Sitting of 25 March 1980

Preamble
The House met at half-past Two o'clock
The Clerk at the Table informed the House of the absence of Mr. SPEAKER from this day's sitting, pursuant to leave given upon Monday 17 March.
Whereupon Mr. BERNARD WEATHERILL, The CHAIRMAN Of WAYS AND MEANS, proceeded to the Table, and, after Prayers, took the Chair, as DEPUTY SPEAKER, pursuant to the Standing Order.

PRIVATE BUSINESS
  CANE HILL CEMETERY BILL [Lords]
  Read the Third time and passed, with-out amendment.
ORAL ANSWERS TO QUESTIONS
  SOCIAL SERVICES

    "Effects on the Personal Social Services"
    Mr. Bidwellasked the Secretary of State for Social Services what assessment he has made of the document "Effects on the Personal Social Services" published by the Association of Directors of Social Services; and if he will make a statement.
    The Under-Secretary of State for Health and Social Security (Sir George Young): I have read the document with interest. I sympathise with the anxieties expressed by the association, but its document was, in my view, too general in presentation to provide a useful assessment of changes in spending patterns. However, it makes a helpful contribution to the current debate about personal social services.
    Mr. Bidwell: Is the hon. Gentleman aware that because of the Government's expenditure cuts, and the consequent pressures on local authorities, there have been threats recently concerning ambulance services taking people to workshops for the infirm, and transporting the disabled and arthritic? The Minister's constituency is
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    in the same borough as mine. Would it not be the decent thing for him to resign? He would thus do the people a good service.
    Sir G. Young: As the hon. Gentleman has said, I share a director of social services with him, and I have made inquiries about the problems that he has raised. I understand that the loan of vehicles to voluntary organisations has ceased because of maintenance difficulties and because of the need to reduce expenditure. However, I am informed that an alternative scheme is to be considered by the authority in June.
    Sir Nigel Fisher: To be more serious about this important matter, would my hon. Friend agree that the cut in real terms is 6·7 per cent., which is harsher than for all other public services? Is he aware that my local authority has already trimmed its administrative manpower, and therefore the cuts will fall on much needed personal social services? That can only mean greater cost to the Health Service through longer stays in hospital, especially for geriatric and psychiatric patients.
    Sir G. Young: The figure to which my hon. Friend refers is contained in paragraph 12 of the White Paper. The figures are necessarily tentative, because it is for each individual local authority to decide the eventual distribution of savings in the light of local needs and conditions. There is no reason for a local authority to cut personal social services by 6·7 per cent. if it can meet its overall target, set by my right hon. Friend the Secretary of State, in some other way. It is for each local authority to determine how best to deploy its resources to meet the needs of its area, and we hope that it would have regard to the most needy.
    Mr. Ennals: We now know what local authorities are doing. Is the Minister aware that the figures published by the Association of Directors of Social Services last week show that 90 per cent. of all local authorities have cut back on residential care, and a third have cut back on home helps, on meals on wheels services, on aid for the handicapped, and on social support for the needy in the community? That has happened after several years of advance, and more cuts are planned next year. Is this not a shameful situation?
    Sir G. Young: The survey also shows that some social services departments have not made any cuts, and that the local authorities have still met their overall targets.

    Disablement Costs Allowance
    Mr. Hannamasked the Secretary of State for Social Services if he will hold discussions with disablement organisations with a view to producing a consultative document on a disablement costs allowance.
    The Minister for Social Security (Mr. Reg Prentice): I am well aware of the views of the disablement organisations and will continue to listen with care to any proposals that they put forward. However, the present is not the time to issue a consultative document on new benefits for disabled people.
    Mr. Hannan: Does my right hon. Friend agree that the present system of disablement benefits represents a rag-bag of conflicting contributory and non-contributory benefits? I take into account the economic constraints of the moment, but would it not be advisable to set out a ladder of objectives towards achieving a more reasonable system of benefits?
    Mr. Prentice: I agree with the expression "rag-bag". It is a confused and illogical system. It is our long-term objective to work towards a general disablement income. It would be wrong to raise false hopes by indicating that we can do so within the next few years.
    Mr. Dempsey: Is the right hon. Gentleman aware that such a study would reveal the plight of the severely visually handicapped, who are required to pay extraordinary costs for extremely expensive visual aids merely to enable them to get around? Is it not about time that something was taken from the Revenue to assist the visually handicapped overcome a great difficulty?
    Mr. Prentice: Those who are visually handicapped have a particularly strong case. Undoubtedly there are extra financial burdens arising from blindness or part blindness. I wish that we could do something for them. We cannot afford to do so at present any more than the previous Administration were able to afford to do so.

    Private Patients (Drugs)
    Mr. Alexanderasked the Secretary of State for Social Services how much it would cost to allow private patients who need drugs to obtain them on the same basis as they are obtained by National Health Service patients.
    The Minister for Health (Dr. Gerard Vaughan): Because the Department does not maintain records of the numbers of private patients, I cannot give my hon. Friend a specific figure. In any event, with so many competing claims for scarce NHS resources at this time, the Government do not feel that they can give a high priority to this particular proposal, although they have carefully considered it on several occasions.
    Mr. Alexander: As the private patient pays as much to the National Health Service as does the National Health Service patient, is it not only fair that he should be able to obtain his drugs on the same basis?
    Dr. Vaughan: I appreciate my hon. Friend's feeling. The total drug bill in England in 1979, excluding hospital pharmaceutical services, was almost £740 million. The bulk of that sum was incurred on prescriptions written by general practitioners and dispensed by general practice pharmacists. The average total cost per person was over £16. I cannot believe it prudent to entertain a proposal to increase that already enormous sum, especially when it would mean removing resources from areas of greater priority.
    Mr. Orme: Is the Minister aware that the question of the hon. Member for Newark (Mr. Alexander) is outrageous? Is he seriously asking for the provision of drugs by the NHS to the private sector when the private sector makes no contribution to the training of nurses or doctors and exploits NHS equipment? Will the hon. Gentleman bear that very much in mind?
    Dr. Vaughan: I do not accept what the right hon. Gentleman has said. He is displaying his ignorance, because only this morning in the Committee considering the Health Service Bill I gave a list of the various private institutions that undertake training for nurses.

    Elderly Persons
    Mr. Stallardasked the Secretary of State for Social Services if he is now able to give a date for the publication of the White Paper on the elderly.
    Sir George Young: Work is proceeding, but it is too soon for me to give a publication date.
    Mr. Stallard: Is the hon. Gentleman aware that, because of the serious shortage of local authority provision, many elderly people are living at risk in hostels and lodging houses throughout the country? Does he accept that existing legislations is confusing and weak? Does he agree that the need for the publication of the White Paper is urgent? Does he further agree that the need for implementation of any recommendations that emerge from a debate on the White Paper is even more urgent?
    Sir G. Young: Yes, indeed. The issue that the hon. Gentleman has raised is the subject of an Adjournment debate next week. It is the responsibility of the Home Office. However, I shall draw my right hon. Friend's attention to what the hon. Gentleman has said about the need to implement measures as quickly as possible.
    Mr. Bowden: Will my hon. Friend confirm that the White Paper will include a section dealing with the problems of the elderly who live in residential homes? Is he aware that 85 per cent. of them are over 75 years of age? They are a vulnerable section of the community and real action is needed quickly.
    Sir G. Young: I confirm that there will be a chapter on housing in the White Paper. I hope that we shall be able to come forward with some positive suggestions to meet the problems that my hon. Friend has described.
    Mr. Foulkes: Is the Minister aware that there are over 60,000 old people living in private old people's homes? Those who live in hostels and boarding houses are, perhaps, in greater danger. They are vulnerable. The legislation is extremely weak. May we have an assurance that the Minister will act quickly on any recommendations to tighten legislation governing old people's homes, to protect vulnerable, old people?
    Sir G. Young: The implementation of fire regulations is the responsibility of my right hon. Friend the Secretary of State for the Home Department and not that of my right hon. Friend the Secretary of State for Social Services. However, I shall draw to my right hon. Friend's attention the remarks of the hon. Gentleman.

    Teaching and Acute Services (London)
    Mr. Dubsasked the Secretary of State for Social Services, what representations he has received regarding the Flowers report and the report of the London Health Planning Consortium.
    Dr. Vaughan: I have received comments on these reports from a variety of sources. But I have made it clear that the Flowers report is a matter for the University of London and that I will not intervene in the issues raised by the report of the London Health Planning Consortium during the process of consultation which is now under way.
    Mr. Dubs: Does the hon. Gentleman accept that the two reports concern only teaching services and acute services in the London area. Will he give an undertaking that he will study, or have studied in detail, other aspects of the Health Service in London before any final decision is made about the future of the Health Service in the metropolis?
    Dr. Vaughan: Yes, of course. We wish to examine the whole of the Health Service in London. For that reason we have extended the remit of the London Health Planning Consortium to consider primary health care.
    Mr. Burden: Is my hon. Friend aware that the Health Planning Consortium has proposed the closure of the radiotherapy department at St. William's hospital, Rochester? Is he further aware that the proposal is causing grave disquiet in the area? Will he give an undertaking that he will soon be able to say that this closure will not take place?
    Dr. Vaughan: I can understand my hon. Friend's concern. It is an issue that we shall consider carefully.
    Mr. Pavitt: Does the Minister accept that it will be intolerable if the Flowers report is implemented by the university in isolation from any influence of his

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    Department? If we close 34 London medical schools and keep only six, the inevitable consequences upon allied health care and provision will have an effect on every patient in the London area. It will be especially intolerable if Westminster hospital is closed to hon. Members.
    Dr. Vaughan: I regret that the hon. Gentleman is constantly being alarmist. We are dealing only with the recommendations of the Flowers committee, which is a working party of the university. We must wait to hear what the university feels about the recommendations. We are setting up urgently a London advisory group to co-ordinate the recommendations that are put to us.
    Mr. Aitken: Will my hon. Friend take note that there will be great hostility from all parts of the House if centres of medical excellence, such as the teaching facility at the Westminster hospital, are closed?
    Dr. Vaughan: I share my hon. Friend's anxiety about any proposal affecting our great London teaching centres. I can assure him that we shall consider any such proposal with great care.
    Mr. Moyle: Does the London Health Planning Consortium's report and the Flowers committee report have any advice to give to the hon. Gentleman on what to do about the Merton, Wandsworth and Sutton area health authority, which I gather is over £4½ million overspent? Does not that put it in the Lambeth, Southwark and Lewisham class? What will he do about it? Would not he be wise to ease the strain under which the London health service is working by setting up an inquiry into the London health service as recommended by the report of the Royal Commission?
    Dr. Vaughan: The right hon. Gentleman knows that in our view an inquiry would be a recipe for further delay. The issues are now well known and most of them have been extensively studied. We do not believe that another inquiry is needed. We need action to overcome the problems—and that is something that our predecessors never undertook.

    Child Benefit
    Mr. Hooleyasked the Secretary of State for Social Services what would be
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    the cost in the financial year 1980–81 of increasing child benefit by £2 per week from 1 October.
    The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker): In the region of £560 million, that is about £280 million per £1 increase in 1980–81.
    Mr. Hooley: Is the hon. Lady aware that an increase of that order will be the minimum required to offset the galloping inflation that has occurred since the Government took office? Does she agree that £560 million spent on this purpose would be a superb investment in the health and welfare of our children?
    Mrs. Chalker: The hon. Gentleman will not expect me to reply in detail to his question. We know that the benefit is much appreciated. He has over-exaggerated the extent of inflation in saying that a £2 increase is necessary.
    Mr. Peter Bottomley: Does my hon. Friend agree that if the level of child support had increased in line with pensions since 1955, the present child benefit would be substantially higher than £6 a week?
    Mrs. Chalker: Yes, Sir.
    Mr. Hardy: Will the Minister confirm that the Conservative Party made a clear commitment at the last general election to maintain the value of that allowance? May we expect that commitment to be fully upheld within the next few days?
    Mrs. Chalker: As the hon. Gentleman knows, I cannot reply in detail. Our commitment to the family is no less than it has been at any previous time. The hon. Gentleman must await the statement of my right hon. and learned Friend the Chancellor of the Exchequer.
    Mr. Orme: Is the Minister aware that we are interested in her response to the child benefit question, made in the presence of her right hon. Friend the Chief Secretary to the Treasury? Is she aware that it will require an increase of £1½20 to maintain the allowance at the current rate of inflation? If the Chancellor of the Exchequer does not announce an increase of £1½20 tomorrow, will she resign?
    Mrs. Chalker: I do not think that the last question is one that I am required

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    to answer at the Dispatch Box. I am sure that my right hon. Friend heard what has been said both today and on many previous occasions in the past. All representations have been carefully noted.

    Social Security Benefits (Abuse)
    Mr. Rookerasked the Secretary of State for Social Services what is his latest estimate of the extent of social security abuse.
    Mr. Christopher Priceasked the Secretary of State for Social Services if he will set out in the Official Report how his Department arrived at the figure of £200 million per annum for social security abuse.
    Mr. Stoddartasked the Secretary of State for Social Services what methods he used to calculate his recent estimate of the cost of social security abuse.
    Mr. Austin Mitchellasked the Secretary of State for Social Services whether he has now made a more exact assessment of the anticipated saving of employing extra Civil Service staff in detecting social security fraud.
    Mr. William Hamiltonasked the Secretary of State for Social Services what progress he has made in the prevention of abuse of social security payments; and what is the latest estimate of the cost of such fraudulent practices.
    Mr. Prentice: The nature of most social security fraud and abuse is such that we can know only about cases which are detected. However, new records have been introduced which should, over the next few months, provide fuller and more accurate estimates of the amount of benefit saved through the work of our fraud and abuse specialists. I shall make a further statement to the House when a sufficient number of these returns have been received and analysed to enable me to draw worthwhile conclusions.
    Several Hon. Members rose—
    Mr. Deputy Speaker: Order. I propose to call first the hon. Members whose questions are grouped with this question.
    Mr. Rooker: How does the Minister square his recent statement that he expects to gain £50 million out of the
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    alleged £200 million which is lost in the social security abuse to which he referred? How did he arrive at that figure? Will he confirm the leaked report from his Department that his officials rang around the large department stores and asked for their estimate of theft? Was that how he conjured up the figure of £200 million?
    Mr. Prentice: There is no need to ring around department stores to know that they, and other large commercial organisations, assume a loss through fraud of 1 or 2 per cent. in their operations. Applying that to the DHSS, with its expenditure of £20 billion a year, leads to an estimated figure of £200 million. Through this operation we are attempting to save this year at least £50 million. If Opposition Members think that that cannot be achieved, they had better stand up and state their case because their constituents will not believe them.
    Mr. Stoddart: Is it not a fact that the figures bandied around lately are sheer bogus figures? Is it not disgraceful that figures produced by a great Department of State should owe more to the experience of "Marks and Sparks" with shoplifters than to decent inquiry undertaken by the Department? Is it not true that far more money is involved in justified claims not taken up than there is in social security fraud?
    Mr. Prentice: If the hon. Gentleman will go into the DHSS office in his constituency—I extend the same advice to all Opposition Members—and talk to the officers working on fraud and abuse cases, he will find that they are very busy and that they are saving a great deal of public money. However, they are working at nowhere near the point of diminishing returns. There is a great deal more to be saved. The experience of the next 12 months will prove that.
    Mr. Austin Mitchell: Will the Minister call on his right hon. and learned Friend the Chancellor of the Exchequer to assess the relative cost-effectiveness of employing extra staff to deal with tax fraud and evasion rather than employing them in an increasingly counter-productive effort to hound social security beneficiaries for a return which must be far smaller than that which would result from strict inquiries into tax fraud and evasion?
    Mr. Prentice: I, and every Member of the Government, would be against fraud and abuse in any sector of our public life. I would have expected Opposition Members to take the same attitude. The attitude that they are taking at present, and have been taking in recent weeks, suggests that they are on the side of the scrounger and against the honest taxpayer.
    Mr. Hamilton: Is the Minister aware that I was approached last weekend by an employee of the DHSS who indicated that pressure was being brought to bear on DHSS employees to produce the answers that the right hon. Gentleman wants on this matter? Will he say whether he approves of the suggestion made by one of his hon. Friends recently that neighbours should snoop on their neighbours to find out whether there is abuse? Is not that absolutely disgraceful?
    Mr. Prentice: On the first point, the overwhelming majority of the staff of the DHSS share the same opinion as the majority of the general public, namely, they want to see those who are trying to cheat the system identified and prevented from doing so.
    As for snooping on neighbours, I have made it clear on many occasions in recent weeks that I am not appealing for that. Some information has always reached the DHSS from members of the public. Some of it is genuine, and some of it is malicious gossip. That information is, and always has been, followed up. I am not in any sense asking for snooping. I have announced that the Department would do a more effective job on its own account by carrying out its duty to root out fraud and abuse.
    Mr. McCrindle: While warmly welcoming the appointment of additional inspectors to detect fraud in the social security system—which is at least as much supported by genuine social security claimants as by anybody else—will my right hon. Friend take this opportunity to repeat that he has given instructions to the additional inspectors to move gently and slowly with those who are likely to be genuine social security claimants before attempting to detect the perpetrators of fraud?
    Mr. Prentice: The guidance that has been sent to officers carrying out this work is that we want an efficient and effective
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    campaign against fraud and abuse, without in any sense acting in a manner which would be offensive to the vast majority of claimants who are honest, and who are making claims to which they are entitled.
    Mr. John Townend: Does my right hon. Friend agree that many of those guilty of social security fraud are also working in the black economy, evading tax at the same time as they are defrauding the social security system?
    Mr. Prentice: One of the common examples of fraud concerns those who are drawing benefit and working at the same time without declaring it. Almost inevitably, that means tax avoidance at the same time.
    Mr. Orme: Is the Minister aware that it is absolutely ludicrous to compare the DHSS with firms such as Marks and Spencer? Will he confirm that after his original statement, he sent out circular 26/ 80, telling staff to take it easy and not to offend people? When will he give the first evidence to the House of the savings that he has indicated he will make?
    Mr. Prentice: I can only repeat the answer that I gave a few minutes ago on the question of the circular sent to staff. That text was approved before I made my public announcement about the extra officers. There has been no change of policy.
    The comparison with Marks and Spencer was made by the hon. Member for Swindon (Mr. Stoddart), not by me. Any large organisation finds that there is a loss of that order. If Opposition Members are saying that the loss in terms of the DHSS is less than 1 per cent. it would be an extraordinary argument, and I would like to hear the reasons for saying so.
    Sir Brandon Rhys Williams: Does my right hon. Friend agree that every honest person must wish him success in his drive to root out abuse? Does he agree also that the hest way to tackle social security abuse is to reduce the very large number of people who find themselves in circumstances where they have to apply for supplementary benefit?
    As it is generally the cost of housing which forces people to apply for supplementary benefit, will he make a study of

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    ways in which we can rationalise the subsidy system for housing so that that element at least is taken out of the qualification for supplementary benefit?
    Mr. Prentice: I think that goes a little wide of the original question, but we all want to see improvements in the Welfare State as and when the country earns the resources with which to carry them out. I am grateful to my hon. Friend for the welcome which he gave originally, because I am sure that he spoke for the great majority of his constituents, and the great majority of Labour Member's constituents, who will support what we are doing because they know that it is their money which is being lost as a result of fraud and abuse.

    Private Patients (Fees)
    Mr. Foulkesasked the Secretary of State for Social Services if he will publish a table showing, for the financial years 1978–79 and 1979–80, the amount of fees collected from private patients in National Health Service establishments, the amount of these payments which are regarded as arrears and the amount which has been written off as bad debts.
    Dr. Vaughan: For the year 1978–79. I refer the hon. Member to my reply to him on 28 January. The estimated figure for 1979–80 is £34 million.
    Mr. Foulkes: Does not the Minister agree that bad debts from defaulting private patients in England and Wales now total between £250,000 and £500,000 a year, and that the accumulated debts over the last six years are now approaching £1 million? As the Government are so concerned about curbing public expenditure, can the Minister tell me what they propose to do to reduce that burden on the NHS? For example, will they consider levying the charge against the consultants who irresponsibly admit these people to private beds?
    Dr. Vaughan: We think that the present arrangements are satisfactory. Bad debts from private patients are included in the total of all sums that are written off as bad debts. The total of bad debts from all sources, except road traffic accident claims, for the year 1978–79 was £302,112. We cannot identify how much of that sum relates specifically to bad debts arising from private patients.
    Mr. Robert Atkins: Can my hon. Friend tell the House when and if he expects to make a statement on the abuse of the NHS by foreigners? Is that likely to happen before Easter? Does that by any chance include anyone coming from the Eastern bloc, say, Russia.
    Dr. Vaughan: We have reciprocal arrangements with a number of different countries. My hon. Friend referred to Russia. As a part of the Government's response to the Russian invasion of Afghanistan, we have postponed the fifth joint medical committee which was due to have met in London earlier this month to review the reciprocal agreements. We are also carefully vetting all Russian visitors to the United Kingdom under the agreement, and we shall reject any proposals for visits by Ministers or VIPs. We were involved—
    Mr. Orme: On a point of order, Mr. Deputy Speaker. The Minister's reply is an abuse of Question Time, and I ask you to assert your authority on behalf of the House.
    Mr. Deputy Speaker: I have no responsibility for ministerial replies, but they should not be too long.

    Warrington General Hospital (Ophthalmic Services)
    Mr. John Evansasked the Secretary of State for Social Services what provision is being made for ophthalmic services in the new Warrington general hospital.
    Sir George Young: An ophthalmic unit of 15 beds has been built as part of the first phase of the redevelopment of Warrington general hospital, but it has not yet been commissioned.
    Mr. Evans: Is the Minister aware that the area health authority does not propose to open the ophthalmic unit because of shortage of funds? Does he not agree that to provide this desperately needed unit—which has been established by many thousands of pounds of taxpayers' money—and not to open it, because of a shortage of cash is lunatic economics? Is he aware that the people in the Greater Warrington area are appalled at the suggestion that this much-needed ophthalmic unit should not open?
    Sir G. Young: The Cheshire area health authority estimates that it will cost an additional £200,000 per annum to run the unit, as it will be a new service in Warrington, and the cash limits for 1979–80, which were set by our predecessors, were plainly inadequate. On taking office, we were faced with massive commitments on NHS pay which were not matched by the finance to meet them. However, when the cash limit for 1980–81 is known, the Cheshire area health authority will be able to decide what priority to give to funding the development to which the hon. Gentleman has referred.

    Mobility Allowance (Blind Persons)
    Mr. David Priceasked the Secretary of State for Social Services whether, in view of the further evidence of rising transport costs, he will now reconsider his decision not to extend the mobility allowance to registered blind persons.
    Mr. Prentice: While we have the greatest sympathy for blind people and the problems they face, there are no resources at present to finance new benefits or extend the scope of existing ones.
    Mr. Price: Is my right hon. Friend aware that if we were to apply the same rules to registered blind people that we apply to the generality of the recipients of mobility allowance, it would cost only £20 million, which is within the errors of accounting even within my right hon. Friend's Department, let alone the whole of Government expenditure?
    Mr. Prentice: The figure of £20 million is about right, if the allowance were applied only to blind people up to the age of 65. If it were applied to blind people of all ages, it would go up to as much as £65 million a year. As my hon. Friend will know, we have extended the mobility allowance in recent months to people between the ages of 60 and 65. However, the financial restraints that we now face will not permit an increase either in the number of categories of people covered or the ages covered in the foreseeable future.
    Mr. Allen McKay: Is the Minister aware that there are cases where mobility allowance has been paid and then with-
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    drawn because the person has gone blind? Is not that a despicable practice?
    Mr. Prentice: The allowance is paid in circumstances where someone is unable to walk or virtually unable to walk. Therefore, I am surprised at the scenario which the hon. Gentleman has set out. Perhaps he will write to me about the case that he has in mind.
    Mr. Pavitt: Is not it intolerable that the only section of the disabled which does not receive mobility allowance is the blind, who probably face the greatest difficulty? Is the right hon. Gentleman aware that those who are partially sighted, with very low acuity, get about only with a great deal of difficulty, especially in the conurbations? Will not he yield to the pressure from all parts of the House in the last four years—as evidenced, for example, in the early-day motions that have been signed by hundreds of hon. Members—and soften his heart to blind people?
    Mr. Prentice: I should very much like to be able to move on this matter, but the hon. Gentleman was not quite correct in the opening part of his supplementary question. Mobility allowance is not awarded to categories of disabled people according to the nature of their disablement. It is available to people who are unable to walk, or who are virtually unable to walk, no matter what the cause.

    Transplantation of Human Organs
    Mr. Farrasked the Secretary of State for Social Services if he will strengthen the wording of paragraph 37 of the code of practice for the transplantation of human organs, in relation to the anonymity of donors.
    Dr. Vaughan: I am sure that the whole House shares my hon. Friend's concern at the distress caused to a family in his constituency. I note that when my hon. Friend introduced his Bill, he told the House that he had complained to the Press Council. I am sure that this is the right method of pursuing the matter. The code of practice has only recently been issued, and we need to see how effective it is. However, I can assure my hon. Friend that I am ready to consider amending the wording if necessary.
    Mr. Farr: I thank my hon. Friend for what he has said. In the light of recent events, does he recognise that the present code of practice is couched in very casual terms? Will he help me to ensure that possibly something stronger is written into the Health Services Bill which is now before the House?
    Dr. Vaughan: I can understand my hon. Friend's point of view, and I shall certainly have a look at the wording to see whether it needs strengthening.

    Juvenile Offenders
    Mr. Jim Marshallasked the Secretary of State for Social Services if he is satisfied that there is adequate provision of community-based alternatives to residential care for juvenile offenders.
    Sir George Young: I refer the hon. Member to my reply to the hon. Members for Battersea, South (Mr. Dubs) and Hammersmith, North (Mr. Soley) on 18 March.
    Mr. Marshall: Does not the Minister agree that far too many juvenile offenders are at present in residential care and that that situation is likely to persist while local authority expenditure on things such as intermediate treatment is only 6 per cent. of the total spent on community homes? Will he encourage more local authorities to switch resources from community homes to community-based projects?
    Sir G. Young: On the first part of the hon. Member's supplementary question, I agree that there are too many children in institutions. But the number is falling. There were 6,800 children in community homes of education in 1976. That had fallen by 700 to 6,100 in 1978. On the last point, our public expenditure White Paper has asked local authorities to give priority, as far as possible, to expenditure on services for children concerned with the prevention and treatment of delinquency and intermediate treatmenl. Community-based alternatives are an integral part of this.
    Mr. Soley: Will the Minister make sure that fostering facilities such as the Kent fostering scheme are expanded in other areas?
    Sir G. Young: am interested in what is happening in Kent over fostering. I
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    am anxious to encourage other local authorities to follow this encouraging in intiative.

    Industrial Disputes (Benefit Entitlement)
    Mr. Meacherasked the Secretary of State for Social Services when he expects to be in a position to make a statement on the Government's plans to reduce supplementary benefit to families of persons on strike.
    Mr. Prentice: Shortly, Sir.
    Mr. Meacher: How many thousands of extra civil servants will be required to administer this proposal? How will union members and non-union members be differentiated? What is the formula proposed to cater for unofficial and official strikes?
    Mr. Prentice: Each of those questions will be answered by the statement when it is made. It will be made shortly.
    Mr. Dykes: Can my right hon. Friend say what would happen if the wife and children were left destitute because the striking husband did a hunk? What would the Minister do then?
    Mr. Prentice: If a wife and children had been deserted by a husband, who is legally responsible for the maintenance of the family, that family would have a claim, in any event, on supplementary benefit. That has nothing to do with the question of trade disputes.
    Mr. James Hamilton: Will the right hon. Gentleman accept from me that, on visiting my local office, I discovered that only a third of strikers in my constituency draw social security benefits? Will he ponder on that statement and ensure that there are no further attempts at blackmailing strikers to go back to work when there is no justifiable case for doing so?
    Mr. Prentice: The proportion of strikers' families in the steel strike drawing supplementary benefit is much larger than usual because, of all the unions involved in the strike, only the two general workers unions have been paying strike pay. The cost to the taxpayer so far is about £8 million.
    Mr. Budgen: Would not my right hon. Friend agree that our proposals may have the effect of encouraging people to join trade unions in order to enjoy the benefit

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    of support during a strike? It may have the effect of encouraging the unions themselves to concentrate on their legitimate role of trying to improve working conditions and wages and to give up their improper role of attempting to be a political party.
    Mr. Prentice: I think that our proposals, when they are made known, will be seen to have many healthy effects, including those enumerated by my hon. Friend.
    Mr. Rooker: If a striker is arrested while on strike, for any offence, and then serves a term of imprisonment, will his family be treated in the same way as other prisoners' families?
    Mr. Prentice: We shall be concerned in the imminent announcement, with the effect of a trade dispute, not the effect of a criminal act.
    Mr. NIcCrindle: In how many other countries of the EEC is social security benefit, or its equivalent, paid to the families of people on strike?
    Mr. Prentice: Some countries make some kind of payment on a means-tested basis, more often from local authority funds than from national funds. None subsidises strikes in the same way or to the same extent as the British taxpayer under our present arrangements.
    r.. Andrew F. Bennett: Will the Minister say what is the difference between someone on strike and someone who has committed a crime? Why should their families be treated differently over the payment of supplementary benefit?
    Mr. Prentice: Because the Govern-take the view as, I am sure, does the majority of the public, that if people go on strike, either they, as individuals, or their trade union, ought to make financial provision for the needs of their families.
    Mr. John Evans: In view of the fact that 81 per cent. of all strikes—official and unofficial—during the lifetime of the Labour Government were settled within 12 working days and therefore no social security benefit was payable to strikers' families, and in view of the additional staff that the right hon. Gentleman will have to appoint, does he not think that the scheme will work at a loss?
    Mr. Prentice: No, Sir. I think it will save public money. It will also direct the attention of the unions to the fact that they have a traditional and historic duty, which many have recognised and others have not, to help maintain the families of their members during an industrial dispute.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Montgomeryasked the Prime Minister if she will list her official engagements for Tuesday 25 March.
    The Secretary of State for Industry (Sir Keith Joseph): I have been asked to reply.
    My right hon. Friend is attending the enthronement of the Archbishop of Canterbury. Later she will be having meetings with ministerial colleagues and others.
    Mr. Montgomery: Will my right hon. Friend, some time today, study some of the speeches, made at the weekend? Does he agree with the Home Secretary that this is no time for faint hearts? Does he agree with the Prime Minister, who said that this Government will not be deflected from their strategy to curb inflation, on which they were elected last May?
    Sir K. Joseph: Yes. I certainly agree with my hon. Friend and with my right hon. Friend the Home Secretary. We always did warn that there was no instant cure and that it would not be possible to revive overnight an economy that has, for several years, been over-taxed, overspent, over-borrowed, over-governed and over-manned.
    Mr. Douglas: Will the right hon. Gentleman, if he is studying speeches, reflect on the speeches made last night in the debate on the convergence document in relation to the European Community, particularly the statement made by the Financial Secretary to the Treasury in which he alluded to a further document from the Community and did not present that document to the House? Is he aware that the press is inundated with extracts from the document and the Community has specifically rejected the gloss put on the document by Her Majesty's Government?
    Sir K. Joseph: I am aware of my hon. Friend's speech. The document concerned is in the Vote Office.
    Mr. Farr: May I first express my pleasure at seeing my right hon. Friend in this position, on a temporary basis? Is he aware of the reason for the postponement of the EEC summit meeting? Will he consider advising our right hon. Friend the Prime Minister not to attend another summit meeting until our budgetary contributions are ironed out satisfactorily in a fair and proper way?
    Sir K. Joseph: I am grateful to my hon. Friend for his kind personal reference. We understand that the summit meeting has been deferred because of the obligations of the current President of the EEC. We appreciate his difficulties but we have made clear that we expect an early date for a re-arranged summit meeting. My hon. Friend will. I think, agree that it is essential that the crucially important problem that we are putting to the summit meeting should be dealt with by Heads of Government.
    Mr. Foot: Does the right hon Gentleman understand that his reply about the document that was placed in the Vote Office today at 2.30 pm is unsatisfactory to the House? Can he explain why the document was not laid before the debate yesterday? The document had apparently been hanging around in Brussels and elsewhere since about 20 March. Why did the Financial Secretary not produce the document in the debate and say there was some mystery about it? When will there be another debate to enable hon. Members to discuss the full document and to allow the House to examine it?
    Sir K. Joseph: I understand that the document arrived from the Commission only at the end of last week, just before the weekend. It has been placed in the Vote Office today.
    Mr. Winnickasked the Prime Minister if she will list her official engagements for the 25 March.
    Sir Keith Joseph: I have been asked to reply.
    I refer the hon. Member to the reply which I have just given to my hon. Friend the Member for Altrinchant and Sale (Mr. Montgomery).
    Mr. Winnick: Perhaps next time Milton Friedman himself will stand in for the Prime Minister. Do not the opinion polls and the latest by-election results show quite clearly that there is the utmost hostility to the economic policies mainly associated with the Secretary of State for Industry and the Prime Minister, who are leading Britain back into the mass misery and unemployment of the 1930s?
    Sir K. Joseph: If the hon. Member supports the alternative policies he should note that they led to the Labour Party being defeated heartily in the last general election.
    Mr. Butcher: Is my right hon. Friend aware that a recent TUC report indicated that the trade unions spend an average of 88p per member on strike pay and an average of £9½72 per member on administration? Does this not support the Government's contention that the trade unions should be more responsible for their members' welfare in times of strike?
    Sir K. Joseph: My hon. Friend is quite right. We do not want the number of strikes to increase so that the unions have more money to spend on them, but we think that it is only fair that when strikes are called the unions should bear more of the costs than they do now.
    Mr. Alton: On this happy day when a new archbishop is being enthroned in Canterbury, will the right hon. Gentleman take time to express the House's outrage at the assassination of Archbishop Romero in San Salvador today?
    Sir K. Joseph: Yes, we certainly deplore the news of the assassination of Archbishop Romero.
    Mr. Eldon Griffiths: Will my right hon. Friend invite the Prime Minister, during her busy schedule, to contemplate the disarray of the West in the aftermath of Afghanistan? If NATO cannot find a common position on the Olympic Games and if the European Community cannot make common cause of lamb and fish, how can we expect the Soviet Union to take seriously our intention to unite to prevent further aggression?
    Sir K. Joseph: My right hon. Friend has played her part very vigorously in trying, with other Heads of Government, to reach common ground in constructive and positive ways. Compared with what

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    might have been the reaction a little whle ago on both sides of the Atlantic, there are encouraging trends.

    SECRETARY OF STATE FOR SCOTLAND
    Mr. John Home Robertsonasked the Prime Minister if she will dismiss the Secretary of State for Scotland.
    Sir Keith Joseph: I have been asked to reply.
    My right hon. Friend has no intention of doing so.
    Mr. Home Robertson: Does not the Secretary of State think that the Secretary of State for Scotland should be dismissed on the ground that he has stolen £2½6 million from the children of Scotland? Does he realise that the Secretary of State for Scotland reduced the funding for education in Scotland in anticipation of the anti-rural bus law which the Government could not even persuade the other place to accept? Will he ensure that the Secretary of State either makes good the missing money for education or resigns?
    Sir K. Joseph: My right hon. Friend the Secretary of State for Scotland is perfectly able to defend himself against that totally unjustified and extravagantly put charge.
    Mr. Henderson: Will my right hon. Friend recall that the Secretary of State for Scotland provided £10 per pupil more this year than last year? Will he assure the Prime Minister that the Secretary of State for Scotland has the fullest support and confidence of all Scottish Conservative Members?
    Sir K. Joseph: I am sure that my right hon. Friend the Prime Minister will read that comment with appreciation.
    Mr. Harry Ewing: If the Secretary of State for Scotland is able to defend himself, why does he always depend on United Kingdom Ministers to come to the Dispatch Box to make statements on his behalf? Since the election on 3 May, the Secretary of State for Scotland has never once made a statement on his own behalf. He has hidden behind either the Secretary of State for Industry or the Secretary of State for Education and Science. If he is surplus to requirements, why not sack him?
    Sir K. Joseph: I am sure that that is another extravagant allegation.
    Mr. Allan Stewart: Does not my right hon. Friend agree that few things could be worse for Scotland than the prospect of an Assembly with economic powers, as envisaged in the resolution passed by the Scottish Labour Party at its recent conference? Is it not just as well that Scottish Labour Members will have no chance of persuading their English colleagues to agree to such a course?
    Sir K. Joseph: I am sure that the contrast between the Labour Government's performance on Scotland and the irresponsible proposals put forward now will be clear to the people of Scotland.
    Mr. Robert Hughes: Does the Secretary of State for Scotland not have a bit of a cheek in advising local authorities in Scotland to adopt a policy of good housekeeping? Is he aware that the very high interest rates now being charged mean that the Grampian regional council, for example, will have to find an extra £4 million simply to service its debts?
    Sir K. Joseph: High interest rates are not welcomed by anybody anywhere, but they are part of the necessary process of abating inflation and the people of Scotland would be far worse off if inflation were not abated than they are with the temporary high level of interest rates.

