of a job, and hundreds of thousands of slums and hutments that ought to have been swept away. There was food in the world, but not for the poverty stricken of Coventry.
Since then, we have had new taxation and social services which have redistributed our wealth, and there is not the most reactionary of Conservative Peers on the Benches opposite who would go back to the poverty of those old days, who would tolerate the fact that our people should suffer as the poor of Coventry suffered in 1936. We need the same feeling of indignation, of hatred for such cruelty about the Third World nations. If we adopt the policy of the Final Document, the reallocation of resources from war to welfare, we solve the danger of the great recession and the danger of inflation.
Some noble Lords may have heard me quote before a transatlantic saying of my youth:
" If you took all the economists in the world and laid them out in a row end to end, they would not reach a single conclusion".
Every economist since Adam Smith has said that inflation is too much money chasing too few goods. Every economist since Adam Smith has said that armament expenditure is unproductive. There are £200,000 million a year pouring out in new purchasing power through the pockets of armament workers, members of the forces and armament manufacturers and no goods at all that anybody can buy or use. Of course, it stands as clear as day that armament expenditure is the main cause of the inflation which we have come to think of as endemic, which is undermining our social system and which may create the great recession of which noble Lords have spoken. We cure the poverty of the world. We solve the problem of inflation. We avert the great recession.
My noble friend spoke of what UNRRA did in 1945. I was the Minister

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who represented Britain in the councils of UNRRA. I had to pass through the House of Commons not only the first 1 per cent. While we were still afflicted by post-war troubles and engaged in our post-war economic reconstruction, another place voted a second 1 per cent. And UNRRA did a marvellous job in putting Europe back on its feet, with minimal help to Russia. Britain can afford to lead today by giving much more economic aid than it has given in recent years. But we can lead in a much more important way. We can press for the early adoption of the total change which the Final Document of the Special Session prescribed.
In a recent debate, a noble Lord speaking from the other side said that the Government still accept as an ultimate objective the general and complete disarmament which the Final Document demands. The ultimate objective? Ultimate after the nuclear war, or soon before the nuclear war can happen? I have said it before and I say it again: Britain is well placed to lead in this great change in world society, because we were the first to make a welfare State, because we had the greatest military empire in the history of mankind, because we demilitarised that empire and because to 650 million people—one-quarter of the human race—we gave freedom, independence and self-government without the firing of a shot. Let us be true to what we did then. Let us think of the innocence and the nobility of our children, and let us leave them a world in which they will grow up with a civilisation of which they can be proud.
7.13 p.m.
Lord ORAM: My Lords, we have had a number of notable speeches in this debate and I am sure that my noble friend Lord Listowel is gratified that his initiative has led to such a valuable commentary on the Brandt Report. I should like to join those who have congratulated the noble Lord, Lord Chorley, on his maiden speech. He spoke most interestingly—and obviously on the basis of personal experience, which is always a good basis upon which to speak. I congratulate him upon his contribution.
Many of the speeches about the Brandt Report have made the point that it is an historic document. I believe that indeed
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it is. We now need to match this historic document with a series of acts of world statesmanship comparable to the Brandt Report. Historical parallels can be inadequate and misleading, but in contemplating the world economic situation today, which has been described not only in the report but in many of the speeches to which we have listened, I cannot help thinking of the economic situation of Europe after the Second World War when the Marshall Plan was the means of revival. I believe that there is a parallel between the nature of the crisis and the method by which it can be overcome.
But today's crisis is not that of one continent needing to be rescued from devastation, as was the case with Europe at that time. It cannot be met, either, by the resources from any one nation, as was largely the case with American aid under the Marshall Plan. What we are concerned with today is not one poverty stricken continent but a poverty stricken hemisphere, the Southern Hemisphere. The action to overcome that problem must come not from one rich, powerful nation, as with the Marshall Plan, but from a group of rich, powerful nations acting together. Those in the OECD, those in the Communist bloc and those in the OPEC group all need to find a common ground for action. As my noble friend Lord Goronwy-Roberts and, indeed, the noble Lord, Lord Aldington, said, the problem which we face is a global problem. The solution therefore must be a global solution.
I think that one further comparison with the Marshall Plan is worthwhile. That plan was as much in America's interest as it was in Europe's interest. Therefore today, as the noble Lord, Lord Holderness, said, it is not a case of charity, of altruism from the rich to the poor;it is as much in our interest, in the interest of the developed world, as in the interest of the developing countries that this world economic crisis must be solved. As a number of noble Lords have pointed out, that is the essential message of Brandt—the message of mutuality, of mutual common interest between the North and the South. Either we learn to swim together —North and South, rich and poor—or we shall certainly sink together.
We are concerned in this debate not only with the Brandt Report but with the

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second part of my noble friend's Motion: with the policies of Her Majesty's Government towards developing countries. If I have any criticism of the way the debate has gone, it is that almost all speakers have concerned themselves with the Brandt Report and that few have concerned themselves with the need for the Government to review their policies towards developing countries. Perhaps I may attempt to redress the balance in that respect. It is not enough to examine the Brandt analysis and to accept its proposals. We need to know what Britain can do and what Her Majesty's Government propose to do. How much I should like to think that when the noble Lord, Lord Trefgarne, speaks he can be as forthcoming and as enthusiastic as was the noble Lord, Lord Aldington, in addressing the House today. I rather doubt, though, whether the noble Lord, Lord Trefgarne, can be thus, because in doing so he would have to retract a great deal of the Statement on aid which Lord Carrington made to the House on 20th February. I doubt whether Lord Trefgarne is authorised so to do.
When we think of the Government's policies towards developing countries we come up against two supremely ironical aspects of the present situation. First, we have had a Statement on the 20th February from the noble Lord, Lord Carrington, about the Government's review of their overseas aid policy, and as Mr. Neil Marten said in another place, the review was produced before the Brandt Commission published its report.
Was there ever a more blatant example of putting the cart before the horse? Here we have a major and thorough review by Brandt and his eminent colleagues which has been under preparation for two years. It was initiated by the President of the World Bank and received the support of the Secretary-General of the United Nations, although of course, as has been noted, it was independent of those two bodies and now, as all have agreed, the report turns out to be a document of outstanding significance. Yet the British Government, instead of waiting for the commission's report in order to relate their own policy decisions to the commission's analysis and conclusions, go ahead with their own inward-looking review in isolation and an
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nounce decisions which in major respects run directly counter to the proposals of the Brandt Commission.
The second great, and indeed somewhat sad, irony that I find in the present situation is that the British signatory of the report is the man who was first rejected as leader by his party and whose talents in world affairs were then spurned by the leader who replaced him;and I believe it is to Mr. Heath's great credit that, having been so treated, instead of retiring to his yacht, as no doubt he was tempted to do, he is raising his voice and giving a lead for sane and imaginative policies in world economic affairs. I hope he will continue to do so with ever greater strength and support and influence. Within the Brandt Commission he worked with eminent colleagues with very different political views, but they found, as Herr Brandt has put it, that consensus became a reality, and what was true on the international front in these respects I believe could be true on the home front.
It is indeed the case that the issues with which the report is concerned do transcend party politics, as has been evident in the debate today and if, as I hope, Mr. Heath is intent upon putting before the British people the conclusions which he and his colleagues have reached, he will find support from across the party boundaries. It is to be hoped also that he will find support from within the Government, but it is here that I am afraid the signs are unfavourable, from what we know so far. I have already said that the Government's policy has run directly counter to Brandt in certain major respects, and I want to deal briefly with two of the ways in which 1 believe it does run counter: the size of the aid programme and the character of the aid programme.
It was clear from what the noble Lord, Lord Carrington, said on 20th February—and indeed from what he did not say when he was directly challenged by the noble and learned Lord, Lord Elwyn-Jones—that we may expect a cut in the aid programme when the figures are announced in the forthcoming White Paper. Yet the Brandt report indicates that one of the major causes of the world's present crisis is the failure of the developed nations to fulfil their obligations of providing 0.7 per cent. of GNP to overseas aid, and it urges that that target should be reached