    LEGISLATIVE PROGRAMME
    Mr. Wigleyasked the Prime Minister if she is satisfied with the progress of the Government's legislative programme as announced in the Gracious Speech.
    Sir Keith Joseph: I have been asked to reply. My right hon. Friend is satisfied that reasonable progress is being made.
    Mr. Wigley: Is the right hon. Gentleman not amazed by that statement, in view of the disastrous effects over the last 12 months resulting from the legislative programme? Has not the time now come to abandon the theory underlying the legislative programme in the last Queen's Speech, and particularly to abandon the idea that men can be starved back to work by refusing them social security benefits? Is not this the time to reconsider the

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    Government's whole attil ude towards creating employment?
    Sir K. Joseph: The hon. Member has brought together three different strands. The answer to his general question is "No". We believe that our policy is the only policy that can achieve the underlying purposes of both sides of the House, namely, a higher standard of living, more employment and better public benefits from the social services. We do not believe that it is right at present for the trade unions to count on the taxpayers to support the families of their strikers. We believe that the vast majority of people in this country agree with what we propose to do.
    Mr. Nicholas Winterton: Will my right hon. Friend agree that one of the major planks in the Gracious Speech was the objective of a genuine reduction in public expenditure? Will he agree that, in order to achieve this objective, we must reduce substantially our net contribution to the EEC budget? Will he give an assurance that, unless we can achieve that objective, we shall review our present position, bearing in mind that our membership of Europe prevents us from taking decisions that are in the best interests of the United Kingdom?.
    Sir K. Joseph: The answer to the first part of my hon. Friend's question is an unqualified "Yes". On the second part we very much hope that the Heads of Government will understand the equity and force of our claim.
    Mr. Cryer: Will the Minister accept that in the Employment Bill currently before the House there is a clause which requires an 80 per cent. vote for a closed shop? Has the Minister seen the Bill that I introduced to the House—which was not opposed by anyone—which requires that persons living in the area of the proposed cruise missile sites should have the opportunity to vote 80 per cent. in favour of the missiles before they are installed? Do the Government intend to apply the same principle and allow that Bill to go through as part of our legislative programme?
    Sir K. Joseph: No. It has always been the practice of Governments of both parties that defence decisions should be taken by the Government of the day, even though the Labour Government occasion-
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    ally hid crucial decisions from the people of this country.
    Mr. Shore: Referring to the Government's programme in relation to the EEC budget, is not the right hon. Gentleman aware, in spite of the ivory tower which he normally inhabits, that last night the House was subjected to what can only be described as a very deceitful, and indeed cowardly, course of action? Is he aware that this document was wholly relevant to last night's debate, was about the extent to which this country will continue to pay into the EEC, should have been laid before the House but was deliberately withheld with the result that the vote last night was cast upon totally inadequate evidence? Will he make sure that his hon. Friend comes to the House and makes a forthright statement about this matter.
    Sir K. Joseph: First, the document itself is a useful contribution and can form the basis of Ministers' discussion. Secondly, I take seriously what the right hon. Gentleman says; but I also believe completely in the integrity of my hon. Friend who is, on all occasions, a vivid and vigorous speaker.

QUESTIONS TO MINISTERS
Mr. Douglas-Mann: On a point of order, Mr. Deputy Speaker, On 21 February the Secretary of State for the Environment made a statement in the House concerning the allocations for the housing investment programme. In the course of questioning following that statement I received a reply from the Secretary of State which I considered to be incorrect and possibly misleading, but in view of the possibility of misunderstanding I thought it was more appropriate for me to pursue the matter by way of a written question to the Secretary of State to give him the opportunity of amplifying it.
I apologise for detaining the House, but I think it is essential that I should read the question that I tabled. I asked the Secretary of State for the Environment
"whether he will publish a revised table on the lines of table 111.28 of the Technical Volume of the Housing Policy Review, (Cmnd. 6951) showing the current estimates of demand or need for public sector housing in the period 1980–86 and of the supply from standing stock; whether he will outline the changes in assumptions"—
Mr. Deputy Speaker: Order. Will the hon. Gentleman come to his point of order? The content of questions and answers is not a matter for the Chair.
Mr. Douglas-Mann: I fully accept that, Mr. Deputy Speaker. Nevertheless, to enable me to establish my point of order it is essential that I explain the point that I sought to elicit from the Secretary of State, as will be apparent from the reply and from the points that I wish to make by reference to "Erskine May". I ask the indulgence of the House to enable me to make my point of order, which I believe is of importance to the entire House.
I asked wether the Secretary of State would outline the changes in assumptions and
"how many householders on current estimates who are in need of housing in the public sector would be deprived of the opportunity of obtaining such housing by the implementaton of the policies outlined in his statement on Thursday 21 February"
and whether he wished to reconsider or amplify the reply which he had given to me on that occasion.
The reply that I received was:
"I will write to the hon Member shortly."[Official Report, 11 March 1980, Vol. 1980 c. 531]
I considered raising a point of order at that time, but I tabled a further question immediately. I should state that I had given the Secretary of State 13 days in which to answer my first question. I put a further question to the Secretary of State asking him when he proposed to give an informative answer to the question about the demand for public sector housing—
Mr. Deputy Speaker: Order. It really is an abuse of the House to quote questions in a point of order. I repeat that the Chair has no responsibility for answers or the failure by a Minister to give an answer to an hon. Member.
Mr. Douglas-Mann: I accept that, Mr. Deputy Speaker, but my point will be apparent in one or two moments. The question that I asked the Secretary of State was whether he would now publish, so that the information would appear in the Official Report, the information requested and if he would state on what basis the housing investment programme allocations had been made. I received a further reply which said:
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"I shall be writing to the hon. Member very soon"
and that the HIP allocations were made in accordance with a statement that was in the Library.
At page 334 of "Erskine May" it is stated that:
"If a Member does not distinguish his question by an asterisk"
—in other words, it is a written question—
"the Minister to whom it is addressed causes an answer to be printed in the Official Report of Debates."
My point is that it is not an acceptable process to the House—I hope that right hon. and hon. Members will agree—for the Minister to say "I will write to the hon. Member" or to say that he will give the information requested in a form that will appear only in a letter. Replies to questions should appear in the Official Report. It is not sufficient or acceptable for the Minister to say that the reply will be contained in a letter.
I fully accept that it is in order for a Minister to say that the information is not available, or could not be made available without expense, or even that it is not in the public interest that the information should be disclosed, but it is not permissible for a Minister to say that he will give an answer in a form that is not public, but is contained in a secret letter to a Member. I submit that this is a matter on which the House should rule.
Mr. Deputy Speaker: In answer to the hon. Member I can only say that he has made his point. It really is not a matter for the Chair. It is a matter that the hon. Member should pursue with the Minister concerned, because the content of answers is not and has never been a matter for the Chair.
Later—
Mr. Douglas-Mann: On a point of order, Mr. Deputy Speaker.
Mr. Deputy Speaker: If it is the same point of order, I believe that the right hon. Member has exhausted the question.
Mr. Douglas-Mann: My right hon. Friend the Member for Ebbw Vale (Mr. Foot) raised a totally different point of order further to my point of order. I wish to pursue my original point of order

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and invite a ruling, not necessarily today but on another day if you prefer, Mr. Deputy Speaker, on the question whether in answer to a written question the words "I will write to the hon. Member" satisfy the requirements on page 334 of "Erskine May" that:
"the Minister to whom it is addressed causes an answer to be printed in the Official Report".
It is of concern to the House and should be decided on authoritatively.
Mr. Deputy Speaker: I have always understood that that was a form of answer. I can understand the concern and resentment of the hon. Member that he has not received a full answer. Every Back Bencher wants a full answer to his question. I shall certainly look into that matter.
Mr. S. C. Silkin: Further to that point of order, Mr. Deputy Speaker I fully appreciate, and of course I accept, the ruling that you have given. In the light of the circumstances put before you by my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) would the position be that the letter subsequently written, if it is written, by the Minister to the hon. Member is incorporated by reference into the reply that he gave? Is there any machinery by which that letter can be published in Hansard in order to fulfil the purpose of the original question?
Mr. Deputy Speaker: I am advised that there is machinery for that to take place.

EUROPEAN COMMUNITY (CONVERGENCE AND BUDGETARY QUESTIONS)
Mr. Foot: On a point of order, Mr. Deputy Speaker. Reverting to the matter that arose during questions to the Secretary of State for Industry about the document that was mentioned in the debate last night but was not available, may I ask whether you have had a request from the Financial Secretary to the Treasury to make a statement on this subject? We regard this as a matter of major importance. We believe that because of the absence of the document that the Financial Secretary said could not then be supplied the debate necessarily took place, in a sense, under false pretences. I ask
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either that the hon. Gentleman makes a statement to the House today, as we assumed that he might, or that he will do so at a very early stage. We believe that the House has been gravely misled by what happened last night. Perhaps the best way for it to be cleared up would be for the Financial Secretary to make a statement to the House now, especially as this matter affects, to a considerable degree, the amount of money that may be available to the Government in the Budget tomorrow.
Mr. Bruce-Gardyne: Further to that point of order, Mr. Deputy Speaker. You will have noticed that in the final question from the right hon. Member for Stepney and Poplar (Mr. Shore) he made two allegations. One was that my hon. Friend the Financial Secretary had not placed before the House last night papers that the Chair had said he was under no obligation to place before the House. Therefore I hope—[Interruption.] Oh yes. Furthermore, the right hon. Gentleman made a personal allegation of cowardice against my hon. Friend which I thought was against the rules of the House. I hope that you, Mr. Deputy Speaker, will ask the right hon. Gentleman to withdraw a thoroughly offensive and totally unfounded personal allegation.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. Two points of order arise. First, I am afraid that I did not hear any allegation of cowardice, but if such an allegation was made I am sure that the right hon. Gentleman will withdraw it. Secondly I was in the Chair last night, when this matter was debated and the Financial Secretary alluded to the document in his speech. A point was raised then about whether that document should be laid on the Table, and I stated that if a State Paper was being read from it should, correctly and properly, be laid on the Table, but that if it was merely alluded to that was not necessary.
Mr. Spearing: Further to that point of order, Mr. Deputy Speaker. In previous debates on EEC documents presented by the Scrutiny Committee, a document debated and decided on by the House has occasionally been overtaken by events and by another document.

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As a result, the decision of the House was rendered null and void. Leaving, aside the question of quotation, are we not now in that position? The phantom paper of yesterday has now been made available.
Can you confirm, Mr. Deputy Speaker, that the decision that the House took yesterday has been overtaken by events? Will you also confirm that any decision that appears in the Journal of the House is inoperative? The document is now available. Yesterday's debate concerned another document.
Mr. Harry Ewing: Further to that point of order, Mr. Deputy Speaker. Whether the House was deliberately misled last night is central to the points of order that have been raised. It may have been brought to your attention. Mr. Deputy Speaker, that the interpretation put on that document by the Financial Secretary to the Treasury was that it was a new document and that it contained new proposals. With respect. Mr. Deputy Speaker, it is irrelevant whether the Financial Secretary read from the document or whether he gave his impression of it. He implied that the proposals were likely to lead Her Majesty's Government to succeed in concluding an agreement with the EEC that would be in some way advantageous to the United Kingdom.
The EEC has issued a statement today saying that the contents of the document bear no relation whatsoever to the interpretation of the document given last night by Financial Secretary. The EEC has gone so far as to say that it has been inundated with telephone calls from member States. They wanted to know whether a secret document had been sent to the United Kingdom. The document that the Financial Secretary told us about did not come within their knowledge. If that is so—and it is obvious that there is a major disagreement about that document between the EEC and the Government—there can be no doubt that the House has been deliberately misled. The Financial Secretary is therefore under an obligation to make a statement to the House.
Mr. Deputy Speaker: Order. Perhaps it would be convenient to clear up this matter. We cannot hold another debate now on what took place last night. [Interruption.] Order. The hon. Member for Newham, South, (Mr. Spearing)
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knows that we have often debated such matters late at night and I have deprecated the fact that documents were not available. I was unaware that the document was available. I gave my ruling in that light. I now know that the document is in the Vote Office. It is not for the Chair to consider whether it was available last night, or whether it should have been in the Vote Office last night.
Mr. Foot: Further to that point of order, Mr. Deputy Speaker. The immediate trouble is that the Financial Secretary has not volunteered to make a statement. If he had done so, our questions would be in order. As we had not received a statement, we sought to raise the subject by means of a private notice question. For proper reasons, Mr. Deputy Speaker, you decided not to grant it. However, in order to clear up this issue, the hon. Gentleman should make a statement. If we do not receive a statement today, we give notice that we shall require one later this week.
Mr. Nicholas Winterton: Further to that point of order, Mr. Deputy Speaker. Whether my hon. Friend alluded to a document, or referred to it and quoted from it, would it not be in the best interest of all hon. Members if the Government were to state that they will soon make a statement about that document? What is the point of having a debate on the most sensitive issue, namely, our contribution to the European budget, if we cannot debate the most up-to-date position? The documents should have been published and made available to all hon. Members before today.
The Financial Secretary to the Treasury (Mr. Nigel Lawson): Further to that point of order, Mr. Deputy Speaker. We have seen a classic example of synthetic indignation. It is quite correct that a new document reached me on Friday. That document was laid before the House today. I alluded to it in the debate last night. I did so briefly, as I thought that it would be to the benefit of the House if some allusion were made. The document is now before the House. It is for the Scrutiny Committee to decide, in its normal way, whether it regards it as of sufficient importance to merit debate. The Scrutiny Committee can decide whether it should be recommended for debate.

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Matters can then take their normal course.
Mr. Shore: Further to that point of order, Mr. Deputy Speaker. The House will regret that the hon. Gentleman has not taken this opportunity freely to volunteer a statement. It is well within our recollection that in so far as the debate was guided by the Financial Secretary it rested upon his optimistic interpretation of a document that he had seen but that the rest of us had not. Therefore, whether inadvertently or deliberately, the House was placed in an intolerable situation. We are therefore right to say that the Government acted deceitfully and wrongly.
Reference was made to a word that I used. Apparently, Mr. Deputy Speaker, you did not hear it. I used the word "cowardly". I can hardly say that the hon. Gentleman behaved in a lionhearted manner. However, I certainly withdraw a word that is thought to be offensive and unnecessary, especially if it reflects upon his character. I withdraw the word, without any equivocation. However, the Minister's intervention has shown just how thick-skinned and insensitive he is. I am sure that he does not need the withdrawal that I have freely made.
Several Hon. Members rose—
Mr. Deputy Speaker: Order. I think that we should leave the matter there.

STEVENAGE DEVELOPMENT AUTHORITY BILL
Mr. Newens: On a point of order, Mr. Deputy Speaker. My point of order refers to the Stevenage Development Authority Bill. I hope to introduce that Bill tomorrow. The Secretary of State for the Environment replied to a question put by my hon. Friend the Member for Easington (Mr. Dormand) on the 12 December. He said:
"the Stevenage Bill is in conflict with Government policy and we shall oppose it on the Floor of the House."—[Official Report, 12 December 1979; Vol. 975, c.]
He explained that the Government's policy was to widen ownership and that that policy was at variance with that of
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transferring assets to a local authority, as envisaged by the Bill.
The policy was initiated when the Secretary of State met chairmen of development corporations and the New Town Commission on 16 July 1979. He called for the sale of £100 million worth of new town assets. He said that there would be a moratorium on new town development while that was being carried out. Subsequently that policy was put into effect by a number of corporations.
The Minister was not challenged at the time, but it now appears—this is the crucial point—that the Minister had no legal powers to require development corporations or the commission to make the sales, and the development corporations and the commission had no legal powers to make them.
It would appear that the issue is determined by section 18(1) of the New Towns Act 1965, where it is stated that a new town may dispose of any land acquired by it as it considers expedient for securing the development of the new town. The key words in that clause are:
"for securing the development of the new town".
In the view of legal authorities consulted in Stevenage and of a prospective buyer of new towns assets, the Minister was acting ultra vires in requiring the sales. Development corporations were similarly acting ultra vires in proceeding with them.
Stevenage Development Corporation—
Mr. Deputy Speaker: Order. We cannot have the speech that the hon. Gentleman should properly be making tomorrow night at 7 o'clock.
Mr. Newens: I am coming to the point of order, Mr. Deputy Speaker, which is important and should be raised before tomorrow evening.
Stevenage Development Corporation today issued a statement in whiah it affirms that there is dubiety as to its legal powers to sell properties solely for investment purposes and as to the Secretary of State's powers to require it to do so, and that it is accordingly taking no further action during the last three months of its life to sell any properties except for purposes clearly connected with the development

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of the town as specified in section 18 of the New Towns Act 1965.
The crux of my point of order is this: how can the Government oppose the Stevenage Development Authority Bill. It has already been stated by the Secretary of State—
Mr. Deputy Speaker: Order. With the greatest good will to the hon. Gentleman, this is not a point of order. It is a matter that should rightly be taken up when the Bill is debated tomorrow during opposed private business. I have no advance knowledge of what the Government will say tomorrow in opposing or supporting the Bill.
Mr. Newens: I am not anticipating what the Government will say tomorrow. I am quoting what they have said.
Can the Government take action on such a matter when it appears that they have no legal powers to act?
It appears that the only authority to which the assets referred to in my Bill can be disposed of is that development authority. The Bill is introduced in response to the Government's policy. Is it, therefore, in order for us to proceed? Will the Government make a statement?
Mr. Deputy Speaker: The hon. Gentleman kindly told me that he wished to raise the matter, but I was not aware that it would be at such length. It is not a matter for the Chair. It is a Private Bill that has been opposed. Because of that I have named it for debate tomorrow evening, and that is why it is being debated.
The hon. Gentleman may be wholly right in his point, but he should raise the issue tomorrow. It is not for me to say what the Government's reactions will be.
Mr. Radice: On a related point of order, Mr. Deputy Speaker. Is it in order for the Secretary of State for the Environment to require a new town, such as Washington new town, in my constituency, to sell off assets without the backing of legislation passed by this House?
Mr. Deputy Speaker: That is a matter of law and not of order. It is not something on which I can rule.
Mr. Eldon Griffiths: On a point of order, Mr. Deputy Speaker. I have two
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precise points on which I wish to ask your guidance.
In pressing his point of order the right hon. Member for Ebbw Vale (Mr. Foot) said that the Opposition had sought to put down a private notice question, which had not been possible because the Chair had not accepted it. Is it not convention that the Chair is not placed in the invidious position of being publicly exposed as having refused a private notice question for reasons that all hon. Members will understand? The right hon. Gentleman's knowledge of the procedures of this House surpasses my own, and perhaps he will acknowledge that he was quite wrong to place the Chair in that position? That is my first point of order.
Mr. Deputy Speaker: Does the hon. Gentleman wish to make both points together.
Mr. Griffiths: It may be more convenient, Mr. Deputy Speaker.
Without reverting to the matter disposed of, may I ask this in protection of the House? The EEC document that we have been discussing is printed by the EEC and brought into the House no doubt through the good offices of the Treasury. Is it therefore possible for you, Sir, or Mr. Speaker, to establish precisely when it arrived in this House, how it was to have been made available and why we have not had a chance until today to look at it?
Mr. Deputy Speaker: On the hon. Gentleman's second point of order, I shall cause inquiries to be made.
Mr. Foot: Further to the first point of order, Mr. Deputy Speaker. I apologise if anything that I said caused embarrassment to the Chair. However, it seemed to me that you were dealing admirably with every topic. I do not, therefore, believe that I caused embarrassment. I was merely emphasising that there had been various opportunities for a statement. I do not believe that that is in the same category as referring to a private notice question for other purposes.
Archbishops or no archbishops, this House of Commons goes on, and you, Mr. Deputy Speaker, have helped us to continue very well today.
Mr, Deputy Speaker: I thank the right hon. Gentleman for the spirit of his

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remarks. I fully understand. It was a heated moment, and I forgive him for mentioning the private notice question.

BILL PRESENTED
  SKYLINE PROTECTION
  Mr. Patrick Cormack supported by Mr. Geoffrey Rippon, Mr. Stephen Ross, Mr. Mike Thomas, Mr. A. J. Beith, Mr. Kenneth Baker, Mr. Andrew Faulds, Mr. Denis Price, Mr. Donald Stewart and Mr. Bruce Douglas-Mann presented a Bill to make provision for the protection of skylines of historic interest or outstanding natural beauty; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed [Bill 173].

  VOLUNTARY AID FOR LOCAL EDUCATION AUTHORITIES
  4.2 pm
  Mr. Gerry Neale: I beg to move,
  That leave be given to bring in a Bill to make legal provision for local education authorities to accept voluntary financial aid and voluntary services from any source for the purpose of furthering the teaching skills and expanding the ancillary facilities and teaching aids in all or any of their nursery, primary or secondary schools.
  I welcome the chance to recommend that the House gives due consideration to the difficulties surrounding voluntary aid to schools for educational purposes. The difficulties are being experienced by many voluntary agencies and they arise from the uncertainty over the statutory powers of local education authorities. It is becoming a matter of concern to Members on both sides of the House who support my Bill.
  The purpose of the Bill is to clarify the uncertainty that arises out of the Education Act 1944 about whether local education authorities may or may not accept offers of voluntary financial aid or services. The Bill would seek to remove that uncertainty by stating that such authorities may accept such offers from any source and in respect of all or any part of any school or schools in their areas.
  I believe that it is necessary to remind the House of the changes that have occurred since 1944 and which have conditioned attitudes to voluntary aid. That reminder is necessary, I think, so that we can appreciate how the current uncertainty is increased and why it is necessary to remove it.
  For example, since 1944 there have been far-reaching developments in education technology. Language laboratories and video systems demonstrate that. Both are trifling advances, however, compared with the educational possibilities opened up by the microchip. At the same time as this change has taken place the cost of available aids has far exceeded the purchasing power of education authorities in all but a minority of schools.
  During the 36 years since the passing of the 1944 Act we have moved through a period when parental willingness to delegate their entire responsibility for the education of their children seemed far

  1185
  greater than it is now. The school population was increasing rapidly and under successive Governments new and larger centralised schools were being built. In the latter part of that period the accelerated programme, as it switched to comprehensive schools, involved further change. There was change in the nature of schools and their location and in the provision of facilities.
  Whatever else was achieved in that period, it was responsible for opening a large and visible gap in the provisions and facilities available in the new as opposed to the old schools. The fact that many new schools were located in places decided upon as a result of planning criteria and not in relation to economic factors left some schools in areas whose viability was always at risk.
  The drop in the school population that followed—and which seems about to continue well into the 1980s—alerted education authorities and parents to the threat to local schools and to the disparity in the provisions. All these factors have had a fundamental influence on changing parental attitudes to the level of education provided by the State. No single factor to my mind has cemented that change more effectively than the effect of restraint on education expenditure by successive Governments and local authorities in recent years.
  The less Governments have been able to keep up with the expectations of parents, the less have those parents been willing to rely solely on the State and the more they have sought to do to promote the educational interests of their children. I shall return to the issue of parental participation later and to the way in which the concern and enthusiasm of parents have affected the attitude of employers and trade unions.
  It is becoming self-evident that parents wish to raise money by any means to improve education provision and facilities in their children's schools. There are those whose philosophy prohibits involvement in funding any facility or service by anyone outside the education authority. The reason is that they see such activity as an invasion of an area of free State provision which to them is sacrosanct. It is evident that some teaching organisations and some education authorities either place a total block on any offers of aid or become apprehen-
  1186
  sive, or even obstructive, once the offer has advanced beyond the provision of swimming pools or minibuses.
  Those views are undoubtedly sincerely held. However, I do not subscribe to them and I do not believe that many parents subscribe to them. That is demonstrated by the work of parents all over the country. What is more, I do not believe that it was the intention of those who drafted the 1944 Act that it should exclude the possibility of any form of voluntary financial aid or service being accepted by a local education authority.
  Many hon. Members, irrespective of political persuasion, would, I believe, join me in claiming that voluntary aid is not prohibited now. The 1944 Act is not clear. Nowhere does it say that local education authorities may accept voluntary aid—but nowhere does it say that they may not.
  There is no case law to go on. All we have is a multitude of inconsistent examples of what has been possible in one area and not in another. The more ambitious schemes become, the more likely they are to be challenged. As confusion increases, the more parents involve themselves. There has been all-party consensus on the need to encourage far greater voluntary participation in schools. The Taylor report confirmed that.
  The increasing influence in school affairs of parent-teacher associations must not be frustrated or blocked unnecessarily. Rather than complaining about the lack of provision, it is more and more evident that parents are now showing that they want to indulge in far-reaching collective self-help to benefit schools in their communities.
  That has been confirmed to me by the parent-teacher associations and it is borne out in my constituency of Cornwall, North. The threat of a primary school closure in my constituency at St. Wenn met with a remarkable response. The parents there, not wealthy people or living in an enclosed village, but living in a sparsely populated area took a practical view of the threat. First, they examined the official reasons for the closure and compiled a list of commendable proposals. The parents offered to enter into negotiations with the education authority to establish a rota to transport the only child receiving school transport

  1187
  and they also arranged to collect meals for school lunches. They offered to enter into an agreement to maintain the interior decoration of the school and to take on financial responsibility for the general rates, the water rates, the rent on the school field and even the telephone bill. One parent in the group, the lady responsible for the school meals, offered her future services free.
  The school won a reprieve of 15 months. However, I am informed by a parent that the education authority refused all the parents' offers because, it was said, the law prevented their acceptance.
  On behalf of parents, I and those supporting me wish to see a Bill introduced which would clarify the 1944 Act and state that local education authorities may accept any offers of voluntary financial aid or services from any organisation. Thus, not only could aid come from a parent-teacher organisation; it could conic from a local industrial organisation, perhaps in concert with a local trades council. If they were persuaded by the local need to offer to supplement the teaching skills in the authority area by providing by way of free secondment a person to advise pupils on the employment needs of local industry, that should be made possible.
  The desire to introduce this Bill does not spring from a wish to protect or limit the powers of local education authorities, teaching organisations or even parents. It springs from the conviction that all those who are sincerely interested in the educational welfare of our children, of any age, should be encouraged to offer, individually or collectively, any voluntary aid or service that they can give uninhibited by lack of clarity in an Act of Parliament.
  I seek the consent of the House for a Second Reading for my Bill.
  4.10 pm
  Mr. Martin Flannery: I oppose the proposed Bill. I have only just looked at it. It is in direct line with Tory Party education policy. I shall prove that it is a dangerous Bill. I am a member of a teachers' union.
  Gestures about voluntary aid in schools are always being made. We spent 100 hours in Committee on the Educa-
  1188
  tion (No. 2) Bill. The Education Act 1979 withdrew the comprehensive school provisions in the 1976 Act. We are heading hack to the provision of more private education.
  The Bill represents an attempt to introduce "dilutee-ism" into our schools. None of the Tory Members in the Chamber has taught, with one exception, for whom I have a deep respect. Educationists are constantly on guard about voluntary aid in schools. The word "voluntary" sounds attractive, but throughout history, teachers' unions have had to fight against the butcher's wife from next door who is "good with children" and totally unqualified but who helps with reading because classes are too big. If the same happened in the medical profession and unqualified people were used in surgeries because they were "good with patients", Government Members would be appalled.
  Tories pay for their medical attention in the same way in which they pay, with money which they have but which we do not, for every aspect of their lives. They used private hospitals, private schools and private everything. They want everything according to the size of their purses. We want a good education for our children. We strive might and main in all aspects of general education to ensure that more of our children can be educated at university. Tory Members have striven in the opposite direction. We know that; we are not daft.
  At Question Time the other day I opposed the suggestion that children should leave school at 14 or 15 years of age to go into factories on the specious excuse that they should be apprenticed because there are not enough apprentices. It is reported in the press that a Minister wants our children to be trundled out of school and into the factories. He was talking, not about the children of Tories but about our children.
  Whatever the motives of the hon. Member for Cornwall, North (Mr. Neale), he is misguided—and I am being charitable. He is promoting the idea that what happened in Kent recently should happen universally. In Kent children were kept behind after school to clean the school because there were not enough cleaners. The hon. Gentleman is suggesting that volunteers should replace skilled people, and even teachers, who are being sacked

  1189
  wholesale. The hon. Gentleman suggests that they should clean and paint the schools. That suggestion is transparent Tory Party policy. It is a pity that my hon. Friends and I did not quite take more note of it.
  When people are apprised of the Bill's dangers, they will realise that it is in direct line with Tory Party policy to educate their children and to keep them in school for the maximum length of time while volunteers teach our children. The Government are running down the educa-
  tion system which we are trying to build. I alert my hon. Friends to the dangers of the Bill, which is the thin end of the wedge for the state education system and is directed against the interests of our children.
  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):—
  The House divided: Ayes 191, Noes 171.

  Division No. 242]

  AYES

  [4.15 pm

  Adley, Robert

  Fowler, Rt Hon Norman

  Morrison, Hon Peter (City of Chester)

  Alexander, Richard

  Fox, Marcus

  Mudd, David

  Alton, David

  Fraser, Rt Hon H. (Stafford & St)

  Neale, Gerrard

  Ancram, Michael

  Freud, Clement

  Needham, Richard

  Aspinwall, Jack

  Garel-Jones, Tristan

  Nelson, Anthony

  Atkins,Robert (Preston North)

  Gorst, John

  Newton, Tony

  Baker, Nicholas (North Dorset)

  Gow, Ian

  Oppenheim, Rt Hon Mrs Sally

  Beaumont-Dark, Anthony

  Gower, Sir Raymond

  Page, Rt Hon Sir R. Graham

  Beith, A.J.

  Grant, Anthony (Harrow C)

  Page, Richard (SW Hertfordshire)

  Bell, Sir Ronald

  Gray, Hamish

  Patten, Christopher (Bath)

  Bendall, Vivian

  Greenway, Harry

  Patten, John (Oxford)

  Benyon, Thomas (Abingdon)

  Grieve, Percy

  Pattie, Geoffrey

  Berry, Hon Anthony

  Griffiths, Eldon (Bury St Edmunds)

  Pawsey, James

  Best, Keith

  Griffiths, Peter (Portsmouth N)

  Penhaligon, David

  Biffen, Rt Hon John

  Grist, Ian

  Percival, Sir Ian

  Biggs-Davison, John

  Gummer, John Selwyn

  Pollock, Alexander

  Blackburn, John

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

  Prior, Rt Hon James

  Blaker, Peter

  Hamilton, Michael (Salisbury)

  Proctor, K. Harvey

  Body, Richard

  Hannam, John

  Rathbone, Tim

  Bonsor, Sir Nicholas

  Haselhurst, Alan

  Rhodes, James, Robert

  Boscawen, Hon Robert

  Havers, Rt Hon Sir Michael

  Rhys Williams, Sir Brandon

  Bowden, Andrew

  Higgins, Rt Hon Terence L.

  Ridley, Hon Nicholas

  Braine, Sir Bernard

  Hooson, Tom

  Rifkind, Malcolm

  Brinton, Tim

  Hordern, Peter

  Roberts, Wyn (Conway)

  Brittan, Leon

  Howell, Ralph (North Norfolk)

  Shaw, Michael (Scarborough)

  Brooklebank-Fowler, Christopher

  Howells, Geraint

  Shelton, William (Streatham)

  Brooke, Hon Peter

  Hunt, David (Wirral)

  Shepherd, Richard (Aldridge-Br'hills)

  Brown, Michael (Brigg & Sc'thorpe)

  Hunt, John (Ravensbourne)

  Shersby, Michael

  Browne, John (Winchester)

  Johnson Smith, Geoffrey

  Silvester, Fred

  Buchanan-Smith, Hon Alick

  Jopling, Rt Hon Michael

  Skeet, T. H. H.

  Buck, Antony

  Joseph, Rt Hon Sir Keith

  Speller, Tony

  Budgen, Nick

  Kimball, Marcus

  Spicer, Michael (S Worcestershire)

  Bulmer, Esmond

  King, Rt Hon Tom

  Sproat, Iain

  Burden, F. A.

  Lamont, Norman

  Stanbrook, Ivor

  Cadbury, Jocelyn

  Langford-Holt, Sir John

  Stanley, John

  Carlisle, John (Luton West)

  Latham, Michael

  Steen, Anthony

  Carlisle, Kenneth (Lincoln)

  Lawrence, Ivan

  Stevens, Martin

  Chalker, Mrs Lynda

  Lee, John

  Stewart, Ian (Hitchin)

  Channon, Paul

  Le Marchant, Spencer

  Stewart, John (East Renfrewshire)

  Chapman, Sydney

  Lennox-Boyd, Hon Mark

  Stokes, John

  Churchill, W. S.

  Lester, Jim (Beeston)

  Stradling Thomas, J.

  Clark, Hon Alan (Plymouth, Sutton)

  Lewis, Kenneth (Rutland)

  Tapsell, Peter

  Clarke, Kenneth (Rushcliffe)

  Lloyd, Ian (Havant & Waterloo)

  Tebbit, Norman

  Clegg, Sir Walter

  Lloyd, Peter (Fareham)

  Thomas, Rt Hon Peter (Hendon S)

  Colvin, Michael

  Loveridge, John

  Thompson, Donald

  Cope, John

  Luce, Richard

  Thorne, Neil (Ilford South)

  Corrie, John

  McCrindle, Robert

  Thornton, Malcolm

  Costain, A.P.

  MacGregor, John

  Townend, John (Bridlington)

  Dean. Paul (North Somerset)

  McNair-Wilson, Patrick (New Forest)

  Townsend, Cyril D. (Bexleyheath)

  Dickers, Geoffrey

  McQuarrie, Albert

  Trippier, David

  Douglas-Hamilton, Lord James

  Marlow, Tony

  Vaughan, Dr Gerard

  Dunn, Robert (Dartford)

  Marshall, Michael (Arundel)

  Viggers, Peter

  Eden, Rt Hon Sir John

  Mather, Carol

  Waddington, David

  Edwards, Rt Hon N. (Pembroke)

  Mawhinney, Dr Brian

  Wainwright, Richard (Colne Valley)

  Elliott, Sir William

  Meyer, Sir Anthony

  Wainwright, Richard(Colne Valley)

  Fairgrieve, Russell

  Mills, Iain (Meriden)

  Wakeham, John

  Faith, Mrs Sheila

  Mills, Peter (West Devon)

  Walker-Smith, Rt Hon Sir Derek

  Fell, Anthony

  Molyneaux, James

  Walters, Dennis

  Fisher, Sir Nigel

  Monro, Hector

  Watson, John

  Fletcher, Alexander (Edinburgh N)

  Montgomery, Fergus

  Weetch Kenn

  Fookes, Miss Janet

  Morgan, Geraint

  Wells Bowen (Hert'rd & Stev'nage)

  Forman, Nigel

  Morrison, Hon Charles (Devizes)

  Wheeler, John

  Whitney, Raymond

  Winterton, Nicholas

  TELLERS FOR THE AYE.

  Wickenden, Keith

  Woltson, Mark

  Mr. Michael McNair-Wason

  Williams, Delwyn (Montgomery)

  Young, Sir George (Acton)

  Mr. Christopher Murphy

  NOES

  Abse, Leo

  Fraser, John (Lambeth, Norwood)

  Parker, John

  Adams, Allen

  George, Bruce

  Pavitt, Laurie

  Allaun, Frank

  Gilbert, Rt Hon Dr John

  Pendry, Tom

  Anderson, Donald

  Golding, John

  Powell, Raymond (Ogmore)

  Archer, Rt Hon Peter

  Graham, Ted

  Prescott, John

  Armstrong, Rt Hon Ernest

  Grant, George (Morpeth)

  Race, Reg

  Ashley, Rt Hon Jack

  Grant, John (Islington C)

  Radice, Giles

  Benn, Rt Hon Anthony Wedgwood

  Hamilton, James (Bothwell)

  Rees, Rt Hon Merlyn (Leeds South)

  Bennett, Andrew (Stockport N)

  Hamilton, W. W. (Central File)

  Richardson, Jo

  Booth, Rt Hon Albert

  Harrison, Rt Hon Walter

  Roberts, Allan (Bootle)

  Boothroyd, Miss Betty

  Hattersley, Rt Hon Roy

  Robertson, George

  Bottomley, Rt Hon Arthur (M'brough)

  Haynes, Frank

  Rooker, J. W.

  Brown, Hugh D. (Provan)

  Healey, Rt Hon Denis

  Ross, Ernest (Dundee West)

  Brown, Ronald W. (Hackney S)

  Hogg, Norman (E Dunbartonshire)

  Rowlands,Ted

  Buchan, Norman

  Holland, Stuart (L'beth, Vauxhall)

  Sandelson, Neville

  Callaghan, Jim (Middleton & P)

  Home Robertson, John

  Sever, John

  Campbell, Ian

  Hooley, Frank

  5heerman, Barry

  Campbell-Savours, Dale

  Hughes, Mark (Durham)

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

  Cant, R. B.

  Hughes, Robert (Aberdeen North)

  Shore, Rt Hon Peter (Step and Pop)

  Carmichael, Neil

  Hughes, Roy (Newport)

  Silkin, Rt Hon S. C. (Dulwich)

  Cartwright, John

  John, Brynmor

  Silverman, Julius

  Clark, Dr David (South Shields)

  Johnson, James (Hull West)

  Smith, Rt Hon J. (North Lanarkshire)

  Cocks, Rt Hon Michael (Bristol S)

  Johnson, Walter (Derby South)

  Soley, Clive

  Cohen, Stanley

  Jones, Dan (Burnley)

  Spearing, Nigel

  Coleman, Donald

  Kaufman, Rt Hon Gerald

  Spriggs, Leslie

  Cook, Robin F.

  Kerr, Russell

  Stallard, A. W.

  Cowans, Harry

  Kilroy-Silk, Robert

  Stewart, Rt Hon Donald (W Isles)

  Cox, Tom (Wandsworth, Tooting)

  Lambie, David

  Stott, Roger

  Cryer, Bob

  Lamborn, Harry

  Strang, Gavin

  Cunliffe, Lawrence

  Leighton, Ronald

  Summerskill, Hon Dr Shirley

  Cunningham, George (Islington S)

  Lestor, Miss Joan (Eton & Slough)

  Taylor, Mrs Ann (Bolton West)

  Cunningham, Dr John (Whitehaven)

  Litherland, Robert

  Thomas, Dafydd (Merioneth)

  Davidson, Arthur

  Lotthouse, Geoffrey

  Thomas, Mike (Newcastle East)

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

  Mabon, Rt Hon Dr J. Dickson

  Thomas, Dr Roger (Carmarthen)

  Dean, Joseph (Leeds West)

  McCartney, Hugh

  Thome, Stan (Preston South)

  Dempsey, James

  McGuire, Michael (Ince)

  Tilley, John

  Dewar, Donald

  McKay, Allen (Penistone)

  Tinn, James

  Dixon, Donald

  McKelvey, William

  Tomey, Tom

  Dobson, Frank

  McMillan, Tom (Glasgow, Central)

  Urwin, Rt Hon Tom

  Douglas, Dick

  McNally, Thomas

  Varley, Rt Hon Eric G.

  Douglas-Mann, Bruce

  McWiIIiam, John

  Wainwright, Edwin (Dearne Valley)

  Dubs, Alfred

  Marks, Kenneth

  Walker, Rt Hon Harold (Doncaster)

  Dunwoody, Mrs Gwyneth

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

  Watkins, David

  Eadle, Alex

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

  Welsh, Michael

  Edwards, Robert (Wolv SE)

  Maxton, John

  White, Frank R. (Bury & Radclilfe)

  Ellis, Raymond (NE Derbyshire)

  Maynard, Miss Joan

  White, James (Glasgow, Pollok)

  English, Michael

  Mikardo, Ian

  Whitehead, Phillip

  Evans, loan (Aberdare)

  Miller, Dr M. S. (East Kilbride)

  Whitlock, William

  Evans, John (Newton)

  Mitchell, Austin (Grimsby)

  Wigley, Dafydd

  Ewing, Harry

  Morris, Rt Hon Alfred (Wythenshawe)

  Willey, Rt Hon Frederick

  Faulds, Andrew

  Morris, Rt Hon Charles (Openshaw)

  Winnick, David

  Field, Frank

  Morton, George

  Woolmer, Kenneth

  Fitch, Alan

  Newens, Stanley

  Wright, Sheila

  Flannery, Martin

  Oakes, Rt Hon Gordon

  Young, David (Bolton East)

  Fletcher, L. R. (Ilkeston)

  O Neill, Martin

  Foot, Rt Hon Michael

  Orme, Rt Hon Stanley

  TELLERS FOR THE NOES:

  Ford, Ben

  Palmer, Arthur

  Mr. Bernard Conlan and

  Forrester, John

  Park, George

  Mr. Ken Eastham.

  Foulkes, George

  Question accordingly agreed to.
  Mr. Clement Freud rose—
  Mr. Deputy Speaker (Mr. Bernard Weatherill): No point of order can arise.
  Bill ordered to be brought in by Mr. Gerry Neale, Mr. Edward du Cann, Mr. Ken Weetch, Mr. A. J. Beith, Mr. John Carlisle, Mr. W. E. Garrett, Mr. Michael McNair-Wilson, Mr. Michael Morris, Mr. Keith Wickenden and Mr. Peter Mills.

  VOLUNTARY AID FOR LOCAL EDUCATION AUTHORITIES
  Mr. Gerry Neale accordingly presented a Bill to make legal provision for local education authorities to accept voluntary financial aid and voluntary services from any source for the purpose of furthering the teaching skills and expanding the ancillary facilities and teaching aids in all or any of their nursery, primary or secondary schools: And the same was read the First time; and ordered to be read a

  1193
  Second time upon Friday 4 July and to be printed. [Bill 174.]
  Mr. Freud: On a point of order, Mr. Deputy Speaker. Standing Order 34 decrees that the doors shall be locked not sooner than eight minutes after a Division is called. It was difficult not to notice that the hon. Member for Poole (Mr. Ward) was nearly decapitated trying to get through the door. It seemed to me that you were watching at the time. To decide that there is one second in it either way, so that an hon. Member is almost impaled by the Lobby door, seems a strange interpretation, if I may say so, of Standing Orders.
  Mr. Deputy Speaker: I appreciate the hon. Gentleman's concern for the hon. Member. The last thing I want is for the hon. Member to be decapitated. I simply operate the rule. The doors are locked after eight minutes. It is a matter of great sadness if hon. Members do not get through the Lobbies.
  Mr. Freud: Further to that point of order, Mr. Deputy Speaker. The Standing Order refers to a period of not less than eight minutes. It does not say "eight minutes"
  Mr. Deputy Speaker: I hope that the hon. Member is not accusing me of having the doors locked so that people might be injured.

ORDERS OF THE DAY
  TRANSPORT BILL
  As amended (in the Standing Committee), further considered.
New Clause 12

  MEMORANDUM AND ARTICLES OF ASSOCIATION OF THE SUCCESSOR COMPANY
  (1) Before the appointed day the Minister shall lay before both Houses of Parliament an order containing the memorandum and articles of association of the successor company to the National Freight Corporation.
  (2) The memorandum and articles of association shall contain provisions to ensure that the Minister shall retain a majority of the securities of the company and that the assets of the successor company shall not be sold without the consent of the Minister.—[Mr. Prescott.]
  Brought up, and read the First time.
  4.27 pm
  Mr. John Prescott: I beg to move, That the clause be read a Second time.
  The clause is concerned with an essential feature of the Bill, namely, the denationalisation of the National Freight Corporation. It is designed to achieve certain safeguards in the transition from being a public company, or perhaps a nationalised industry or corporation, to being a public-private company. It seeks to protect the public interests of the employees as expressed in the objectives and purposes of the new company.
  It is no secret that the Opposition will oppose the principle of denationalisation both in this piece of legislation and in others going through Committees. In the clause we are concerned with the doubts and uncertainties that have arisen as a result of the conversion of the National Freight Corporation into a private company. We must recognise that there is a phase 1 and a phase 2 in this transition. In phase 1 the company is transferred, on the appointed day, from the National Freight Corporation to a wholly-owned Government private company, and from there, eventually, with the selling of shares, to a private-public company or a public-private company.
  We are therefore particularly concerned in this new clause about the objectives of

  1195
  the company and with details and information about the operation of the successor company, which normally can be ascertained from the memoranda and articles of association of a company. The clause is designed to give an opportunity to the House to debate and see the purpose and policy of the new company that is to be brought into being by this denationalisation measure.
  During the passage of the Bill through Committee we expected and were not surprised to be told that the private company that will come into existence will be more favourably treated than the corporation. For example, it will not have to carry the heavy interest payments that are such a burden under the financial obligations of nationalised industries. Nor will it be required to accept the public duties that we have spelt out and the requirements under the 1968 Act that led to the creation of the National Freight Corporation. Indeed, it would appear that the sole objective is to maximise profits for private rather than the public good.
  This new company is to be financed by a form of equity financing, which will clearly make it much easier for it to earn profits and compete with its private competitors. That is exactly the same area of competition in which nationalised industries have been forced to exist without equity financing. Admittedly this is a criticism of nationalised industry financing, that it had to operate under the penalties of heavy interest payments and borrowing from the Government for investment, as distinct from the more advantageous procedures that are adopted by private companies.
  During the course of the debate in Committee we repeatedly requested copies of the memorandum and articles of association of this new company, but with no success, although we have noted that other Committees dealing with denationalisation measures have been fortunate enough to be provided by the Departments concerned with articles of association and memoranda. This applies to the denationalisation of British Aerospace and British Airways, where the same process is being pursued and nationalised companies are being converted to private companies.
  We have not been given a great deal of substantial information on why it was not possible for us to be provided
  1196
  with articles of association and the memorandum relating to the denationalisation of the National Freight Corporation. That has meant that we have been less clear about the objectives and policies of the new company. We have had to rely upon our probing in Committee, and it has become increasingly clear that the position is somewhat fluid. A great deal of reflection is going on, and if we compare the answers that have been given on different occasions it is possible to see a considerable change in the thinking and attitude in two specific areas.
  The first is in the proportion of Government shareholding. Members of the TUC and the trade unions have come away from meetings with the Minister under the impression that the Government will hold 51 per cent. of the shares, but the Minister has made it clear that that is not his view, and he has put it in writing that it is not his intention that the Government should have a majority holding. We have seen that what was to have been a substantial shareholding, as debated in Committee, has come down to a statement by the Minister that it is likely to be only a small Government shareholding. As yet we have not reached nothing, but according to the estimates of a number of people it is down to its lowest point. As I understand it, the Government still intend to have a certain number of shares in this company.
  The second area in which there has been some questioning is that of the Government's intention, clearly stated on a number of occasions, both in the House and outside, that there will be no hiving off; that the intention is to pass the Corporation over as one entity to this private company. This matter was debated in the Committee, and the Minister said:
  "I believe that State ownership has, up to now, denied the NFC the commercial freedom that is open to private sector firms and has shielded it from some of the rigours of commercial discipline." [Official Report, Standing Committee H, 19 February 1980; c. 1736.]
  That is the thinking that led the Minister to justify denationalisation—that the present corporation does not enjoy sufficient flexibility or commercial freedom. If that is the case, I think that it is useful for the House to bear in mind, as did the Committee, the record of the National Freight Corporation. There seems to be general agreement that the corporation

  1197
  was a unique company and was given the task of attempting to achieve integration, particularly between road and rail. I shall not today enter into the argument about integration. We put that argument in Committee, and there is a clear record of my thinking on what integration means. The corporation had the specific duty of integrating, conducting research and maintaining good industrial relations. Those aims were all written in as its statutory duties.
  The Minister of Transport (Mr. Norman Fowler): Is that an indication that it was the hon. Gentleman's personal view that he was putting in Committee, or was it the Opposition's view?
  Mr. Prescott: I do not want to delay the House, but the Minister is probably referring to the more controversial issue of whether traffic should be directed. I said in that speech that in the 1968 Act there were powers, which the Bill is now repealing, which make it possible to direct traffic. I think that there is an argument, particularly in regard to energy use, for determining the priorities of certain areas of traffic. This is done on the Continent and in certain other countries, and I think that there will be an increasing demand for that kind of action in an energy-conscious country such as we are likely to be in the next decade. I have put the arguments on record and people can see them, and I hope that we shall have another opportunity to debate this matter. We have lost one hour of the debate, and it is difficult to be brief if I get dragged off into arguments about integration.
  Mr. Fowler: I am sorry to delay the hon. Gentleman, but the simple question that I asked was whether he was speaking personally or whether, since he is speaking from the Front Bench, he was putting the view of the Opposition. He keeps talking about his own view. Is it also the Opposition's view?
  Mr. Prescott: I put forward the Opposition's attitude to the process of integration between road and rail as was embodied in the 1968 Act. We are in opposition, and we are thinking through the policies again. Clearly that is a matter for consideration. We have heard it over South Yorkshire, and we have heard it over freight, and that debate will continue. I am sure that others may not
  1198
  agree with that view. There was a Labour Government who were not necessarily convinced of that view and did not implement the direction of traffic.
  Things are changing rather rapidly in transport priorities, as the Minister must know, with the Channel tunnel, the Armitage inquiry into the effects of lorries, and all sorts of things. These changes are occurring not only in Britain but everywhere because of energy priorities. I have always believed, and opinion seems to be moving towards this, in the importance of having some form of direction of traffic based on certain criteria. At the moment it is directed only by price, but I think that other criteria should come in. That is the most that I can say about this matter. I have put my view. I think that it is shared by many people. Certainly it is shared by the trade unions and is Labour Party policy, as determined by conference decisions.
  The basic point is that the corporation was given a specific duty to integrate, and was given the tools with which to do it. Because of those policies, it would seem that the nationalised industry had a specific responsibility to the community, and that was set out. We want to know whether such obligations are likely to apply to a private company. We presume that the overall objective will be to maximise profit and to ensure the greatest private gain, and that the public good, as determined in the duties imposed on the National Freight Corporation, will be given a lower priority.
  Despite those major problems, and despite the fact that the National Freight Corporation existed in a highly competitive industry, in a depressed economy, which had a considerable effect on bankruptcies in the transport industry, it is generally recognised that the corporation did remarkably well.
  The Minister congratulated the corporation on the way it tackled the difficulties that it faced over the past few years. The Select Committee on nationalised industries has also made favourable remarks about it. According to the reports on nationalised industries, the corporation's record on industrial relations is as good as that of any other company, and better than most. The general secretaries did not want to give evidence in any way to

  1199
  criticise industrial relations. That is a remarkable tribute to the corporation.
  The productivity of the corporation increased considerably, although there was a 50 per cent. reduction in the labour force. That is a remarkable record, whatever the judgment about the loss of job potential. The corporation has been an innovator of certain types of traffic; so much so that Marks and Spencer has become a customer. It developed road rescue units, which can be seen on our motorways. It was successful in integraing the freightliner service—which was later transferred—and in the development of a computer to enable empty lorries to be used more efficiently. It has also played an important part in solving urban traffic problems and in energy conservation. Major training on heavy goods vehicles was done by the National Freight Corporation, which promptly lost its drivers to the commercial sector, which was not doing such training.
  That is a considerable record of success by a corporation which controlled only 10 per cent of the market. Congratulations should be given to workers and management, particularly to Dan Pettit, who used to be the chairman of NFC. We all pay our respects to him, especially in respect of the lectures on intermodal systems for which the NFC was responsible.
  Nevertheless, the Government gave a considerable amount of money to the corporation, as became clear in Committee. In 1978 the Labour Government wrote off £53 million of capital debt. That reduced the commencing capital debt to approximately £100 million. The reason why the original debt had increased to £53 million was the penal interest rate which the National Freight Corporation had to carry. That again is a reflection on the principles that we have imposed for the financing of nationalised industries.
  Grants were also given by the Government to assist with the additional difficulties associated with taking on National Carriers Ltd. The corporation was asked to take on National Carriers Ltd, and was given more than £40 million in grants. The corporation certainly turned the corner, but a considerable amount of taxpayers' money was involved. To
  1200
  that extent, when we are considering what is to be done in selling off these assets, we should bear in mind that the corporation had turned the corner sufficiently to be a candidate for selling to the private sector. A lot of money was put in by the taxpayer, and this is an opportunity to get some return for the future.
  The final accolade for the company is that the Government want to sell it off. They do not propose to sell off British Rail or other nationalised industries which are not able to make a profit. They are selling off only the profitable areas. A number of sweeteners have been thrown in to make it attractive to the market. For example, there is the writing off of high interest debt problems associated with the corporation. The burden of pension obligations has been made easier for the private company. There is the £40 million that will be available if the company becomes profitable for the setting off of profits against tax allowances. No doubt a good price will be set to enable as many shares as possible to be sold. The balancing act which the Minister will have to do is to decide how many shares he can sell and what price he will get for them. Substantial sweeteners are offered in selling off a concern that has considerable potential.
  4.45 pm
  There is considerable concern about the new company that will take the corporation's place, whether it is the mark I or the mark II version. The clause is designed to give the House an opportunity to debate the policy and objectives of the company that will he embodied in the articles of association and memorandum. The Committee was denied the opportunity to make that assessment. Yet other Committees dealing with aerospace and aviation in which holding companies are being established in a similar way have been able to see such documents. Why did the Government not give them to our Committee?
  In Committee the Parliamentary Secretary said:
  "We do not have any draft articles of association at the moment. They are being drafted by those who give legal advice to the Government. I understand that another Committee was given draft articles of association, but the arrangements for sale in that case were much more advanced than ours."

  1201
  I have taken advice from my colleagues, and I am told that the sale of British Aerospace and British Airways may be delayed because they will be facing the same problem, namely, when is the best time to float shares? There is not a great deal of difference in the delay time, although the Minister may indicate that he believes that the time perspective may be different. We believe, from our proceedings in Committee and discussions, that the Minister envisages a delay which depends on when is the best time to sell the shares. That is why there are these differing transition periods.
  When we pressed the Parliamentary Secretary in Committee, he said:
  "I shall inquire of our advisers about the present stage of the drafting of the memorandum and of the company's objectives."—[Official Report, Standing Committee H; 14 February 1980, c. 1574–75.]
  Six weeks have elapsed and the documents have still not been produced. Are we to be denied what has been given to other Committees of the House?
  It is essential that hon. Members acting on behalf of the taxpayer should be able to make a proper judgment about two important matters. What will be the Government's share? Perhaps the Minister will say that it is only a small share. Will he tell us the size of the share ownership? Is it a requirement by the brokers that the Government should have a guaranteed portion of the shares? The logic of the argument is that the Government should sell all the shares and get all the money. Why are we told that the Government intend to hold a certain percentage of the shares? If that is true, it will be seen from the articles of association or the memorandum.
  Secondly, if the Government's policy is to keep the NFC as a single holding and not to sell off the assets, they should make that commitment clear, as it was made clear in the articles of association in connection with aviation and aerospace. It was made clear that foreign domination of the company would not be allowed. Government policy was made clear in those documents, to which we have not had access.
  When we asked the Minister in Committee how he could guarantee that once the company becomes a private company it will not sell off the profitable assets
  1202
  and allow the unprofitable parts to go to the wall, he said:
  "Clearly, at some point, this must be a matter for the commercial decision of the new national freight company. I do not run away from that. I can give no guarantee about the future of the NFC over the next 10 or 20 years. That would be to limit its freedom.
  If it has the commercial freedom—as I believe it should have—to develop in the ways that are best for it, and if control should, as I believe, go to the private sector, clearly the control has to be exercised and decisions taken. I do not pretend that there is any way in which I can control the activities of the NFC after it has become a company and gone out of the public domain."—[Official Report, Standing Committee H; 19 February 1980, c. 1737.]
  That will hold only until the appointed day. The Minister was not guaranteeing anything. The legislation was doing that. The Minister was promising nothing. The corporation will remain as one unit. He meant that he was selling it as one unit. The industry wishes to maintain it as a successful integrated unit, as it is at present. Apparently the Minister is not concerned about that priority. He simply wants it to be sold as a commercial going asset, and what happens after that does not matter.
  The employees are concerned about conditions in the industry, which they feel are associated with the cross-subsidisation that has been practised in the industry. They are concerned whether the new company will maintain the benefits that they have derived from the industry. Whether those fears are realisable and whether they have substance are matters of judgment. The importance for this debate is that the employees and unions feel that they have substance.
  It is the Government's view that there must be maximum flexibility for continuing rethinking in the matter, but issues of policy must be decided. Some indication of policy is given in the articles of association and memorandums of British Aerospace and British Airways. I do not accept that it is a strategic matter. Questions need to be answered, and an indication of policy should be given in the articles of association and memorandum of the new company.
  What will be the principle of policy control? What will be the role of the nominees and their influence in stage 1 of the company? What will be the capital construction? What will be the

  1203
  nominal value of the shares and the proportion of equity and security, which are of concern to the existing company? What period of time is envisaged by the Government between the appointed day and the selling of shares? What payments and obligations will be required from the existing company to pay the Government if there is a considerable period between the appointed day and the selling of shares? Under the interest payments, the Government were guaranteed £8 million. What will be the payments under the new security role? What will the taxpayer receive? Will the Government not ask for money back from the company, in order to make it an attractive selling proposition and to influence the price? It is fair to ask what proportion of shares the Government will hold. They say that they will hold the majority of shares in British Aerospace. How do they interpret a small share? A prospective shareholder needs that sort of information. Some indication on those matters is given in the articles of association and memorandums of other companies. It should be given in the articles of association and memorandum of this company.
  I understand from the Minister that the Government have no intention of influencing commercial decisions. What will be the role of the Government if they hold only 10 or 15 per cent. of the shares? Is the taxpayer to be denied any right to participate in the commercial decisions of the company? If the Minister feels that there is some benefit in keeping the present corporation companies together, and if the new company proposes to break up the old company, will the Government use their shares to prevent such a policy?
  Some indication of Government policy should have been given to the Committee, and it should be included in the articles of association and memorandum of the company. We feel that the new clause gives the House an opportunity to debate policy matters that should be included in the articles of association before the appointed day. The Government should make clear the political purpose of the Bill. Without doubt, we feel that it aims to denationalise and transfer to the private sector the National Freight Corporation. The Bill plunders the taxpayers' assets. It makes
  1204
  the Government an asset-stripper. The Government aim to acquire ready cash. The Minister desires to feed the Treasury with some money, whether from pensions or the sale of assets. That is also the Government's aim in selling and hiving off British Rail hotels and in their actions over British Airways and British Aerospace. Flexibility means a quick and ready access to cash.
  The Bill is ideological because it rolls back the frontiers of the public sector. It also aims to please political and commercial friends—people who will gain from the transaction. It will reduce the public sector borrowing requirement. That is one of the fundamental reasons for this process—to fulfil the monetary madness policy of the Government, which even Professor Friedman found difficult to justify.
  We believe that the Bill is more ideological in character than in commercial sense. We ask the House to support our clause because it makes sense and because it will provide hon. Members with a further opportunity to assert the matters of policy that they have been unable to assert in previous debates.
  Mr. Fowler: It may be for the convenience of the House for me to intervene briefly at this stage to set out the Government's general policy on the National Freight Corporation.
  The hon. Member for Kingston upon Hull, East (Mr. Prescott) said that the articles and memorandum of association should be laid before the House, and that they should contain provisions to ensure that the Minister retains a majority of the securities of the company, and that the assets of the successor company shall not be sold without the consent of the Minister. That is a fundamental attack on our policy.
  First, I wish to set out Government policy on the National Freight Corporation. The corporation is a public corporation operating in road haulage, and in a number of other related areas —cold storage, removals, and personal travel. The corporation takes the form of a holding company, controlling about 50 subsidiary companies, many of which are familiar. They include British Road Services, National Carriers and Pickfords. The Government do not feel that the State should be involved

  1205
  in the running of a road haulage business, and even less in the running of cold storage or household removal services, a travel agency or any of the other business in which the National Freight Corporation is at present engaged. The corporation is not the sole provider of an essential public utility. It comprises about 10 per cent. of the road haulage industry. In every type of business it is necessarily competing with the private sector in areas where the level of service and price must be determined by the free market. It is our view that the corporation should be subject to the disciplines of the private sector and enjoy some of the opportunities of undertakings within that sector. The restraints upon it should be lifted. It should be able to operate with a commercial freedom that it does not have at present. That which we propose has the full support of the board of the corporation.
  5 pm
  Mr. Walter Johnson: It does not have the support of the unions.
  Mr. Fowler: The Government contend that the denationalisation of the corporation as proposed in the Bill is the best possible way to serve the interests of the corporation, those who work in it, its customers and the taxpayer.
  The Government intend to dispose of the controlling interest in the corporation. That will be achieved by changing the legal form of the corporation so that it becomes a normal Companies Act company with an appropriate capital structure, including shares which can be sold to investors.
  All the assets of the corporation will be transferred to a company formed specifically for that purpose. All shares in the company will be held initially by the Minister or his nominee on behalf of the public. It is impossible now to make a firm commitment on timing. I have already said that that will depend on a range of factors such as general Stock Market conditions and the company's track record.
  Our overall objective is clear—namely, to sell as quickly as possible a controlling interest in the company to private investors. I have made it clear—the hon. Member for Kingston upon Hull, East did
  1206
  less than justice to my case—that we have decided not to sell off individual corporation subsidiaries to the highest bidder. I recognise that I can give no guarantee on the future of the corporation after it goes into the private sector. I can give no guarantee on the corporation and the development of its business. However, the House should recognise that we have taken a strategic decision not to break up the corporation and to sell it part by part. We have decided to keep it together.
  We want the corporation to go into private ownership as a single entity without any major changes in its size or in the range of its interests. Its prosperity and future—I do not run away from this —must depend to a large extent upon its success after vesting day. We believe that we shall ensure the best possible future for the corporation.
  The corporation, as a nationalised industry, is subject to Government intervention at every stage of its operations. It is important that the House understands what nationalisation means in practice. Government control affects the appointment of the board of the corporation and the corporation's borrowing powers. It means that Government approval must be given for the corporation's investment programme. It means that there must be consultation on the corporation's general financial and business progress. There has to be consultation on issues that may have political implications. Government intervention also involves broader economic and social policies—for example, prices and incomes policy and employment policy. The corporation as a nationalised industry faces those constraints.
  The Bill will make no changes to the position of employees or to their existing rights.
  Mr. Walter Johnson: The Minister has said that the board supports the idea of selling shares in the corporation. He made no reference to the attitudes of the trade unions and those of the staff. As someone who knows something about the problem, I assure him that the vast majority of the corporation's staff want nothing to do with the Bill. All the indications are that they are concerned about their future prospects. They are especially concerned about resettlement

  1207
  and redundancy arrangements that might occur as a result of hiving off any part of the corporation. The Minister did not deal adequately with those issues in Committee, and he has not done so in the House.
  Mr. Fowler: I was about to deal with the employees' conditions of employment. If the hon. Gentleman is saying that many of those within the trade union movement, of which he is a much respected figure, do not agree with the Government's policy, I accept that that is so. I have never been left in any doubt about that. However, he has conceded that the board, which has responsibility for the direction of the corporation, is in favour of taking the course that the Government propose. We are taking this course because we believe that it will provide extra opportunities for those working in the corporation. There is no question but that nationalisation has held back the nationalised transport industries.
  Mr. Walter Johnson: Rubbish.
  Mr. Frank Dobson: Such as?
  Mr. Fowler: British Transport Hotels is a prime example. I do not mind taking the House into a general debate on nationalisation, but I have a feeling that the Chair would rule me out of order if I were to embark upon that.
  Notwithstanding the initial views that have been expressed by those who work for the corporation—I understand them —I hope that it will be understood that our proposals have been introduced with the intention of developing business. After all, the future for those working for the corporation can be assured only by developed and better business.
  There seems to be a feeling on the Opposition Benches that, because an organisation is in the public sector, job security is created for ever more. That is not so. That would not be so even if the corporation were to remain nationalised.
  Mr. Prescott: The right hon. Gentleman does not have to lecture the corporation about that. It lost 50 per cent. of its employees over 10 years. Nationalised industries, including the corporation, have
  1208
  been dissatisfied with the financial obligations of nationalised industries. They have argued for equity financing. That is what the corporation was interested in, and that is what the National Bus Company wanted. It was wanted, too, by British Rail. If the right hon. Gentleman addressed himself to that problem, he would be a greater friend of the nationalised industries.
  Mr. Fowler: I accept that Labour Members might want to go along the policy line that enables the public sector to expand further. The hon. Gentleman will be less surprised to hear that that is not the Government's policy. We believe that if undertakings such as the corporation want the opportunities of the private sector they should observe the disciplines of that sector. The board of the corporation is content with the arrangements that we are making. It is content because it believes that the Bill will lead to a developing business and not a receding business.
  Mr. Walter Johnson: The jobs of board members are also at stake.
  Mr. Fowler: I emphasise that the Bill will make no changes to the position of employees or to their existing rights. It was said in Committee that the Bill provided for the new company to assume all the existing obligations of the corporation. That includes its obligations to the staff. There will be no interference with the pension rights of individual employees or with their contracts of employment. Similarly, the proposals will not affect the travel concessions available to employees who were transferred from British Rail to the corporation on its establishment.
  I have set out why I believe that this is in the interests of the NFC and also in the interests of the taxpayer. It is certainly true that the position of the NFC has improved over the past few years. Opposition Members will remember that under the previous Administration there were times when the NFC was in a rather worse shape than it is now, and it was supported to the tune of £82 million. That position has improved. The real question is what is in the best interest of the NFC. How do we secure its future? We shall secure its future more effectively by following the course that I

  1209
  propose rather than by retaining it in the public sector and making it subject to restraints.
  The proposals embodied in the Bill will give everyone a better deal. The corporation will lose its unwanted and anomalous position as a nationalised industry, with no clearly defined role or objective. The employees will benefit through working for an organisation whose prospects for growth are greatly enhanced by a new freedom to compete in the market place on equal terms with private sector companies. The taxpayer will benefit also in an obvious way.
  The memorandum and articles of association are being drafted by those who advise the Government. The articles will contain no surprises. They will follow the form described in Table A of the Companies Act 1948. The final shape of the memorandum will depend on the capital structure of the new company. This need not be comprised entirely of shares. As the Bill stands, it could be part shares and part loan stock. The capital structure will therefore be decided by the Government on the appointed day.
  The second part of the new clause seeks to ensure that the Minister retains a majority of the securities. We covered that ground in Committee. I made it absolutely clear that that is not the Government's position. In the policy document that I sent out in August 1979, I said that ultimately the Government intend to dispose of the majority shareholding. I made the position equally clear in my Second Reading speech.
  There is absolutely no question of the Government retaining a majority shareholding in the successor company. We intend to ensure that a controlling interest passes to the private sector. That is fundamental to the aims of the Bill.
  The second section of this part of the new clause is another attempt by the Opposition to revive the weary topic of asset stripping. We have tried to explain that point before. All the major subsidiaries of NFC are trading profitably, and those engaged in transport operations could not be closed without higher costs in redundancy than could be realised from the sale of assets. At the same time it is essential to its business strategy, and to future employment prospects, that the corporation should continue the
  1210
  modernisation and rationalisation of its networks. Inevitably, that would mean the closure of some depots, and their sale to provide much needed cash for reinvestment in the business.
  It is ludicrous to propose that the Minister should be required to give permission in such cases. In 1979 the NFC raised more than £4 million in that way, without the need for any Ministerial consent. I certainly do not intend to impose any such restrictions on the new company.
  We intend to take the NFC out of the public sector, for a number of reasons. First, we do not believe that it should have been in the public sector in the first place. There is no justification for so-called public ownership of a company that depends for its future on its success in competing in the private sector and with private companies.
  Secondly, the NFC should not be subject to the restraints that public ownership provides, or the interference of Government and civil servants. That has never been a recipe for success in any commercial undertaking.
  Thirdly, there is a successful and developing business available, and that is in the interests of the NFC. It is also in the interests of those who work for the NFC. It should have the freedom to develop. It has a good and a prosperous future. I ask the House to reject the new clause.
  Mr. Ken Weetch: We have heard a speech from the Minister about the denationalisation of the NFC. We did not hear one transport argument. We heard a series of unsupported assertions based on political dogma and nothing else. It is odd that no transport arguments should be advanced in a transport debate when the Minister is speaking from the Front Bench.
  I rise to speak in support of new clause 12. In doing so, I wish to endorse and support the remarks of my hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott). New clause 12 touches upon matters relating to part II of the Bill. It is true to say that that is the most politically controversial area in the Bill. The arguments that we shall

  1211
  hear relate especially to clause 36, which contains the root principles of the matter.
  The twin aims of the new clause are, first, that there should be laid before the House the articles of association of the successor company, so that they could be properly scrutinised in the public interest. Secondly, we wish to ensure that enough power is left in the hands of the Minister for him to determine the size and financial structure of the new successor company.
  The new clause is related to crucially important political and economic principles, which are matters of substantial political controversy.
  In essence, the Government are proposing that the NFC—which is a State-controlled transport concern in the shape of a public corporation—should be convened into a private company under the Companies Acts. It is essential to argue the matter now, because we shall see it happening again. The Minister has already flown a kite on the privatisation of the railway assets. It is necessary for us to meet the argument head-on because we shall hear it again before, politically, hon. Members are much older.
  The mechanism is simple. The present fixed interest capital formation will be changed to equity shareholding, which immediately will be held by the Minister, guided by the Treasury, and then sold off.
  I have sifted the vast bulk of the Government's arguments. A number of reasons have been put forward for this major economic and political change. The clearest statement came from the hon. Member for Faversham (Mr. Moate), who has not spoken in the debate today. He said that the policy aims at:
  "a free-standing, highly competitive concern". —[Official Report, Standing Committee H, 14 February 1980; c. 1636.]
  In other words, the Government are putting forward this policy as a matter of principle and in relation to competitive principles which they wish to bring to bear upon the argument.
  Secondly, as I understand it, they are putting the policy forward for financial reasons. The NFC is under "investment constraints", whatever that may mean There are rigidities in the NFC's financial structure. It must be admitted that it is
  1212
  highly geared to fixed-interest loan capital, which in its wake brings financial disadvantages.
  Thirdly, the arguments are concerned with the Government's precept and practice of economic policy as it relates to the public sector borrowing requirement and control of the money supply. Any loss which the Government might have to meet would increase the PSBR which, as we all now live in the world of Samuel Smiles, we must avoid at any cost. The argument, although spurious, is put forward under the banner of financial responsibility.
  Therefore, the argument ultimately rests on all those assumptions. The purpose of the new clause is to counter the whole series of arguments that the Government have put forward. The Opposition are countering with new clause 12, in particular its second proposition, which seeks to present alternative and opposite assumptions through ministerial control, and ultimately, through control by this House. In order to argue the case for new clause 12, it is necessary to dispute all the assumptions which the Government have made about transport policy in general.
  In passing, I must say that none of the arguments that have been put forward from the Government Front Bench have anything to do with transport. They have been concerned not with transport economics, but rather with doubtful, general political propositions.
  The first argument put forward by the Minister related to competition. That differs from the arguments put forward by other Government Departments, which are attacking the present situation on grounds of monopoly. The NFC has no monopoly position at all in transport. It has 10 per cent. of the haulage business. It is true to say that the NFC is in a competitive position at almost every turn.
  The hon. Member for Faversham (Mr. Moate) said that we want an enterprise which responds to the needs of the market. Yet on various occasions the Minister's own words have suggested that it does so. For example, he said:
  "The National Freight Corporation is not run as some vast over-centralised nationalised industry".
  He also said:
  "It seems genuinely in no way to avoid commercial realities".

  1213
  If what is being looked for is a fresh commercial approach, what we have, on the Minister's own admission, is a commercial attitude which is already present in the NFC. I should again like to quote the hon. Member for Faversham, who has a detailed knowledge about these matters. He said:
  "current management is first class and its relationship with the work force has been superb".
  In fact, the real clue as to the Government's purpose was clearly brought out by the Parliamentary Secretary, who said that the NFC
  "is by no means out of the wood"—
  here he was talking about its past difficulties—
  "But it is in a very strong recovery position. We believe that we can time the sale in such a way that it will be an attractive proposition for investors".—Official Report, Standing Committee H, 14 February 1980; c. 1635–44.]
  Although the Parliamentary Secretary mixes with some doubtful political company, his integrity shines through in these matters. What he is saying is that although Government money has been used to see the NFC through difficult times, now that it is improving a little, and its future prospects are brighter, it will be sold off to the private sector. In brief terms, that is a precis of the argument which brings us to the truth at last.
  The Parliamentary Secretary to the Ministry of Transport (Mr. Kenneth Clarke): I hate to rise critically when the hon. Gentleman has put his remarks in such a generous context. However, I am quite sure that the quotation which he used was not used in the context of giving my reasons for denationalisation. He has picked two sentences out of a debate about the way in which we would organise the sale. I hope that he is not suggesting that that was the only comment I made in Committee which was at all directed to the purposes of denationalisation. The reasons that I have given for denationalisation are strikingly similar to those given in the remarks which the hon. Gentleman has already quoted of my right hon. Friend and my hon. Friend the Member for Faversham (Mr. Moate).
  Mr. Weetch: The last thing that I would do is to quote things out of con-
  1214
  text or to accuse the Parliamentary Secretary of any sort of sharp practice. He said a good many other things, but I leave it to the judgment of the House. One would need acres of context if one were to misconstrue remarks such as those.
  However, such is the strength of the competitive principle which the Government have put forward that they are to give a public subsidy of £100 million to go with the sale. The Government will wipe off £58·7 million of commencing capital debt and £41·3 million of outstanding loans in order to dress up the shop window so that they can make a sale. There is not much of the competitive principle in that. That reeks of a subsidy principle, only it is a subsidy for wrong purposes.
  In transport terms, will the NFC be better under private enterprise? No arguments have been advanced to say whether that will be so. All that we have had has been a series of assertions. In fact, the argument boils down to financial and political sharp practice for very narrow ends.
  Let me take the argument about financial structure. Let us admit that the financial structure of the NFC is such that it is too rigid. I think that over the years the NFC itself has argued that there should be an injection of equity capital, and that there should be some sort of public dividend capital, because when so much of one's financial structure is geared to fixed interest payments, instability is introduced into the structure.
  The point that I am seeking, to make is that one does not have to go through the transfer into a successor private company in order to put that right. The Minister can put that right now with the present structure of the NFC.
  The third argument relates to the PSBR. Will the £100 million which the Government will give to the sale with their blessing, be put on the PSBR account? I suggest that it will not. The straight issue here is a political one. The kernel of the political argument from start to finish is that the Government intend to put the whole of the road haulage transport business into free enterprise.