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by 1985. Yet according to the noble Lord, Lord Carrington, we are proposing to go in the opposite direction.
It is not valid for the noble Lord, Lord Carrington, to say that Britain is a poor country and therefore we must give only what we can afford. This is the whole point of defining an aid target as a percentage of GNP. If our production turns out to be less than hoped then we are committed to a smaller aid programme than was expected. If a country is smaller or poorer than another then its contribution is correspondingly less. So it is not right for us to plead poverty in aid-giving. But the path which we now seem to be treading is one which leads away from the United Nations target. Apparently what we are proposing to do is to go back on our word: to make cuts in real terms, cuts relative to GNP. I believe that is the implication of what we heard the other day, but if it is not so then I hope that the noble Lord, Lord Trefgarne, will say so and I will gladly withdraw that part of my criticism of the Government's policy. I hope he can say that we are not going to cut aid.
The second major way in which the Government's policy runs counter to the Brandt Commission concerns the tying of aid to British products. The Brandt Commission argues cogently in several parts of this report that more aid should be provided for development programmes rather than for projects. I myself experienced this when 1 was a Minister in the Ministry of Overseas Development and when I engaged in discussions with ministers from developing countries. What we had to offer was not what they needed most for development. They wanted to be able to choose programmes of development and technologies suited to their own local needs. They wanted resources with which to meet local costs, and our conditions often compelled them to accept inappropriate aid or none at all.
Now it is proposed that we should go further in that wrong direction. It would seem that we propose to take a narrow-minded and restrictive view of the aid which we provide. Aid tied to British products is much less useful to the recipient than untied aid and also it is an illusion to believe that it is in the long-term commercial interests of the
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donors. What we need are markets, and markets in developing countries result only from sound development programmes. So I am not opposed by any means to the Government's declared objective of conducting our economic relationships with developing countries in order to serve our own commercial and industrial interests, but we can do so only if we know where our true interests lie.
Let me give an example from the work of the Commonwealth Development Corporation, which 1 have seen in the field and which I am sure many of your Lordships have seen. In their work they are doing a great deal to build up the economies of the developing countries where they operate;in other words, they are building markets for British goods. Yet I understand that they are threatened with severe cuts in their budgets, resulting from the gneral policy of the Government. This country's commercial interests depend on the kind of work that the CDC is doing in the developing countries and I believe it would he a great folly to inflict cuts on that kind of work.
Lord TREFGARNE: My Lords, if the noble Lord will allow me to intervene, 1 think it is the case (is it not?) that the CDC has access to many funds other than just Government funds.
Lord ORAM: My Lords, that may be so, but to a major extent it depends upon the funds which are provided through Acts of Parliament and it will be those cuts which will severely eat into their viability. I say again that our task is to create markets in the developing countries for our goods and services. That is the long-term objective. But there is another problem to which I want to call attention;that is, the immediate and urgent task which faces us in preventing the collapse of the markets that already exist. That is why in my concluding moments I want to say a word or two about the problem of the increased indebtedness of the developing countries and to emphasise one part of the Brandt proposals in that connection.
There are of course, as we have heard in this debate, a multitude of other problems and I do not propose even to list them;we have heard of them from other speakers. The monetary problem, and

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particularly the indebtedness of many developing countries, has been getting alarmingly worse in recent years. The Brandt Report call particular attention to this, if I may quote from it. The report says:
" One of the most dramatic changes in recent years has been the increase in the loans of the international private market, which now account for nearly 40 per cent. of the outstanding debt of developing countries compared with only 17 per cent. in 1970. As the loans fall due they "—
that is, the developing countries—
" need to borrow more in order to repay and service them, and the debtor economies, and the entire international credit structure, are now very vulnerable to any disruptions in the flow of capital."
As Professor Singer of the Institute of Development Studies has written in The Times:
" If the large deficits projected particularly for 1980 are not financed, some non-oil developing countries may be unable to cover their balance of payments deficits and may increasingly default on their repayments of debts, with very serious consequences for the international banking community and world economy."
He goes on—and this is the point relative to our commercial interests:
" This would worsen also the recession of the developed countries, as important markets for their exports in the Third World would be lost."
So what I am saying is that our commercial interests should be served, but we should have a proper view of what those commercial interests are. Those commercial interests will not be served by cutting aid to the developing countries;they will be served by an expansive attitude to what we need to do for the developing countries.
The resources for us to do that are there, as the report makes clear, and indeed, it was made very clear in that article by Mr. Heath in The Times of 26th February, to which the noble Lord, Lord Aldington, referred. There are trading surpluses arising from the transactions of the OPEC countries and of the members of the OECD. There are already powers exercisable by the World Bank, the regional development banks and the International Monetary Fund which could do much to meet the problem of world monetary liquidity. And beyond them there is the possibility of a new institution, as proposed by the Commission, to fill the gap if those existing institutions should prove inadequate.
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I am not urging—and I do not think anyone who has spoken in the debate is urging—that the Government should here and now espouse all or indeed any particular one of the many proposals put forward as part of the programme for survival. I am not suggesting, indeed, that any one country, least of all perhaps our own, is in a position to act alone in these matters. What I am suggesting is that we can and should, as a nation and as a Government, respond positively to the challenge that Brandt places before us. We should at least—and I hope we can have this at least this evening—announce our willingness to join with others in a global effort to avoid the international crisis which confronts us, knowing, as we do, that the world has available to it the material and technological resources to overcome that crisis. It is the political will that is missing, and we as a nation can, if we bestir ourselves and if the Government will respond, make a full contribution to the creation of that will on the international scene.
7.35 p.m.
Lord TREFGARNE: My Lords, like other noble Lords, it falls to me to thank the noble Earl, Lord Listowel, for raising this matter this afternoon, and of course to congratulate the noble Lord, Lord Chorley, on his most enlightened and absorbing maiden speech which clearly—as several noble Lords have already said—came from the depth of his own experience.
My Lords, the Brandt Commission was an original and imaginative concept. I would pay tribute to Mr. McNamara, who proposed it, and of course to its ditinguished members, particularly Herr Brandt, who led it during its two years of work, and indeed to our own Mr. Edward Heath. Indeed, I noticed that the right honourable gentleman was sitting for a good long time on the Steps of the Throne earlier this afternoon. He clearly has the same fortitude as your Lordships in surviving the all-night Sittings. Those steps are not particularly comfortable.
The commission has produced a clear and comprehensive account of the whole range of problems which will confront us in the remaining two decades of this century. They have addressed problems whose scale is truly daunting. In the

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course of its work the commission has achieved broad agreement between its members, despite the wide differences that might have been expected. In doing so, they have produced a report that will command serious attention around the world.
As many of your Lordships have said, the 1980s will clearly be difficult, particularly for the less developed countries. The world faces grave economic problems. There is serious concern about the future adequacy of oil supplies, their price and inflation which is widespread and intractable. Unemployment, too, is rising. These are universal phenomena, but for the developing countries they pose particular problems. In many of the poorest countries the growth in food production is inadequate in relation to a population which is still growing too rapidly. I will refer to that point a little more later on. The burden of debt which developing countries carry, already high, will rise as increases in oil prices take effect in their balance of payments. Many developing countries face a painful process of adjustment and nearly all of them are critically dependent for their export earnings upon a renewal of world economic growth. We fully appreciate the difficulties which these countries face and we well understand the impact which this prospect has had on the authors of the Brandt Report.
My Lords, the result of their study is a major document. It is extensive, running to nearly 300 pages, and I can assure the noble Earl, Lord Listowel, that the Government are giving it the most careful study that it deserves. At this early stage, the remarks that I shall make should, however, be regarded as of a preliminary nature. The report covers a very wide range of issues. The commission members have brought their considerable collective experience to bear in providing a comprehensive view of world economic relations as we enter the new decade. Their general theme is simple: a world in want is an unstable world. Or, as Herr Brandt himself has put it,
" While hunger rules, peace cannot prevail."
Their account of grave and growing difficulties in developing countries is a sobering one, and one can readily endorse their overall intentions and aims. The issue for Governments is how to make
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progress in the desired directions while preserving and strengthening the existing means of world economic co-operation.
I am sure that my noble friend Lord Aldington would agree that our approach should be evolutionary and not revolutionary. I can assure my noble friend that we endorse the commission's central message—the need to advance the North/ South discussion for the furtherance of the mutual interests of all the parties concerned. The noble Lord, Lord Pitt of Hampstead, also raised that point. Any new arrangements, if they are to be both credible and durable, must clearly be in the general interest. The commisson is therefore right, I believe, to urge a freeing of the log-jam which has too often characterised North/South discussions: the two groups have tended to dig them selves deeper into entrenched positions. I hope that the commission's encouragement of a balanced and constructive approach will point the way to a more promising future.
Unfortunately, not all countries have been willing to play a part in world economic development commensurate with their economic resources. In my view, the commission were fully justified in pointing to the poor performance of the Soviet Union and its partners. The Russians have sought to disguise the very modest dimensions of their civil aid programme by making exaggerated promises. But it is the sums actually paid over which count. The OECD estimates that in 1978, apart from Cuba and Vietnam, which are clearly political special cases, repayments by developing countries exceeded new disbursements of aid by the Soviet Union by some 135 million dollars. That same year the British aid programme paid out a net £768 million or nearly 1.5 billion dollars to developing countries. Your Lordships will have noted that the Soviet experts told the Brandt Commission that "necessary military expenditure "prevented an increase in overseas development aid. The world has recently seen some of the uses to which that military expenditure has been put. The answer to the point raised by the noble Lord, Lord Noel-Baker, is that we cannot advance along the road that he would wish—indeed, that we would all wish—while the Soviet Union builds and develops its military capability at the present speed.