  1215
  5.30 pm
  My quarrel with that argument is that I am a strong believer in the mixed economy. I believe that there should be a State sector in road haulage, which, according to the Minister's own admission, has made striking progress, in difficult conditions, over the years. I listened carefully to the Minister. He made a number of arguments in support of his case. He said that the Government have the support of the National Freight Corporation. That argument is not worth a light. People's jobs are at stake. I do not blame them for keeping their heads below the parapet. I might do the same in that situation. It adds no strength to what the Minister says.
  The Minister also did his best—it is a doubtful argument—by saying that the Government would keep the corporation together in the initial stages. That conflicts with the commercial responsibility of the successor company. If the board is to be commercially free to make business decisions, there is nothing to stop it from breaking up the corporation into lots and selling it off piece by piece. Commercial freedom means exactly that. If the Minister says that he intends to try to keep it together and retain some of the structure, his argument will not hold water. It conflicts precisely with the principle of commercial freedom that he is trying to establish. That is the centrepiece of the argument for moving into the private sector.
  I am certain that the corporation will be broken up. Those who seek to enter this market and 'who will buy their way into what is now the National Freight Corporation have their eyes on separate parts of it. They have no intention of running the framework of the unit as at present constituted. The purpose of the new clause is to try to maintain the structure by giving the Minister certain powers concerning the assets and the sale of such assets of the corporation with its improving record.
  The new clause seeks to keep the Government in a majority shareholding position and to enable them to keep the present NFC structure intact. Under the clause it would be necessary to have ministerial consent for the sale of assets in the successor company so that the predators can be kept at bay and so that
  1216
  the non-transport political dogma thrown up by this Bill can be minimised.
  Mr. Iain Mills: We talked yesterday about a fundamental divide that exists over several clauses. This is obviously another fundamental divide between our ideologies and attitudes. My greatest difficulty is in accepting or grasping the status quo. If one could guarantee that any organisation, nationalised or private, would be allowed, magically, for ever, to continue its business without change, some arguments proposed by the Opposition might be attractive. How can we live with the status quo? Do nationalised industries guarantee a status quo? We have seen in many nationalised industries the diminution of their asset.
  This precious asset—its value in financial terms and in employment—has diminished extraordinarily quickly in most nationalised industries over the last decade. How can hon. Members propose, as justification for the maintenance of the present status of the National Freight Corporation, that by being nationalised and being a Government concern, it will stay the same and guarantee the same levels of employment, retain the same asset value and still give guarantees to its customers, who, after all, play some part in this complex, and to its staff and work force, who play an enormous part?
  The answer is that life moves on. Industry is competitive. If hon. Members argue that nationalisation is an answer to meeting competitive changes and competitive forces, I ask them to quote any examples of success among present nationalised industries from steel to British Leyland and the rest. The answer is simple. I shall give way if any hon. Member has an example.
  Mr. Albert Booth: It is kind of the hon. Gentleman to offer to give way. I suggest that he is trying to bring about a self-fulfilling prophecy. If the Government sell off all the nationalised industries making a profit, what he suggests will come about.
  Mr. Mills: I thank the right hon. Gentleman for his interesting intervention. How does one compete in an international competitive situation? How can one guarantee that any one factor will remain the same? I give a hostage to fortune to the House and say that distribution arrangements of freight will change in

  1217
  this country. That is no hostage. How can the organisation adapt to that change and best guarantee that the asset value of the concern will remain the same or increase and that there will be growth and adaptation to new processes and to new technology? By direction? By integration? By nationalisation? The answer is "No".
  The answer is that it must be a keen competitive organisation. In defining a keen competitive organisation, one must, in essence, be able to compete. How can the National Freight Corporation compete in financial terms with private enterprise companies which have access to borrowing which is not available to the corporation? How can the corporation compete with private enterprise corn-panics that are not subject to political direction from the Government? The answer is self-evident.
  What is an asset? I became most frustrated in Committee when Opposition Members talked about assets and assets being stripped. An asset is really an asset only if it has a positive value through being able to exist in the same form or in some growth form. If it diminishes, it rapidly loses its asset value.
  Many companies, especially those in the private sector, have shown that they can adapt to modern conditions and changes in employment and industrial practice. I refer to a company near my constituency for which I used to work. A big multinational concern has started off a series of small industrial estates on its own grounds. That is private enterprise adapting. If the National Freight Corporation is to be allowed to change and to attract sufficient credibility in the City and among the financial institutions, in order to attract future capital to give its employees and customers better services and stability, it must be able to compete without political direction.
  The political and ideological divide is clear. If a majority shareholding is held by a Government, whichever party is in power, there is no doubt that the customers and finances necessary to fuel the competitive urge and to allow the National Freight Corporation to adapt to innovative changes and to innovate itself will be necessary. It is not enough to claim that past success is enough. This has been the claim, over decades of British indus-
  1218
  trial history, for industry after industry that has subsequently found itself, due to changed events and the emergence of new countries and new concerns, without that keen cutting drive. If we wish to allow the National Freight Corporation to continue to be an asset and to allow those who work for it and its board the freedom necessary to drive it against keen and cutting competition, we should reject this new clause. We should certainly not allow the majority of the shareholding to be held by the State through the Minister.
  Mr. Dobson: I have been amazed by the speeches of the hon. Member for Meriden (Mr. Mills) and the Minister. Both have portrayed the National Freight Corporation as some stultified, dying outfit with no clearly defined role or objectives, which is clearly not doing its job and will be so inflexible to be incapable of adapting to change.
  I refer the House to what the Minister said of this stultified nationalised industry when he was Opposition spokesman on 12 May 1978:
  "the NFC is not run as some vast over-centralised nationalised industry. The corporation is broken down into a federated structure, and maximum independence is given to the separate companies … the management in the NFC seems genuinely in no way to wish to avoid commercial realities. The opposite is the case. The approach of the corporation is … to achieve a commercially viable company, to invest in success and to disinvest in failure."— [Official Report, 12 May 1976; Vol 911, c. 587.]
  That would be a reasonable, flexible approach to the problems of a company that represents about 10 per cent. of the freight transport industry.
  There is a division of view even among Conservative Front Bench spokesmen. On the one hand they say that they want to get rid of nationalised industries because they are monopolies and on the other the Minister tells us today that he wants to get rid of the NFC because it is not a monopoly.
  The object of the new clause is to keep the National Freight Corporation together as an entity, and to prevent it from being sold off in bits. Above all, we wish to keep the corporations assets—material and human—as part of the freight transport industry because we have no faith that the prospects of the denationalised company would be very good once it was in the private sector, unless

  1219
  some form of protection to the existing entity were provided. We want the Minister to keep control of it so that he can veto the sale of assets.
  The Minister may say that he wants to keep this unit together. He said on Second Reading:
  "we are not going to be selling off individual NFC subsidiaries to the highest bidder. The whole purpose of this Bill is to enable us to sell shares in the enterprise as a whole. We want it to go into private ownership as a single entity, without any major change in size or range of interests."—[Official Report, 27 November, 1979; Vol. 974, c. 1129.]
  We agree that that is a laudable objective, but once the corporation is sold into private ownership there is no way of maintaining that objective, because of the likelihood that it would be broken up and sold off. Without the powers that we seek in the amendment the Minister would have no power to achieve his objective of keeping the National Freight Corporation as a single entity. There is no chance whatever of his attaining his own demonstrated objective. The reason for that is that he is not really interested. He is not actually committed to keeping the corporation as an entity. What he really wants—as with the other denationalisation measures going through the House, concerning BP, British Airways and British Aerospace—is a rip-off for his Tory friends in the City.
  During the Committee stage I referred to this as being a three-part rip-off. As it turned out, information provided in Committee revealed a four-part rip-off. The Minister, not content with three parts, announced a further part later in the day.
  The first part of this series of rip-offs is the write-off of £100 million of debts. The NFC currently owes the Government £100 million, or £8 million of income each year. Before this company is sold to the private sector the taxpayer will write off that £100 million so that the debt is not carried forward to the private company and so that the private company can flourish because it will not have to pay the NFC's debt to the Government.
  5.45 pm
  The next stage in this rip-off is the sell-off. Having written off the £100 million, the Government will sell off the
  1220
  remaining assets of the NFC. Hon. Members who heard me discourse on this aspect in Committee will know that the third stage in the rip-off is the strip-off. At that point the assets of the company will be stripped off separately. The fourth part of the rip-off that we discovered in Committee was the tax write-off. I shall come to that later.
  Referring to the debt write-off, I should draw the attention of the House to the fact that on Second Reading the Parliamentary Secretary said:
  "One of the immediate effects of our proposals is that the company's capital structure will be very much more attractive "—[Official Report, 27 November 1979; Vol. 974, c. 1242.]
  He can say that again. If a company has a debt of £100 million and that debt is written off there is no doubt that its capital structure becomes very much more attractive to those who want to buy it.
  We come now to the sell-off. During a debate on the Consolidated Fund Bill two weeks ago I discovered an aspect that had not occurred to me before about the selling off of nationalised assets. There is a great lining of pockets and greasing of palms in the City direct to those who handle the transaction—not just those who buy the public assets, but to those who help the Government sell those assets.
  When the last tranche of shares in BP was sold no less than £4·5 million was paid out in fees to the merchant banks and other City institutions for helping the Government to sell those shares in BP. I reckon that two or three hon. Members could have joined together and sold those shares in Leather Lane or Petticoat Lane market and still have received as good a price, even after the Government had paid out £4·5 million for financial advice. They may need a little more advice in selling shares in the NFC and therefore we can expect the level of fees paid to the merchant banks and others assisting the Government to be higher. We were told that the £4·5 million paid in fees for the BP shares was "an especially lean fee". Therefore, we can expect a rather fatter fee for helping the Government sell off the National Freight Corporation, because it will be harder to sell and harder to judge the value of the shares.

  1221
  It is worth pointing out to the House, when considering the strip-off rip-off, that the total assets of the NFC amount to about £100 million. Of that sum, about £60 million is in land and buildings. If hon. Members have visited the National Carriers depot they will know that the bulk of that value must be in the land, because it is certainly not in the buildings. We have £60 million worth of assets in the land of the NFC. It is worth knowing—I am sure that the asset-stripping property companies who contribute to Tory funds have observed this—that if one reads very carefully the last annual accounts of the NFC one will see that the £60 million valuation of the land was carried out as long ago as 1968. There has been a great deal of inflation since they, as well as a dramatic, catastrophic inflation in the value of land. The asset stripper always concentrates on identifying assets that are presently undervalued, so that he can sell them off at current values and make a killing
  A fourth point, the tax write-off, was something that came to light only as a result of the intervention of the hon. Member for Faversham (Mr. Moate), who has already been mentioned today. In Committee he said—
  Mr. Deputy Speaker: I have been in a very lenient frame of mind for some time this afternoon, but I am sure that the hon. Gentleman will relate his remarks to the new clause that we are discussing.
  Mr. Dobson: I will break off to explain, Mr. Deputy Speaker, that the object of the clause is to try to keep the NFC together as a single entity within the freight industry in future. I am outlining what the state of the company will be when it is transferred into the private sector if the clause does not go through, and trying to exemplify the dangers that will result and the threat to the NFC as an entity in the freight industry.
  The hon. Member for Faversham said:
  "The company has immense accumulated losses … If carried forward those tax losses would mean that the new company would not have to pay corporation tax for some years. That would be a helpful factor for the new company."
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  He went on:
  "If it is to begin life as a free enterprise company, let us give it a good start. The tax losses could be an immense asset to it." —[Official Report, Standing Committee H, 14 February 1980; c. 1633–4.]
  That rather took aback the Parliamentary Secretary, who, quite reasonably, had to consult his officials about Government policy in relation to the tax losses. However, he confirmed to the Committee that it was the intention of the Government that tax losses on the scale envisaged would be allowed to be carried forward from the nationalised sector into the new company so that they would be a substantial asset for the company.
  Mr. Peter Hordern: Surely the fact that the NFC has extensive tax losses proves beyond doubt the need to transfer a loss-making organisation into private enterprise hands.
  Mr. Dobson: The losses were incurred some time ago. One of the questions that need to be resolved and that the Ministers have not resolved to date is whether these tax losses from 1968 to 1980 will include the actual losses themselves and not just the tax losses that were written off at various stages during different times when the capital structure of the NFC was being sorted out. I do not think that that is a sound argument for denationalisation. It is certainly not a sound argument for denationalisation and carrying forward the tax losses so that, in effect, the taxpayer does without twice. That seems quite absurd.
  In Committee, in an effort to establish an NFC that would be retained as a single entity, which is the purpose of the amendment, and to ensure that it continued to operate in the national freight sphere, we put forward—the Minister has already referred to the terms and conditions of the existing staff—amendments that sought to carry forward the existing structure of industrial relations, so that the present machinery for negotiation of pay and consultation about other terms and conditions would be carried forward with the new company. We believed that that was an asset that any company would want if it was to operate in the private sector.
  Needless to say, our amendments were turned down by the Government, as was

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  our desire to carry forward certain of the existing rights of employees. The Government did not accept that suggestion. They said that people could rely on the Employment Protection Act and various other measures to which, ironically, the Government had earlier objected. I believe that there was a cavalier objection by the Government to our efforts to include in the structure of the new company proposals that would make it work as an organisation operating in the transport freight sector.
  Following that, the Minister, at a meeting with the TUC—groans, no doubt, from Government Members—said that it was his impression that employees of the NFC were looking forward to the challenge of the private sector. In the immortal words of the Duke of Wellington
  "If you believe that you will believe anything".
  I do not know whether Government Members have consulted people who work for the NFC, but I represent a substantial number of them in my constituency, and as a sponsored NUR Member of Parliament I have a great deal of contact with their official representatives. I have seen no sign whatever that they welcome this transference to the private sector, even though the hon. Member for Meriden (Mr. Mills) would have me hold out to them the glorious prospect of burgeoning wealth if they all battle together flexibly, responding to the call of the market and everything else that the right hon. Member for Leeds, North-East (Sir K. Joseph) continually talks about.
  The second part of our clause says:
  "The memorandum and articles of association shall contain provisions to ensure that the Minister shall retain a majority of the securities of the company and that the assets of the successor company shall not be sold without the consent of the Minister."
  I think that the people working in the NFC at present might be willing to bite on the bullet about the prospect of transfer to the private sector if they had a guarantee on those lines and were assured that they would not be put through the City's bacon slicer to the advantage of people working in the City and to their substantial disadvantage.
  Alternatively, I believe that if the Minister, by accepting this amendment,
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  could give worthwhile assurances that the NFC, even when in the private sector, would remain an entity and continue roughly as it is at present, and operate in the freight transport sphere as it does at present, the employees of the NFC might be a trifle less reluctant than they are at present. However, I know that he will ask the House to vote against this amendment, and consequently he will not give the guarantee for which I am asking. Therefore, I can only conclude—as we have concluded from everything that has been said by the Government in the House and in Committee—that the object of the sell-off of the NFC has nothing to do with freight transport and everything to do with property and financial speculation.
  Mr. David Penhaligon:I have listened to the debate with great interest and I still am not very worried about whether the NFC is sold or not. I am certain that if my party were in power we would not have gone through the process of putting this Bill together. Although we are basically against nationalisation, most of our objections do not apply to the NFC. It is not a monopoly. It has to compete in the market, and if it does not do so it will not survive. If the company competes successfully it will grow. Most of the historic objections that I have to nationalisation, therefore, do not apply.
  I wish that there were two separate votes on new clause 12, because I would vote enthusiastically for the first subsection. It is important, at least to me, to know precisely what the memorandum and articles of association say. If they included wide regulations, which greatly encouraged the owning of shares by employees, I could vote for the proposal with some enthusiasm.
  6 pm
  We must work towards a society in which those who work in large corporations have a direct financial interest. I look forward to a system in which those who work throughout their lifetimes for a company will share in its assets growth. When they retire I hope that they will have something worth while to invest.
  As the new clause stands, we are buying a pig in a poke. The Minister said that they will be the normal memorandum and articles of association. However, we

  1225
  have no idea of their content. It is incredible that the House has been asked to vote for the denationalisation of a company when it does not know the rules and regulations by which the new company is to be run.
  I would like to see the new rules and regulations put in a form that would allow us to debate them, and amend them if necessary. We should greatly increase an employee's ability to buy shares. I had understood that the Government were keen on that. Why will they not give a total commitment to that type of company?
  Turning to the second part of the new clause, one must make up one's mind whether to sell. The half-sale arrangement proposed in the new clause is unsatisfactory. British Petroleum has often been quoted. However, I suspect that that unique arrangement arose as a result of circumstances that existed many years ago. As that company is in the profitable energy sector, the arrangement has worked well. That does not apply to most industries. I am therefore against the second part of the new clause, but I am tempted to vote in favour of it as a whole.
  I hope that a privately owned company will not have to ask the Minister whether it can sell a motor-bike. The company should make that decision. I am tempted to vote in favour of the new clause because the memorandum and articles of association are unsatisfactory. The House should be given clear details before voting. We need the document. It should be presented in a form that can be amended. We could thereby reflect on the type of company that we should like to see restructured.
  The employees should be given a direct and personal interest in the success of the new company. That was the argument behind nationalisation 40 or 50 years ago. If I had been around at that time, those arguments might have appealed to me. It was envisaged that society and employees would benefit from nationalisation. However, it has not worked. There is an alternative. Employees could be given massive investment in the company and an opportunity to build up assets during their working lives. I should like to see that included in the memorandum and articles of association. The Liberal Party will probably vote in favour of the clause. However, we are against one part of it.
  Mr, Kenneth Clarke: The hon. Member for Ipswich (Mr. Weetch) chided us for failing to produce transport arguments against the new clause. I waited for him to produce his transport arguments in favour of it. However, I waited in vain. The nearest that Opposition Members came to offering a transport argument was when the hon. Member for Kingston upon Hull, East (Mr. Prescott) strayed into his favourite theme of integration and direction of freight traffic. He made a long speech on that subject in Committee. New clause 12 provided the hon. Gentleman with an ideal opportunity to express his enthusiasm.
  The basis of the 1968 Act, and of the Labour Party's belief in the National Freight Corporation, was that it would integrate freight transport. That belief accompanied quantity licensing and the direction of traffic from road to rail. The hon. Member for Kingston upon Hull, East is beaming with pleasure. He nods his head as he remembers those far-off days. His preferences are clear. However, it might have been useful if, in stating those preferences, he had made clear whether he was speaking for the Labour Party. Many of those involved in the road haulage and transport business would like to know where they stand. I understand that the right hon. Member for Barrow-in-Furness (Mr. Booth) will shortly speak in the debate. He speaks with the authority of a member of the Shadow Cabinet. I hope that he will make clear whether there has been a fundamental shift in the Opposition's transport policy. At one stage it was suggested that the Opposition would reconsider all their policies. However, if the Labour Party has no policy, perhaps the right hon. Member for Barrow-in-Furness could indicate when debate within the Labour Party will end.
  Those who operate in the transport business need to plan. They need to know the Opposition's transport policy. They want to know whether the Labour Party wishes to return to the so-called golden days of Barbara Castle; the days of integration, direction of traffic, quantity licensing and the rest of the rigmarole that the previous Labour Government found impracticable throughout their six years of office.
  That point relates to the National Freight Corporation and the reasons why

  1227
  the Labour Party might resist the method of denationalisation that we propose. We see no reason for subsidising or directing any part of freight transport. Freight transport exists primarily to serve its customers, including British industry. The National Freight Corporation can make its best contribution—as it has a 10 per cent. share of road haulage—by becoming a private enterprise road haulage company. It will be free of the constraints of the public sector and be able to operate in the market to the best of its competitive abilities. There is no reason to restrain that.
  As my right hon. Friend said, we cannot understand why the Government should continue to have a stake in operations such as cold storage, furniture removals, travel agents, and so on. We propose to sell the company for the best price available. The proceeds of that sale will go into public funds, for their benefit. Sale is also in the interests of those in the National Freight Corporation. We have the support of the board. It supports us not because individuals on that board fear for their positions, but because they see this as a desirable option. We have been opposed by the trade unions. Such opposition to denationalisation is predictable. Many of the corporation's employees should appreciate that their position wil be best ensured if the company is given the maximum commercial freedom to thrive—if it can—in a highly competitive market.
  The company does not have that commercial freedom now. The hon. Member for Ipswich made a disparaging reference to "investment constraints"—whatever they may be. If a trading company, such as the National Freight Corporation, operates in a commercially competitive market, it will find no advantage in nationalisation. The company has to operate under investment constraints. It needs Government approval for its investment programmes and for borrowing. The Government appoint the board.
  Previous Governments intervened heavily in the decisions of the board, for political reasons. Sometimes those reasons were wise, sometimes they were the result of expediency. The corporation might have wished to pursue a policy that would prove embarrassing and inconvenient to the Government. These problems are in-
  1228
  escapable, yet they face public sector corporations. If a corporation is given commercial freedom, it will be to the advantage of all those within it.
  Commercial freedom may be resisted because it is thought that nationalisation is a guarantee of job security and of high pay, thus avoiding the rigours of the market. That view is completely fallacious, yet it was implied by the hon. Member for Derby, South (Mr. Johnson) in the course of several interventions. The hon. Member for Kingston upon Hull, East knows that that is not true. The National Freight Corporation has lost 50 per cent. of its employees in the past 10 years. There is no guarantee except that it should have commercial freedom.
  The board has commercial freedom, subject to the necessary restraints of investment and borrowing imposed on any public company to enable the Government to retain control over public sector finances. It is also free from political interference. The logical next step is to turn it into a private sector company.
  As the proposers of the new clause know, its acceptance would put impossible inhibitions on the process by which lye seek to make the corporation a private sector company. What is the objection to the mechanics by which we propose to change the public corporation into a Companies Act company, privately owned and operating in the market? As so often throughout our proceedings, the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) phrased the attack in the most dramatic language, with elaborate descriptions of rip-offs, strip-offs and every other undesirable but exhausting sounding word. I wish to refute in the plainest terms the allegation behind those colourful words.
  There is no question of giving away public assets to anybody. We are maximising the amount that we shall get for the shares and making it an attractive and saleable company. In that way we shall increase the price that we get, and the public will benefit. My right hon. Friend and I do not have back pockets into which to slip even the merest percentage of the proceeds. We wish to transform the company's structure and organisation so that it will realise a sensible

  1229
  price upon quotation, which will benefit the public and the public purse.
  The Opposition cannot have it both ways. They accuse us of giving away a priceless asset. In Committee when I talked of making the corporation more saleable to attract a reasonable price and get a good return for the public, we were accused of helping our friends in the City.
  We are accused of writing off over £100 million of fixed interest capital debts that the company owes to the Government. We are being falsely accused of doing what the previous Government did. They wrote off £50 million as one of the many stages of propping up the company during its bad old days. That amount was wiped off with no return, together with the £82 million grant given to the corporation over the past five years. The previous Government waved goodbye to those sums.
  We are changing the capital structure of the company. It cannot be sold with the fixed interest capital debt. We are converting it into a proper capital structure. It will have a mixture of share capital and fixed interest stock in order to make it saleable on the market. We are not waving goodbye to £100 million. We are exchanging our marketable equity and stock for that debt, and we shall thereby produce a return. We are simply changing the nature of the Government's interest from an unrealisable £100 million of fixed interest debts into what we trust will be a realisable quantity of equity.
  We are accused of giving something away, because a first charge on the proceeds of sale will be to top up the pension fund. We have to put the pension fund into a soundly financed position as we dispose of this company. The company must have a proper actuarial-based fund to finance its pension obligations. It is currently a liability on the corporation's assets. We are merely discharging that liability, as we must, out of the first proceeds of sale. We are not giving anybody anything. If we did not do that, the liability would rest on the new company, just as it does on the old corporation.
  6.15 pm
  The tax losses have been referred to. They are there now for the benefit of the corporation. If we change the cor-
  1230
  poration into a company, they will remain there for the benefit of the company in the future. The hon. Member for Holborn and St. Pancras, South claims to want to see the company thrive. It is therefore entitled to the benefit of the tax losses. As the hon. Gentleman knows, there is no question of another business acquiring in a devious manner the advantage of those tax losses. The successor company will have the entitlement to those tax losses. We are not giving away any Government liability.
  Mr. Dobson: Does the hon. Gentleman agree that, once the National Freight Corporation is wholly privately owned, he will have no control over its capital structure? He can give no guarantee, particularly as the legislation for carrying forward these tax losses is not yet before the House, that a company will not move in and amalgamate its existing assets with the National Freight Corporation and use those tax losses to offset its unfavourable tax position.
  Mr. Clarke: The legislation is not yet before us. My hon. Friend the Financial Secretary, in reply to a question, made it clear that the Government intend to make early legislative provision for the circumstances in which the tax losses of these public corporations will, on denationalisation be carried forward to their private sector successors. There is no give-away in what I have described.
  I ask Labour Members to keep their eyes on the essential point in regard to the public's position—and perhaps this is the last time that I shall make that plea. At present the public have something of value—the National Freight Corporation. Its value cannot be measured by merely looking at what the public have put into the corporation in the past. The public do not have the sum total of loans, grants, capital debt, and so on. Most of that has been written off. It has been long since lost. The money came from the Exchequer, was poured away and was wasted. We simply have the corporation as a trading corporation.
  It has a value based mainly on its trading record and expectations in the competitive road haulage market. We shall realise the full value of what the public have now. We are not giving anything away. There is no way in which we can magic up something from the past

  1231
  to try to claim public credit for grants and leans that have long since gone into the sand.
  It is said that even if we get a good price we should prevent asset stripping by requiring Government control over all future disposals of property by the new private sector company. I have listened for weeks to these arguments about asset stripping. It is an elastic phrase, used particularly by those on the Left of politics to describe a wide variety of operations.
  I believe that I know what the phrase means. The hon. Member for Holborn and St. Pancras, South and his hon. Friends do not have a great future as asset strippers, because they do not appreciate the circumstances in which that happens. The idea is that a company with long undervalued land and other assets is bought at a knock-down price. Those assets are rapidly realised for a quick windfall profit, the business is closed down and the assets disposed of. We have tried to lead the Opposition through the position of the National Freight Corporation to explain that it is in no such position. We are glad to have their assistance in warding off any incompetent asset stripper who might blunder into the operation, believing that he might make a profit.
  The hon. Member for Holborn and St. Pancras, South mentioned National Carriers Ltd. depots. I agree that at the moment they are not all the most attractive property, but they stand on land that has a value. The National Freight Corporation is in the same position, but, as one has tried to explain, the possible value of these lands and assets on the market will be outweighed by the considerable redundancy payments required to get rid of the large number of people employed in that business. It would be a loss-making exercise as an asset stripping proposition. That is no basis upon which we can sell it, and it is not the basis upon which it will be sold.
  After it is sold, we cannot guarantee that the corporation will stay in its present shape. As a private sector company it will have to change and react successfully and well to the market. We could not guarantee the existing shape of the corporation against market pressures, any more than previous Governments have
  1232
  been able to ward off market pressures on the corporation. Despite all the money thrown at the corporation in its bad and unsuccessful old days, the last Government could not stop necessary change.
  We hope that the company will maximise its most successful features once it is in the market and go for growth where it can be achieved. In those sectors where the company is less successful it will have to retract, and it must be free to do so, as is any other private sector company. We believe there will be plenty of opportunities for the new company to benefit once it enters the market.
  However, the company could not trade under the conditions suggested by the second part of the new clause, where it would need Government approval to dispose of any asset. That is not even a requirement on the present corporation. The corporation raised £4 million last year by disposing of redundant land. The idea that any company, nationalised or private, can somehow trade in a competitive market while having to come to the Minister every time it wants to dispose of a redundant, derelict warehouse is ludicrous. We do not believe that the new company should be put under any such constraint.
  The other way in which the Opposition expressed their concern about the successor company and how it will behave was to ask for the articles of association and memorandum of the new company. We have explained exactly what we shall do on the appointed day to change the corporation into a Companies Act company, 100 per cent. owned by the Government. At that stage it will be a private company, but on flotation it will become a public company when we sell whatever proportion of our shareholding seems to us right at the time.
  The only commitment of my right hon. Friend in this context will be to dispose of at least a majority shareholding. We must be left free to make the eventual judgment whether, and if so to what extent, the Government need to retain any shareholding at all. So far as the articles of association and the memorandum are concerned—
  Mr. Prescott: Will the Minister tell us whether it is Government policy to keep some shares or whether, if they are able to do so, they will sell all of them?
  Mr. Clarke: The size of the Government shareholding, if any, will have to be decided when we come to flotation. We are not in a position, as the hon. Gentleman claims, analogous to the sale of British Aerospace and British Airways. If we were selling off shares in a company manufacturing military aircraft, or selling shares in a company that was the national flag flyer in the international airlines market, different considerations would apply.
  We wish to make the best decision commercially, and in the public interest, about the extent to which the Government should retain a shareholding in the corporation. The company to which we shall transfer the corporation—that is, the company whose shares we shall sell—will be an ordinary Companies Act company with no unusual quirks or sinister content in its articles of association or memorandum. The reason why we did not produce the articles in Committee was that we simply did not have them. They had not been drafted then, and they have not been drafted yet. But we have indicated that the articles of association will follow table A of the Companies Act and that the memorandum will contain nothing unexpected.
  The hon. Member for Truro (Mr. Penhaligon) is concerned that those details are not before the House at the moment. I must tell him we would resist that aspect of the new clause—even if we had articles of association ready—if it was sought to make them some kind of statutory instrument or to make them debatable or amendable in the House. Heaven knows what shape of company we would end up with if we were not careful, or what shape of company might be forced upon us.
  We see no need for that, but I can give this undertaking to the hon. Member.
  When the articles of association are available and we are approaching the appointed day, we shall make copies available. They will be placed in the Library or wherever is the most appropriate place for those hon. Members who are interested. The articles will contain no surprises and nothing sinister. They will contain nothing that will make this new company unusual.
  Mr. Penhaligon: When we eventually obtain one of these magnificent documents, and when, having read it, we come to the conclusion that it is an absolute
  1234
  load of old rubbish, what will we, as Opposition Members, be able to do about it?
  Mr. Clarke: The hon. Member for Truro can make representations to my right hon. Friend the Minister. We shall have a statutory instrument which might have to return constantly to the House for amendment. It is not unusual for the memorandum of a company to be amended from time to time, and it may even be necessary between the appointed day—when the corporation becomes a Companies Act company—and the day of flotation to make some amendments. It is not unusual if a private company—I use the words "private company" in the Companies Act sense of the word—is floated and made into a public company for there to be some necessary changes to the memorandum. But we do not wish to proceed on the affirmative resolution procedure before we are able to do that. We will produce these documents, and I assure the hon. Member for Truro that they will contain nothing startling or sinister.
  Though we do not intend to respond to the request of the hon. Member for Truro that the articles of association should be tabled before the House now and that they should show a commitment, in terms, to employee participation, we share his interest and enthusiasm for employee shareholding. It is the desire of the Government when they sell off their shares to offer them to employees of the company, and we are considering ways in which we can encourage the take-up of the shares. We hope that there will be a reasonable sale of our shares to the people who work in the National Freight Corporation so that there will be no conflict of interest between the owners and management of the company and those who work for the company, in its new private sector role.
  There is no conflict between ourselves and the hon. Member for Truro. The conflict of policy between the Government and the official Opposition on the new clause is predictably ideological. However, there is not much substance in the advocacy of the new clause on any other point.
  I hope that I have dealt in detail with particular points. It remains obvious that the fundamental motive of the Opposition in moving this new clause is a kind

  1235
  of Pavlovian reaction to any reduction of our public sector holdings or any privatisation or introduction of private capital. I thought that the Labour Party normally went in for this kind of thing in relation to the commanding heights of the economy. When last I heard a clear statement of official Labour Party policy, that was the theory. It may be that they are now coming down the slopes a little and that the glaciers are descending. It may be that a different definition of the commanding heights is coming into play.
  The National Freight Corporation is 10 per cent. of the road haulage business. It is a public sector company by sheer historical accident, and the attitude of the Opposition does no good to its employees, its customers or anyone else. It is startling that the Labour Party is determined to try to stop the escape of even a small company such as this from the public sector.
  For the Labour Party nationalisation remains just as much a shibboleth as ever it was, but the Opposition are extending the concept into some strange corners by moving this new clause and trying to keep Pickfords, BRS, the travel agents and the coal haulage business inside the public net.
  6.30 pm
  Mr. Booth: The new clause has three clear aims. One is to secure for the House copies of the memorandum and articles of association of the company that is to be sold under the Bill. The company is a public asset of some consequence. I shall not go down the path that the Parliamentary Secretary invited me to walk when he suggested that Members of the Labour Party were concerned principally with the commanding heights of the economy. Such an argument is not worthy of him because he knows that in Government and in Opposition we have demonstrated a concern for aspects of the economy that we believe to be important in the public interest, whether they are described as minor industrial and service aspects or major public aspects. We believe that a combination of industries and services alone can secure the social and economic objectives that we in the Labour Party pursue.
  The Parliamentary Secretary invited me to state the Labour Party's policy on the
  1236
  National Freight Corporation. We have never tried to hide our policy. The Labour Party is not averse to holding considerable policy debates about a number of subjects, and transport is not excluded. The Labour Party believes that there should be a public holding in the freight industry. The industry should be efficient, innovative and well-managed. It should have good industrial relations and maximum employee participation. The Government should be able to intervene with sensitivity on social and economic issues that arise from the operation of the freight industry. There has never been any secret about our policy.
  We have been given no explanation why we should not see the memorandum and articles of association connected with the transfer of an important public asset. The hon. Member for Horsham and Crawley (Mr. Hordern) made an embarrassing statement in an intervention. He said that the tax losses were evidence of the need for public ownership to secure profits and efficient working. Before the hon. Gentleman came into the Chamber the Minister said that each subsidiary of the National Freight Corporation was profitable.
  Mr. Hordern: I was in the Chamber when the Minister replied to the debate. He said that considerable sums had to be written off. That is why the National Freight Corporation became profitable. If it had been left as it was, endless losses would still have had to be made.
  Mr. Booth: Whatever way the NFC capital is constructed, and no matter how it is to be transferred to a Companies Act company, that is to be hidden from us. After all, we are only the elected representatives of the British people. We are not to be told. The reality is that the company is paying £8 million a year to the British people on that capital holding. That is the return which the British people receive from that group of public assets. It does not matter whether the previous money paid by the taxpayer is written off to the point where the capital value is £100 million or £15 million. The requirement is that NFC pays £8 million to the British taxpayer.
  Mr. Hordern: The right hon. Member for Barrow-in Furness (Mr. Booth) proves my point. Having written off £80 million, it is impossible to state that the profit is

  1237
  £8 million. If £80 million is written off the company must have been running at a loss.
  Mr. Booth: The hon. Member for Horsham and Crawley proves nothing of the kind. He misunderstands the argument. If the public possess an asset on which there is a return of £8 million a year the valuation put on the asset does not matter. The return is predetermined. Its percentage of the capital value, of course, depends on how the assets are valued, but one cannot deny that the possession of one-tenth of the road transport industry, on which there is a return of £8 million, is a valuable asset.
  Because the corporation is a valuable asset it cannot win under a Conservative Government. No nationalised industry can win under the Conservatives. When a nationalised industry is successful the Conservative Government try to sell it off to the private sector. When an industry is unsuccessful the Conservative Government try to cripple it with cash limits. When a nationalised industry occupies the whole of an industrial sector it is accused by the Conservatives of abusing its monopoly position. If it occupies only 10 per cent. of the market the Conservatives say that there is no reason why it should remain in public hands. The Conservatives cannot even understand why Labour Members wish the NFC to remain in public hands. Whatever the position of a nationalised industry, it is condemned by the present Government.
  Considerable restrictions are placed upon the operation of nationalised industries by those who manage them. I have some sympathy with the Minister's argument. To be forced to pay fixed interest of £8 million a year on an operation that covers one-tenth of the road freight industry is a considerable restraint.
  We explained in Committee how we believe that the Government should respond. They should explore ways in which greater flexibility and freedom might be exercised by those who manage the nationalised industries. A degree of flexibility that allows industries to pay less to the public in times of expansion and more at other times may be desirable. We do not reject the argument that nationalised industries work under restrictions that might not make sense,
  1238
  particularly when they compete vigorously in the public sector. However, we reject the idea that because of the restrictions an industry should be denationalised.
  One cannot argue that the NFC has not competed successfully. Perhaps its crime in the eyes of the Conservative Government is that it has competed too successfully—that it has been the innovator and the leader in many aspects of road freight. It has served a valuable public function. It enabled British road freight to move with the times in a way that many privately owned sectors of road freight would not consider. It has a value in that sense.
  Therefore, the public ownership limitations, to which I attach importance, along with the Minister, have not prevented its operating as a successful element in the road freight industry. Therefore the Opposition can state their side simply. The House needs much more information before this major and important public asset—because of its special position in road freight transport—is turned over to a private company.
  There may have been an unfortunate choice of words by the Parliamentary Secretary. He said that Ministers must have the right to decide these matters. It is a constitutional affront for any Minister to say that, be he the Prime Minister or the Parliamentary Secretary. It is for the House to decide whether Ministers should be free to construct the sale of public assets in the way they want, or whether it should have a sight of the proposition under which those public assets are to be disposed of. We favour the latter course.
  There is an onus upon those who argue, as the Opposition do, that part of the National Freight Corporation should be in public hands, to say how far the Government should intervene in that area. That fair challenge was thrown out by the Parliamentary Secretary. I want to respond to it briefly.
  The Opposition believe that nationalisation in road freight, as in a number of other areas, means that the Government have a responsibility to intervene on certain major policy issues, especially in the area in which they have a public holding. We also accept that the Government should have an employment policy regard for the area. The Government

  1239
  should be prepared to intervene, where they judge it right in the public interest, in the investment policy of the industry. In doing that, the Government must be sensitive to, and intelligently apprised of, the social and economic needs of all those who are affected by the way in which road freight is operated.
  The Government are completely blind to that as a result of their own mone-
  tarist theories and doctrinaire prejudice against public ownership. Therefore, the new clause represents an absolute minimal basis on which the House should approve any sale of any part of this important public asset.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 217, Noes 270.

  Division No. 243]

  AYES

  [6.44 pm

  Abse, Leo

  Fitch, Alan

  Meacher, Michael

  Adams, Allen

  Flannery, Martin

  Mellish, Rt Hon Robert

  Allaun, Frank

  Fletcher, L. R. (Ilkeston)

  Mikardo, Ian

  Alton, David

  Fletcher, Ted (Darlington)

  Miller, Dr M. S. (East Kilbride)

  Anderson, Donald

  Foot, Rt Hon Michael

  Mitchell, Austin (Grimsby)

  Archer, Rt Hon Peter

  Ford, Ben

  Mitchell, R. C. (Soton, lichen)

  Armstrong, Rt Hon Ernest

  Foulkes, George

  Morris, Rt Hon Alfred (Wythenshawe)

  Ashley, Rt Hon Jack

  Fraser, John (Lambeth, Norwood)

  Morris, Rt Hon Charles (Openshaw)

  Ashton, Joe

  Freud, Clement

  Morton, George

  Barnett, Guy (Greenwich)

  Garrett, John (Norwich S)

  Moyle, Rt Hon Roland

  Barnett, Rt Hon Joel (Heywood)

  Garrett, W. E. (Wallsend)

  Newens, Stanley

  Beith, A. J.

  George, Bruce

  Oakes, Rt Hon Gordon

  Benn, Rt Hon Anthony Wedgwood

  Gilbert, Rt Hon Dr John

  O'Neill, Martin

  Bennett, Andrew (Stockport N)

  Ginsburg, David

  Orme, Rt Hon Stanley

  Bidwell, Sydney

  Gourlay, Harry

  Owen, Rt Hon Dr David

  Booth, Rt Hon Albert

  Graham, Ted

  Palmer, Arthur

  Boothroyd, Miss Betty

  Grant, George (Morpeth)

  Park, George

  Bottomley, Rt Hon Arthur (M'brough)

  Grant, John (Islington C)

  Parker, John

  Bradley, Tom

  Hamilton, W. W. (Central Fife)

  Pavitt, Laurie

  Bray, Dr Jeremy

  Harrison, Rt Hon Walter

  Pendry, Tom

  Brown, Hugh D. (Provan)

  Haynes, Frank

  Penhaligon, David

  Brown, Ronald W. (Hackney S)

  Hogg, Norman (E Dunbartonshire)

  Powell, Raymond (Ogmore)

  Brown, Ron (Edinburgh, Leith)

  Holland, Stuart (L'beth, Vauxhall)

  Prescott, John

  Buchan, Norman

  Home Robertson, John

  Race, Reg

  Callaghan, Jim (Middleton & P)

  Homewood, William

  Radice, Giles

  Campbell, Ian

  Hooley, Frank

  Rees, Rt Hon Merlyn (Leeds South)

  Campbell-Savours, Dale

  Horam, John

  Richardson, Jo

  Carmichael, Neil

  Howells, Geraint

  Roberts, Albert (Normanton)

  Cartwright, John

  Huckfield, Les

  Roberts, Allan (Bootie)

  Clark, Dr David (South Shields)

  Hudson Davies, Gwilym Ednyfed

  Roberts, Ernest (Hackney North)

  Cocks, Rt Hon Michael (Bristol S)

  Hughes, Mark (Durham)

  Roberts, Gwilym (Cannock)

  Cohen, Stanley

  Hughes, Robert (Aberdeen North)

  Robertson, George

  Coleman, Donald

  Jay, Rt Hon Douglas

  Robinson, Geoffrey (Coventry NW)

  Concannon, Rt Hon J. D.

  John, Brynmor

  Rodgers, Rt Hon William

  Conlan, Bernard

  Johnson, James (Hull West)

  Rooker, J. W.

  Cowans, Harry

  Johnson, Walter (Derby South)

  Ross, Ernest (Dundee West)

  Crowther, J. S.

  Johnston, Russell (Inverness)

  Rowlands, Ted

  Cryer, Bob

  Jones, Rt Hon Alec (Rhondda)

  Ryman, John

  Cunliffe, Lawrence

  Jones, Dan (Burnley)

  Sever, John

  Cunningham, George (Islington S)

  Kaufman, Rt Hon Gerald

  Sheerman, Barry

  Cunningham, Dr John (Whitehaven)

  Kerr, Russell

  Shore, Rt Hon Peter (Step and Pop)

  Dalyell, Tam

  Kilroy-Silk, Robert

  Silkin, Rt Hon John (Deptford)

  Davidson, Arthur

  Lambie, David

  Silkin, Rt Hon S. C. (Dulwich)

  Davies. Ifor (Gower)

  Lamborn, Harry

  Silverman, Julius

  Davis, Clinton (Hackney Central)

  Lamond, James

  Smith, Rt Hon J. (North Lanarkshire)

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

  Leadbitter, Ted

  Snape, Peter

  Dean, Joseph (Leeds West)

  Leighton, Ronald

  Soley, Clive

  Dempsey, James

  Lestor, Miss Joan (Eton & Slough)

  Spearing, Nigel

  Dewar, Donald

  Lewis, Arthur (Newham North West)

  Spriggs, Leslie

  Dixon, Donald

  Litherland, Robert

  Stallard, A. W.

  Dobson, Frank

  Lofthouse, Geoffrey

  Steel, Rt Hon David

  Douglas, Dick

  Lyon, Alexander (York)

  Stewart, Rt Hon Donald (W Isles)

  Douglas-Mann, Bruce

  McDonald, Dr Oonagh

  Stoddart, David

  Dubs, Alfred

  McGuire, Michael (Ince)

  Strang, Gavin

  Dunnett, Jack

  Mckay, Allen (Penistone)

  Straw, Jack

  Dunwoody, Mrs Gwyneth

  McKelvey, William

  Summerskill, Hon Dr Shirley

  Eadie, Alex

  MacKenzie, Rt Hon Gregor

  Taylor, Mrs Ann (Bolton West)

  Eastham, Ken

  Maclennan, Robert

  Thomas, Dafydd (Merioneth)

  Edwards, Robert (Wolv SE)

  McMillan, Tom (Glasgow, Central)

  Thomas, Jeffrey (Abertillery)

  Ellis, Raymond (NE Derbyshire)

  McNally, Thomas

  Thomas, Mike (Newcastle East)

  Ellis, Tom (Wrexham)

  Marks, Kenneth

  Thomas, Dr Roger (Carmarthen)

  Ennals, Rt Hon David

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

  Thorne, Stan (Preston South)

  Evans, loan (Aberdare)

  marshall, Dr Edmund (Goole)

  Tilley, John

  Evans, John (Newton)

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

  Tinn, James

  Ewing, Harry

  Maxton, John

  Torney, Tom

  Field, Frank

  Maynard, Miss Joan

  Varley, Rt Hon Eric G.

  Wainwright, Edwin (Dearne Valley)

  Whitehead, Phillip

  Woolmer, Kenneth

  Wainwright, Richard (Colne Valley)

  Whitlock, William

  Wright, Sheila

  Walker, Rt Hon Harold (Doncaster)

  Wigley, Dafydd

  Young, David (Bolton East)

  Watkins, David

  Willey, Rt Hon Frederick

  Weetch, Ken

  Williams, Rt Hon Alan (Swansea W)

  TELLERS FOR THE AYES:

  Welsh, Michael

  Williams, Sir Thomas (Warrington)

  Mr. James Hamilton and

  White, Frank R. (Bury & Radcliffe)

  Wilson, William (Coventry SE)

  Mr. Hugh McCartney

  White, James (Glasgow, Pollok)

  Winnick, David

  NOES

  Adley, Robert

  Fell, Anthony

  Macfarlane, Neil

  Aitken, Jonathan

  Fenner, Mrs Peggy

  MacGregor, John

  Alexander, Richard

  Finsberg, Geoffrey

  MacKay, John (Argyll)

  Ancram, Michael

  Fisher, Sir Nigel

  McNair-Wilson, Michael (Newbury)

  Arnold, Tom

  Fletcher, Alexander (Edinburgh N)

  McNair-Wilson, Patrick (New Forest)

  Aspinwall, Jack

  Fletcher-Cooke, Charles

  McQuarrie, Albert

  Atkins, Robert (Preston North)

  Fookes, Miss Janet

  Madel, David

  Atkinson, David (B'mouth, East)

  Forman, Nigel

  Major, John

  Baker, Kenneth (St. Marylebone)

  Fowler, Rt Hon Norman

  Marlow, Tony

  Baker, Nicholas (North Dorset)

  Fox, Marcus

  Marshall, Michael (Arundel)

  Beaumont-Dark, Anthony

  Fraser, Rt Hon H. (Stafford & St)

  Mather, Carol

  Bell, Sir Ronald

  Fraser, Peter (South Angus)

  Maude, Rt Hon Angus

  Bendall, Vivian

  Fry, Peter

  Mawby, Ray

  Benyon, Thomas (Abingdon)

  Gardiner, George (Reigate)

  Mawhinney, Dr Brian

  Benyon, W. (Buckingham)

  Gardner, Edward (South Fylde)

  Maxwell-Hyslop, Robin

  Best, Keith

  Garel-Jones, Tristan

  Mellor, David

  Biffen, Rt Hon John

  Gorst, John

  Meyer, Sir Anthony

  Biggs-Davison, John

  Gow, Ian

  Miller, Hal (Bromsgrove & Redditch)

  Blackburn, John

  Gower, Sir Raymond

  Mills, Iain (Meriden)

  Blaker, Peter

  Grant, Anthony (Harrow C)

  Mills, Peter (West Devon)

  Body, Richard

  Gray, Hamish

  Molyneaux, James

  Bonsor, Sir Nicholas

  Greenway, Harry

  Monro, Hector

  Boscawen, Hon Robert

  Grieve, Percy

  Montgomery, Fergus

  Bottomley, Peter (Woolwich West)

  Griffiths, Eldon (Bury St Edmunds)

  Morgan, Geraint

  Bowden, Andrew

  Griffiths, Peter (Portsmouth N)

  Morris, Michael (Northampton, Sth)

  Boyson, Dr Rhodes

  Grist, Ian

  Morrison, Hon Charles (Devizes)

  Braine, Sir Bernard

  Grylls, Michael

  Morrison, Hon Peter (City of Chester)

  Bright, Graham

  Gummer, John Selwyn

  Mudd, David

  Brinton, Tim

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

  Murphy, Christopher

  Brittan, Leon

  Hamilton, Michael (Salisbury)

  Myles, David

  Brocklebank-Fowler, Christopher

  Hampson, Dr Keith

  Neale, Gerrard

  Brooke, Hon Peter

  Hannam, John

  Needham, Richard

  Brown, Michael (Brigg & Sc'thorpe)

  Haselhurst, Alan

  Nelson, Anthony

  Browne, John (Winchester)

  Hastings, Stephen

  Neubert, Michael

  Bryan, Sir Paul

  Havers, Rt Hon Sir Michael

  Newton, Tony

  Buchanan-Smith, Hon Alick

  Hawkins, Paul

  Oppenheim, Rt Hon Mrs Sally

  Buck, Antony

  Hawksley, Warren

  Osborn, John

  Budgen, Nick

  Hayhoe, Barney

  Page, John (Harrow, West)

  Bulmor, Esmond

  Henderson, Barry

  Page, Rt Hon Sir R. Graham

  Burden, F. A.

  Hicks, Robert

  Page, Richard (SW Hertfordshire)

  Butcher, John

  Higgins, Rt Hon Terence L.

  Parkinson, Cecil

  Butler, Kon Adam

  Hogg, Hon Douglas (Grantham)

  Parris, Matthew

  Cadbury, Jocelyn

  Hooson, Tom

  Patten, Christopher (Bath)

  Carlisle, John (Luton West)

  Kordern, Peter

  Patten, John (Oxford)

  Carlisle, Kenneth (Lincoln)

  Howell, Ralph (North Norfolk)

  Pattie, Geoffrey

  Chalker, Mrs Lynda

  Hunt, David (Wirral)

  Pawsey, James

  Channnon, Paul

  Hunt, John (Ravensbourne)

  Percival, Sir lan

  Chapman, Sydney

  Irving, Charles (Cheltenham)

  Pollock, Alexander

  Churchill, W. S.

  Johnson Smith, Geoffrey

  Porter, George

  Clark, Hon Alan (Plymouth, Sutton)

  Jopling, Rt Hon Michael

  Powell, Rt Hon J. Enoch(S Down)

  Clarke, Kenneth (Rushcliffe)

  Joseph, Rt Hon Sir Keith

  Prentice, Rt Hon Reg

  Clegg, Sir Walter

  Kaberry, Sir Donald

  Price, David (Eastleigh)

  Colvin, Michael

  Kershaw, Anthony

  Prior, Rt Hon James

  Cope, John

  Kimball, Marcus

  Proctor, K. Harvey

  Cormack, Patrick

  King, Rt Hon Tom

  Rathbone, Tim

  Corrie, John

  Kitson, Sir Timothy

  Renton, Tim

  Costain, A.P.

  Knight, Mrs Jill

  Rhodes James, Robert

  Critchley, Jullan

  Knox, David

  Rhys Williams, Sir Brandon

  Dickens, Geoffrey

  Lamont, Norman

  Ridley, Hon Nicholas

  Dorrell Stephen

  Lang, Ian

  Ridsdale, Juliian

  Douglas-Hamilton, Lord James

  Langford-Holt, Sir John

  Rifkind, Malcolm

  Dover, Denshore

  Latham, Michael

  Roberts, Wyn (Conway)

  du Cann, Rt Hon Edward

  Lawrence, lvan

  Ross, Wm. (Londonderry)

  Dunn, Robert (Dartford)

  Lawson, Nigel

  Rost, Peter

  Dykes, Hugh

  Lee, John

  Royle, Sir Anthony

  Eden, Rt Hon Sir John

  Lennox-Boyd, Hon Mark

  Sainsbury, Hon Timothy

  Edwards, Rt Hon N. (Pembroke)

  Lester, Jim (Beeston)

  St. John-Stevas, Rt Hon Norman

  Eggar, Timothy

  Lewis, Kenneth (Rutland)

  Scott, Nicholas

  Elliott, Sir William

  Lloyd, Ian (Havant & Waterloo)

  Shaw, Michael (Scarborough)

  Emery, Peter

  Lloyd, Peter (Fareham)

  Shelton, William (Streatham)

  Fairbairn, Nicholas

  Loveridge, John

  Shepherd, Colin (Hereford)

  Fairgrieve, Russell

  Luce, Richard

  Shepherd, Richard(Aldridge-Br'hills)

  Faith, Mrs Shella

  Lyell, Nicholas

  Shersby, Michael

  Farr, John

  McCrindle, Robert

  Silvester, Fred

  Skeet, T. H. H.

  Thomas, Rt Hon Peter (Hendon S)

  Walters, Dennis

  Speller, Tony

  Thompson, Donald

  Ward, John

  Spence, John

  Thorne, Neil (Ilford South)

  Watson, John

  Spicer, Michael (S Worcestershire)

  Thornton, Malcolm

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

  Sproat, Iain

  Townend, John (Bridlington)

  Wheeler, John

  Squire, Robin

  Townsend, Cyril D. (Bexleyheath)

  Whitney, Raymond

  Stainton, Keith

  Trippier, David

  Wickenden, Keith

  Stanbrook, Ivor

  Trotter, Neville

  Wiggin, Jerry

  Stanley, John

  Taylor, Teddy (Southend East)

  Wilkinson, John

  Steen, Anthony

  Vaughan, Dr Gerard

  Williams, Delwyn (Montgomery)

  Stevens, Martin

  Viggers, Peter

  Winterton, Nicholas

  Stewart, Ian (Hitchin)

  Waddington, David

  Wolfson, Mark

  Stewart, John (East Renfrewshire)

  Wakeham, John

  Young, Sir George (Acton)

  Stokes, John

  Waldegrave, Hon William

  Stradling Thomas, J.

  Walker, Bill (Perth & E Perthshire)

  TELLERS FOR THE NOES:

  Tapsell, Peter

  Walker-Smith, Rt Hon Sir Derek

  Mr. Spencer Le Marchant and

  Tebbit, Norman

  Waller, Garry

  Mr. Anthony

  Temple-Morris, Peter

  Question accordingly negatived.

New Clause 13

  PENSION FUNDS UNFUNDED PORTION VARIATION
  '(1) The Minister shall specify in writing to the persons administering each BR pension scheme what general economic assumptions he has used for determining the proportion referred to in section 45(1) and what modifications he has made to those assumptions in order to take account of the particular circumstances of the said scheme.
  (2) If the actuary to a BR pension scheme shall certify at any time after 1st April 1986:

  (a) that the assets held by that scheme in respect of the relevant pension obligations exceed or fall short of the amount required to meet the proportion of those obligations which is not being paid for by the Minister under section 43; and

  (b) that the reason for the said excess or shortfall, or part of it, is that the general economic assumptions made by the Minister in determinating the proportion referred to in section 45(1) have proved to be invalid;

  then the Minister shall make an order to increase or decrease the said proportion with effect from a date later than six months but not later than one year after the date of the actuary's certificate to such an extent as to place the scheme in as nearly as possible the same position as it would have been in at the date of the said certificate had the proportion determined under section 45(1) been based on valid economic assumptions.
  (3) An order under subsection (2) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament and may be amended by a further order under this section.'—[Mr. Booth.]
  Brought up, and read the First time.
  Mr. Booth: I beg to move, That the clause be read a Second time.
  The Minister has said that in the provisions of the Bill there is no intention on the Government's part to worsen the pension rights of any of those affected by the
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  Bill. The extent to which the pension rights are protected or worsened by this Bill is a matter of considerable contention between us and I have no intention on the new clause of rehearsing the very many arguments we had on that score in Committee, because, whatever else this new clause does, it does not attempt to state the basic position of the Opposition on historic railway pension rights. What it seeks to do, rather, is hold out to the Government the possibility of a compromise which would meet much of the concern of those responsible for the running of pension schemes.
  The reason for a clause of this sort springs from the way in which the Bill is constructed and the way in which the Government seek to legislate in this Bill to evade their current statutory responsibility fully to fund the historic pension rights of certain railway pensioners and certain NFC pensioners. It springs also from the great difficulty which exists for anybody who is running a funded pension scheme today in working out how much funding is required at this time to ensure provision for payments of certain pension rights at some time in the future. Both of those considerations bear on the clause.
  Clause 45 requires the Minister to determine the unfunded proportion of each of the pension schemes under which historic railway pension rights accrue before the end of 1981, and this is the proportion of the historic pension payments which from time to time the Minister will have to meet.
  The Government's proposal in the Bill is that for the present statutory commitment of the Government fully to fund these pension rights there should be exchanged an undertaking to meet a proportion of these pension demands. The

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  Government are proposing that such funding as has been paid up to now should be calculated as meeting the requirement up to a certain proportion of the funds and that the remaining proportion, what is called in the Bill the unfunded proportion, should be paid for on a pay-as-you-go basis by the Government in annual payments arrangements from now on.
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  The difficulty to which the clause is addressed is that there is no provision in the Bill for adjusting the percentage of the unfunded proportion if the assumptions upon which it is originally calculated prove to be wide of the mark in practice. Anyone who has studied pensions recently must agree that it is highly likely that the Government in making the calculation will get it wrong. That is not to say that the Government are trying to diddle pensioners, or that they do not have good actuarial advice. But it is extremely difficult to predict what will happen to the inflation rate, to wages or to the dividend-earning capacity of the pension fund investments.
  After consultation with the unions and the committee of the principal pension funds involved, the British Railways Board proposed to the Government that it was desirable for the unfunded proportion to be adjustable in future years. The board held that this would safeguard the position of members and pensioners and also of the Government. If it were adjustable, it was held that members and pensioners would have the safeguard that, if the assets held in respect of the historic pension funds became exhausted, the Government would have to adjust the proportion to be met on a pay-as-you-go basis upwards, possibly to 100 per cent. if the funded proportion had been fully exhausted. But the Government would have the safeguard on behalf of the British taxpayer that, if the actuarial basis used at the outset proved to be too conservative and a surplus arose on the funded proportion, it would be possible to adjust the unfunded proportion in a downward direction, even to zero, to avoid unnecessary calls upon public money. That is the basis of the proposition originally put to the Government which we argued for in Committee.
  The Government raised several objections to this proposal which I will try to state as succinctly and fairly as I can.
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  The Government said that if there were complete adjustability the incentive to those who manage railway pension funds to perform efficiently would be removed, and that it could even open the door to some abuse on their part because, so the Government argued, the board would not then have to meet the historic pension costs associated with any change in the definition of pensionable pay and, therefore, they could make those changes believing that the Government would pick up the tabs.
  We are putting forward in the clause a compromise proposal which attempts to meet fully the Government objections while still maintaining the principle that some adjustability is needed if the propositions on which the unfunded proportion was originally calculated turn out in future to be incorrect. So we are trying to maintain the principle of adjustability if those general economic assumptions prove to be wrong either in one direction or the other—and we acknowledge that that is possible.
  The clause proposes that the unfunded proportion shall remain fixed until 1 April 1986, no matter what happens, on exactly the same basis as the Government's proposals. If the clause is accepted by the Government, as I hope that it will be, there will be no change in the operation of the historic pension funds from what the Government propose until 1 April 1986. At any time after 1 April 1986, if there is a surplus or a deficiency in the fund in respect of the historic pension obligations, provided that it can be shown that the surplus or deficiency has arisen because the general economic assumptions that were made in calculating the historic pension obligation funding proportion were invalid, then, and then only, will the Minister be required to adjust the unfunded proportion to such an extent as to place the scheme in the position in which it would have been had those initial assumptions been correct.
  The clause proposes that that adjustment should take place with no retrospection. If a surplus or deficit in the fund arises at any time after 1 April 1986 for any reason other than wrong economic assumptions, that would have to be dealt with under existing arrangements. If a surplus became available for a reason other than that the economic assumptions were wrong, it would be open to those who

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  manage the funds to improve the benefits under them or to reduce contributions. If a deficit arose because the funds had not been managed well or terms other than those involved in the economic assumptions had turned against the funds, the deficit would fall to be met by the board under its guarantee of the solvency of the funds.
  The effect of the proposal would be that the Government would be responsible for a surplus or deficit that arose because the initial economic assumptions were wrong and for no other reasons, whereas the railways would remain responsible for any surplus or deficit arising from any other cause.
  The clause meets the Government's objection of incentive being removed. Clearly in the clause there is an incentive for railway pension schemes to be managed in the best possible manner and for the full costs of any proposed changes in pensionable pay to be taken into account on a proper basis before the board makes any decision about pension changes.
  In practice I believe that the clause would require the Minister at the outset, when determining the unfunded proportion, to specify in writing to the trustees or the management committee of each pension scheme what general economic assumptions he had used and what modifications he may have made to those assumptions to take account of the particular circumstances of a scheme.
  The reference that we make to general economic assumptions requires those assumptions to be defined, and we have sought to do that in the clause by saying that we are talking about future pay, prices and dividend increases in the United Kingdom. We are concerned with the effect of these factors on our economy and on future investment returns for United Kingdom pension funds in general. Either these assumptions, at the discretion of the Minister, could be as to a uniform rate for future years or the Minister could specify different Assumptions for different years. That is a matter for the Minister as long as he states the assumptions at the outset. Presumably, the Minister would make the same general economic assumptions for all the railway pension schemes in which he is concerned.
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  Modifications to meet particular circumstances of individual schemes might take the form of assumptions that the rate of pensionable pay will increase at a different rate from the assumptions made for the economy in general. Another possibility is that the Minister could assume a lower rate of investment return for railway funds because of their lack of new investment income. One change which the Bill brings about is the cutting off of these considerable funds to which the schemes have a right under present legislation. Those are all matters on which the Minister will have to make a decision in determining which proportion of the pension should be funded and which part should be covered by the annual pay-as-you-go payments.
  Having specified his general economic assumptions, the Minister should also specify what official indices he will use as an indication of actual experience from time to time in future, because at some time beyond 1 April 1986 we shall compare what has actually happened with what would have happened had the assumptions been correct.
  It would be a comparatively simple matter for an actuary, when making an actuarial valuation after April 1986, to estimate how much more or less the assets held in respect of historic pensions would have been if the unfunded proportion had been determined at the outset on the basis of assumptions which were in accord with the experience over the period from the outset to the date of valuation, and in accordance with the original assumptions from the date of valuation onwards.
  The implicit assumption is that the original estimate could still come true in the final result after 1986, even if the performance year to year had not been in accordance with the assumptions. If that were to be the outcome it should be accepted by those in the pension scheme as putting them in a position similar to that which would have been brought about if the assumptions had been correct. That would enable the Government Actuary to certify how much of any surplus or deficit was attributable to the incorrectness of the general economic assumptions.
  Once it has been determined that a deficit exists at the valuation date, because the general economic assumptions

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  had proved invalid, the Government actuary could calculate the increase required in the unfunded proportion in order to eliminate the deficit. The same would apply for a surplus. It might not be possible—I am trying to cover the full range of possibilities—for a deficit or a surplus to be completely eliminated, because the unfunded proportion could not be increased by more than 100 per cent. or decreased to less than zero. Any balance of the surplus or deficit attributable to invalid economic assumptions would have to be borne by the funds and by the board in the same way as any surplus or deficit that has arisen for any other reasons would have to be borne in respect of historic pension obligations.
  This proposal offers a compromise between the proposals in the Bill—where the unfunded proportion remains fixed for all time—and the proposals previously put forward by the board, which would entail complete adjustability. The proposal realistically meets the objections made by the Government on the basis of their assessment of the original proposals.
  It is difficult to predict at this stage the proportion of the historic pension rights that can be said to have been funded already. It must be accepted that the return on shares might be different. I shall not tease the Government with the suggestion that success or failure of their monetary theory or economic policy might be in question in this respect. It would have been true of any calculation made by any Government over the last 20 years. It is difficult to predict uprating costs, inflation and dividends.
  Our proposal gives a fair run to the Government's proposition, and it enables the Government to calculate on the basis of there being no change between now and April 1986. It has to be held also that the proposal offers a safeguard to pensioners, to those who manage the pension schemes, and to the public.
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  I hope that it will be agreed that our proposal in no way reduces the responsibility of those who operate the funds. The proposal does not relieve them of any obligations to make decisions to carry through their responsibility in a way which has proper regard for the needs of pensioners, the public, and the British Railways Board as guarantor, to
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  deal in a prudent way with the funds of the railways and the funds of the British public. It addresses itself to the simple question of the difficulty of calculation.
  I hope that the Minister will be able to respond to the proposal constructively, and I hope that he will not attempt to damn it on a minor technical point. If the Government have decided that there must be a change in the way in which the public will meet a statutory obligation which has previously been decided by the House and on which those who have operated historic railway pension funds have made decisions in good faith, this proposal can give a fair run to what the Government are seeking to do. It will safeguard against dangers which could occur through no fault of the pensioners or those who have been appointed to manage funds for them.
  Mr. Fowler: Before I turn to the amendment, it may be helpful if I make a few introductory comments at this stage.
  I should like to try to put the Bill into context and explain its relationship to the 1974 Act, which it will replace. The 1974 Act is a starting point for the Bill.
  The pension provisions of the 1974 Act were part of a general reconstruction of the finances of the British Railways Board. The reconstruction was directed towards the various obligations of the board. It was not concerned with the pension entitlements of members of the pension schemes. The reconstruction did not deal only with the means by which support was to be provided for railway passenger services; it observed an important general principle. The functions and responsibilities of the board and of the Government were to be kept separate. The Government did not take over the board's pension scheme. Instead, a system was devised by which the board received a defined measure of support to enable it to discharge the historic obligations that it owed to its pension schemes.
  Part III of the Bill reflects three main considerations. First, it retains the principle of support for historic obligations. As far as I am aware, that principle has not come under any criticism. Secondly, it is designed to meet the concern of the

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  Public Accounts Committee that substantial public expenditure was incurred in advance of need. Thirdly, it is designed to secure public expenditure savings in the years immediately ahead.
  I repeat that it is the Government's view that nationalised industry pension schemes should continue to be funded. It is right that the contributions should be collected from employees and employer and invested by management committees against future liabilities. The Bill maintains the principle of funding for a proportion of the liabilities of each scheme.
  The purpose of part III of the Bill is to change the method by which support is provided, rather than using either the principle of funding or the principle that support should be provided.
  The machinery of the Bill is in many ways similar to the machinery that was to have been adopted under the 1974 Act. The procedure is basically as follows: the actuary will have to assess the historic liabilities of each scheme. He will have to estimate the number of pensioners that there will be, how long they will live, and their pensionable salaries. I need not go into all the details.
  The end result will be that the actuary will put a total capital value on historic liabilities. He will likewise have to estimate the value of the assets corresponding to the liabilities. He will have to make crucial assumptions about the rate of return on investments, interest rates and dividends. Again, the end result will be the total capital value of the assets. The difference between the two capital values is the deficiency or surplus in the scheme concerned.
  It was proposed in the 1974 Act that funding debts should be created, equal in value to the deficiency. The schemes would then have assets and liabilities that exactly matched. The difficulty lay in the magnitude of the sums that were involved. Under the interim funding orders £1¼ billion stood to be paid from 1980–81 onwards. The board was arguing that that was nothing like enough fully to fund its obligations.
  The Bill proposes that the proportion of the liabilities of each scheme that is not covered by the assets should be met by Government payments. It is proposed that the payments should be made on
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  an emerging-cost basis as and when the corresponding pensions come to be paid. The remaining proportion of the liabilities would then exactly match the assets. Thus, as under the 1974 Act, the liabilities that were the responsibility of the scheme would be fully funded. The difference would be that the total sums involved would be proportionately smaller, and the risk with any future surplus or deficiency that emerged would be correspondingly less.
  Mr. Hordern: Will my right hon. Friend explain the position of any possible limit of Government support to the British Rail pension fund within his proposals? I understood that in any one year there is a limit of £52 million. Will my right hon. Friend confirm that there is such a limit and that that is the sum?
  Mr. Fowler: That is the real value. I shall ask my hon. Friend the Parliamentary Secretary to give my hon. Friend a full reply. I say, off the cuff, that that is the real value averaged over the next few years.
  The preliminary professional advice is that there would be great difficulties in operating the clause. However, I do not intend to seek to argue that. The starting point of the Bill was the 1974 Act. That measure provided for a once-and-for-all settlement by the end of 1979. No provision for adjustment was made after that. British Rail pension schemes would have been left with total responsibility for the historic pensions liabilities. They would have had a fixed quantity of assets with which to discharge the liabilities. Some of the assets would have been those that they have now—for example, equities, properties, gilt-edged stock, and works of art. The remainder of the assets would have consisted of funded debt.
  If the actuarial assumptions under the 1974 Act had been wrong, the whole of any deficiency that emerged would have been a renewed burden on the board's finances. That is what was proposed under the 1974 arrangement, and that was the whole philosophy of the 1974 Act. In other words, a defined and fixed measure of assistance was to be given to the board. It might have proved too much and it might have proved too little. However, the whole of the responsibility for the historic pensions obligation would have remained with it. The difference would

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  have been that it would have started from a higher base line, inasmuch as it had more assets.
  The Bill proposes to reproduce the support that would have been given under the 1974 Act. It follows the same philosophy. Once again, we are proposing a once-and-for-all settlement, after which the board will basically be on its own. The differences are technical but they are important. As the Minister will be taking responsibility for a fixed proportion of the historic pensions' outgoings, the surpluses or deficiencies that will emerge in the part of the funds that is the board's responsibility will be much smaller than under the 1974 Act.
  The substance of the amendment is that the Minister should take the main responsibility for the historic pensions' liabilities. It would isolate only factors local to the board and to British Rail pension schemes. That goes beyond the 1974 Act.
  It has been argued that the actuarial assumptions are bound to be wrong. I do not seek to pretend that there is not bound to be a measure of uncertainty.
  Mr. Walter Johnson: We are worried about the Bill and the actuarial valuation. Will account be taken of inflation proofing, especially for those superannuates who are not members of a new fund that automatically caters for inflation proofing? This is a real worry of the superannuates who are already on pensions.
  Mr. Fowler: I think that I can give the hon. Gentleman an assurance that it will do just that.
  It has been argued that the actuarial assumptions are bound to be wrong. I should be less than frank if I did not say that there is bound to be a measure of uncertainty. However, if the actuarial assumptions that are used when the unfunded proportions are determined are significantly wrong, the consequences will obviously go much wider than British Rail pension schemes. Every funded pension scheme depends on actuarial assumptions. That is self-evident. At any given time not every actuary will be using the same assumptions. However, there will be some degree of agreement.
  The actuarial assumptions that will be used in the determination of the unfunded proportions will not necessarily be exactly
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  the same as those currently being used in routine valuations of funded pension schemes. Such assumptions are likely to be the base line.
  If the actuarial assumptions used under the Bill are significantly wrong, the assumptions currently being used for most other funded schemes will also be wrong. Again, that will be a much greater problem than the problem being faced by British Rail. The clause will insulate the board and the British Rail pension scheme from general economic trends. That is an insulation that was not provided under the 1974 Act.
  Mr. Stanley Cohen: If the Bill is enacted in its present form, will any profits or surpluses made from the pensions schemes be distributed and used for other purposes, whereas any losses incurred will have to be covered by the scheme?
  Mr. Fowler: Profits and surpluses will be used for the benefit of the pensioners. We shall be discussing that issue in a later amendment.
  For all pension funds there is a risk that actual experience will differ from the assumptions on which actuarial assessments were based. It is then for the employer and the fund managers to decide what action to take. If a major difference emerged between the actual experience and the assumptions on which the determination of the funded proportion was based, that would pose a serious problem for all pension funds.
  There is no reason to legislate now to exempt BR funds from the risks that are faced by every other funded pension scheme. I know that that will come as a disappointment to Opposition Members. I thought that it was right to intervene at this early stage to indicate the Government's views.
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  Mr. Leslie Spriggs: To which of the pension funds is the Minister referring? The superannuation fund has been in existence for many years. It was started by the private railway owners and then passed on when public ownership took place. There is a male wages grades pension fund, and a later superannuation fund that includes a number of the male wages grades. Will the Minister make it

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  clear to which of the funds he is referring, so that we can follow his argument?
  Mr. Fowler: I refer the hon. Gentleman to schedule 8, where the pension schemes are listed.
  Mr. Dobson: I am finding it difficult to follow the Minister's arguments. He says that if there is a catastrophic error in the one-off valuation made by the Government Actuary there will be similar errors in the valuations made by the actuaries of other pension funds. That is nonsensical. The Government Actuary is not responsible for other valuations.
  All other pension funds, including the funded aspect of the BR pension funds, will be subject to revaluation from time to time. It is usual for the revaluations to be carried out every three or four years. If the Minister does not accept the new clause it will mean a one-off valuation by the Minister with the assistance of the Government Actuary.
  Representations were made by my right hon. and hon. Friends in Committee. Representations were made also by the management and the unions of BR against a one-off valuation. Those representations were unavailing. We are faced with a last effort in the House—although common sense may prevail in another place, as it did on another transport matter—to persuade the Minister to accept that he is not infallible. Certainly the Government Actuary is far from infallible.
  If the Minister does not accept this reasonable clause, he will have to guesstimate about half a dozen fluctuating factors for 20 years ahead. The consequences of a one-off valuation, if it were not changed, could carry on for 80 years from now, by which time everybody in the House, including those in the Public Gallery, would be dead.
  By asking the House to reject the clause the Minister is saying that he will carry out an actuarial valuation that could carry us forward until everybody in the House has died, probably from natural causes. That is not just nonsense; it is absurd. It is nonsense on stilts.
  The Minister, together with the Government Actuary, needs to consider the rate of price inflation for the next 20 years, the rate of increase in public sector pensions—which are inflation-proof at present
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  —and, because he has to value the funded part of the scheme, he needs to know the general rate of return on investment over the next 20 years.
  I was reluctant to believe that the Minister could do that. I tabled a question to the Chancellor of the Exchequer for answer on 3 March. I asked him
  "what is the Treasury's estimate for the next 20 years of the rate of price inflation, the increase in public service pensions and the general rate of return on investment."
  The Treasury mandarins considered the matter, but by 3 March all that the Minister could tell me was:
  "I shall let the hon. Member have a reply as soon as possible."—[Official Report, 3 March 1980; Vol. 980, c. 35.]
  A further two days' wait brought forth an interesting reply:
  "The Treasury has not made any estimates for the next 20 years of these three variables."—[Official Report, 6 March, 1980; Vol. 980, c. 211.]
  It was our understanding that the Government Actuary would not conjure these figures out of the air, but turn to the Treasury for advice. If he turns to the Treasury for advice, on the strength of the answers that have been given to me he will receive no worthwhile advice because such estimates are not made by the Treasury. I concluded that the Treasury did not know the answer.
  Because the Minister of State, Civil Service Department has to consider Civil Service pensions, I asked him for how many years ahead he estimated the cost of Civil Service pensions, what factors he took into account, and what rate of inflation he was assuming for each of the years for which he made such estimates. His reply on 24 March 1980 stated:
  "Estimates of expenditure on Civil Service pensions are made in the annual public expenditure surveys which are carried out in constant price terms; such estimates to 1983–84 will be included in the Government's forthcoming public expenditure White Paper. These take account of forecast retirements in each year as well as the assumed mortality rate of pensioners. The actuarial cost of Civil Service pensions is assessed by the Government Actuary in his review of the adjustment in pay research for differences in superannuation benefits. The assumptions about future price and salary inflation used in the 1979 review are set out in his 1979 report, a copy of which is in the Library."
  The Library staff, in their excellent and helpful manner, found the report.

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  There was no reference to future inflation—only references to past rates of inflation. Even those were presented in the form of graphs. I understand that it would not be in order to wave graphs about to demonstrate what has happened.
  Taken over the past 30 years, the average rate of return on equities has been 9·8 per cent. On occasions, the increase in the rate of return has dropped below 50 per cent., to minus 50 per cent., and has risen above 100 per cent. Those startling changes occurred within a span of two years during the latter part of that 30-year period.
  The Government Actuary does not guess 20 years ahead for the purpose of Civil Service pensions, but he will be expected to guess 20 years ahead for the purposes of BR pensions. That is absurd.
  I wish to demonstrate how much the position can change in 20 years.
  Mr. Kenneth Clarke: It is not possible to make actuarial valuations of funding that is needed to meet any pension obligations. Every actuary makes that sort of assumption when he issues a certificate to indicate that a pension scheme is properly funded. It is true that in this case, as a once-and-for-all funding, any further obligation to top-up if variations emerge will fall on British Rail as the employer, as it does with any other pension scheme.
  We are replacing the 1974 Act, which had a once-and-for-all valuation in 1979, with no review. It does not strengthen the hon. Gentleman's case to produce in this tortuous way arguments that all actuarial calculations are impossible or always wrong, because actuaries make those kinds of calculations day in and day out.
  Mr. Dobson: The Parliamentary Secretary has given the game away with his last sentence. They make those valuations day in and day out, and in some cases they keep revising those valuations. In this case there will be no procedure whatever for revising the valuation once it has been made. The purpose of the new clause is to allow those sorts of revaluation to take place. Under the Bill as drafted, they cannot take place, and the fact that they were in the earlier Bill does not oblige me to support the provisions of the earlier Bill.
  Mr. Harry Cowans: Surely the point at issue has been revealed by the Parliamentary Secretary. By saying that actuaries make such calculations daily, he gave away the fact that the Government should now accept the new clause. The new clause gives an actuary the opportunity of putting right a mistake that he has made. That is basically what it is all about. My hon. Friend is seeking to help the Government. Will not the Minister accept the help that has been offered to him?
  Mr. Dobson: I am always happy to accept the help that is offered by my hon. Friend. Indeed, I have accepted that help for quite a long time with regard to this Bill. My hon. Friend makes the point very cogently. We are asking the Government Actuary, the Minister and the Parliamentary Secretary to guess accurately 20 years from now, yet we do not expect actuaries to do that in any other sphere.
  I should like to illustrate my argument with two examples of what can happen over a period of 20 years. I do not claim to be able to predict. All that I can do is look back. When I looked back 20 years from 1980 to 1960, I discovered that the average wage in 1960 was £14 a week. In 1980, the average wage is, I understand, £114 a week. I do not think that any actuary who carried out actuarial valuations in 1960 would have guessed that that scale of increase was likely to come about. Had anyone made a one-off valuation at that time he would almost certainly have got it wrong.
  I turn to something that is closer to the hearts of hon. Members. In 1960, Members of Parliament were paid £1,750 a year. They had no secretarial allowance and, more appropriate to this debate, no pensions. Today, in 1980–20 years later—I understand that Members of Parliament now receive £10,750, a secretarial allowance of £6,850 and provision for a pension. Of course, Ministers will chuckle, because they get a lot more than honest Back-Bench Members. They are getting rather more than the Queen's shilling for their services. In addition, following the previous debate on this matter, Members' secretaries will in future be entitled to some sort of pension.