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We agreed also with the stress placed by the report on the importance of the efforts of the developing countries themselves and particularly of the key role of their own economic and social policies. The noble Lord, Lord Tanlaw, raised this point. It is also true that the stronger developing countries are increasingly well-equipped to play a fuller part in world trade and to assist their less fortunate partners, and we welcome the attention given in the report to regional co-operation.
The Brandt Report contains a great number of recommendations which, as I have said, are being given careful study. Some of the measures suggested are already familiar and are being examined in international fora. The report's value is that it takes a comprehensive view of the measures needed to tackle the world's problems. A full appreciation of the report needs to be addressed, I think, to its proposals as a whole, so I must emphasise again that any comments by me tonight on individual proposals are just preliminary reactions.
The Report proposes a massive transfer of financial resources to the developing countries. The commission is confident not only that this would benefit the developing countries but that, through increased imports from the industrialised North, it would prove to be an effective way of stimulating world economic growth—a point which the noble Lord, Lord Oram, dwelt upon at some length. But clearly one has to consider the implications for inflation, and for economic and monetary policy. Recovery in world economic activity is a vast and enormously complex process. I would note in passing that South and South-East Asia contain both the poorest among the developing countries, and also the most successful;it is evident that economic growth results from many different factors, many of them of a domestic character, and not merely geographical origins.
The transfer of resources alone cannot magically dispel internal obstacles. For instance, greater agricultural and food production depends critically upon the share of total investment which each country directs to the rural sector. It depends on the terms of trade which public policies induce as between town and country;and
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on overcoming cultural and political obstacles to needed land reforms, as well as the development of effective agricultural training and infrastructure.
Several noble Lords—the noble Lord, Lord Tanlaw, my noble friend Lord Aldington and others—referred to the report's recommendations in the field of energy. The way in which we manage our energy resources will surely be critical for the development of the world economy and, indeed, for the lives of future generations. The report has some interesting suggestions for a new approach to these problems which we shall wish to consider very carefully. However, as regards the specific proposal of the noble Lord, Lord Tanlaw, about nuclear power for the developing countries, I rather feel that the difficulties described by my noble friend Lord Aldington will prove very formidable, indeed.
Another novel proposal in the report is for a new kind of summit conference intended to promote what is called a "leap forward "in understanding. We shall certainly look carefully at any such proposals which may emerge. But if expectations are not to be disappointed, the ground would have to be prepared very thoroughly.
The Brandt Report will undoubtedly prove a valuable catalyst for further serious thought among the world community. At the same time, we should not forget how much has already been achieved and what is going on at present. The IMF—as one noble Lord mentioned—has greatly extended its facilities and modified the terms on which it can lend its considerable resources. A doubling, by 40 billion dollars no less, of the general capital of the World Bank is expected, as is a sixth replenishment for the International Development Association. Overall financial flows from the developed to the developing countries have expanded greatly. They include official aid flows from the major OECD donors which now have a grant element in excess of 90 per cent. Some major Western aid donors have, in common with the United Kingdom, written off past aid loans to the poorest countries, or taken equivalent measures.
Trade between the OECD and the developing countries has expanded more

1165
rapidly than trade within the OECD, and developed countries have largely resisted protectionist pressures. The Multilateral Trade Negotiations have been successfully completed with general reductions in barriers to trade and special—and indeed, favourable—measures for developing countries. The new Lome Convention extends and improves on the trade arrangements of its predecessor as well as providing aid totalling £3.3 billion over the next five years. As the noble Lord, Lord Pitt, mentioned, discussions on a common fund for commodities has been making some progress. I am sorry that the progress is not as fast as the noble Lord would wish, but these are difficult matters and we are certainly playing our part. An agreement was reached towards the end of last year on stabilising the price of natural rubber and on establishing a buffer stock for it;that agreement was under the auspices of UNCTAD.
As several noble Lords mentioned, in particular again my noble friend Lord Aldington and, I think, the noble Lord, Lord Chorley, Governments are very far from being the only factor in the development process. The contributions of private individuals and private companies are vital. They bring technology and management expertise which are essential for the recipient countries. Indeed, commercial finance now represents some 70 per cent. of total financial flows to the developing countries. The United Kingdom has traditionally been a major investor overseas and, now that we have removed all exchange controls, there is no hindrance to private funds flowing from Britain to projects overseas. Furthermore, we take positive steps, by means of investment guarantees and investment protection agreements, to encourage such flows. Complementary to these activities, it is very important that developing countries themselves play a full part and provide an attractive climate for foreign investors.
For our part, our overriding responsibility must be to restore the strength of the United Kingdom economy. Renewed growth in the United Kingdom will benefit all, not just through increased investment flows, but also through increased trading possibilities for the develop-Mg countries. Furthermore, our ability to continue to provide aid to the develop
1166
ing countries on a substantial scale is clearly dependent upon the state of our own economy.
The efforts of the developed countries, which I have just described, demonstrate the importance that we attach to our relations with developing countries. Their political importance has been underlined by developments in recent years, and particularly by the invasion of Afghanistan.
Lord PITT of HAMPSTEAD: My Lords, the noble Lord seems to be moving away from the point I raised. I have the impression that, in effect, the Government, or probably on this occasion the noble Lord, have not given enough information to the House about the part that we, as a developed country, would play in accepting manufactured goods from the developing countries. The noble Lord did not seem to deal with that point, which I thought was important. As the noble Lord seems to be moving towards the political aspect of this matter, perhaps he can give us some assurance on my point.
Lord TREFGARNE: My Lords, there are two important points here. First, our ability to receive goods from developing countries, or anywhere else, on a substantial scale depends, of course, upon the health of our own economy, and that we are working to rectify. The other important matter, to which I have briefly referred, is our resistance to clamouring calls for protection by British industries. There are many applications to the Government, particularly through the European Community machinery, for protection from what are called imports from low-cost suppliers, and these we have been able to resist to a very substantial extent. I hope that that is helpful to the noble Lord.
However, the political importance of the developing countries has been underlined by developments in recent years, and particularly, as I said, by the invasion of Afghanistan. This action has caused many developing countries to reassess the role and policies of the Soviet Union. On any objective analysis, they have a greater community of interest with the West, their major trading partner and source of both finance and technology, than with the Soviet Union, which, as my right honourable friend the Prime Minister

1167
has said, has offered them little apart from arms and dogma. If, however, developing countries are to accept this, they will look to us for evidence that their economic difficulties have been understood and that we are willing to work with them to overcome the problems ahead.
Just before I close, may I deal, as far as I can, with some of the points that have been raised. The noble Lord, Lord Oram raised the question of the Colonial Development Corporation—I say the "Colonial "Development Corporation because that is what it was when my father was its first chairman in 1947. It is now, of course, called the Commonwealth Development Corporation. But I can tell the noble Lord that the CDC does, indeed, raise funds commercially, and from the ODA, and can borrow from the National Loans Fund. I fancy that the noble Lord knew that already, but now at least I know it as well.
The noble Lord, Lord Oram, also criticised the Government—and I suppose, by implication, me—for announcing the results of our aid policy review ahead of the publication of the Brandt Report. But, of course, the Brandt Report—as every noble Lord has suggested—refers to the aid policies of the entire Western world, or the North, in respect of the developing countries, and we have to consider our policies in accordance with the restraints placed upon us here at home. That was an important consideration which persuaded us to bring forward the results of our aid policy review at the time we did.
The noble Lord, Lord Noel-Baker, whose speeches I listen to with such admiration, although not I confess always with total agreement, I felt departed from his usual high standard for one brief moment this evening when, as I understood him, he referred to my noble friends sitting on this side of the House as being in favour of all sorts of evil things, which, of course, we are not. We are just as compassionate as noble Lords on any other side of the House, but in the context of the topic which we are discussing this evening, let me just say that we must first create the necessary wealth and not, as some of our predecessors have done, seek to spend the seedcorn first.
Lord PITT of HAMPSTEAD: My Lords, I do not want to interrupt the noble Lord too much, but are not the Government missing the point that investment in overseas development should be regarded as an investment and, therefore, it is not a question of eating the seedcornit is a question of using it in order to produce more corn?
Lord TREFGARNE: My Lords, it really does not matter what we call it;we still have to find the money, and that is the difficulty. The aid programme which we inherited from our predecessors could not be sustained with the funds available to the Government. That was why we had to revise them. My noble friend Lord Holderness delivered, as he always does, an illuminating and thought-provoking speech founded on his great experience and eminence in these matters. It might be presumptive of me, as well as time-consuming, if I discussed in too much detail, what my noble friend said, but I shall certainly undertake to study it very carefully indeed.
Several noble Lords raised the point of population control. I agree with them and other noble Lords, who referred to the great importance of population programmes—which are, indeed, set out and vividly analysed in the Brandt Report—that this is a sector to which we ought to give considerable attention in our aid programme, and indeed we do. For example, last year we spent about £7 million on aid for population projects, but progress in moderating population growth goes hand in hand with economic growth and progress generally;and of course our aid programme contributes to these factors generally. However, I certainly accept and agree with the noble Lord, Lord Vernon, and others that a root cause of the problems of so many of these Third World countries is overpopulation.
Lord ORAM: My Lords, I wonder whether the noble Lord would care to say a few words about our contribution to the United Nations Fund for Population Activities. Is it our intention to maintain that contribution?
Lord TREFGARNE: My Lords, I am afraid that I do not have that information

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in front of me. Perhaps the noble Lord, Lord Oram, will allow me to find out and write to him.
The final point with which I should like to deal was raised by a number of noble Lords, including the noble Earl, Lord Listowel, and my noble friend Lord Aldington, who said that the Government should be moving more rapidly to the United Nations' target of 0.7 per cent. of GNP. We accept that target—as has been done many times from this Box, by me at least—but we have never set a date by which we should reach it, and I am afraid that it is not possible for me to do so tonight. However, there is another United Nations' target of 1 per cent. of GNP for all financial flows—that is, both private and governmental—and I am pleased to say that we have greatly exceeded that target for a number of years past.
The speeches that have been made in the course of the debate tonight are evidence of the widespread interest that has been aroused in this matte!. The commission have shown how a fresh approach to these major problems can command the attention of an important and influential audience. Governments must now look anew at these problems to see how we can move forward. As my noble friend the Foreign Secretary made clear on the 20th February, our ability to support development overseas is dependent upon the state of our own economy and the need to strengthen it. We shall nonetheless be examining the report of the Brandt Commission with great care to see how progress can be made in ways conducive to the welfare of all.
Lord BROCKWAY: My Lords, before the noble Lord sits down—
Lord NOEL-BAKER: My Lords, before the noble Lord the Minister sits down —
Lord WELLS-PESTELL: My Lords, I should like to point out to your Lordships, at the risk of incurring your Lordships' displeasure, that this debate has been going on for five hours and there have been only 17 speakers. There is another debate, just as important, if I may say so, in its field, in which there are eight more speakers. There are some noble Lords
1170
in your Lordships' Chamber who have been here since 2.30 yesterday afternoon.
Lord BROCKWAY: My Lords, I was going to ask the noble Lord before he sat down this question. I was perplexed by what he said earlier in his speech that British aid was greater than what we received in return. Is it not the case that private investment is included in our estimate of aid? Was it not estimated, up to the end of 1978, that we received back in repayment for loans, dividend and interest three times more than the expanded interpretation of aid which was given?
Lord TREFGARNE: My Lords, I think we are not talking of like with like. 1 was referring to the raw figures, if I may call them that, of our aid programme which, in the year I referred to, was £768 million net from the United Kingdom: that is to say, the gross figure less the receipts from loan repayments and interest. I compared that with a similar figure for the Soviet Union.
Lord NOEL-BAKER: My Lords, before the noble Lord sits down, may I ask him to consider that he has misunderstood what I said tonight and what I have said before? I have never proposed that we should reduce our armaments, or get rid of our offensive weapons, before the Russians or other nations do the same. What I have proposed, and what I urge upon him and upon the Government, is that our admirable Foreign Secretary, who has spoken and worked for us all on the question of Rhodesia, should do the same in the United Nations on the even more vitally important twin evils of the arms race and the world poverty with which the Brandt Report has dealt, and that the noble Lord, Lord Carrington—
Lord LYELL: My Lords, would the noble Lord give way? I think it is the feeling of the House that the noble Lord might be abusing the custom. He may ask probably one question, but I think it would be the feeling of the House that the noble Lord might pursue this argument either by writing to my noble friend or possibly at a later date. The noble Lord made a lengthy and worthwhile speech. It might be the feeling of the House that my noble friend has replied to all the points. I think that the noble Earl

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would like to wind up, and we have the feeling of the House that many of us have been here for a long time.
Lord NOEL-BAKER: My Lords, may I apologise to the House if my inexperience has led me into error.
8.5 p.m.
The Earl of LISTOWEL: My Lords, I shall be very brief indeed. This debate has been memorable, if not unique, because it has displayed a complete and wholehearted agreement between the noble Lord, Lord Aldington, and my noble friend Lord Brockway. I should like to thank the noble Lord, Lord Trefgarne, for the undertaking he gave that the Government would give serious consideration to the proposals of the Brandt Report. I did not expect him to go further this evening. I do not think he will be surprised if I say that I shall not leave him or the Government alone until they can come back to this House and say whether or not they accept the main recommendations of the Brandt Report.
I should like to join in my congratulations to the maiden speaker, who is not here at the moment. I should like him to read in Hansard—
A noble Lord: My Lords, he is here.
The Earl of LISTOWEL: I apologise, my Lords, he is here. I should like to tell him that I have listened to many maiden speeches but that I have listened to none that has shown such an extraordinary excellence in the qualities that your Lordships particularly appreciate: first-hand experience and balanced judgment. I should like to thank all your Lordships who have taken part in the debate for your welcome to the broad outline of the Brandt Report. It is indeed impressive that this welcome has come equally from both sides of the House. This has been an important expression of Parliamentary opinion. I hope that it will influence public opinion and the policy of the Government. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

CARE OF THE ELDERLY
8.7 p.m.
Lord HYLTON Lord HYLTON rose to ask Her Majesty's Government whether they are giving favourable consideration to certain modest but significant proposals for improving the financial arrangements affecting residential homes and care generally for the elderly who arc frail or handicapped. The noble Lord said: My Lords, I beg leave to ask the Question standing in my name on the Order Paper. After those formal words I should like to thank in advance all those who are going to speak on this question this evening. I am doubly grateful to them for doing this after an all-night sitting and after a long debate on a question of world importance. I am delighted to have attracted a maiden speaker tonight in the person of my noble friend Lady Trumping-ton.
I should perhaps briefly declare my interest in this subject. I have been for many years closely connected with three charitable trusts which make both grants and loans for the housing of elderly people. Therefore I am perhaps in a position to know, as regards the voluntary sector, just where the shoe pinches. It may be helpful if I try briefly to define some of the terms of art which 1, and no doubt other speakers, will use.
First, there is sheltered housing. By this I mean grouped, self-contained housing for the elderly, usually with a resident warden and with some communal facilities designed normally in accordance with the DOE circular 82/69. There is also under this heading shared accommodation of, for instance, the type of Abbeyfield Houses with which many of your Lordships may well be familiar. The second important term is voluntary homes for the elderly. By this I mean residential accommodation registered with local social services departments and designed to standards set by the Department of Health and Social Security.
The neatness of these definitions is slightly blurred by some other newer forms. We have, for instance, caring hostels in accordance with the Housing Corporation Circular 1/77, and certain extra care units which are built on to traditional sheltered housing. Voluntary housing associations manage all of these

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forms of accommodation;in some cases one association manages more than one form. Housing associations provide some 10 per cent. of all sheltered housing, and this involves some 50,000 people living in it. The voluntary homes supply about one third of the places in residential care for the elderly. This Question is wide enough to include local authority homes and domiciliary services, which I know my noble friend Lady Faithfull will be touching on later.
I will confine myself to the voluntary sector only. One of the problems faced there, first at the national level, is the division of responsibility between, on the one hand, the Department of the Environment and, on the other, the Department of Health and Social Security. At the local level, housing is normally the responsibility of the district and social services that of the county, while health comes under a third body, the area health authority.
There has been much documentation about the numbers of people aged 75 and over, and we know as a fact that a big bulge is coming in the next few years. It is thought there will be some 500,000 extra people over 75. Many of these, of course, will be perfectly healthy and fit, as we know from experience in many parts of your Lordships' House, but there is certain to be a considerable increase in the number of those who are frail and handicapped, and that poses serious difficulties both for sheltered housing and voluntary homes. With this progressive ageing, help is needed for such things as dressing, washing, lavatories and feeding. This can produce acute problems for the wardens of sheltered housing who may be expected to give extra care when domiciliary services are unfortunately not fully available. The same sort of thing happens in the voluntary homes when they begin to find themselves in a nursing situation.
There are, therefore, human and financial problems. The financial problems are possibly most acute for the voluntary homes. It is possible now, and has been for some years, for an approved sheltered housing scheme to qualify for 100 per cent. loans and other help above that, but new voluntary homes seldom or never qualify for Government grants and loans. These homes have urgent cash needs for such
1174
things as lifts and fire precautions, and the money for these has at present to be raised nearly entirely from voluntary sources. One sometimes finds one Government department saying, "Do this;put in your fire precautions ", and another saying, "No, you cannot have any money for it". It is all very difficult. There are also revenue problems, but I will not go into those in detail.
Housing associations which are providing, the voluntary homes ask, "Why should this form of housing be the poor relation of all the other forms? Why should it be, in effect, the Cinderella of what they are able to provide? "These problems have been highlighted by a working party set up by the National Federation of Housing Associations. The conclusions which that working party came to were, first, that we need better co-operation at national level between the two Ministries, the DOE and DHSS, and the Federation would be only too willing to do anything it possibly could to help on that point. At local level we need closer liaison locally to co-ordinate in each area the provision and use of sheltered housing and residential homes, together with those all-important domiciliary services. I believe they do these things slightly better than us in Scotland and we look forward to improvements both nationally and locally in England and Wales.
We are also asking in the conclusions of this study for some increased Government funds for the voluntary homes, first for repairs, then for modernisation—lifts, fire precautions, kitchens and boilers in particular—a little extra money for extensions to existing homes to make them more manageable and workable, and a few brand new homes. I stress that this is a very limited number of homes about which we are talking, homes designed particularly to relieve the pressure that exists and is building up in the sheltered housing. For example, one home could serve a number of local housing associations or local authorities, or a mixture of both. Such homes would be much cheaper than hospital accommodation and many housing associations are already well qualified to provide them.
In this connection, I would say with respect to the Department of Health and Social Security that it is no good saying that the number of places in voluntary