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  I do not believe that many hon. Members who were present in 1960—when President Eisenhower was President of the United States, when the Cuban missile crisis had not even taken place, when the Minister was chairman of the Cambridge University Conservative Association and when the Parliamentary Secretary would have to wait another year before he moved into that warm seat which his right hon. Friend would leave—would have predicted those sorts of changes.
  Mr. Spriggs: I am afraid that my hon. Friend will sit down before this matter has been clarified. A few moments ago, the Parliamentary Secretary said that the railway board would be left to fund its pension scheme as other pension schemes are funded by the employers. Will my hon. Friend try to discover from the Parliamentary Secretary how many of the non-contributory pension and superannuation schemes that operate today would fall into the scheme as it was explained to us? When I did my last research I discovered that there were quite a number of non-contributory schemes. The railmen contribute to their scheme. How are the other funds, which are non-contributory, actuarially funded?
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  Mr. Dobson: I trust that the Parliamentary Secretary will take my hon. Friend's question on board and will reply to it.
  The Minister also suggested that British Rail would have to take on anything that went wrong, as everyone does. However, that is not a reasonable comparison, because in that case what may go wrong will be the fault of the Minister and the Government Actuary. It is quite unreasonable to expect the British Rail pension fund to take on board the consequences of its own possible mistakes as well as someone else's.
  It seems to me that the Government will have to resort to necromancy or something of that sort in order to decide what the actuarial valuation should be. It reminds me of the three witches in Macbeth. We shall have the Minister, the Parliamentary Secretary and the Government Actuary going round some
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  cauldron into which they will throw ideas, muttering:
  "Double, double toil and trouble;
  Fire burn and cauldron bubble."
  I shall not go on to quote all that they say, except that at the end of that scene, Hecate, a strident female character, appears on the scene. I do not allocate that characterisation to any Member of the Government Front Bench, although other hon. Members may do so. Hecate comes in, sees the witches throwing all the stuff into the cauldron, Which will help them predict the future for Macbeth, and says:
  "O! well done ! I commend your pains,
  And every one shall share i' the gains.
  And now about the cauldron sing,
  Like elves and fairies in a ring,
  Enchanting all that you put in."
  I believe that the Government will need some enchantment in order to predict what they are trying to in a way that will protect the pensions of a large number of railway pensioners.
  Mr. Hordern: I followed with great interest what the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) said about the difficulty of forecasting what funds would be required to fund pensions. Not only do I have sympathy with what he said, but I agree with virtually every word that he said. The only exception was the current salaries that are now paid to Members of this House. Otherwise, what he said seemed to be accurate.
  It seems to me that the purpose of the new clause is to have a regular review, I think on a three-year basis, to see what the valuation of the fund is at any one time and, if necessary, to add to the fund if circumstances demand or, if there is a substantial surplus, to return such part of the surplus as may be required. In replying to the right hon. Member for Barrow-in-Furness (Mr. Booth), my right hon. Friend put the position very clearly. It is that the Government will set aside a certain sum annually which will account for the deficiency in the valuation which the Actuary has placed upon the historic obligations of the fund.
  When the Public Accounts Committee, of which I have been a member for some time, first looked at this matter in 1976, the deficit on the fund stood at £660 million. At the time we were told that the Government would do something

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  about it, and would pay large sums of money over to the British Rail pension fund. However, for one reason or another, which is understandable, those sums were not paid. As my right hon. Friend rightly said, that figure now amounts to £1¼ billion. That lends strength to the arguments of the hon. Member for Holborn and St. Pancras, South about the great difficulty in assessing what those obligations might be and what they will amount to. My hon. Friend the Parliamentary Secretary, in replying to the debate, will say whether there is to be a limit of £52 million, in real terms, in each year or any limit at all on what the Government propose to make available in paying off the unfunded proportion of the fund.
  I have what are generally called unsound views about funding in the public sector. I believe that I am regarded otherwise as a sound money man and a convinced monetarist. But a problem arises by the very nature of public sector pensions. They are schemes that aim to provide an index-linked pension. Such an index-linked pension is not available in the private sector, so far as I am aware. The comparison that might properly be drawn between one funded scheme and another in the public sector and the private sector is therefore impossible to draw.
  It is one thing to make an actuarial valuation of future liabilities with a funded scheme where one can forecast, perhaps inaccurately, what future pensions might have to be. It is quite another to have to make a forecast of future wage increases, because the pension depends on the salary at retirement and on future cost of living increases which arise because of the index-linking provision. How can anyone tell, 20 or 30 years away, what the cost of living will be at that time? I respectfully suggest to my right hon. and hon Friends that such an attempt is impossible in the present state of knowledge or in any reasonable course of prediction. I do not think that it is possible.
  I have already stated that I think that the difficulty arises due to the index-linking commitment. One way out might be to say that if there is to be a funded scheme it must be on all fours with all funded schemes in the private sector. If
  1262
  left on its own, there should not be an index-linking provision. It should be the same as the others. I concede that this is a real argument. I do not think, however, that it is the position that the Opposition or those employed in British Rail would prefer to see. I believe that the employees value the index-linking provision and regard themselves as public servants in the same way as civil servants do. That is a natural proposition.
  I should like to explain why I believe that the Government's proposals, if I understand them correctly, will prove ineffective as time goes on and why hon. Members were right to say that substantial increases will have to be given to the rail fund if this commitment is to be carried out.
  The real rate of return—the essential element of the matter—has been unsatisfactory for many years. The average rate of return on a typical fund—and I know that there are difficulties in establishing what a typical fund is—has, for the last 15 years, been 8 per cent. But the increase in salaries over the same period has been 10·9 per cent. There has been a negative rate of return over the last 15 years of some 2 per cent. Over the last 50 years, for each of the last five decades, taking each separately, there has been a negative real rate of return on each of those periods.
  The Government Actuary, when asked to report to the Wilson committee on what would be the position if a negative rate of return was achieved on a fund of investments, said that the contribution rate required to support the benefits of a new entrant to a scheme providing final salary pensions protected against inflation after award, assuming a negative rate of 2 per cent., which is what we have seen over the past 15 years, would be 50 per cent. of salary. He added:
  "Employers would increasingly find it impossible to pay the rates of contribution recommended by actuaries and they would certainly doubt the wisdom of paying contributions to a fund where those contributions would wither away in real terms."
  I ask the House to note that the Government Actuary was talking about an index-linked fund of the kind that British Rail runs. I indicate the difficulty of the real rate of return because the nature of the capital market means that the problem is likely to get worse and not

  1263
  better. This is because of the weight of the funds themselves. Year after year there is a substantial increase in investment by institutions on the Stock Exchange, in property, in equities, and in gilt-edged securities.
  In each of those areas, if the public sector fund has to be financed by the taxpayer, an extraordinary position arises. I invite the House to consider the gilt-edged market today. Where there is a deficit in a public sector fund, the deficit has to be made up by the taxpayer. If that money is invested in gilt-edged securities, the interest itself has to be paid by the taxpayer. So the taxpayer is paying both the contributions to the pension fund and the interest on the loan that arises from the investment. It is an extraordinary circular course.
  In the equity market, a great deal depends on what capital appreciation is possible within any fund of investments. It is no secret that capital appreciation has been hard to come by, in nominal terms, let alone in real terms, on the Stock Exchange in recent times. I say recent times. It would perhaps be more appropriate to say over the last 15 years or so. There remains the property market—
  Mr. Cohen: Does the hon. Gentleman agree that investment in the public or the private sector, and expenditure in both, are paid for by the public?
  Mr. Hordern: No, I do not agree. Investment by the private sector comes out of private savings. The same cannot be said of public sector contributions, except as forced savings. I do not agree with the hon. Gentleman. I was referring to property investment.
  The average yield on properties at the moment is 5 per cent. Let us suppose that when a fund is in deficit the managers invest in property. At the end of the year they come back to the trustees and explain that there is a deficit on the fund that they want the trustees to make up. Five per cent. does not represent anything like the increase in salaries or the increase in pensions that the fund has to pay for. More money is passed across to the trustees and invested in other property still yielding 5 per cent. It will be argued that the rate of return on property in-
  1264
  volves not only the rents but the capital appreciation. But pension funds and other institutions are competing with each other for blocks of offices and other blocks of property, the valuation of which is based on a random market competition for assets by tax-free funds.
  The House will remember what happened in 1972, 1973 and 1974 when there was a property collapse. Many pension funds found that the value of their investment had been halved, and sometimes gone down by two-thirds.
  Mr. Walter Johnson: On a point of order, Mr. Deputy Speaker. What have the hon. Gentleman's remarks to do with the clause under discussion?
  Mr. Deputy Speaker (Mr. Richard Crawshaw): I understand the hon. Gentleman's remarks to be pertinent to what is being discussed.
  Mr. Hordern: I should hope so. I am sorry that the hon. Gentleman has not been following what I say. I shall try to speak more slowly. It is difficult to achieve a real rate of return on investments by any fund, least of all a fund where the commitment is to provide a pension that is index linked. I would say that it is virtually impossible to do so. The hon. Gentleman may disagree. In the case of the British Rail pension fund, of which the hon. Gentleman probably has some knowledge due to his past experience, the position reached a height of absurdity. I am glad to say that the position has now been changed.
  The position was reached where the British Rail pension fund was investing in works of art, achieving no rate of return of any kind. At one stage that pension fund was competing with the British museum and others for the bottom half of a silver gilt candlestick. As it happened, British Rail won and got the candlestick. But we had one lot of taxpayers' money competing with another lot of taxpayers' money. The amount of money that was devoted by that fund to works of art at one stage actually exceeded the amount of money that the taxpayer gives to the Tate gallery, the National gallery and the British museum. That was the absurdity of the situation.
  8 pm
  Mr. Cowans: I am following the hon. Member's argument very closely, and I

  1265
  agree with a lot of what he says. However, I must correct him on one point. He talks about the British Rail pension fund speculating in works of art with taxpayers' money. That pension fund is contributed and it does not consist of taxpayers' money.
  Mr. Hordern: I am afraid that if the hon. Member looks at the forecast of public expenditure year after year he will see that this House has voted sums of money for the British Rail pension fund. I do not have the figures with me, but I assure the hon. Member that that is the case.
  I wish to draw attention to one aspect of that arrangement. One interesting thing about the British Rail pension fund's works of art is that many people ask where these pictures are. Many of them are hanging in the City Club—the bastion of the City itself—where they are not on view to the public at all.
  Finally, I turn to the general economic effect on pension funds, and particularly those of nationalised industries and local authorities—
  Mr. Spriggs: The Railways Board does not make a contribution to the male wages grades pension fund. Any investment that it has made is not as a result of grants from the Government to British Rail, but comes from the wages of the railway workers themselves.
  Mr. Hordern: I am sorry, but I did not fully grasp the hon. Member's point. My right hon. Friend the Minister says that he is wrong anyway. I assure the hon. Member that the taxpayer has made a continuing contribution to British Rail's pension fund for some years, and obviously will do so for many years to come.
  I wish to draw the attention of the House to the general economic effect of paying contributions to nationalised industries' pension funds in this way. The Government Actuary says that if all the funds in the nationalised industries and local authorities were frozen as of tomorrow and pensions were paid, index-linked as they arose, there would be a saving on the public sector borrowing requirement of £2,000 million a year. I believe that that is a significant figure, and it is worth having. If it were announced in the Budget tomorrow that nationalised industries pension funds
  1266
  would be frozen and that all future payments and obligations would be made on a "pay-as-you-go" basis, that would give an immense saving.
  I commend that argument to the right hon. Member for Barrow-in-Furness. I noticed in Committee that he had not definitely made up his mind about whether these pensions should be on a "pay-as-you-go" basis or on funded schemes. I ask the House to distinguish between the real nature of the guarantee for a person working in the nationalised industries, the local authorities or the Civil Service. In the Civil Service, pensions are "pay-as-you-go" and here seems to be no reason, in any proper sense, why pensions in the nationalised industries and local authorities should not similarly be so paid.
  What is the effect of this extra money going into the pension funds? I shall give some idea of the growth. Institutions account now for some 60 per cent. of the entire turnover of the Stock Exchange. The nationalised industries invested £184 million in property in 1974, and £386 million in 1978. That amount will grow every year. Substantial funds are given by the taxpayer to these pension funds, which will be devoted to property—not only property in this country, but abroad as well. Those property values will depend on considerable increases in rents.
  Let us take a typical City development. It may be funded by a nationalised industry pension fund, and it might have first-class tenants such as Marks and Spencer or Boots. The success of that scheme will depend entirely on substantial rent increases which those companies will have to pay. Of course they will pass these increases straight on to their customers. This money could be saved to the tune of £2,000 million a year if we simply paid the pensions on a "pay-as-you-go" basis.
  I have been in the investment business all my working life and I should like to feel that there was a real rate of return on investment in the future, but I fear that that will not be the case. It is my belief that, having regard to the experience of the last 15 years, even on an ordinary funded pension scheme where there is no commitment for an

  1267
  index-linked pension, it will be very difficult to pay satisfactory pensions in future. In the case of a public sector pension scheme where the pensions are guaranteed to be index-linked, I believe that such a commitment will be almost impossible to bear, and will be borne only with considerable exertion and distortion of the market, and considerable waste of money from the public purse.
  Mr. Walter Johnson: I shall not detain the House for long because I realise that we have a long way to go before the Bill receives its Third Reading this evening, or perhaps tomorrow morning. It is clear to me that the hon. Member for Horsham and Crawley (Mr. Hordern) knows nothing about the historic background of the railway pension scheme. Perhaps hon. Members do not realise that in 1948, when the railways were nationalised, the assets of the railway superannuation fund were taken over by the Government of the day—I am sorry to say that it was a Labour Government—on the understanding that pensions would be guaranteed, and that 4 per cent. would be paid as a result of the change in funding.
  Between 1948 and 1974 no proper funding took place at all and, as a result, the superannuation funds of British Rail were unfairly treated by successive Governments. Governments did not play the game with these pension funds until 1974, when it was decided to make good the massive deficit that had been built up over the period from 1948. We were talking in terms of £1,000 million by the end of last year.
  Had that money been properly invested, as it could have been during that period, we would not have any financial problem at all. Even with the 1974 Act, in time and with proper funding the pension fund would have been able to operate properly.
  I give an example. London Transport was allowed to stay out of this situation although it was taken under the umbrella of the British Transport Commission. London Transport—and its pension fund—was permitted to stay outside, and as a result of proper wide-ranging investment over the years, apart
  1268
  from two or three years when there was rapid inflation of the order of 27 per cent. to 30 per cent. it was able to pay its pensions out of the return on its investments.
  The point I am trying to make is that successive Governments have not played fair with British Rail funds. If they had we would not be in the present situation. I am convinced that, because the difficulties have never been understood by the House, we face problems today. I cannot for the life of me understand what the Government find so difficult about accepting the clause. I believe that it will provide the safeguards which are essential if we are to get proper consideration by the Government Actuary year by year so that this issue can be dealt with fairly.
  One of the difficulties for any actuary is to estimate the level of inflation in the following year. If we look at what has happened we will see that as a result of the Pensions (Increase) Act 1971 astronomical amounts have been passed on in the form of supplementation justified by the Government of the day—both the present Government and the previous Government. I believe that to be right. The hon. Member for Horsham and Crawley said that he thought this was grossly unfair. But does he understand that the British Rail Pension Fund and other pension funds in nationalised industries are being paid for by increased contributions? That is the difference. Had those pension funds been able to invest money which was taken from the funds there would be no problem as regards paying out pensions.
  Mr. Hordern: I must have misled the hon. Member, and I apologise for that. Clearly he has not grasped the drift of my argument. I fully agree that successive Governments have not handed over the money that should have been handed over, but my remarks concentrated on the fact that, even had money been passed over, a deficit would have emerged just as it has in virtually every private sector scheme. I ask the hon. Member to look at the public expenditure White Paper which, year after year, shows subventions to the British Rail pension fund.
  Mr. Johnson: Of course. That had to be done because the money was not funded. Surely the hon. Gentleman

  1269
  understands that. The Parliamentary Secretary knows about this because he sat on the Statutory Instruments Committee with me for two or three years when we dealt with it. It was something that had to be done because a guarantee had been given under the 1974 Act. Clearly that is the way in which we should proceed now, and not have the hotch-potch where an actuary determines just how much money is required to keep the fund going and to pay out any deficit.
  From the response I received from the Minister to a question I put earlier I am pleased to know that supplementation has now been understood and guaranteed for those who are on pension. When the Minister replies I should like him to reiterate that that is where the Government stand. Among my many jobs I happen to be the honorary President of the British Transport Superannuitants Federation.
  I believe that we have made a case why the House should support the new clause. I am surprised that the Government cannot see their way to accept it. It would provide a sensible approach to the problem and I believe that it would be supported by the House. I hope that the Minister will explain why he feels that he cannot accept it.
  8.15 pm
  Mr. Kenneth Clarke: I begin by touching on what lay behind the interventions made by the hon. Members for Derby, South (Mr. Johnson) and for Leeds, South-East (Mr. Cohen). They were not engaged in the Committee proceedings, but both of them are well-known for their interest in railway matters. Both of them were plainly concerned about the position of pensioners and beneficiaries under the various schemes. That has concerned a number of people.
  There is nothing in the Bill that affects the position of members of these pension schemes. Their rights and putative rights to pension depend on the rules of the pension schemes to which they belong supplemented by the practices which have sprung up in the area of railway pensions as regards the supplementation schemes.
  What we are concerned about in the Bill are the technicalities of how those pension obligations should be met. Essentially it is a conflict between two
  1270
  giant bodies with the resources between them to meet these obligations in one way or another. On the one hand, there is the British Railways Board assisted by the managers of their fund and on the other hand the taxpayer. We are trying to make sense of a historic division of liability between them on a particular aspect of British Railways pension funds.
  The battle is between the actuaries on both sides, the fund managers of the board and the Treasury, about who picks up how much of the bill towards these pension entitlements. The position of the members of the schemes remains as it was, determined by the rules and practices that have been accepted as of right.
  Who is actually liable to those pensioners? The liability to pensioners lies with the British Railways Board. It always has. It is the board's scheme. The board is the employer and the Government are no more stepping into its shoes in the Bill than the previous Government did in the 1974 Act which set up these arrangements. We are dealing with a Government involvement in assisting the Board with those obligations.
  The hon. Member for Derby, South, whose knowledge of these matters is considerable, said that it is a matter of history. Unfortunately, what we are talking about is constantly described as the historic obligations of the pension fund, which in railway terms turns out to be prior to 1 January 1975. That is historic enough to be going on with.
  The current beneficiaries expecting their pensions in years to come are in a funded scheme which is the responsibility of the British Railways Board and to which the taxpayer has no obligation whatever. We are dealing with the pre-1975 obligations. How did the Government become immersed in making a contribution to this Fund? I cannot remember, but I believe that it goes back even further than the hon. Member for Derby, South indicated. Eventually we shall be adding to schedule 8 the South-Eastern and Chatham Railway Motormen's Fund. That was a scheme we missed. It is a pre-1923 company. It is not just Government, but railway management and companies over the years which have adopted a quite bizarre view of how they should fund their pensions. There is a difference between myself and

  1271
  my hon. Friend the member for Horsham and Crawley (Mr. Hordern) on the funding of pensions. But neither of us can approve of what went on in the railways before 1974. The railways used to invest in their own companies and in time-affixed interest stock. The Government used to make notional interest payments on moneys they took from their own pocket. In 1974 the railways wound the scheme up, having agreed meanwhile to go on to fully-indexed final salary pension schemes, with obligations which they had no prospect whatever of meeting.
  In 1974 British Railways were faced with massive pension obligations which they could not meet. With respect to my hon. Friend the Member for Horsham and Crawley, one cannot draw analogies with other nationalised industries. I know of no equivalent of the unbelievable mess that the Government tried to sort out in 1974.
  Mr. Cohen: Why did the Minister decide to draw a demarcation line between the board of British Railways and the taxpayer, or those who fund that board? In the opinion of most people, British Railways exist as a result of their relationship with the taxpayer. It is ludicrous to try to draw such a demarcation.
  Mr. Clarke: The Government are anxious to draw clear distinctions between British Railways—a nationalised commercial business providing transport services—and the obligations of the taxpayer. Contributions to the funding of railwaymen's pensions come from employees' contributions and from the revenue of the board, as employer. That will apply as long as British Railways continue to provide index-linked pensions. The taxpayer does not make a contribution to current service pensions. There is no reason why the general public should chip in towards the cost of pensions. That cost should be met by the board, as employer, and by its employees.
  In 1974 it was decided that unfunded historic obligations should be funded. The board needed a financial reconstruction in order to get rid of its impossible debts. It was decided to try to convert those unfunded obligations into a funded scheme. Even then, the sums involved
  1272
  were massive. A fund could not be set up overnight. It was decided to fund it in instalments. Many of those instalments remain to be paid. As my hon. Friend has pointed out, by 1976 the Public Accounts Committee began to look at the size of the bills. Inflation took instalments steadily upwards. The Committee said that problems were involved in funding those pensions. It pointed out that one had started from nothing and that one was trying to build up a fund at a time when inflation and salaries were racing away. It pointed out that we were running up a down escalator at an impossible rate. It said that it would be impossible to finance that fund without a colossal cost to the Treasury.
  In response to the Public Accounts Committee, the Bill was introduced. We must save the taxpayer from the huge contributions that will be required by the pension fund during the next few years. However, we should meet the Government's obligations under the 1974 Act in a different way. We are taking over the situation part way through the 1974 Act settlement. It is not possible to fund. It cannot be done other than at an impossible cost to the Treasury and to the public. We shall therefore treat them on the basis that they are partly funded.
  We have got part way towards funding these pension obligations. I cannot say that we have got half way, because the clause seeks to determine that. A proportion is now funded. The funds must therefore look after that proportion. That is what they are there for. That is why the taxpayer has given his money. God bless all who sail in them. Funds are responsible for their proportion.
  The taxpayer will continue to accept liability for the unfunded proportion. He will no longer do so in a foolish and expensive attempt to fund it, but on an emerging cost basis as those pensions become payable. That is the rationale of the Bill. It will save £70 million in the first year of operation. It will save countless hundreds and millions of pounds thereafter.
  I realise that the Opposition would not choose this machinery. They say that they want regular reviews of the funded and unfunded proportion, according to the constant revisions of actuaries as assumptions emerge. Our reason for

  1273
  resisting that is simple. The Opposition seek to change the whole nature of the settlement made in the 1974 Act. They demand that the Government take on an obligation for all pensions, using the taxpayers' money. They want us to cover all eventualities and to relieve the fund of its basic obligations.
  Our policy is to repeat the arrangements made in the 1974 Act; no more, no less. We accept that the Government and the taxpayer have continuing obligations under that 1974 settlement. However, there is no reason why they should be enlarged, made more flexible or extended as the Opposition have urged. We do not see why this particular pension fund should be given further guarantees—in the form of regular revisions—against the uncertainties that face any pension fund in our present economic circumstances.
  Mr. Cowans: I do not believe that the hon. Gentleman has read the clause. It seeks only that there should be a revaluation where it is proved that the Minister's or the actuarial forecasts are invalid. That is not what the Minister is saying. He is saying that it will be for ever and a day.
  Mr. Clarke: The hon. Gentleman helpfully leads me on to the points made by my hon. Friend the Member for Horsham and Crawley and the hon. Member for Holborn and St. Pancras, South (Mr. Dobson) about how actuarial assessments are made, and so on.
  In the ordinary case, an employer with a contributory pension fund for his employees has actuaries to advise him on the present level of funding. They have to make long-term assumptions about movements, final salaries, inflation and so on. They certify the level of the fund each year. They have to vary those assumptions regularly, because no assessments are ever right. If the assessments turn to the good, there is a surplus which is devoted to improving benefits. If they turn to the bad and the surplus goes down, they look for increased contributions or even a lump sum topping-up from the employer. That is the obligation that every employer has to accept.
  British Railways have that system for their in-service pensions for those who are contributing now. We are not relieving them of that obligation. To do so
  1274
  would be to subsidise labour costs in a way that no other business can be subsidised. We do not intend to do that.
  My hon. Friend the Member for Horsham and Crawley has great knowledge of these matters and great erudition in financial matters generally. He argues that it is not even possible to have index-linked pensions. I do not accept that and neither do others with more expertise than myself. It is an opinion that I have heard previously and it is at the root of the argument about funded pensions in the public sector and index-linked pensions.
  Many actuaries, however, believe that they can do it. At present about a dozen actuarial firms are engaged in issuing certificates about the funding of pensions that carry index-linked obligations. They are playing with a lot of variables, and assumptions may vary frequently. Nevertheless, they can do it. They have to respond to changes in their assumptions in the same way they have to in other pension schemes.
  I am told that some actuaries find easier to allow for index-linking than for final salary arrangements in schemes that are much more variable and difficult to estimate. There are people around who do not know their own salary, like the hon. Member for Holborn and St. Pancras, South.
  Mr. Walter Johnson: The hon. Gentleman is forgetting the 26 years. Had the pension fund been taken over and properly funded, there would be no problem for the taxpayer. The Government and the country are not doing the British Railways pension fund any favour. The money is owed to the pension fund.
  Mr. Clarke: We are doing no more nor less than the previous Government in 1974. Our method is different.
  I agree with the hon. Member for Derby, South (Mr. Johnson). I am an advocate of funded pension schemes and always have been. We are dealing with the consequences of failing to fund inflation-proofed final salary pension schemes.
  My hon. Friend the Member for Horsham and Crawley is right in pointing out that in the short term, if we ceased to fund the current contributory and index-linked pensions, there would be a massive saving in the PSBR. We do not have

  1275
  time to enlarge that argument. However, by doing so we defer to later generations or, in the case of British Railways, business managers in 20 years' time, the problem of finding from revenue the necessary resources for an incalculable quantity of liabilities that will then exist, based on what inflation has done to final salaries. Although my hon. Friend can probably counter it, I believe that savings made now by ceasing to fund pension schemes in the public sector will be short-term. The long-term cost and difficulties may be enormous. Meanwhile we will no longer top up but will adhere to the settlement made in 1974.
  We will do a once-and-for all actuarial calculation of what the funded and unfunded proportion is of each scheme. The 1974 Act was similarly based on a once-and-for-all actuarial assumption. Assumptions were made in 1979 and there was no provision for revision and the final payments of last instalments were to be made by 1986. If we had not introduced this Bill, the 1974 Act would still be in operation, there would be no revision of actuarial assumptions and the risks to the fund under the 1974 Act would have been much greater.
  8.30 pm
  If the actuarial assumptions had been found to be wrong by 1986 there would have been a large lump sum deficiency to be made up by British Rail. If we are wrong in our once-and-for-all calculation on this occasion it will become clear, year in and year out, that the proportions will be to the advantage of one party or the other. Sometimes British Rail may win and at other times the Treasury may win. The risks in that situation will be much more confined.
  The core of the argument is that not only are we not differing from the 1974 assumptions but we are relying on the same justification as that relied upon by the then Government. The reason why we do not intend to review and are not behaving as employers, where our actuaries will come along every three or six years—or whenever the new clauses suggests—and revise our assumptions so that we top up depending on the position, is that it is not our pension scheme. It is the British Rail pension scheme.
  1276
  We are taking over a 1974 financial reconstruction, when an agreement was entered into to put the scheme back on its feet to enable it to face up to its obligations. That was a once-and-for-all financial reconstruction. What will happen to final salaries as inflation progresses is within the control of the board just as what happens to basic pay rates and to the consolidation of overtime and bonuses is a matter for the board.
  We wish to adhere to a once-and-for-all settlement in the style of the 1974 Act. We cannot enter into the complications of three-yearly discussions between the fund managers and the Treasury. No matter what period is chosen, we cannot enter into a continuing dialogue year after year about actuarial assumptions and constant adjustments and readjustments of the Government's liability.
  The taxpayer's liability is fixed at £52 million at present prices for all payments throughout the years until the last beneficiaries have gone and all obligations are extinguished. What that means in money terms nobody knows. Anyone who hazarded a guess would be guessing at the rate of inflation over the next 20 years. The taxpayer's obligation is therefore limited and we are resisting pressure continually to review it. We all know in which direction that pressure will push us if the fund gets into further difficulties.
  That figure of £52 million is based on proper actuarial assumptions made by technical experts and they cover the next 20 years. The Government Actuary and the fund's actuaries are accustomed to making those assumptions every time they are asked to value the obligation of the fund to meet any pension liability.
  Mr. Booth: I cannot conceal that I am appalled at the Government's response to what was—putting it at its highest—a modest compromise proposal given acceptance of the Government's primary intention. The Minister and the Parliamentary Secretary have said that the provisions made by the historic railway pension fund under the terms of the Bill are as good as those made under the 1974 Act because the Government say that they are. The Government ignore the fact that the 1974 Act provisions for historic railway pensions were agreed with those who run the funds. The amount of

  1277
  funding was worked out and there was agreement. The Government's proposal will not be agreed; it will be imposed by the Minister, subject to Treasury approval, and rammed down their throats. Those who run the pension funds will be told to bear a certain proportion with a specified amount of funding and that the rest will be on a "pay-as-you-go basis".
  The Government argument is that people running funded pension schemes will have to face the results of assumptions made by actuaries today which may turn out to be wrong in 5 or 20 years' time. The Minister says that the British Rail pension fund managers must be put in the same position.
  British Rail pension managers are in charge of a different set of circumstances in several important ways. Those who run other funded pension schemes do not have to face a Tory Government who say "Whether you like it or not, funds guaranteed by legislation will be cut off and a certain proportion of the scheme will cease to operate on a funded basis".
  Mr. Hordern: I have sympathy with the problem. Is the right hon. Member really saying that in the event of the Labour Party being returned at the last election, it would have paid £1,250 million until 1986?
  Mr. Booth: I am not saying that. If a Labour Government had been returned at the last general election they would have either stood by the 1974 provisions and regarded themselves as being under a legal and moral obligation to pay to the trustees of the railways pension fund the amount promised in the 1974 Act or they would have gone to the trustees to see if they could agree on a different basis. A Labour Government would have asked the trustees to agree that if the 1974 Act provisions were carried out there would be an immediate call on public funds with no certainty of the pension fund being more than adequately or insufficiently funded.
  I do not say that a Labour Government would have said that they must use the 1974 Act and nothing but the 1974 Act—
  "till death us do part".
  1278
  They would have tried to find an agreed basis. A Labour Government would not have sought to impose an entirely different basis without consent.
  The hon. Member for Horsham and Crawley (Mr. Hordern) was a member of the Public Accounts Committee. That Committee did not suggest that its recommendation should be applied by any Government in such a way as to disadvantage those who run pension funds.
  No other body which runs a funded pension scheme will be called upon to reconstruct its investment pattern because guarantees have been totally changed. The managers of the British Rail historic pension fund have invested money on the assumption that they must produce returns from that investment from 1986 when the funding was to be cut off. They invested on that basis. Now they must change all that. There will be no compensation for difficulties or losses.
  If British Rail is unable to pay for the funded proportion in 1986, or at some later date, a limited number of options will face it. First, it can possibly seek to put the burden on rail fares and to say that the railway passenger can meet its historic pension obligations. It could ask those in existing British Rail pension schemes "Will you make a contribution by paying more into the present pension schemes?" in the hope of funding something else. It may be difficult to get that agreed. However, it is one of the theoretical possibilities. It could return to the House of Commons and say "You passed legislation in 1980 which changed the basis for 1984. A proportion has been fixed by a Minister, whom you authorised, which turned out to be wrong".
  In any of those circumstances it cannot lie in the mouths of any Ministers in a Conservative Government to say that they have not, in this Bill, put at risk guarantees and expectations on the part of pensioners and railway funds. I therefore call upon the House to vote for this modest amendment, which would do nothing more than to require in five years' time, if assumptions made on funding a proportion were wrong, that the matter should then be put right.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 225, Noes 283.

  Division No. 244]

  AYES

  [8.42 pm

  Abse, Leo

  Fraser, John (Lambeth, Norwood)

  Oakes, Rt Hon Gordon

  Adams, Allen

  Garrett, John (Norwich S)

  O'Neill, Martin

  Allaun, Frank

  Garrett, W. E. (Wallsend)

  Orme, Rt Hon Stanley

  Alton, David

  George, Bruce

  Palmer, Arthur

  Anderson, Donald

  Gilbert, Rt Hon Dr John

  Park, George

  Archer, Rt Hon Peter

  Ginsburg, David

  Parker, John

  Armstrong, Rt Hon Ernest

  Gourlay, Harry

  Pavitt, Laurie

  Ashley, Rt Hon Jack

  Graham, Ted

  Pendry, Tom

  Ashton, Joe

  Grant, George (Morpeth)

  Penhaligon, David

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

  Grant, John (Islington C)

  Powell, Raymond (Ogmore)

  Barnett, Guy (Greenwich)

  Hamilton, James (Bothwell)

  Prescott, John

  Barnett, Rt Hon Joel (Heywood)

  Hamilton, W. W. (Central Fife)

  Race, Reg

  Benn, Rt Hon Anthony Wedgwood

  Harrison, Rt Hon Walter

  Radlce, Giles

  Bernett, Andrew (Stockport N)

  Haynes, Frank

  Rees, Rt Hon Merlyn (Leeds South)

  Bidwell, Sydney

  Heffer, Eric S.

  Richardson, Jo

  Booth, Rt Hon Albert

  Hogg, Norman (E Dunbartonshire)

  Roberts, Albert (Normanton)

  Bottomley, Rt Hon Arthur (M'brough)

  Home Robertson, John

  Roberts, Allan (Bootle)

  Bradley, Tom

  Homewood, William

  Roberts, Gwilym (Cannock)

  Bray, Dr Jeremy

  Hooley, Frank

  Robertson, George

  Brown, Hugh D. (Proven)

  Horam, John

  Robinson, Geoffrey (Coventry NW)

  Brown, Ronald W. (Hackney S)

  Howells, Geraint

  Rodgers, Rt Hon William

  Brown, Ron (Edinburgh, Leith)

  Huckfield, Les

  Rooker, J. W.

  Buchan, Norman

  Hudson Davies, Gwilym Ednyfed

  Ross, Ernest (Dundee West)

  Callaghan, Rt Hon J. (Cardiff SE)

  Hughes, Mark (Durham)

  Rowlands,Ted

  Callaghan, Jim (Middleton & P)

  Hughes, Robert (Aberdeen North)

  Ryman, John

  Campbell, Ian

  Hughes, Roy (Newport)

  Sandelson, Neville

  Campbell-Savours, Dale

  Janner, Hon Greville

  Sever, John

  Carmichael, Neil

  Jay, Rt Hon Douglas

  Sheerman, Barry

  Cartwright, John

  John, Brynmor

  Shore, Rt Hon Peter (Step and Pop)

  Clark, Dr David (South Shields)

  Johnson, James (Hull West)

  Silkln, Rt Hon John (Deptford)

  Cocks, Rt Hon Michael (Bristol S)

  Johnson, Walter (Derby South)

  Silkin, Rt Hon S. C. (Dulwich)

  Cohen, Stanley

  Johnston, Russell (Inverness)

  Silverman, Julius

  Concannon, Rt Hon J. D.

  Jones, Rt Hon Alec (Rhondda)

  Smith, Rt Hon J. (North Lanarkshire)

  Conlan, Bernard

  Jones, Dan (Burnley)

  Snape, Peter

  Cowans, Harry

  Kaufman, Rt Hon Gerald

  Soley, Clive

  Spearing, Nigel

  Crowther, J. S.

  Kerr, Russell

  Spriggs, Leslie

  Cryer, Bob

  Kilroy-Sllk, Robert

  Steel, Rt Hon David

  Cunliffe, Lawrence

  Lambie, David

  Stewart Rt Hon Donald (W Isles)

  Cunningham, George (Islington S)

  Lamborn, Harry

  Stoddart, David

  Cunningham, Dr John (Whitehaven)

  Leadbitter, Ted

  Stott, Roger

  Dalyell, Tarn

  Lelghton, Ronald

  Strang, Gavin

  Davidson, Arthur

  Lestor, Miss Joan (Eton & Slough)

  Straw, Jack

  Davies, Rt Hon Denzil (Lianelli)

  Lewis, Ron (Carlisle)

  Summerskill, Hon Dr Shirley

  Davies, Ifor (Gower)

  Litherland, Robert

  Taylor, Mrs Ann (Bolton West)

  Davis, Clinton (Hackney Central)

  Lofthouse, Geoffrey

  Thomas, Jeffrey (Abertillery)

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

  Lyon, Alexander (York)

  Thomas, Mike (Newcastle East)

  Deakins, Eric

  Lyons, Edward (Bradford West)

  Thomas, Dr Roger (Carmarthen)

  Dean, Joseph (Leeds West)

  McCartney, Hugh

  Thorne, Stan (Preston South)

  Dempsey, James

  McDonald, Dr Oonagh

  Tilley, John

  Dewar, Donald

  McGuire, Michael (Ince)

  Tinn, James

  Dixon, Donald

  McKay, Allen (Penistone)

  Torney, Tom

  Dobson, Frank

  McKelvey, William

  Varley, Rt Hon Eric G.

  Douglas, Dick

  MacKenzie, Rt Hon Gregor

  Wainwright, Richard (Colne Valley)

  Douglas-Mann, Bruce

  Maclennan, Robert

  Walker, Rt Hon Harold (Doncaster)

  Dubs, Alfred

  McMillan, Tom (Glasgow, Central)

  Watkins, David

  Dunnett, Jack

  McNaily, Thomas

  Weetch, Ken

  Dunwoody, Mrs Gwyneth

  Magee, Bryan

  Wellbeloved, James

  Eadie, Alex

  Marks, Kenneth

  Welsh, Michael

  Eastham, Ken

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

  White, Frank R. (Bury & Radcliffe)

  Edwards, Robert (Wolv SE)

  Marshall, Dr Edmund (Goole)

  White, James (Glasgow, Pollok)

  Ellis, Raymond (NE Derbyshire)

  Marshall, Jim (Leicester South)

  Whitehead, Phillip

  Ellis, Tom (Wrexham)

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

  Whitlock, William

  Ennals, Rt Hon David

  Maxton, John

  Wigley, Dafydd

  Evans, loan (Aberdare)

  Maynard, Miss Joan

  Willey, Rt Hon Frederick

  Evans, John (Newton)

  Meacher, Michael

  Williams, Rt Hon Alan (Swansea W)

  Ewing, Harry

  Mellish, Rt Hon Robert

  Williams, Sir Thomas (Warrington)

  Field, Frank

  Mikardo, Ian

  Wilson, Rt Hon Sir Harold (Huylon)

  Fitch, Alan

  Millan, Rt Hon Bruce

  Wilson, William (Coventry SE)

  Flannery, Martin

  Miller, Dr M. S. (East Kilbride)

  Winnick, David

  Fletcher, L. R. (Ilkeston)

  Mitchell, Austin (Grimsby)

  Woolmer, Kenneth

  Fletcher, Ted (Darlington)

  Mitchell, R. C. (Soton, Itchen)

  Wright, Sheila

  Foot, Rt Hon Michael

  Morris, Rt Hon Alfred (Wythenshawe)

  Young, David (Bolton East)

  Ford, Ben

  Morris, Rt Hon Charles (Openshaw)

  Forrester, John

  Morris, Rt Hon John (Aberavon)

  TELLERS FOR THE AYES:

  Foster, Derek

  Moyle, Rl Hon Roland

  Mr. Donald Coleman and

  Foulkes, George

  Newens, Stanley

  Mr, George Morton.

  NOES

  Adley, Robert

  Fowler, Rt Hon Norman

  Meyer, Sir Anthony

  Altken, Jonathan

  Fox, Marcus

  Miller, Hal (Bromsgrove & Redditchi

  Alexander, Richard

  Fraser, Rt Hon H. (Stafford & St)

  Mills, Iain (Meriden)

  Ancram, Michael

  Fraser, Peter (South Angus)

  Mills, Peter (West Devon)

  Arnold, Tom

  Fry, Peter

  Mitchell, David (Basingstoke)

  Aspinwall, Jack

  Gardiner, George (Reigate)

  Moate, Roger

  Atkins, Robert (Preston North)

  Gardner, Edward (South Fylde)

  Moiyneaux, James

  Atkinson, David (B'mouth, East)

  Garel-Jones, Tristan

  Montgomery, Fergus

  Baker, Kenneth (St. Marylebone)

  Goodhew, Victor

  Morgan, Geraint

  Baker, Nicholas (North Dorset)

  Gorst, John

  Morris, Michael (Northampton, 3th)

  Beaumont-Dark, Anthony

  Gow, Ian

  Morrison, Hon Charles (Devizes)

  Bell, Sir Ronald

  Gower, Sir Raymond

  Morrison, Hon Peter (City of Chester)

  Bendall, Vivian

  Grant, Anthony (Harrow C)

  Mudd, David

  Benyon, Thomas (Abingdon)

  Gray, Hamish

  Murphy, Christopher

  Benyon, W. (Buckingham)

  Greenway, Harry

  Myles, David

  Berry, Hon Anthony

  Grieve, Percy

  Neale, Gerrard

  Best, Keith

  Griffiths, Eldon (Bury St Edmunds)

  Needham, Richard

  Bitten, Rt Hon John

  Griffiths, Peter (Portsmouth N)

  Nelson, Anthony

  Biggs-Davison, John

  Grist, Ian

  Neubert, Michael

  Blackburn, John

  Grylls, Michael

  Newton, Tony

  Blaker, Peter

  Gummer, John Selwyn

  Nott, Rt Hon John

  Body, Richard

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

  Oppenheim, Rt Hon Mrs Sally Osborn, John

  Bonsor, Sir Nicholas

  Hamilton, Michael (Salisbury)

  Osborn, John

  Boscawen, Hon Robert

  Hampson, Dr Keith

  Page, John (Harrow, West)

  Bottomley, Peter (Woolwich Wesl)

  Hannam, John

  Page, Rt Hon Sir R. Graham

  Bowden, Andrew

  Haselhurst, Alan

  Page, Richard (SW Hertfordshire)

  Boyson, Dr Rhodes

  Hastings, Stephen

  Parkinson, Cecil Parrls, Matthew

  Braine, Sir Bernard

  Havers, Rt Hon Sir Michael

  Parris, Matthew

  Bright, Graham

  Hawksley, Warren

  Patten, Christopher (Bath)

  Brinton, Tim

  HeddiG, John

  Patten, John (Oxford)

  Brittan, Leon

  Henderson, Barry

  Pattie, Geoffrey

  Brocklebank-Fowler, Christopher

  Heseltine, Rt Hon Michael

  Pawsey, James

  Brown, Michael (Brigg & Sc'lhorpe)

  Hicks, Robert

  Percival, Sir Ian

  Browne, John (Winchester)

  Higgins, Rt Hon Terence L.

  Pollock, Alexander

  Bruce-Gardyne, John

  Hogg, Hon Douglas (Grantham)

  Porter, George

  Bryan, Sir Paul

  Hooson, Tom

  Powell, Rt Hon J. Enoch(S Down)

  Buchanan-Smith, Hon Allck

  Hordern, Peter

  Prentice, Rt Hon Reg

  Buck, Antony

  Howell, Ralph (North Norfolk)

  Price, David (Eastleigh)

  Budgen, Nick

  Hunt, David (Wirral)

  Prior, Rt Hon James

  Bulmer, Esmond

  Hunt, John (Ravensbourne)

  Proctor, K. Harvey

  Burden, F. A.

  Irving, Charles (Cheltenham)

  Rathbone, Tim

  Butcher John

  Johnson Smith, Geoffrey

  Rees, Peter (Dover and Deal)

  Butler Hon Adam

  Jopling, Rt Hon Michael

  Rees-Davies, W. R.

  Cadbury, Jocelyn

  Joseph, Rt Hon Sir Keith

  Renton, Tim

  Carlisle, John (Luton West)

  Kaberry, Sir Donald

  Rhodes, James, Robert

  Carlisle, Kenneth (Lincoln)

  Kershaw, Anthony

  Rhys Wiliiams, Sir Brandon

  Carlisle, Rt Hon Mark (Runcorn)

  Kimball, Marcus

  Ridley, Hon Nicholas

  Chalker, Mrs Lynda

  King, Rt Hon Tom

  Ridsdale, Juliian

  Chapman, Sydney

  Kitson, Sir Timothy

  Rifkind, Malcolm

  Churchill, W. S.

  Knight, Mrs Jill

  Roberts, Michael (Cardiff NW)

  Clark, Hon Alan (Plymouth, Sutton)

  Knox, David

  Roberts, Wyn (Conway)

  Clark, Sir William (Croydon South)

  Lamont, Norman

  Ross, Wm. (Londonderry)

  Clarke, Kenneth (Rushcliffe)

  Lang,Ian

  Rossi, Hugh

  Clegg, Sir Walter

  Langford-Holt, Sir John

  Rost, Peter

  Colvin, Michael

  Latham, Michael

  Royle, Sir Anthony

  Cope, John

  Lawrence,Ivan

  Sainsbury, Hon Timothy

  Cormack, Patrick

  Lawson, Nigel

  St. John-Stevas, Rt Hon Norman

  Corrie, John

  Lee, John

  Scott, Nicholas

  Costain, A.P.

  Le Marchant, Spencer

  Shaw, Michael (Scarborough)

  Crltchley, Julian

  Lennox-Boyd, Hon Mark

  Shelton, William (Streatham)

  Crouch, David

  Lewis, Kenneth (Rutland)

  Shepherd, Colin (Hereford)

  Dickens, Geoffrey

  Lloyd, Ian (Havant & Waterloo)

  Shepherd, Richard (Aldridge-Br hills)

  Dorrell, Stephen

  Lloyd, Peter (Fareham)

  Shersby, Michael

  Douglas-Hamilton, Lord James

  Loveridge, John

  Silvester, Fred

  Dover, Denshore

  Luce, Richard

  Skeet, T. H. H.

  du Cano, Rt Hon Edward

  Lyell, Nicholas

  Speed, Keith

  Dunn, Robert (Dartford)

  McCrindle, Robert

  Speller, Tony

  Dykes, Hugh

  Macfarlane, Neil

  Spence, John

  Eden, Rt Hon Sir John

  MacKay, John (Argyll)

  Splcer, Michael (S Worcestershire)

  Eggar, Timothy

  McNair-Wllson, Michael (Newbury)

  Sproat, Iain

  Elliott, Sir William

  McNair-Wilson, Patrick (New Forest)

  Squire, Robin

  Emery, Peter

  McQuarrie, Albert

  Stainton, Keith

  Fairbairn, Nicholas

  Madel, David

  Stanbrook, Ivor

  Fairgrieve, Russell

  Major, John

  Stanley, John

  Faith, Mrs Sheila

  Marlow, Tony

  Steen, Anthony

  Farr, John

  Marshall, Michael (Arundel)

  Stevens, Martin

  Fell, Anthony

  Mather, Carol

  Stewart, Ian (Hitchin)

  Fenner, Mrs Peggy

  Maude, Rt Hon Angus

  Stewart, John (East Renfrewshire)

  Finsberg, Geoffrey

  Mawby, Ray

  Stokes, John

  Fisher, Sir Nigel

  Mawhinney, Dr Brian

  Stradllng Thomas, J.

  Fletcher, Alexander (Edinburgh N)

  Maxwell-Hyslop, Robin

  Tapsell, Peter

  Fookes, Miss Janet

  Mayhew, Patrick

  Taylor, Teddy (Southend East)

  Forman, Nigel

  Mellor, David

  Tebbit, Norman

  Temple-Morris, Peter

  Waddington, David

  Wickenden, Keith

  Thatcher, Rt Hon Mrs Margaret

  Wakeham, John

  Wiggin, Jerry

  Thomas, Rt Hon Peter (Hendon S)

  Waldegrave, Hon William

  Wilkinson, John

  Thompson, Donald

  Walker, Rt Hon Peter (Worcester)

  Wiiliams, Deiwyn (Montgomery)

  Thorne, Neil (Ilford South)

  Walker, Bill (Perth & E Perthshire)

  Winterton, Nicholas

  Thornton, Malcolm

  Walker-Smith, Rt Hon Sir Derek

  Wolfson, Mark

  Townend, John (Bridlington)

  Walter, Garry

  Young, Sir George (Acton)

  Townsend, Cyril D. (Bexleyheath)

  Walters, Dennis

  Younger, Rt Hon George

  Trippler, David

  Ward, John

  Trotter, Neville

  Watson, John

  TELLERS FOR THE NOES

  van Straubenzee, W. R.

  Wells, John (Maidstone)

  Mr. John MacGregor gnd

  Vaughan, Dr Gerard

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

  Mr. Peter Brooke.

  Viggers, Peter

  Whitney, Raymond

  Question accordingly negatived.

Clause 2

  DEFINITION OF "PUBLIC SERVICE VEHICLE"
  Mr. Kenneth Clarke: I beg to move amendment No. 1, in page 2, line 38, leave out from 'tramcar' to end of line 5 on page 3 and insert
  'which—

  (a) being a vehicle adapted to carry more titan eight passengers, is used for carrying passengers for hire or reward; or

  (b) being a vehicle not so adapted, is used for carrying passengers for hire or reward at separate fares in the course of a business of carrying passengers.

  (2) For the purposes of subsection (1) a vehicle "is used" as mentioned in paragraph (a) or paragraph (b) of that subsection if it is being so used or if it has been used as mentioned in that paragraph and that use has not been permanently discontinued.'.
  In Committee we had considerable discussion about the definition of a public service vehicle as set out in clause 2, and it was generally agreed that it was unsatisfactory and could be improved. As a result, we are bringing forward this drafting amendment, which in no way changes the meaning of the clause. It does not affect the debates in Committee. It is a tidying up of the way in which the definition is presented. This is a drafting amendment, which meets the undertakings that I gave in Committee, and I hope that it will be generally acceptable to the House.
  Mr. Booth: I agree with the Parliamentary Secretary. The amendment is a step forward, in that it makes the meaning clearer. I hope that it will be accepted by the House.
  Amendment agreed to.
  Mr. Vivian Bendall: I beg to move amendment No. 4, in page 3, line 24, at end insert
  1284
  'such costs to be based on the Motoring and Cycling Index'.
  Clause 2 causes me great concern. As I understand it, the Government will have no control over charges, the way in which charges are made, or how they are indexed. The clause provides that wear and tear can be included, but how much wear and tear can be included? How will the Government check on the amounts that are charged for car sharing?
  The other danger is that as people discover that there is no guide on the charges that can be made they will start a business of car sharing. Naturally, that concerns people in the licensed taxi trade who, in effect, have their arms tied because the tariff is set by the Government. It would be difficult for them to be in open competition with anyone who wished to start a business, because there would be no check on that person's charges.
  Another problem that has emerged—minicabs were discussed at length yesterday—is that many minicab owners and minicab companies—although illegally—are installing two-way radios. If people were to go into business on a car-sharing basis, and if two-way radios were used, immense problems could occur for the licensed trade.
  There should be some check, guide or index to which car sharing owners could relate regarding charges. I agree that there is a difficulty, but some safeguards must be provided. If not, there will be immense problems for the licensed trade, and particularly for London cab drivers. I urge the Minister to consider the matter again.
  Mr. Fowler: I appreciate my hon. Friend's desire to ensure that drivers tie the increase in their passenger contribution to some sort of index. He did not specify the type of index.
  Car sharing benefits ordinary people. It is a practical way in which they can reduce their cost of living, and in which

  1285
  they can make better use of their cars. Car sharing is already being practised in many parts of the country, particularly in rural areas, but it also has application in the commuter context. If we could persuade people who now drive into London to share a car there would be an impact in respect both of energy saving and of congestion.
  There is no difference between Conservative Members and Labour Members on the importance of car sharing. The Transport Act 1978 loosened the car-sharing provision. The only point that divides my hon. Friend the Member for Ilford, North (Mr. Bendall) and myself is how we seek to define the costs, and how they are shared. We have given much thought to that. At one stage we believed that mileage rates should be fixed for different types of cars.
  I am persuaded that if we intend to encourage tar sharing we must keep restrictions to a minimum and have as little formality and red tape as possible. The Bill sets out exclusions—for example, it will not be possible to make a profession of car sharing in the same way as taxi drivers. We are seeking to enable sensible and amicable arrangements to be made. We do not want people to be worried about detailed indexes, formulae or restrictions.
  9 pm
  I am encouraged, because all the reports that we have received so far seem to indicate that there have been no problems. For example, there is no problem about insurance. It is right that the public should know that the insurance conditions now cover car sharing. Car sharing can make an important contribution. We shall examine the arrangements as time passes, as my hon. Friend the Member for Ilford, North would expect. At this stage it would be wrong to encumber the new system with too many restrictions. I fear that I cannot accept my hon. Friend's amendment.
  Mr. Prescott: The Minister has given an assurance about car sharing. Is he aware that when the previous Labour Government initiated the rural route experiment, insurance companies charged more for premiums to cover the sharing provisions? Did the right hon. Gentleman take that into account before he eave his assurance?
  Mr. Fowler: I seek the leave of the House to reply, Mr. Deputy Speaker. The example that the hon. Gentleman has given will not arise generally. I have spoken to representatives of insurance companies. I shall take up the hon. Gentleman's example with them. I was not talking about premiums. I received an assurance from the companies that no difficulties would stand in the way of car sharing. In other words, I have been told that insurance policies cover car sharing. It was feared that insurance cover did not do so. The advice of the companies, and of insurance associations, is that those fears are unfounded and that the public should not be afraid to share cars. The Government hope that when the Bill becomes law car sharing will increase. I believe that such arrangements will ease congestion and benefit transport generally.
  Mr. Bendall: As my right hon. Friend has given me an assurance that he will undertake reviews from time to time, and in order to save the time of the House, I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 3

  CLASSIFICATION OF PUBLIC SERVICE VEHICLES AS STAGE, EXPRESS OR CONTRACT CARRIAGES
  Mr. Booth: I beg to move amendment No. 5, in page 4, line 35, leave out "(i)".
  Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to discuss the following amendments:

  No. 6, in page 4, line 35, leave out "30" and insert "40".

  No. 7, in page 4, line 35, leave out "30" and insert "35".

  No. 8, in page 4, line 37, leave out from "up;" to and"in line 40.

  No. 9 in page 4, line 39, leave out "30" and insert "40".

  Mr. Booth: If amendments Nos. 5 and 8 are taken together, they remove from the Bill a special definition of what constitutes an express bus service. It is a

  1287
  definition that has never previously existed in our law or in that of any other country. I have tried to think of a term or a word that would describe it. The best word is probably "dog-leg". I am referring to a route which involves picking a passenger up and putting him down, during which time he and the vehicle travel through a place that is 30 miles from the place at which he was picked up or put clown. That is the meaning of the provision. Therefore, one can have a dog-leg shaped course conveying each passenger, as the scheme works for each passenger, and not in respect of total routing, and still come within the definition of express service.
  There is a better way of looking at this matter, and that is to think of the scheme in terms of an area bounded by two arcs, each of 30-mile radius. It does not matter whether the centres of the arcs are less than 30 miles apart. Provided that one travels from the centre of one arc to the centre of the other, with the two bus stops passing outside the point where the arcs intersect, an operator can ensure that the service is classed as an express service.
  That is a rather complex concept by any criterion, and it is one that does not serve to meet the objection that I raised with regard to the initial definition in the Bill. In practice our objections to the way in which express service is defined are so substantial that they wipe out any limited advantage that it might have.
  My first objection is quite straightforward. If an operator wishes to avoid submitting an application for a road service licence, he will be able to construct his route in a way that will ensure that it can convey passengers, or a passenger, more than 30 miles, thereby avoiding the need for a road service licence. I do not think that such a provision is desirable in legislation.
  The other and more important objection is that this provision is almost unenforceable if one thinks of it in terms of realistic routing. Any operator who realistically wants to construct his route for the convenience of the public in whose area he is travelling in such a way as to allow someone to get off the bus after travelling 30 miles must keep on the bus anyone else who has embarked within
  1288
  the 30-mile limit. He must not let such people off at that stop, otherwise he ceases to operate an express service.
  I do not envy the task of the conductors or drivers engaged in express operations in trying to keep people on the bus until they have travelled more than 30 miles from the point at which they got on. Some people may be prepared to pay the fare for 31 miles because it offers the advantage of an express service, but I suggest that they will make darned sure that they get off when the bus stops at their destination.
  Another objection is that the scheme will be almost impossible to operate in a reasonable way. Therefore, I prefer the much simpler definition of express which would remain in the Bill if amendments Nos. 5 and 8 were carried. In that case, an express service would be one which carried passengers a set distance from the point at which they got on to the point at which they got off.
  I shall not comment on the circular routes that exist in some parts of the country, including my own constituency. But in that case, some people must travel around Morecambe Bay, which is a much greater distance than the distance across the bay, in order to travel to Barrow-in-Furness. That has occurred because no Government have had the wisdom to build the Morecambe Bay barrage. I make that as a non-party point.
  Amendment No. 7 extends the distance from 30 to 35 miles. Unlike the argument in Committee, the argument is now one of degree rather than of principle. I prefer the argument of principle, but I cannot advance it on this amendment. Given that one will exclude express services as defined in the Bill from the test of the traffic commissioners as to whether or not they are in the public interest, the question is whether the distance should be 30 or 35 miles.
  It is no part of the Opposition's argument that somebody should not be allowed to operate an express service that stops at distances less than 30 or 35 miles. We are saying that where that is done the traffic commissioner should consider the matter. If he is convinced that it is a reasonable service, with no adverse public effects or adverse effects on the maintenance of the stage carriage service.

  1289
  the express service should be allowed to operate.
  We are arguing only about where there should be applications for road service licences. We are not saying that there should be any prohibition on express services which allow passengers to disembark at distances between 30 and 35 miles.
  Up to 35 miles there is a greater likelihood of the introduction of the express service cutting across the cross-subsidised services. Therefore, it is proper that those who wish to operate that service, like those who operate a stage carriage service, should be subject to an application for a road service licence.
  Another consideration is that when travelling further than 35 miles passengers are more likely to use the stage carriage services to take them to the express bus stop. Some people may take a bus, even if it is going in the opposite direction, to the nearest terminus to catch the express bus. Up to distances of 35 miles, express services are more likely to affect the network arrangements, and even the single service arrangements, that have been subject to consideration by local authorities under their transport policies and plans.
  For all those reasons, it makes sense to widen the range of services that are subject to road service licences, leaving the issuing of such licences to the good sense of the traffic commissioner. It makes sense for a service to be run with stopping points of up to 35 miles, rather than to work on a 30-mile definition. It is an argument of degree rather than of principle.
  On the dog-leg, or intersecting arc, description of what constitutes an express service and a stage carriage, it is almost impossible to operate a service. The only operators who will gain any advantage from it are those who are prepared to create artificial routes so that they are not subject to road service licensing requirements.
  Mr. Penhaligon: I wish to raise the case of the ultimate dog-leg, namely, where a person returns to the point from which he started. I am referring to the day excursion, which is common in my part of the country for people on holiday. Someone coming to Newquay or Perranporth on holiday often takes a coach trip
  1290
  around the countryside, and at the end of the day he returns to precisely the point from which he started.
  Ironically and incredibly, that qualifies as an express service under this definition, provided that at some time during the day the bus travels more than 30 miles in a straight line from its departure point.
  9.15 pm
  I do not believe that the Government have malice. However, the clause could smash the only profitable part of the coach industry that exists in Cornwall. We have discussed before how few bus routes make a profit. One profitable activity in Cornwall is carrying passengers on day trips during the summer. The routes are licensed. They are highly fought over and much sought after: They are the backbone that keeps together the rudiments of a private bus service that still exists within the county.
  The pattern of the holiday industry is that people often come to the tourist areas of Cornwall by coach from the Midlands, London and other places. They arrive on a Saturday and the coach stays with them until the following Saturday. During the week, the driver and the coach are doing nothing. On marginal costings, the coach company could run a service in competition with local operators at low cost. Those coaches can be used at the moment to take on day trips the passengers that they have brought to the area. They cannot advertise the fact that they are going to Land's End. Only a licensed local operator can offer that service. I cannot believe that an amendment could not be produced to prevent what is defined as an express service from applying to people who arrive back from where they started. I am sure that is not what the Minister intended as an express service. It is not my understanding of an express service.
  I support the clause, but it is crazy that this one valuable part of the travel industry in Cornwall looks like being smashed for a general principle which I cannot believe was intended by the Minister. The repercussions on public transport in Cornwall will be substantial. I would vote to make the journey longer. Cornwall is not a wide county. If the distance could be increased to 50 miles, that would extend into Devon. No one in his right mind on holiday in Cornwall would go to Devon. That would perhaps

  1291
  largely solve the problem. The further the distance can be stretched, the fewer routes will be available for coaches coming into the area.
  As a percentage of the total British travel industry this must represent 0·1 per cent. In the peculiar financial structure of Cornwall, it seems that the only people who do not make money out of holiday visitors are those living locally. There seems a danger that the clause will unwittingly have the effect I have outlined on the one lucrative travel industry that exists.
  Mr. Bendall: I rise because my amendments are linked with this group. My concern, like that of the hon. Member for Truro (Mr. Penhaligon), is specific. I am concerned about the area between Heathrow and Gatwick airports, operated, to a large extent, by the London black cab service. If express operators are able to carry on business between those airports, it will affect the trade of the black cabs.
  When almost a year ago the Government granted an increase in tariffs for taxis, they saw fit to reduce the double tariff that operated out of Heathrow airport to a tariff and a half. That obviously affected those taxi drivers operating out of Heathrow airport. If they are to be further restricted by express carriages operating between Heathrow and Gatwick, their livelihood and income are liable to be affected.
  Another problem at Heathrow will have a serious effect. There has been a High Court decision which was taken to appeal with regard to the operating of minicabs out of Heathrow airport. Lord Denning made clear, on appeal, that there were abuses at London airport by minicabs and he suspenthd a certain number of people found not to be operating within the law.
  All these things will add up, and now we have the additional problem of people running express carriages between the two airports. This could affect the livelihood of taxi drivers. I cannot see why this clause could not be tidied up in order to exclude the airports. If that were done it would resolve the problem.
  Mr. Selwyn Gummer: I rise only to oppose the idea that we should make
  1292
  the distance even longer than it is. If one must travel 30 miles by road in a rural area one finds that that involves an enormous amount of travelling. If the 30-mile limit is extended even further it means that many of the services that we in Suffolk hope will arise from the implementation of the Act will not be possible.
  If the distance is increased to 40 miles the situation is even worse. The House contains a large number of hon. Members representing metropolitan areas. Therefore, we who represent rural areas must place on record the fact that in those areas we have long winding roads. To extend the 30-mile limit to 35 miles would have an entirely deleterious effect.
  Mr. Prescott: Whether we represent urban or rural areas, the fact remains that Labour Members have placed a great deal of emphasis on the rural argument. We believe that this measure will make the situation much worse in rural areas.
  Mr. Gummer: Although these arguments are put by the Opposition simply because they are in opposition, some of us live in rural areas and we put the arguments because the problem affects us.
  Mr. Kenneth Clarke: We are concerned with those features of the bus system that we intend to take out of road service licensing altogether, wherever they may be in the country. I shall deal with the individual local points in the course of my speech.
  Basically it is the Government's position that there are two categories of service for which there is no need to have road service licensing. One is the long-distance excursion and tour—that which does a circular journey returning to the place where it started. The second is the long-distance express service, which takes each passenger a distance of at least 30 miles from his starting point. Basically the policy of this part of the Bill is to take out of quantity licensing and road service licensing the long-distance excursion tours and the express services, because we see no worthwhile public interest in keeping those within the traffic commissioners' set-up.
  I shall deal with the English aspect of excursions and tours and come to the

  1293
  Cornish case later. Generally, our argument is to save bureaucracy and needless objections by competitors when there is no particular interest in having licensing arrangements for them.
  I turn to the question of inter-city express services and others which make long-distance journeys through urban and rural areas, taking people for considerable distances before setting them down. We want to encourage the growth of that type of service. We believe that the best and cheapest way of travelling by public transport in this country between major centres of population is by express bus services. We are encouraged by all the signs, at the moment, that people are contemplating extending their services in this field. We welcome the opportunity that will be given by the Bill for people to provide good express services between cities. If something equivalent to the United States' Greyhound network can be established in this country, it will provide a valuable addition to our passenger transport, particularly for low-cost travel for students and others who want to cut back on fares. We shall resist any attempt to eliminate them.
  What sort of distance should one choose above which the services will be taken out of road service licensing? The choice of any distance involves judgment. People make an application for their particular area. My hon. Friend the Member for Eye (Mr. Gummer) mentioned Suffolk and the rural areas that he represents. Given the huge geography of East Anglia, he is in favour of the retention of 30 miles. My hon. Friend the member for Ilford, North (Mr. Bendall) mentioned a service that runs between Heathrow and Gatwick. I am anxious to do everything possible for the taxi trade. I attempted to meet a representation yesterday. However, many air travellers look forward to the provision of an express coach service to Heathrow and Gatwick.
  We tried to hit on the right distance to fit Britain generally. We began with 25 miles. However, many representations were made to the effect that 25 miles was not long enough. Most of them came not from the public but from bus and coach operators. They felt that public interest demanded that they should have protection for another five miles. Some good general points were made about the
  1294
  damaging effects that that limit would have on stage carriage and on areas that need protection. In response to consultation, we therefore move to a 30-mile limit.
  If one accepted the various figures suggested in these amendments, long-distance and important express passenger services would be brought back into the licensing network. It is contrary to our policy to bring such services back into licensing. Operators have responded to our suggestions. I advise the House that we do not wish to go beyond that 30-mile limit.
  I appreciate the particular problems of Cornwall. To a certain extent those problems arise as a result of its peculiar shape. In particular, the area depends heavily on summer tourist traffic. The amount is probably out of proportion to that found in any other part of the country. My hon. Friends the Members for Cornwall, North (Mr. Neale) and for Bodmin (Mr. Hicks) made arrangements for me to attend a meeting at a hotel in Liskeard. A large number of bus and coach operators attended that meeting. Some of them may have been constituents of the hon. Member for Truro (Mr. Penhaligon). Not all those who attended would have come from Bodmin.
  Those operators pressed exactly the same point at considerable length. I appreciate that they are heavily dependent on summer traffic. They use coaches in the summer that fulfil school contracts during the winter. They fear that coaches from far away will suddenly bring passengers from Manchester and will spend a week in Cornwall making tours of over 30 miles up and down the peninsula.
  If we were to meet that problem we should undermine our policy and its effect on the rest of Britain. I examined some of the propositions. I tried to argue with those that I met and to persuade them that the damage would not be as great as they had initially feared. I found no example of anyone supporting a village stage carriage service.
  The vehicles used during summer peak periods to run excursions and tours do not, by definition, provide stopping services to villages. They are at a considerable advantage to coach operators from

  1295
  outside. Indeed, local operators might consider such operators as coming from abroad. Their garages and maintenance facilities are on the spot. Their drivers know the geography of the area and have better knowledge of the market. Local operators have a head start on outside competitors.
  If a firm in Manchester, Birmingham or Warrington wished to move in on a large scale, it would have to set up a branch operation in the summer, miles away from its base. It would have to try to get in on the Cornish trade.
  Many people were not reassured. Many believe that they will face serious problems, but there are others who accept that they will have to do what they can to respond. In practice it may not be as bad as they fear.
  9.30 pm
  I am glad to say that in Cornwall I found a number of operators—not always popular with their colleagues at the meeting—who said that they were looking forward to the Bill and had been waiting for it for years. They were the people who had fewer road service licences under the present arrangements and were being prevented from having more by the other operators at that meeting. No one wishes to undermine or destroy the Cornish bus and coach service, or those provided in similar districts. There are some coach and bus services on the West Coast of Scotland and in some of the tourist resorts along the coast.
  Having listened to those operators and considered whether we could revise the 30-mile limit, my right hon. Friend and I came to the conclusion that the dangers were not so great as feared and do not justify transforming the system for the whole of the United Kingdom. If we went beyond a 30-mile limit we would undermine the policy in the Bill. We believe that it is right, for the reasons that I put forward at the beginning, that we should take these long-distance excursions and tours and the express services out of the licensing system altogether. It is a needless restraint on the development of new services.
  Amendment negatived.

Clause 4

  ROAD SERVICE LICENCES
  Mr. Kenneth Clarke: I beg to move amendment No. 10, in page 6, line 4 at beginning insert
  'Subject to section 9(1A),'.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 13.
  Mr. Clarke: This amendment deals with a small point that was drawn to my attention by my right hon. Friend the Member for Bournemouth, West (Sir J. Eden) after representations that he had received from a constituent. This was an occasion when an hon. Member brought to the attention of Ministers a problem that the drafting of the Bill had presented. There was no answer to the point that my hon. Friend made and I undertook, therefore, to bring forward an amendment to meet the point.
  As the Bill stands, a travel agent or tour organiser who organises a long-distance excursion or tour can provide that tour even though he himself does not have an operator's licence so long as he hires a vehicle and a driver from a licensed operator. However, because of the requirement in subsection (4) that a road service licence holder must also have an operator's licence, anyone running a service that requires a licence must also have an operator's licence.
  My hon. Friend found an example of a travel agent/small tour organiser who sometimes runs local tours within the 30-mile range by hiring a coach and a driver from a local operator who is licensed. However, because of the mistake of wording the travel agent would not have been able to obtain a road service licence unless she herself had an operator's licence. That would require her having to employ a competent transport manager and fulfilling the various other requirements of the Bill. That was not an intended consequence of the Bill. There is no policy reason for it. These amendments seek to change that and enable short-distance excursions and tours to be operated without the requirement to hold an operator's licence so long as the vehicle and the driver are provided by a licensed

  1297
  operator, so that public safety is satisfied. I therefore ask the House to approve the amendment.
  Amendment agreed to.

Clause 5

  GRANT OF ROAD SERVICE LICENCES
  Mr. Prescott: I beg to move amendment No. 11, in page 7, line 10, after 'authorities', insert 'or some other person'.
  The amendment deals with how the information is provided to the commissioners when they are issuing a road service licence. We are concerned about the public interest. In Committee we spent time arguing about the public interest and the definition of the clause, and I do not intend to go over that ground again this evening.
  In granting a road service licence the commissioners must consider the public interest. The clause deals with the information that the commissioners must consider in assessing an application for a road service licence. Subsection (3)(a) states that the commissioners must consider the relevant transport requirements of the area as a whole. Paragraph (b) states that they should consider:
  "any transport policies or plans which have been made by the local authorities".
  A great deal of such information, particularly TPPs, is prepared by local authorities. Local authorities may not necessarily provide the relevant information. The clause provides that the TPPs made by local authorities have to be drawn to the commissioners' attention by those authorities.
  The amendment seeks to add the words "or some other person". That would ensure that important information in the TPP, not only concerning matters with which the commissioners will deal in the application but also other relevant matters, may be provided by other persons.
  The amendment is simple. It seeks to ensure that if such information is not provided by an authority—we spent time in Committee on the different attitudes towards licence applications for bus services between local authorities and district councils arising from different
  1298
  transport policies and priorities—it can be provided by other persons.
  If a county authority does not provide such essential information to the commissioners it is possible for another person to do so. The Bill requires the commissioners to consider all the relevant information before granting the application. The amendment would provide the opportunity for anyone to provide such information to the traffic commissioners.
  Mr. Kenneth Clarke: We were expecting a Division. The Liberal Party spokesman entered the debate intending to divide the House. He listened to the argument and was so persuaded that he went away. I trust that the official Opposition will be as responsive to many of our arguments, which will save a great deal of time.
  It is not a good beginning. I am surprised that we are debating this matter again. We are rather splitting hairs. In Committee I thought that hon. Members were satisfied by the Government's response.
  The amendment will make no practical change. Subsection (3)(c) enables anyone to make any objection or representation that he wishes. It is open to a district council to point to a TPP produced by the county and urge it upon the commissioners. It will be perfectly proper for the commissioners to consider that.
  Subsection (3)(b) underlines the fact that county councils have a particular responsibility for transport. There is a duty on the commissioners to have regard to transport policies and plans brought to them by the county councils that made them and presented them to my right hon. Friend. It seems right to us as a matter of presentation that that particular duty of local authorities should be put in a special category in this list of matters to which the traffic commissioners must have regard.
  However, a member of the public who wishes to take out a TPP can do so. A member of the public might wish to refer to an out-of-date TPP, whereas a county council, if it brought forward a TPP, would be underlining to the commissioners that that was the one under which it was acting. Anyone may draw

  1299
  anything to the attention of the commissioners but I think that we are splitting hairs. I prefer the presentation of the Bill as it is and I hope that the hon. Member will be satisfied—as I thought he was in Committee—and withdraw his amendment.
  Mr. Prescott: We will certainly cooperate. We were hoping that there would be no more votes until the final stages of the debate. I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.

Clause 9

  GRANT OF ROAD SERVICE LICENCES FOR CERTAIN EXCURSIONS OR TOURS
  Amendment made No. 13, in page 11, line 6 at end insert—
  '(1A) Section 4(4) does not prevent a road service licence granted in pursuance of this section from having effect for the purposes of the provision of a service by means of a vehicle whose operator holds a PSV operator's licence granted by the traffic commissioners, for any traffic area, not being a licence which is for the time being of no effect by reason of its suspension.".—[Mr. Newton.]

Clause 12

  DESIGNATION OF TRIALS AREAS
  Mr. Fowler: I beg to move amendment No. 14, in page 12, line 33 at end insert—
  "(3A) Subject to subsection (4), the Minister may by order vary or revoke a designation order but shall not do so except on an application made to him by the local authority concerned; and the Minister—

  (a) on an application for an order varying a designation order, may at his discretion refuse the application or make the order applied for either with or without modifications; and

  (b) on an application for an order revoking a designation order may at his discretion refuse the application or make the order applied for.".