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homes has kept pace with the increase up to now in the elderly population. Because of the bulge I mentioned earlier, we are getting into a much more difficult situation. We also need greater flexibility of design and management of sheltered housing with the aim that the tenants there should be able to stay in occupation until the point of death.
How can these things be done? This is where I come to what is referred to in the Question as:
"…certain modest but significant proposals for improving the financial arrangements".
First, we need some capital funding for improvements and extensions and new building of voluntary homes, and I hope that could come from the Department of the Environment via the Housing Corporation to registered housing associations. Secondly, the revenue costs of existing and new voluntary homes will come, as they do now, from charges made to residents, but these need supplementing, and the possible places from which they might be supplemented are the Supplementary Benefits Commission via board and lodging allowances, from attendance allowances and from block grants from social service departments and/or area health authorities. The effect of involving the Supplementary Benefits Commission would be to relieve some of the burden that currently falls on local authorities.
As regards the sheltered housing, we feel we need an amendment or perhaps several amendments to Circular 82/69 to allow, first, lifts to all dwellings on two floors or more;secondly, accommodation designed to mobility standards;thirdly, communal kitchens capable of providing meals, not only to tenants but to other old people living nearby;and, fourthly, flexible staffing for sheltered housing, and the suggestion is that care assistants should be attached to sheltered housing schemes where domiciliary services are not so readily available, and I think these would have to be paid for by social service and health funds.
The important question is how much this will all cost, and some careful studies have been made. It is probably accurate to say that the immediate demands for repairs and some extensions to voluntary homes would be about £1 million per
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annum. New building of voluntary homes, especially for those people who are mentally confused or physically frail, might come to £27 million spread over three years. That would allow, say, 30 schemes of about 30 beds each. This is equal to 5 per cent. of the allocation to housing associations for sheltered housing in 1979–80. Therefore, it is, I believe, a modest re-allocation of existing funds and is not a call for additional Govern- ment funding. As regards sheltered housing, communal kitchens cost on average £4,000 extra, and lifts for two storeys cost about £12,000 each. If mobility standards are to be incorporated in sheltered housing schemes, this will cost very little extra provided they can be built in at the design stage.
The voluntary housing movement fully accepts that it must take its share of the current cuts;it is not asking for preferential treatment. However, it is asking that there should be greater flexibility both for existing and new buildings and a more pragmatic use of the available funds, both capital and revenue funds. I am sure that at the end of the debate I shall receive a sympathetic reply from my noble friend Lord Cullen of Ashbourne. and I trust that the Government are giving the favourable consideration for which we are asking. I very much hope that my noble friend and his colleague, the noble Lord, Lord Bellwin, will use their influence with Her Majesty's Government to secure the best possible results for the elderly people who are frail or handicapped.
8.20 p.m.
Earl GREY: My Lords, I look forward with great interest to the maiden speech of the noble Baroness, Lady Trumpington, who I know is well qualified and experienced in matters of health and welfare. I, too, am grateful to the noble Lord, Lord Hylton, for asking this Question, and I shall welcome any considerations that the Ministers may extend this evening. We are all aware of the Government's policy on cutbacks in public expenditure, but I am convinced that there are one or two areas in which the greatest care must be taken before implementing this policy. One such area is education, which is receiving our closest attention this week, and the other is that of the elderly and handicapped. I have read the sub-

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mission to the Minister from the National Federation of Housing Associations. That report is a worrying one, in that it highlights many areas in which the situation for the elderly and handicapped is not improving;in fact it is worsening. It appears that there is virtually no statutory finance available to improve existing homes or to meet the demands regarding new homes.
As the noble Lord mentioned, the indications are that over the next 20 years the population of people over 75 years of age will increase by 500,000, which will create a problem in itself. It is obvious that all elderly people do not, and will not, need special homes and care provided for them, but it is very likely that the numbers needing help will increase, and if the facilities are not now adequate, it is certain that the position can only get worse.
I am not advocating that the Government should have the sole responsibility of financing, housing, and taking charge of people who are no longer able to care for themselves. Many families have at least one person who is in that position, and I believe that a moral duty and an obligation to be concerned and involved rests with them, but it is not always easy or practical for a family to house an elderly relative who needs constant attention. It can prove very expensive, disrupt family life, and lead to bitterness.
Some councils that I know of provide excellent facilities and homes for the elderly and handicapped;for example, self-contained flats, well maintained in pleasant surroundings, with trained wardens on hand to look after them, are to be found in many districts. Mealson-wheels contributes an invaluable service and friendly contact, ensuring the health and wellbeing of an individual and, most important, making sure that he is not forgotten. It should be said that approximately one-third of the places in residential care are provided by voluntary or private homes, but with rising costs and inflation there is a likelihood of a drastic, though reluctant, cutback in these services. It is vital that extra homes are provided, that finance becomes available, and that people are trained to be well-qualified to care for the special needs of the elderly and infirm.
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I should like to ask the Minister when taking into consieration the Government's policy of cutbacks in public expenditure, to bear in mind that this is an area that requires not a reduction in funds, but an injection of more funds. The old-age pensioner who is able to care for and look after himself has difficulty enough to make ends meet, but for one who is physically handicapped and incapable of coping by himself the problems are enormous.
I should like to ask the Minister, finally, what is the present position with regard to the attendance allowance payable to families who are able to look after an elderly or handicapped relative at home. This allowance has been of immense benefit, in that it eases both the financial and manpower pressure on councils and hospitals which would otherwise have to bear the responsibility.
8.24 p.m.
Baroness TRUMPINGTON: My Lords, my tiny hand may be shaking, but it is certainly not frozen, in view of the warmth and friendliness which has been extended to me in the limited time in which I have had the honour to be a Member of your Lordships' House. I would therefore crave your Lordships' indulgence over what I fear will only inadequately express my strong feelings on the subject that has been raised by my noble friend Lord Hylton this evening.
As a former member of the social services committee of the Cambridgeshire County Council, it was natural for me to consult officers from that authority concerning the very real and pressing problem of care for the elderly who are frail and handicapped, particularly in relation to residential homes. It was pointed out to me that over the decade from 1974 to 1984 Cambridgeshire will have built six homes for the elderly, which will provide 240 more places. However, at the end of this decade Cambridgeshire envisages that they will still have the same number of places per thousand as at the beginning. In other words, they will have stood still, instead of moving forward in the face of an ever growing population of old people. I assume that this situation is paralleled throughout the country.

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It follows, therefore, that local authorities will depend more and more on housing associations and organisations such as the Abbeyfield Society to provide accommodation for those who can no longer live alone. Local authority sponsorship of places in voluntary homes does, of course, exist. It was however a depressing fact to be told that, due to financial cuts in the budget, Cambridgeshire will this year be reducing their sponsorship by 10 places. This cannot be right. The economic climate forces cuts in all programmes, but surely care of the elderly is such an essential service that their wellbeing is paramount.
Of course, the ideal is for all of us to live out our days in our own homes, with our own familiar possessions around us. But the fact is that for many, indeed for an increasing number, that simply is not possible. Sponsorship of places should therefore be increasing, and not standing still—if not decreasing;and surely during a time of economic difficulty it is cheaper to sponsor rather than to build. I am informed that only 3 per cent. of those living in sheltered housing move out of such places. People are now living longer, and therefore there is a greater demand for places. Also more care and attention will be needed to look after the residents.
At present, charges in voluntary homes are usually below local authority levels, partly because the homes tend to be smaller and cost control may be easier, partly because they aim to provide each individual with only the specific care that he needs, and no more, and partly, as in the case of the Abbeyfield Society, because they depend greatly on voluntary help. If the residents are to remain in these homes, being hospitalised only for acute illness, and returning to the homes after convalescence, in many cases the organisers of sheltered housing will have to replan their homes to accommodate the needs not just of the elderly, but of the very old and frail, too.
As my noble friend Lord Hylton said, corridors should he wide enough for wheelchairs, and provision should be made for communal facilities such as occupational therapy, and for day care and communal eating, as well as other facilities which he mentioned. I fully appreciate that public funding for sheltered housing through district councils or the Housing Cor-
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poration is becoming very limited. But the problem is so urgent that public funding levels must be maintained, and, given the growing numbers, let alone the current population of the elderly, increases will be needed. As an alternative I would suggest that encouragement should be given by the Government, and acceptance made by the housing associations now to plan joint schemes for the future whereby sheltered homes and local authority Part 3 old people's homes are situated near enough to each other to provide complementary facilities. This alternative would be more economical and flexible.
If your Lordships will bear with me for one more moment, I feel I must bring to your Lordships' notice one other problem which is not often mentioned but which is entirely relevant. I refer to the question of incontinence, which is the key to so many of the troubles experienced by the elderly;for instance, home help problems, support by relatives, the expense incurred in laundry and cleaning by a group with very limited financial resources, and, indeed, for old people's homes themselves. The national guidelines state that one lavatory should be provided for eight people in old people's homes. Although these guidelines are not directives and are not rigid—and, indeed, local authorities are planning above that level for old people's homes—they do not go far enough to encourage the provision of such basic necessities at a reasonable level. In the wider community of the elderly, the problem of incontinence is far more widespread and personally disastrous than many of us appreciate, and I see an urgent need to develop services, training and research into the needs of the elderly for the amelioration of such a basic and undignified disability.
My Lords, I wish that I was ending my maiden speech on a more elegant note. Indeed, it was suggested to me today that I should ask to be excused in midspeech in order to make my point. It is a long time since many of us were teenagers, though we remain young in heart. The physical and psychological problems of aging are major ones in the latter decades of this century. Without being over-protective we must do everything to enable the aged to live in comfort and dignity—above all, dignity. It is remarkable how the old respond to a challenge. In many ways they react

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better than the middle aged. In fact, I have been struck by what a happy relationship can exist between the young and the old—not second childhood, indeed, but often a meeting of kindred spirits who learn from each other.
I speak as the wife of a headmaster among whose pupils he is happy to count my noble friend Lord Hylton. Many schools, in their schemes of community service, provide not only a social service but an educational benefit in bringing the generations together. The young can till the well of loneliness and discomfort in which too many of the old live. We, too, can play our part.
8.33 p.m.
The Lord Bishop of DERBY: My Lords, I should like to offer congratulations to the noble Baroness, Lady Trumpington, on her fine maiden speech, which comes out of so much close knowledge and experience. We all have to discover by trial and error what the traditions, the Standing Orders and the customs of this House are, and I suppose it would have been only by staging the demonstration that she suggested as a possibility that she would have discovered those traditions. But I hope that we shall again have her lighthearted touch, as well as the knowledge that she has to give.
My Lords, the first point that I want to make—and at this late hour I must try to avoid ally repetition of facts which have already been given—links up closely with what the noble Baroness was last saying. The pressure of the number of old people now requiring care and homes means that many of them are ceasing to be treated with full humanity. Something is being lost in their life as human beings, as real persons;and what I think this Question is concerned about is not primarily buildings and finance but things which flow from them. We need to be concerned with this increasing number of old people, and with securing that they are helped to be as fully human to the end of their days as they have been during the course of their lives.
Another effect of the pressure of the still increasing numbers is that very often people who are being discharged from hospital are not able to go into any caring situation. Recently I heard of one 80year-old who could not be kept in hospital.
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She was totally confused in mind and had to go to her own home where she would not allow anyone in to give her any help at all. There was no transitional stage which could be provided for her. But, of course, this kind of stubbornness is one of the problems which have to be dealt with by the kind of care which is given, one way or another.
There are those who enjoy the benefits of day care, but this can be a very expensive business, both in the provision of transport and in the provision of escorts, who so often have to be there to help old, frail and handicapped people in and out of cars. For example, collecting 25 patients in the morning and taking them home later in the day is both time-consuming and very expensive. Then there is the increasing burden, often by way of intolerable pressure with increasing responsibility on those who are wardens of homes.
Other pressures arise at the present time. There are homes of one kind and another which will take old people while the relatives with whom they are normally living go on holiday. This works very well if the relatives return at the end of the holiday to take the old people home again. But so often this does not happen;and there is no longer any legal obligation on the relatives to care for parents and other old people. This problem goes on increasing in extent. Similar things happen, though at a slower pace, over "Granny flats". The family may have an extension built on to their house, or set aside a part of it for Granny, but in no time reasons are found for sending her elsewhere;and elsewhere may not be a very satisfactory place. This is a further indication of the need for greater provision. Sometimes, in some places, the joint funding between area health authorities and social service departments leads to all sorts of interdepartmental fighting—and, in fact, arrangements last for only five years.
The noble Lord, Lord Hylton, mentioned that one-third of the places in residential care are provided by voluntary or private homes. A very large proportion of these are provided and run by Church bodies—Methodists, Roman Catholics, the Salvation Army and the Church Army—and this is one particular reason of mine for being interested in the subject. Reference has already been made to the

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fact that the report of the National Federation of Housing Associations points out that charges in voluntary homes are usually below local authority levels, and this may well be a reason for continuing to maintain them and to increase their number slightly. But they need increased financial support, and this need I would join in stressing.
Some of the homes, as we have heard, need extensive repairs, if not replacement, and some need considerable refurbishing and improvements, some demanded by authority and some known by those who work in them. But again let me say that this financial provision which is being asked for is designed to serve deep human needs which go on expressing themselves in a greater number of people, and I hope that the Government will take this into account as they consider the material that the noble Lord, Lord Hylton, and this debate bring to their attention.
8.40 p.m.
Countess of LOUDOUN: My Lords, I, too, should like to congratulate the noble Baroness, Lady Trumpington, on her fine maiden speech. I hope she will often give us the benefit of her wisdom. I shall be very brief as I am feeling rather frail and elderly myself. I realise that at the moment we are in no position to spend vast sums of money to improve our care of the elderly who are frail or handicapped. More could be done at no great financial cost to improve the facilities we already have. In 1978 there were 151,000 elderly people living in residential homes, some in voluntary or private homes and the remainder in local authority homes. The demand for these places increases as the number of very elderly people in our population is rising, but many voluntary organisations seem to be unaware that the nature of this demand for residential care is changing.
Most elderly people live in the community, some managing on their own for as long as possible, but most living with their families. Due to the fact that they are remaining in the community longer, the degree of frailty and disability of residents in the homes is intensified, which suggests that both the admission policies and the discharge practices of voluntary homes should be reviewed. Many of these voluntary homes are at a grave dis-
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advantage in meeting present-day needs for care with out-of-date buildings, in-adequate facilities and low staffing levels.
If the voluntary sector is to continue to play its part in supplementing statutory provision, it must be equipped to do so. Part of the problem comes from the fact that the services for the elderly have been developed piecemeal both by the National Health Service and local authorities, so that the resulting facilities conflict or overlap, or cannot meet the needs of whole sections of the eldery population.
Surely one answer would be joint planning between local authorities, the Health Service and voluntary organisations, to develop a range of residential services which complement each other and yet offer a choice to meet the needs of individuals. Add a large amount of common sense to the great deal of expertise which exists among all these people—that is, the local authorities, the Health Service and the voluntary organisations—plus the earnest desire to cut out any unnecessary waste, and I am sure we can only improve the quality of life for our senior citizens.
8.43 p.m.
Baroness FAITHFULL: My Lords, a few days ago the noble Baroness, Lady Trumpington, was sitting next to me in a debate and she said, "I itch to get up. I should like to speak, but I cannot". Now she can. We are delighted that she has made her maiden speech and that she will no longer have to sit quiet. She will be able to let us have the wisdom of her experience.
I am most grateful to the noble Lord, Lord Hylton. I feel very deeply on the question of the elderly, having been a director of social services. I wish, if I may, to take a slightly different course from that taken by the speakers up-to-date, but may I say, before I do so, that I agree with all that has been said by the noble Lord, Lord Hylton, the noble Earl, Lord Grey, the right reverend Prelate, our maiden speaker, Lady Trumpington, and the noble Countess, Lady Loudoun. I should like to take up the question of domiciliary services and not mention the question of residential care, except in one or two areas. As the noble Baroness, Lady Trumpington, said, people like to be in their own homes,

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with their own bits and pieces round them, to a very late age. How can we do this?
As the noble Lord, Lord Hylton, has said, residential care is very expensive. It is expensive in personnel. It is expensive in buildings. It is expensive in revenue. We must have residential care and I agree with all that has been said, but I am wondering whether we should not think much more deeply and much more positively about our domiciliary services;first of all, the home help service. The home helps are the salt of the earth. I think of the home helps we had in the area of Oxford, where I worked, and of what they used to do not only as a job but also in their spare time. A number of people are going to be without jobs and we ought to maximise on them. Home helps, given the support and help of social workers, can give an infinite service and many people can be helped to remain in their own homes.
Secondly, I want to ask the Minister about district nurses. I understand that district nurses are getting extra training which they have not had before. If there was a tremendous infusion of people and of finance into the district nursing service, many people could remain in their own homes who, at the moment, have to leave. I say this with the utmost diffidence. 1 wonder whether the medical profession, the general practitioners, are all experienced in the care of geriatrics and the elderly. I wonder how many of them have the knowledge and the wide experience of helping people at the end, helping relatives at the end of a person's life and helping a person through very difficult stages. General practitioners give a marvellous service, but I think many of them have not qualified in geriatric work, particularly in the homes.
My fourth point is the question of volunteers. We have at Berkhampstead a volunteer centre and I have read in the Hospital and Social Service Journal of various schemes in the country involving volunteers in the most extraordinarily imaginative way. In the Isle of Wight, for instance, there is a total scheme of volunteers;district nurses, health visitors, doctors and professional social workers who work together, who have plotted the island and are helping one another to help people to stay in their own homes. 1186
I think there are also such schemes in Southampton, Kent and in many other places. I am wondering whether we should not give thought to a united local team, using volunteers with a certain sense of co-operation, of gaiety and of knowledge.
I now come to the question of wardened accommodation. I have found—and I shall be grateful to hear from the noble Lord, Lord Hylton, whether he has found the same—that when you get good wardened accommodation the people in the area within which it is situated think, "Oh, there is a warden there;then there is nothing for us to do. It is her responsibility to care for the elderly in the wardened accommodation". I was privileged to go up to Northumberland to open one of the Johnny Johnstone wardened accommodations. These wardened accommodations are run by a voluntary committee of the air aces who survived the last war, Bader being one of them. As their thanksgiving for having survived the last war, they have contributed to build the Johnny Johnstone wardened accommodation.
I went up to open it and it was a magnificent place. But I felt that, with the charming and enchanting warden, there was perhaps—I have seen this not only in that place but in many others—an opting out of the community because it was felt the warden was there to do everything. The warden did do everything in many cases, but she needed support and help. I think that sometimes the wardened accommodation, by the very fact that it is a little community on its own, becomes slightly divorced from the community, and the volunteers and the people in the area have the feeling that the old are being looked after there and there is nothing for them to do—forgetting, perhaps, that the warden herself needs help.
I was responsible for seven old people's homes and I agree with the noble Lord, Lord Hylton, that to make these viable and a possible place for the very elderly to live is expensive, but I cut my costs quite considerably in our old people's homes by dividing the houses so that the old people looked after each other and themselves. We divided the houses into little flatlets of six so that six people lived together and looked after themselves and

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were only provided with one meal a day, themselves shopping and getting the other meals. We have a number of hostels, and here again it is a question of responsibility, of asking people to give much in the hostel to those who cannot care for themselves.
I wonder whether we ought to think of what hospital is for. Should we be sending people to hospital who are not ill, who are simply frail by virtue of age but not by virtue of illness? On the whole question of the frail elderly, I ask myself whether this is the terrible chink in the armour of our services to the elderly. If one is fairly young, one can get into an old people's home after a while, but one must be fairly healthy to get into an old people's home. The other day I was in the library in Oxford getting a book out and I heard two people talking on the other side of the library. One of them said, "I'm 70. I'm putting my name down for an old people's home". The other said, "I'm 71. I shall get into one in five years' time".
When it comes to trying to get in frail elderly persons, they are not acceptable in wardened accommodation, in hostels or in homes. So where are they to go? We must think very carefully about the domiciliary services, but we must also have regard to this chink in our armour because the frail elderly are very often those who have had the courage to live in the community until they are too frail. They do not go in at an earlier stage.
I should also like to touch on the question of knowledge. Very often we arc talking about work in the schools in home economics, for training people up for marriage, for home, for children, and for family life. But are we informing our elderly and ourselves exactly what we ought to be doing for planning for our own future? A hook entitled, Taking Care of the Elderly Relative has just been written by a doctor in the area I live in, and his colleague. It is an extraordinarily interesting book born of their experience of the kinds of things we all ought to know. Looking at this book, one realises they are very simple things but the kind of things that people very often do not know: when to put one's name down, who to go to, what one can expect and what hope there is. As the noble Lord, Lord Hylton, pointed out, and perhaps to put
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the whole thing in proportion, it is right to say that an enormous number of people do live in their own families, do die within the orbit of their families, but do not want to stay in the mainstream of life until the very end. I think that with all the domiciliary services we ought to try to make this possible.
8.55 p.m.
Viscount BARRINGTON: My Lords, I do not know if this is in order, but the noble Lord, Lord Wells-Pestell, has very kindly allowed me to say a few words. The subject of this debate is old age, including incontinence. I am not continent enough to refrain from saying how much 1 agree with everything the noble Lord, Lord Hylton, said, and how grateful I am to him. I should like to congratulate the noble Baroness, Lady Trumpington on what I thought was a superb maiden speech. It will read extremely well tomorrow. She said her tiny hand was not frozen. I do not know whether it is tiny but certainly it was not frozen. I think that making a speech in a House as empty as this, after everyone has sat up all night, would make most people's hands freeze. It did not do so in her case. I say this without any prejudice, because I believe she has some association with Cambridge, just as the noble Baroness, Lady Faithful! has some association with Oxford—I do not express any preference. The noble Baroness may even have had some association with Eton, although I suppose that is not very likely. I agree entirely with everything she said.
The point I should like to make is that voluntary help in these things should come in the right way. Recently I visited an elderly relative of mine in a home, after she had been taken from one that was quite appalling to a very good one. She had been really rejuvenated by the fact that there were a great many younger people around her. There is a saying that age and youth cannot live together. Youth and age cannot, but young people can help old people. Perhaps I am very lucky, being one of what has been described as "a big bulge". Having been helped by younger people, I felt I could not listen to the debate without saying how much I appreciated what has been said. I apologise to the House: perhaps it was the fact that I sat up all night that made me decide to speak in this debate.
8.59 p.m.
Lord WELLS-PESTELL: My Lords, the first thing I should like to do is to extend my personal congratulations to the noble Baroness, Lady Trumpington. I do not know when I have enjoyed a maiden speech quite so much. I say that very sincerely. I have not a reputation for saying things that I do not mean. It really was delightful and I am almost inclined to say, "To the manor born". I was warned before the noble Baroness came to this House not to be intimidated by her appearance. I was told that I would find her a most delightful and charming person;and those of us who have come to know her—perhaps not too well in so short a time—realise that we are fortunate in having her in this House. I hope that it will not be too long before she makes a further speech and plays a full part in the work of this House. We, on this side, I am sure, will spend more time disagreeing with her than agreeing with her, but that is the purpose of the whole thing.
I should like to answer a good many things that have been said. I feel that I want to congratulate the noble Lord, Lord Hylton, on being able to draw attention to the needs of the elderly in residential homes without commenting on the disastrous policy of the present Government, which is keeping a large number of people who need to be in residential homes out of residential homes because the homes are not there to meet their needs. I was surprised that he said, if I understood him correctly, that voluntary organisations accept the fact that the Government cannot do anything more financially in this matter.
Lord HYLTON: My Lords, the voluntary homes are being realistic about the position. They would like an avalanche of funds, but they probably will not get them.
Lord WELLS-PESTELL: My Lords, their realism is based on the fact that they know the Government have dug their toes in and are not doing anything more about it—No, my Lords, I am not going to give way to an intervention. Whenever I speak, the noble Baroness finds some reason to try to intervene. I would say to the noble Countess, Lady Loudoun, that if the Government, when they came
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in, had not given away by way of tax reduction £4,500 million, one-third of that sum going to the higher income groups of £10,000, £15,000 and £20,000 a year, they would have been able to meet this situation and to do the everything that the noble Lord, Lord Hylton, wants them to do.
With the noble Lord, Lord Hylton, I am concerned as to what is happening in this particular field. He rightly pointed out that only a very small percentage of the elderly need residential homes. I believe the figure to be something like 150,000. Some 20,000 of them find places in private homes, 30,000 in voluntary homes and 100,000 in local authority homes. We must face up to the fact that the position is serious. It is not a question of what we want for the future;it is what we need here and now. Private homes are getting more and more expensive—anything up to £500 a week. I think there must be a lot of thieving scoundrels who charge that amount of money. Voluntary homes can do it for between £55 and £60 a week. Local authority homes certainly cost more, at something like £70 a week, as I understand the situation.
The Government are in a difficult position when it comes to providing financial aid to charities, although as noble Lords will probably know there is legislation which enables the social services departments to give capital grants or loans to such voluntary organisations as Residential Care for the Elderly who are providing services. i am aware of the fact that this money is not going to be forthcoming because of the present economic situation. But what does it mean? It means that many local authorities have new buildings in the course of construction—and the latest figures I have are that there are between 55 and 60 such buildings—which, when completed will be left unused. They will include buildings of homes for the elderly. In addition, there are about 50 to 60 existing establishments which will close. They will be largely residential homes for the elderly;although I accept that some of those 50 to 60 buildings will be for children. So that not only are we not going to have the 55 to 60 buildings which are now under construction and will soon be finished, but something like 50 to 60 arc going to be closed.

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The noble Baroness, Lady Faithfull, spoke about the domicilary provisions. I think she is right. I think that we ought to be debating this. This question is so important that it ought not to be left to an Unstarred Question late at night. The whole field of help for the elderly ought to be brought under the microscope. But we must bear in mind that there is a substantial number of elderly people whose problems are not going to be met by home helps, and are not going to be met by other domicilary services, for the simple reason that they need to be under the watchful eye of somebody for 24 hours a day. We all know a large number of elderly people who sometimes go days without seeing anybody. This is why it really is so important that the Government should do something without further delay to make it possible for these new buildings, which otherwise will remain empty, to be occupied, and to take some immediate step to prevent the 50 to 60 existing buildings, in the main housing the elderly, closing down.
I do not know who it was who said that we are in the middle of an age explosion. The number of elderly people is increasing rapidly each year and will continue to do so right up to the end of the century. The 74 to 85 age group will increase by 20 per cent. in the next 10 years. Think what that means, my Lords! We shall become a country concentrating mainly on manufacturing bath chairs. I do not mean that literally, but your Lordships know what I mean.
The number of those aged 85 and over will increase by no less a figure than 30 per cent. in the next 10 years, and the 85s will increase by 48 per cent. by the year 2011. This is what medical science is doing for us, keeping us alive. Whether it is desirable that it should be allowed to go on doing so is another matter. For decades there has been a steady improvement in the services provided for the elderly and weaker members of the community. I should have thought that this is the responsibility of Government, particularly if they believe in a compassionate society. I am told from time to time that there is nothing between us on this, that the party opposite is just as compassionate as we on this side of the Chamber. If this is so—and I do not deny it—then we ought to be thinking first and foremost of
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the weaker members of the community. We ought to be thinking of the elderly who need so much. I have a great admiration, as I am sure other noble Lords have, for the work of the National Council for the Single Woman and her Dependants. In Oxford we have a very large branch, as the noble Baroness knows. A vast army of women have sacrificed marriage and careers to look after an aged father, an aged mother or an aged couple. It is not only that they are saving the community a tremendous amount of money;it is that they are maintaining a parent or parents in the kind of environment, in the kind of atmosphere, that they would want to be in.
I am glad that, as far as I know, the Department of Health and Social Security is helping that organisation financially—at least it did when I was in that Department. I know that we engage in party politics. That is what it is all about;that is why we are here. However, I think that if we are concerned for the wellbeing of the less fortunately placed, we ought to be doing something—and noble Lords opposite are in a far better position to do it than we are—to bring pressure upon the Government to stop the closure of residential homes for the elderly and to see that these new buildings which were built for the purpose, will be used.
Let us face it, it does not involve a great number of people: 150,000 is the top number in the three groups providing facilities for the aged. It cannot possibly cost very much money. It cannot possibly cost more than a few million pounds. I would have thought that to do this for this section of the community would be making a supreme contribution to the community in the sense that we may well save in the long run far more money than we expend.
I am not asking the noble Lord the Minister any questions: I do not think this is a case for questions. This is a matter for setting out what we think and what we believe, as the noble Lord, Lord Hylton, has set out what he thought ought to be done. I think it can be done and I want to see the noble Lord, Lord Hylton, succeeding in what he wants to achieve. But before that happens I do want to see something done for the elderly immediately, and I think it can be done.
9.14 p.m.
Lord CULLEN of ASHBOURNE: My Lords, we have listened with great interest to a number of stimulating and thought-provoking speeches on the subject of housing and care for frail and elderly people. I should first like to congratulate my noble friend Lord Hylton for raising this matter and for the cogent way in which he argued for changes in the present arrangements. I should like also to congratulate him on his timing: his timing is remarkable, because after having debated the Education Bill throughout yesterday and yesternight, your Lordships should be just in the right mood to discuss matters affecting the elderly and frail.
I think it would be helpful if I were to explain something of government thinking and policy in this area and to indicate our reactions to the proposals put forward by the National Federation of Housing Associations. However, before doing so, I should like to add my sincere congratulations to my noble friend Lady Trumping-ton on a most interesting speech. It was admirably brief, clear, practical and extremely moving. I am not sure that I have heard a better. My noble friend told me that she was nervous about making her maiden speech. I well remember what an ordeal I found it when I made my own, but I would say that, even if at this moment she does not believe me, she needs have no qualms on future occasions, to which I feel sure all your Lordships will look forward, as I do.
As my noble friend Lord Hylton mentioned—and the noble Lord, Lord Wells-Pestell, expanded on it—it is a familiar fact that the numbers of very old and frail people will continue to increase. As has been mentioned, it is estimated that by 1990 there will be some 3½million people aged 75 and over—an increase of half a million. Since I very much hope to be one of them, I unhesitatingly declare my own personal interest in this estimate.
Although 90 per cent. or so of these elderly people live in ordinary housing, perhaps with such modest adaptations as some handrails, a ramped access or a relocated lavatory, a significant minority need sonic degree of support or care and attention. The increasing numbers of frail, elderly people present a challenge to our society;and it is right that, as invited by the National Federation, we should
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review administrative and financial arrangements to make sure that they arecapable of meeting sure that they are capable of meeting needs in the most appropriate and satisfactory ways. In this connection, I should like to pay tribute to the splendid work done by housing associations in providing accommodation for elderly people, and indeed for other groups with special housing needs. I believe that housing associations have already provided 47,000 specially designed units for old people and indeed for other groups in need of special housing. I very much hope they will continue to be active in this way.
We have heard that the National Federation of Housing Associations consider that present administrative and financial arrangements are insufficiently flexible to permit of the kinds of developments which their member associations would like to undertake, and we have heard of the suggestions they have made heard of the suggestions they have made to introduce a great degree of flexibility into the system. We have naturally looked with the greatest care at the Federation's suggestion and my honourable friend the Parliamentary Secretary at the Department of the Environment has today written to the Federation with reactions to these suggestions. If I may, I would like to direct my remarks to the remarks made by the Federation and I do not propose to answer the few questions I have been asked today because I think that the rest of my speech will answer the bulk of them.
As I have indicated, the majority of old people neither need nor indeed want sheltered accommodation, and only a minority have recourse to the statutory services. For those who do, the primary aim of Government policy is to ensure that wherever possible, and practicable, the services should be provided in the community so that elderly people can continue to remain in their own homes. This point was particularly stressed by my noble friend Lady Faithfull, who seemed to say so many things with which we in Government entirely agree.
To this end, emphasis is placed on the provision of domiciliary health and personal social services, which are available to tenants in sheltered housing and hostels in the same way as they are to elderly people living elsewhere in the community. It is, however, recognised that there will always be a minority of

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elderly people who cannot be maintained in their own homes even with full domiciliary support;and to meet their needs long-term care is available in hospital or residential home.
It has been said that there is a shortage of such facilities. That may be so in some parts of the country, but I do not think we should ignore the significant body of opinion which is calling in question the need for more places in residential homes as a universal answer to difficulties. Also I think that we should approach with caution measures which would serve to turn sheltered housing into some sort of residential home. I see as matters for concern the possibility of creeping institutionalisation and the erosion of the independence of the individual by a gradual, perhaps imperceptible, change from a housing scheme to a quasi-residential home. For these reasons alone, we should preserve the fundamental and established distinction between, on the one hand, essentially housing schemes;and, on the other hand, schemes which are essentially for "caring" institutions.
One of the consequences of this distinction is that housing schemes look for their sources of finance to such bodies as the Housing Corporation, while" caring" schemes are financed by local authority social services departments. It is therefore of considerable importance that schemes which include an element of both housing and caring, that is those schemes which straddle the boundary, can obtain adequate finance. Our arrangements need to be sufficiently flexible to cater for such schemes. We have therefore considered, in the light of the representations from the National Federation, whether we need to change our present arrangements;and in particular whether we should move in the specific directions which it advocates.
I should like to draw your Lordships' attention to Housing Corporation Circular 1/77 on "Caring Hostels". This circular, which was issued in December 1977, with the approval of DOE, DHSS and other interested departments, was intended to encourage developments in the kind of hostel accommodation that gives a degree of care to its tenants. It introduced a much greater degree of flexibility through the concept of supportive hostels—that
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is, hostels which provide a degree, but not a high degree, of care. The housing element of such hostels is eligible for housing association grant and extra running costs of providing supportive care are met by other, non-housing funds—in practice largely by social services. The provision of meals and home help services, and a measure of support under the terms of the circular, and the provision of a degree of care by way of additional facilities or extra staff, do not make these schemes ineligible for hostel deficit grant.
The essential ingredient in Circular 1/77 is co-operation between those who provide housing and those who provide care and the consequential arrangements—agreed in advance—which are needed to ensure that the hostels function well. It is open to the members of the National Federation to enter into negotiations with social services departments locally to see whether they would wish—or be able—to provide the kind of care envisaged. But I think it right to say that the assessment of need for personal social services is solely for the social services authority to determine. Such assessments are primarily made upon the needs of individuals, and authorities need to retain sufficient flexibility in the deployment of their resources in order to ensure that those most in need are assisted wherever they may he living.
On design standards of sheltered housing, and therefore grant entitlement, the National Federation have made four specific suggestions for greater flexibility. As is well known, the Department of the Environment is at present engaged in a major review of the role of Parker Morris standards and cost yardsticks in local authority housing. The aim is to relax the present system of centrally determined standards, and thus to permit local authorities a greater degree of discretion to take their own decisions in the light of local circumstances. Although I cannot of course anticipate the outcome of that review, it may well be that changes in the general direction of more flexibility for local authorities will result in similar changes for housing association schemes. Meanwhile, there is already a degree of flexibility in three of the areas to which the National Federation draw particular attention.
On the question of added facilities to

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ease the delivery of services to occupants of sheltered housing, policy is to the effect that neither housing nor social services should unduly subsidise each other's functions. But the additional capital costs of providing for an enlarged kitchen and a dining room to allow meals to be prepared on the premises, and consumed in a communal setting by the tenants and by other elderly non-residents, can be provided with finance from social services or other non-housing sources, including funds made available by health authorities under joint financing arrangements.
On the question of mobility standards, the Department of the Environment are always prepared to negotiate the costs of additional work, in ground floor premises or in blocks that are already provided with lifts, to allow greater freedom of movement for those with some degree of dependence on a wheel chair. The DOE are aware that there is pressure to subsidise the provision of lifts in two-storey sheltered housing, but this is something that they are actively considering at present.
On the question of standards on heated enclosed access in Category 2 housing, final decisions will need to await the completion of the review of project control. Meanwhile, housing associations which wish to build a scheme without covered access arc free to make a case on merits to the appropriate Department of the Environment regional office.
I hope that your Lordships will forgive me this complicated elucidation of a complex subject. It may he that the complexity of arrangements in the Housing Corporation circular and their relatively recent vintage mean that they are not well enough known or understood. My honourable friend the Parliamentary Secretary at the Department of the Environment has therefore suggested in his letter to the National Federation that
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officials from the DoE and DHSS might meet with representatives of the Federation to discuss the detailed operation of the arrangements. I am sure that such a meeting would be valuable. I trust that my noble friend Lord Hylton and other noble Lords who have taken part in this debate will feel that this is the way forward. Perhaps we should also consider, as the noble Lord, Lord Wells-Pestell, suggested, a more wide-ranging debate on the subject of the care of the elderly.
I hope that I have been able to demonstrate that, on the housing side, the financial arrangements are such as to permit an adequate degree of flexibility in funding schemes which include elements of both housing and care. Also, I hope that I have demonstrated that, on the social services side, it is not a problem of inadequate arrangements requiring review but one of limited resources. Much of what the National Federation of Housing Associations suggest is becoming standard practice. But authorities individually have to decide the priorities of the pressures competing for a share of their resources. Inevitably, in the process of making choices, they will not always reach the same conclusions as others over relative needs. My right honourable friend the Secretary of State for Social Services does not treat this lightly, and has made it clear that authorities should, as far as possible, aim to protect services for the most vulnerable, including the very old and frail and the physically handicapped. We believe that authorities themselves are very mindful of the need to do so.

WATER (SCOTLAND) BILL [H.L.]
Reported from the Joint Committee without amendment, and recommitted to a Committee of the Whole House.
  HORSE BOXES: TACHOGRAPH INSTALLATION
  HORSE BOXES: TACHOGRAPH INSTALLATION