  Mr. Deputy Speaker: With this amendment it will be convenient to take the following amendments:
  No. 15, in page 12, line 33 at end insert—
  "(3A) No designation order shall be made for the whole or part of the area of a local authority which contains a district council operating a bus service unless that district council has signified its agreement in writing to the Minister."
  1300
  Government amendment No. 16.
  No. 17, in page 12, line 37, at end insert:
  "unless the local authority concerned applies to the Minister to revoke the order in which case the Minister shall revoke the order not later than 30 days after receiving the application."
  Government amendments Nos. 18 and 59 to 61.
  Mr. Fowler: This is an important group of amendments and they cover an area that we discussed at some length yesterday, when we considered the work of the traffic commissioners.
  Amendment No. 17 deals with trial areas and is the result of concern expressed in Committee about the revocation of trial areas. We agree that the original Bill was inflexible and that some county councils may have been discouraged from beginning an experiment for fear of the cost of reinstatement after as long as three years of an unsuccessful trial.
  We are, therefore, moving a group of amendments that will give flexibility in the minimum period in a trial area. Instead of the period being three years for all, it will be whatever period between two and five years is specified in the original designation order. That is a matter for discussion between the Government and the county council.
  The balance may be struck differently in different cases. In the other amendments with which we are dealing local authorities are more involved in the revocation procedure than they were under the original Bill. This follows concern expressed by my hon. Friend the Member for Meriden (Mr. Mills) in Committee. It is logical that if the initiative to start experiments comes from local authorities so should the initiative to bring them to an end.
  A further change is designed to encourage new providers of transport to engage in the investment in vehicles necessary for new stage carriage services. Such investors might be put off by the fear that there could be revocation before they had recouped their investment and that after revocation the licensing procedure would be exploited by their competitors to deprive them of their routes.
  There will, therefore, be an automatic right to a road service licence for anyone

  1301
  who has been providing an established service while the area was a trial area. This issue was thoroughly debated yesterday and I think that the House will be well aware of the input of these proposals.
  Mr. Prescott: We spent some considerable time discussing trial areas yesterday, as we did in Committee. Our concern is with the designation orders. We give a general welcome to the Government amendments that have been spelt out by the Minister. They are largely concerned with consultation rights, which we argued should be extended. The Government have gone some way to meet our wishes, particularly in regard to revocation and the variation of designation orders and to the period of application.
  9.45 pm
  We are anxious about what will happen if a designation order is shown not to be working. I welcome the reduction of the three-year period, although if an area is found to be in difficulties in less than three years action should be taken. The Minister argued that three years was the minimum that could be allowed for sufficient return on investment by the operators providing the service. The Minister's guarantees are welcome. If an operator finds that he cannot maintain a service and the trial area runs into difficulties the Minister will be prepared to give a road service licence to that operator. One does not need to worry too much about compensation for a bankrupt company, because no further help can be given to such a company.
  If the relevant local authorities believe that a trial area is not working they can make an application to the Minister. However, I understand that the Minister will not contemplate a period under two years. Only after between two and five years will any variation or revocation be considered by the Minister after an application from local authority. The proposition is an improvement and because of the time of night I shall not argue the two-year question.
  In amendment No. 15 we tried to give a veto to district bus authorities, of which there are 40 or 50. We felt that political difficulties could be caused in the designation of trial areas because many district councils are Labour-controlled in Conservative-controlled county areas. All
  1302
  bus authorities, whether Tory- or Labour-controlled, resent the possible imposition.
  The Government amendment gives district bus authorities further consultation rights. That is welcome. Another amendment provided for the revocation of an order within 30 days. That is an absolute way of saying that the Minister should act within 30 days. In view of the lateness of the hour we shall accept the Government's amendments and not press ours to a Division.
  Mr. Iain Mills: I thank the Minister and the Parliamentary Secretary for their swift and comprehensive reaction to the amendment tabled by my right hon. and hon. Friends in Committee. We withdrew the amendment as a result of assurances. The Minister has done an excellent job, particularly on the two-year issue. We were worried about possible problems and the need for flexibility. I thank the Minister for considering the needs of district councils, many of which have a need for more detailed consultation.
  Amendment agreed to.
  Amendments made: No. 16, in page 12, line 35, leave out 'of three years' and insert
  'specified in the order, as originally made, as the minimum period for which the order is to be in force, being a period of not less than two and not more than five years'.
  No. 18, in page 13, leave out lines 1 and 2.—[Mr. Newton.]

Clause 14

  DUTY TO PUBLISH PARTICULARS OF STAGE CARRIAGE SERVICES IN TRIAL AREAS
  Mr. Kenneth Clarke: I beg to move amendment No. 23, in page 14, line 9 after 'concerned', insert
  ', and to every district council in whose area passengers will be or are taken up or set down in the course of the service in question (including, in a case within paragraph (b), the service as proposed to be changed),'.
  This amendment meets the substance of one moved in Committee by my hon. Friend the Member for Meriden (Mr. Mills). Once again, it was based on his concern that the district councils should be properly recognised in the new structure that we are setting up. It requires that operators should let districts as well as counties know of changes in the pattern of services which result from the changes that we propose in the Bill. My

  1303
  right hon. Friend agreed to consider that point when it was made in Committee. It seems to us to be an entirely worthwhile suggestion. We hope that it will lead to a useful level of co-operation developing between district councils, on the one hand, and operators and county councils on the other. I am glad to honour the undertaking that my right hon. Friend gave. I recommend the amendment to the House.
  Mr. Booth: This amendment applies only to district councils in trial areas. They are in a special position when the trial is operating. I agree that they should be notified by operators if new services are to be brought into the areas or if services are to be withdrawn or changed. I hope that the proposal will lead to their making representations to the local and county authorities, which have the power to apply to Ministers for revocation. Where this happens, I hope that the Minister will be prepared to respond quickly. We know that there is a great deal at risk in this issue.
  The initial decision by the Minister on a previous amendment allows him to make a designation for varying periods of from two to five years. If, for example, he designated one county as being a trial area for five years and if, after a couple of years, district councils prevailed upon the county council in their part of the county to accept that this area operation was such a disaster that they wanted a revocation, there should be a quick response.
  Mr. Iain Mills: I thank my right hon. and hon. Friends for their comments in Committee. I wish to say how much Government supporters appreciate their action. We are glad about this demonstration of local democracy, which is so much part of the Government's philosophy.
  Amendment agreed to.

Clause 16

  CERTIFICATE OF INITIAL FITNESS (OR EQUIVALENT) REQUIRED FOR USE OF PUBLIC SERVICE VEHICLE.
  Mr. Booth: I beg to move amendment No. 25, in page 16, line 11, at end add—
  '(5) For the purpose of this section only a bus run by a local authority for providing
  1304
  transport in pursuance of arrangements made under any Education Act shall be treated as a Public Service Vehicle for the purposes of this section.'.
  The Bill, which has as one of its early purposes the definition of "public service vehicles", omits from the definition school buses run by school authorities. The purpose of the amendment is to make a school bus that is run by an education authority a public service vehicle solely for the purpose of the requirements of initial certificates of fitness under the Bill.
  The Opposition can see no reason why school buses run by school authorities should be excluded from a provision that applies to all vehicles which are designated as public service vehicles. I believe that that is a mistaken judgment in the Bill.
  I understand why the Government were especially sensitive, possibly when the Bill was being drafted, about school buses, in view of the b charaing provisions. I do not want to stir up that difficulty tonight. The argument for the amendment rests on a simple proposition which is unassailable—namely, that carrying children to school on a bus, the arrangements for which are made by school authorities using their own buses, is just as much a matter about which the House should be concerned. The vehicles should be as fit for that purpose as those carrying passengers where charges are made. Here I am not concerned with whether a charge is made. That seems to be irrelevant. The certificate of fitness has nothing to do with whether or not charges are made on buses; it is really the starting point at which, in the whole construction issue in relation to safety, it is ensured that the vehicle is a proper one for the purpose.
  Yesterday, in debating new clauses 1 and 8, we were concerned with the need for annual tests of public service vehicles. I am grateful to the Minister for pointing out on his new clause 1 at that time that by removing the bar in the 1972 Act to making test requirement provisions concerning public service vehicles he was going wider than public service vehicles as defined within this Bill and asking the House to give him power to require by regulation the testing of other vehicles.
  I make a plea on this amendment that if the Minister accepts the logic of making

  1305
  buses which run solely as school buses subject, as the amendment requires, to an initial certificate of fitness, he will accept, within the spirit of the definition of new clause 1 yesterday, that he should later follow this by regulations making them subject to annual tests as well.
  Mr. Fowler: I sympathise entirely with the right hon. Gentleman's intention. I would not plead that the safety requirements for school buses are particularly logical, but I argue that they have worked reasonably well over the years. It is not strictly true to say that the Bill is making any change in this respect. What we are doing is preserving the status quo. I think we have to consider the cost of any changes we seek to make, and I am advised that the amendment would impose considerable costs on local education authorities. I do not think that there is any doubt about that.
  The amendment would produce a rather curious change. It would require fitness; it would require all school buses to have a certificate of initial fitness, but it would not give the PSV examiners or certifying officers any powers to inspect vehicles once the certificate had been issued or to prohibit the driving of unfit vehicles. The amendment would apply to existing as well as new vehicles and might well require substantial refitting and even structural adaptations to most of the 800 or so school buses owned by local education authorities.
  My reaction to the right hon. Gentleman's proposals—and I certainly sympathise with what he is seeking to do—is twofold. First, I take the view that local authorities are responsible public bodies which can be trusted to ensure the safety of school children. Indeed, this is probably a point which the Opposition recognise. They are not, for example, seeking powers to examine school buses or to prohibit the driving of unfit vehicles, so by implication that point is accepted. I would add that the system whereby we have undoubtedly put this responsibility on local authorities has worked well.
  The scond point of which I wish to remind the House is that new clause 1 and the annual test for buses, which, as I announced yesterday, is to be implemented, will cover all school buses and that, I believe, is more relevant to the continued fitness of a vehicle than an initial certifi-
  1306
  cate of fitness. In other words, I claim that what we are doing in new clause 1, which we debated yesterday, has more relevance to the continued safety of school buses, in the concern as to which I am entirely at one with the right hon. Gentleman; clearly he is right in everything he says on that.
  I must conclude, therefore, that the costs resulting from this amendment would not be justified by any gain there might be in public safety. I would also claim that new clause 1 deals more satisfactorily with the problem about which the right hon. Gentleman and we are concerned.
  Mr. Booth: With the leave of the House, Mr. Deputy Speaker, I speak again. I totally retract anything I said that may have implied that the Bill created the problem of the school bus. I accept that previous transport legislation failed to grapple with the problem, and did not define the school bus run by a school authority as a public service vehicle.
  It was not the intention of my hon. Friends and me—
  It being Ten o'clock, the debate stood adjourned.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Transport Bill and the consideration of Lords Amendments to the National Heritage Bill may be proceeded with, though opposed, until any hour.—[Mr. Newton.]

  TRANSPORT BILL
  Question again proposed, That the amendment be made.
  Mr. Booth: It was not the intention of my hon. Friends and myself in addressing the amendment to convey the impression even by implication that we do not want as full and rigorous a testing procedure applied to the school bus run by the school authority as that applied to any other public service vehicle. We may have been remiss in not having introduced the point earlier, although it was raised in

  1307
  Committee by my hon. Friend the Member for Holborn and St. Pancras, South (Mr. Dobson).
  Our intention was to raise the question in the House in the hope of persuading the Minister that we want as full and rigorous a testing procedure as possible. If all local education authorities are running perfectly safe buses fit for carrying children, I cannot see why it should cost a lot of money to put the buses through the initial certificate of fitness procedure.
  The other question that arises is how the annual inspection requirements which the Minister is to introduce will be defined in respect of vehicles which have not been subject to the initial certificate of fitness procedure. Obviously, where there is no initial certificate, vehicles cannot be tested to see whether they are still of the standard required by that certificate.
  I appreciate what the Minister told the House about his intention to apply the
  1308
  annual test regulations to the vehicles. That is a considerable step forward. While I would not want it to be taken from anything I say that I am suggesting that local education authorities are not concerned about the safety of youngsters, I feel that this is an area in which we should demand uniformly high standards right across the board and should not distinguish between buses run by local authorities to carry children and buses run by private operators to carry fare-paying passengers.
  In many cases the buses which are contracted to carry children will have public service licences and be subject to test procedures, but they will be buses used for other purposes as well as for carrying children. That is a particular category in which local authorities have a high standard. Will the Minister tell us how the annual tests will be carried out, and to what standard or criterion, if there is no initial certificate of fitness for the school bus run by the school authority?
  Mr. Fowler: If I may reply to that point, with the leave of the House, what is being proposed would not give PSV examiners or certifying authorities powers to inspect vehicles once a certificate had been issued, or to prohibit the driving of unfit vehicles. The annual test for buses that is to be implemented will cover all school buses.
  There is little difference of opinion between Conservative Members and Labour Members on that point. I shall examine the matter raised by the right hon. Member for Barrow-in-Furness (Mr. Booth) in more detail and if there is a further point to be discussed I shall be happy to have talks with him to see whether any improvements can be made. My advice is that the annual test will provide all the safeguards that the right hon. Gentleman will require.
  Mr. Booth: In the light of that assurance, I beg to ask leave to withdraw the amendment.
  Amendment, by leave withdrawn.
  Mr. Booth: I beg to move amendment No. 27, in page 19, line 25 at end insert—
  '(aa) that the operating centre for those vehicles is suitable for the operations authorised in the licence; and'.
  The amendment makes the granting of an operator's licence conditional upon the operating centre being suitable for the operation of the number of vehicles included on such a licence. This is a difficult issue, because there is an enormous variation in the standards of operation. There are many good public service vehicle operators who have excellent offices that are well administered, and who have good maintenance facilities for their buses and good garaging arrangements. The amendment will be welcomed by them. They have nothing to fear from it and everything to gain.
  The amendment is aimed at the small minority of operators who seek to operate on a shoestring, without proper office provision and without proper garaging facilities. I do not suggest that this is a problem peculiar to the bus industry; it happens also in the freight industry. If we are to attach the importance to the operator's licence that the Bill suggests,
  1310
  before an operator's licence is granted there should be consideration of the question whether the person making an application to run 10, 20, 30, 40 or 50 public service vehicles has an office in which he can admiinster their operation, a garage in which he can park them, and arrangements by which he can suitably deal with them.
  I appreciate that maintenance facilities are covered in another part of the Bill. I am not suggesting that this amendment is necessary to secure maintenance arrangements. It is necessary to ensure that there are adequate parking facilities for all vehicles covered by operators' licences and that an operating centre can be located.
  Mr. Gummer: Wherever possible, we must not extend the number of regulations for people wishing to operate a business. The right hon. Member for Barrow-in-Furness (Mr. Booth), in introducing his proposals, made great play of the word "office". I understand that there might be some argument about parking, and that many difficulties have arisen because operators have not had adequate parking facilities. However, the Bill should be concerned with safety and the maintenance necessary for that safety.
  This amendment is widely drawn. We are talking about a suitable operating centre and we are extending the word "suitable" to cover the offices in which the operation is administered. We are moving into an area that has laid considerable increases on the costs of running services in Britain.
  We have begun to be a nation that sets standards that are applied universally to many areas where local conditions and situations do not demand such standards. I should be happier—I am sure that many of my right hon. and hon. Friends would be happier—if we made clear that our main and central purpose is to ensure the safety of the travelling public. We are not in this place to implement detailed regulations that govern how people run their offices and operations. We should strenuously object to the amendment.
  Mr. Kenneth Clarke: I echo the words of my hon. Friend the Member for Eye (Mr. Gummer). The right hon. Member for Barrow-in-Furness (Mr. Booth) confined the application of the amendment. Most of his arguments bore on

  1311
  the requirements of the operator's licence that appertain to public safety. However, the amendment goes much wider. I contend that the Bill as drafted gives sufficient power to the traffic commissioners to ensure that the operator is a proper and competent person with maintenance facilities that enable him to keep his vehicles in a safe and sound condition. That is what the Bill is concerned with, and that is its limit. It is a proper limit and there is no need to go further.
  The amendment would open up the prospect of traffic commissioners entering into town and country planning considerations and deciding whether in their opinion the centre chosen by the operator who wants to set up a business is "suitable"—a very wide term—for the operations authorised. That would bring the commissioners into dreadfully contentious areas.
  Everyone thinks that a bus operation is good in principle as long as the garage is not next door. Of course, we have to protect the environment when bus services are being contemplated. Garages have to be sited, so far as possible, so that they do not constitute a nuisance to neighbouring properties. That is a function of the local authority, the planning authority and those who are charged with town and country planning. As my hon. Friend said, it would be an inappropriate additional function to give to the commissioners.
  It seems that yet another hurdle is being set for a business man to overcome before he obtains the necessary licence to enable him to operate a bus. Before anyone says that the Foster committee recommended similar arrangements for heavy goods vehicles, I hasten to say that the Government intend to respond very soon to the Foster report. We have not closed our minds to the heavy goods vehicle recommendation. However, we feel that the considerations that apply to heavy goods vehicles are different from those that apply to passenger transport vehicles.
  Mr. Booth: The Parliamentary Secretary seems to ignore one of the propositions that the Bill raises, namely, that there must be an operating centre for the purpose of establishing the appropriate
  1312
  traffic commissioner to which the operator should go. Therefore, someone will have to take a decision. For this purpose I do not mind whether it is the planning authority or the traffic commissioner.
  An operator may properly be asked by the commissioner "Where is your operating centre? Why are you applying to me as opposed to applying to another commissioner? On what grounds do you say that the area for which I am the commissioner is the one in which your operating centre falls?" If it is a matter for the planning authority, and the operator is able to say "I have planning consent to operate from this centre", the point is met.
  The issue of what is suitable is, I suggest, a matter for the commissioner. What is suitable for running a two-bus business may well be a small bureau in the front room, which a man might reasonably say is his office. A different situation exists when a major bus company makes an application to operate.
  Mr. Gummer: Will the right hon. Gentleman explain why an official rather than the operator should decide whether an office is suitable? Surely this is totally outwith the purposes of officials. Surely a man is able to decide whether his office is suitable for his operation without someone popping along to tell him whether it is suitable.
  Mr. Booth: The individual who is considering the application is placed under a statutory duty that the Minister has decided to impose. Application must be made to the traffic commissioner for the area in which the applicant has his operating centre. The Parliamentary Secretary said that the planning authorities for the area must decide whether the operating centre is suitable. That is the proposition with which I am dealing; it is not my own concept of the matter.
  10.15 pm
  Following the logic of the Minister's remarks and the requirements of the Bill, the commissioner will have to ask applicants whether they are applying to him because their operating centre is within his area. Applicants will have to assure him that that is the case. That is why it is necessary to consider the location of the operating centres. It is also a matter of enforcing the requirements of the operator's licence. To enforce those

  1313
  requirements the commissioner must be able to locate the operating centre.
  Mr. Kenneth Clarke: The right hon. Gentleman is overlooking clause 35, where the operating centre is defined as the
  "base or centre at which the vehicle is normally kept".
  It does not follow that there is a need for suitability, which is the point at issue. The traffic commissioner is not required to visit an operating centre and say that it would be more suitable if the building were half-timbered and thatched. That matter is best left to the local authority.
  Mr. Booth: The Minister's point is relevant if we rely purely on the definition clause. All that the applicant has to say is that he normally keeps his vehicle in a certain place. If he says that he normally keeps it on the public highway at the place where it will start its operation he is giving a perfectly honest answer to the commissioner, but one that should not satisfy the House if the House is serious about providing a Transport Bill—
  Mr. Ronald W. Brown: Will my right hon. Friend bear in mind that recently I referred a problem to the Government where somebody in my constituency made an application for a licence in another borough? The advertisement for that licence was in another borough. The commissioner did not know that the vehicles were in use in our area. My right hon. Friend's point is valid, and I hope that he will pursue it.
  Mr. Booth: I am grateful to my hon. Friend for his intervention. If the other borough to which he referred was in the area of another traffic commissioner, it is one of the problems that the Bill should tackle. I accept that the term "suitable" could be interpreted widely, but it would be interpreted by a commissioner in whom the Government repose enormous faith.
  In the Bill the Government are proposing to give commissioners responsibility for making difficult decisions. Therefore, the Government must believe that they are responsible and capable men. On that basis, they are sufficiently responsible and capable to decide whether a person who applies for an operator's licence has a suitable operating
  1314
  centre within his area. If the commissioner thinks that the proper operating centre lies elsewhere, or that no such suitable centre exists, he must take that into account when deciding whether to grant a licence.
  Mr. Kenneth Clarke: With the leave of the House, Mr. Deputy Speaker, I shall reply. Clause 20 sets out the conditions that must be fulfilled to obtain an operator's licence. Subsection (1) sets out the various criteria for the operator himself, which we all agree are sensible. One criterion about which the traffic commissioners must be satisfied is set out in subsection (3)(a), namely, that commissioners should be satisfied, before they grant a licence
  "that there will be adequate facilities or arrangements for maintaining in a fit and serviceable condition the vehicles proposed to be used under the licence".
  I cannot intervene in the details of any one case, but given that the application for an operator's licence must give the location of the operating centre—which is where the vehicles are usually kept—the operator must show that operating centre to somebody. If he showed an oily patch on the ground in Acacia Gardens, somewhere in the area of a traffic commissioner, it would be open to the commissioner to say that there were not adequate facilities or arrangements to maintain the vehicles in a fit and serviceable condition—for example, if there were no pits or workshops.
  Mr. Ronald W. Brown rose—
  Mr. Clarke: I shall give way to the hon. Gentleman in a moment. I know of his problems, and I supect that he wishes to embroil me in the details of one operator. That is a matter for the traffic commissioners. The Bill tells them not to grant operators' licences unless there are adequate facilities. I am merely suggesting as a matter of fact that a person will not normally be regarded as having adequate facilities if he proposes to stick his vehicle out in the street.
  Mr. Brown: I should like the hon. Gentleman to take account of the fact that when applications are made it is possible for operators to show that the place at which they maintain their vehicles is valid in the eyes of the traffic commissioners. What the commissioners do

  1315
  not know, and do not ask, is where an operator leaves his vehicles at night. Therefore, if an operator runs his business off the street, a commissioner is not involved. It has been claimed that the commissioners' concern is whether or not the vehicles are in a good condition, and whether they are properly maintained. That is not the same as granting a licence to operate off the streets.
  Mr. Clarke: That brings us back to the basic point of the argument. In granting an operator's licence, the commissioner's sole concern is public safety. He will take into account whether the person is reputable, whether he will comply with the law, and whether the vehicles are in a fit and serviceable condition. If an operator runs his business off the street, he is defying the parking regulations. That is a matter for the police, the local authority, the planning authority, and so on. However, I believe that the duties of traffic commissioners must be confined to the safety of vehicles and to licensing. We must find other ways of ensuring that the law of nuisance is enforced, that people can protect their premises, and that the town and country planning regulations are adhered to, and so on. I do not believe that the amendment will be of very much help in terms of operators' licences.
  Mr. Brown: I am told that no one has any right of appeal whatever, and that when an application is made to the traffic commissioner only the local authority and/or the police can make such an objection. Therefore, the ordinary individual, who knows the truth, cannot make any representations. Am I right in saying that the Bill, as drafted, retains that provision? If so, will the hon. Gentleman please have a look at it and see whether, in another place, we ought not to introduce an amendment to ensure that ordinary people have the right of objection?
  Mr. Clarke: I shall have a look at it. As the hon. Gentleman is anxious to pursue that problem I shall write to him setting out exactly the position about the revocation of an operator's licence once it has been granted, as well as the powers and duties of the traffic commissioners.
  Amendment negatived.
  Mr. Kenneth Clarke: I beg to move amendment No. 28, in page 20, line 7 at end insert—
  "(8) Where an application is made to the traffic commissioners by the holder of a PSV operator's licence for the grant to him of a new licence to take effect on the expiry of the existing licence and the traffic commissioners decide not to grant the new licence, they may direct that the existing licence continue in force for such period as appears to them reasonably required to enable the business carried on under the licence to be transferred to another person duly licensed to carry it on.".
  Mr. Deputy Speaker: With this we may take Government amendment No. 30.
  Mr. Clarke: This amendment deals with the situation in which one applies for the renewal of an operator's licence and it is refused or, under clause 22, which relates to amendment No. 30, the traffic commissioners decide to revoke an operator's licence. In both cases the operator is potentially going out of business, either because he has been refused renewal or because he has had his licence revoked. Howeved, we think it right to give him a breathing space in which to transfer the business to someone else, who can carry it on as a going concern. In fact, we are enjoined to do just that by a European Community directive that covers that point.
  I suggest that it is a perfectly sensible provision, as it enables someone who is being put out of business because of the drastic powers of the traffic commissioners to sell the business as a going concern. It also protects the public against a sudden, overnight withdrawal of services where the traffic commissioners have taken the drastic step of ending an operator's licence. In practice, it will give protection to the public and also to a company that would otherwise go out of business overnight, with a consequent effect on employment, and so on.
  Mr. Booth: This amendment bears out the point that I was making, that the Government are reposing enormous confidence in and placing enormous responsibilities on the traffic commissioners. If, as the Parliamentary Secretary suggests—I am not saying that he is wrong—there is adequate safeguard, that is only because the traffic commisioner is able to judge accurately that a business should be carried on beyond the point at which the operator could get his licence renewed,

  1317
  or even beyond the point at which the traffic commissioner has intervened to revoke his licence for a limited time. Whether that can be done safely or without any risk to the public depends very much on the judgment of the commissioner as to the reasons why he is revoking the licence and the reasons why he is refusing to renew. He may be refusing to renew because the present owner has not got proper maintenance facilities for his vehicles, through allowing them to be run by an incompetent manager, or has not ensured that drivers have properly carried out their duties.
  These amendments, following that decision, inform the commisioner that he has the power to allow the business to be run in spite of the fact that he has decided that he must revoke the licence and will not renew for a period. Under both amendments the commisioner will have power to fix the period. While we do not oppose these Government amendments, because we see there is a genuine difficulty and appreciate the point that the Parliamentary Secretary makes about EEC requirements, we feel that we should be given further assurance and some evidence of the number of cases, possibly at some time in the future, when we return to the matter, when commissioners grant to operators the right to continue to run a business, and the reasons for which licences have been revoked or renewal refused in such circumstances.
  Mr. Clarke: I am not sure on what occasion we are likely to return to this interesting topic, relating to how many licences have been revoked or not renewed. We have every confidence in the ability of the traffic commissioners to look after public safety in passenger transport. Nothing in the Bill weakens their ability to judge the suitability of operators, the safety of vehicles, and so on. We are giving them a new permissive power. They may, in circumstances where they think fit, extend the period within which an operator may continue to operate, although they intend not to renew his licence or to revoke it. They will use this power only where they are satisfied that safety will not be threatened by the way in which the business is conducted in the meantime. The right hon. Gentleman is right. They will be allowed to fix whatever period seems to them fit.
  1318
  I do not think that it would be the general will of the House if I answered at this stage the questions that have been asked about the number of cases that have arisen in which licences have not been renewed or have been revoked, and what were the causes. I shall try to gather together such statistics as exist within the Department and put them in a letter to the right hon. Gentleman. In Committee we canvassed thoroughly the various situations within which an operator might lose his licence. All can broadly be stated to relate very much to the safety of vehicles and the competence of the operation, and the way in which the public can be assured that an operator will comply with the law and put on the road only those vehicles that should be on the road.
  Amendment agreed to.

Clause 22

  REVOCATION, SUSPENSION, ETC. OF LICENCES
  Amendment made: No. 30 in page 22, line 14, at end insert—
  '(5A) Where traffic commissioners decide to revoke a licence under this section, they may direct that the revocation shall not take effect for such period as appears to them reasonably required to enable the business carried on under the licence to be transferred to another person duly licensed to carry it on.'.—[Mr. Kenneth Clarke.]

Clause 27

  AMENDMENT OF TRANSPORT (LONDON) ACT 1969
  10.30 pm
  Mr. Prescott: I beg to move amendment No. 32, in page 27, line 2, leave out 'Minister' and insert 'independent body'.
  Mr. Deputy Speaker: With this, it will be convenient to take the following amendments:
  No. 33, in page 27, line 2, at end insert—
  '(1A) The independent body shall be appointed by the Minister and shall be comprised of nominees of the Greater London Council, trade unions representing bus workers, and the Transport Users' Consultative Committee.'.
  No. 34, in page 27, line 13, leave out 'Minister' and insert 'independent body'.
  No. 35, in page 27, line 16, leave out 'Minister' and insert 'independent body'.
  No. 36, in page 27, line 28, after 'On', insert:
  'the recommendation of the independent body on'.
  Mr. Prescott: We had intended to debate the issue of appeals but we are faced with the time element, and there is clearly not time to deal fully with all the arguments. The clause has already been amended in Committee in relation to the appeals procedure to apply in London. Again, one must face the fact of the uniqueness of the London area and its transport system. For example, there is not a requirement for a road service licence, as such. For a London bus service one must make an application to the London Transport Executive.
  The Government orginally wanted to establish that the appeal would be to a commissioner, but the commissioner did not deal with bus applications in London. In this case the appeal was not to be to the commissioner but to the Minister. The arguments were put forward by a number of bodies and by the hon. Member for Faversham (Mr. Moate) that the appeals system should be changed and that the commissioner should be bypassed and the appeal made directly to the Minister. In areas outside London the appeals are directly to the commissioner in the case of bus operations, but there is always then a right of appeal to the Minister. Under this arrangement any refusal to grant a bus operation certificate or licence to operate can be denied by the London Transport Executive as before, but the appeal now will be directly to the Minister.
  By these amendments we had hoped to discover whether an independent body could be returned. Such a body would consist of appointed representatives, and that in itself would cause considerable controversy. The argument might be that the representatives should be elected, but in the amendment we suggest that they should be appointed in the same way as commissioners in the rural areas are appointed, and that representatives of the Greater London Council, the trade unions
  1320
  representing the bus workers and the Transport Users' Consultative Committee should be members of this independent committee. To call it an independent committee presupposes that the Minister himself may not be considered to be independent.
  Much of the transport system in London is extremely controversial, and a Tory Minister and a Tory GLC deciding whether a private bus service should operate in the London area might well be considered more than a coincidence. If the Minister and the GLC were to come together in the agreement. some might feel that they were undermining the London Transport system.
  This amendment takes the matter of appeals a little further than the Committee agreed. I have been wondering for some time whether the commissioners' role is satisfactory, but I do not think that this is the time to continue the debate on the appeals, so we do not intend to press the amendment.
  Mr. Ronald W. Brown: I wish to intervene briefly, as I did not have the privilege and benefit of being on the Committee. I was a little surprised when I saw that the hon. Member for Faversham (Mr. Moate) had been chosen in Committee to move an amendment concerned with London. There are about 47 Conservative Members for London constituencies and apparently not one could be found to move the amendment. I can understand why—he would not be very popular for bringing forward this sort of proposal.
  I want to speak about the change that has been made. The Minister must accept that it is not a good one. At present the position is quite satisfactory. I contacted London Transport to ask about the current position regarding the numbers of applications dealt with under this procedure and I was told that London Transport had approved 99 applications and had refused only 23. I am told by all those who have had to deal with London Transport under the clause that they are satisfied that they are treated fairly and generously.
  There is a suspicion in the minds of many of us about the new concept that the Government are bringing forward. They claim that in London we shall be subjected to enormous competition from

  1321
  outside operators, and we are concerned. The present system is not satisfactory, not wholly because of bad management by London Transport or inadequate finances but because of the traffic conditions in London.
  At present the amount of money available to local authorities has been substantially cut back, so that they are unable to carry out the necessary roadworks to get traffic in London moving again. It seems odd that this Government are now introducing a system that will apparently allow operators to come along on the pretence of being able to improve the transport facilities in London, in terms of public transport, by acting like the old pirate buses used to do.
  I took the opportunity of re-reading a book by Barker and Robbins about the history of London Transport. It is a fascinating book, and I urge the Secretary of State to take time to read it. He will see how, in 1923, the now Lord Ashfield argued that though he was not against competition, in the context of providing transport in London it would only create increasing problems. He also identified many of the problems.
  That book takes one through the development of the pirate buses of 1923 through to 1924, which in the main resulted in the Act of 1924. That book highlights how many of the privateers operated. At first they service only the lucrative parts of the routes. They carried many destination boards, so that when they saw a lucrative area that was clearly waiting to he serviced they changed the destination board, turned the bus round, joined the queue and picked up the passengers.
  Those pirate buses also searched out areas where there was a free run. They would look for an area where passengers were waiting to travel and where there was also a good run. They would ply that area, running back and forth making money, and when they had finished carrying the bulk of the traffic—which in London is between the hours of 7 am and 9 am and again between 4 pm and 7 pm—they stopped running. That meant that it was necessary for someone else to run services during the unprofitable hours.
  Is that what the Government have in mind? The Secretary of State has taken
  1322
  to himself the power to overrule London Transport should it make a decision against which someone appeals. When I read what the Minister said in Committee I was not sure that he had established the case for the criteria that he said he would use. In answer to one of my hon. Friends, he said that the Minister would be able to check the criteria to see whether he was satisfied with it. What is laid down as the Minister's criteria? We want to know, and so does London Transport.
  Normally, when one goes to the traffic commissioner—and London Transport is the traffic commissioner in inner London—one knows the criteria by which they work. It is no longer clear from the proposal in clause 27. There are a lot of words there. It is all negated by the Minister saying that he will call it in if there is an appeal and that he will make up his mind according to what he sees.
  I am dissatisfied with that argument. I am not satisfied that the case for change has been made. I looked at the report of the Standing Committee. It appears that the amendment was delivered as a backhander. The hon. Member for Faversham suddenly tabled a very complicated clause. I do not believe that he sat in the Lobby outside, drafting it in detail. My suspicious mind leads me to feel that the amendment was the result of departmental briefing.
  The amendment is much too detailed. It is too well drafted for an ordinary amateur from Faversham, who no doubt knows London like the back of his hand. That suggests that it was handed to him. Why? Was it a departmental amendment? That would be perfectly honourable. However, I wish to know if that occurred. If so, was London Transport consulted. Was the GLC consulted? The GLC is an elected body. It controls London Transport. By taking the power embodied in clause 27 the Minister is overruling an elected council. Why? Has he discussed the issue with the GLC? Did it agree that this was the best solution? We are somehow changing something that has worked satisfactorily to date. No complaints have been made. No complaints have been heard in London. Perhaps complaints have been heard in Faversham. The House and Londoners are entitled to know why this

  1323
  interference factor is being used tonight. There is no reason for it. I hope that the Minister will give an explanation before winding up. What advantages to London does lie envisage? How will it help London Transport to operate efficiently and effectively? How will it help the GLC to fund London Transport? Indeed the Government are keen to cut down its money.
  Mr. Dobson: I shall be brief. The measure and the amendment have little to commend them. There is not much to choose between the rag, tag and bobtail independent body that we propose and that proposed by the Minister. They both fall into the, same category. They are both unnecessary interventions in the affairs of London Transport.
  As my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) pointed out, last year London Transport received 122 applications from independent bus operators. It approved 99 of them. My hon. Friend failed to point out that some of the remaining 23 applications were not turned down for reasons of quantity control; some were turned down because applicants' vehicles and professional competence were inadequate to run anything, least of all a public bus. Therefore, it would be best if the Minister were to withdraw this pathetic attempt at intervention in the affairs of London Transport.
  I cannot go along with my hon. Friend in lauding the intervention of the GLC. The sooner the law is changed and the less the GLC has to do with London Transport, the better for those who work for it and who like to travel on it. The introduction of the GLC is complicated by the Minister, the London boroughs, the Metropolitan Police and Lord knows who. All the parties involved in providing London's transport can happily blame one another for its failure to work properly.
  Mr. Ronald W. Brown: As my hon. Friend knows, I am a great believer in party conference decisions. It was a party conference decision that the GLC should take over London Transport.
  Mr. Dobson: There are certain party conference decisions that I do not agree with, and I shall not change my mind merely because policy decisions have re-
  1324
  cently been changed.
  10.45 pm
  Mr. Fowler: The internal debate within the Labour Party is indicative of the state of the party. We have had three short speeches on this fairly uncontroversial clause, and all three speakers have disagreed with each other. The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) does not support the amendment put forward by his Front Bench. I am not altogether clear what the hon. Member for Hackney, South and Shoreditch (Mr. Brown) thinks of the amendment.
  We are saying for the first time that there should be a right of appeal against a decision of London Transport. The hon. Member for Hackney, South and Shoreditch is right that at present there are comparatively few applications, and only a quarter of those are turned down. Nevertheless, we believe that an independent operator should have the right of appeal against the decision of London Transport. It is a check. It serves notice on London Transport that it is not judge and jury in its own cause. It emphasises to the new operator that there is a right of appeal if he believes that he has been unjustly treated. That is all that we are setting out to do. It is a moderate and reasonable right of appeal.
  The only issue between us is where the appeal should go. We believe that it should come to the Minister as in other appeals from traffic commissioner decisions. The Opposition want an independent body set up, appointed by the Minister and comprising nominees of the Greater London Council, the trade union movement, representing bus workers, and the Transport Users' Consultative Committee.
  I shall not weary the House by setting out all the ways in which this group of amendments is defective, but it is not at all clear whether the decision of that great new body would be binding on the Minister or merely advisory.
  Having listened to the arguments in Committee, I am surprised that the Opposition should suddenly introduce this totally new body into the London appeals procedure. The hon. Member for Holborn and St. Pancras, South spent most of the time in Committee complaining. He has at least been consistent in his

  1325
  remarks. First, he did not want to see anyone interfering, but, worst of all, he felt, was a proliferation of the authorities responsible for London Transport. I fully understand why he is not in sympathy with the amendments.
  We would have another quango that would be asked to do an uncertain job, without its powers being clearly defined. Until 12 months ago we had too many quangos. At long last we are cutting back on that form of life. We should not add new quangos, particularly for transport.
  Amendment negatived.

Clause 29

  REDUCTION OF MINIMUM AGE FOR DRIVERS OF PUBLIC SERVICE VEHICLES
  Mr. Fowler: I beg to move amendment No. 37, in page 28, line 19, leave out from 'Act' to end of line 21 and insert
  '(PSV drivers' licences: minimum age and other conditions) for the words from "unless" in the first place where it occurs to the end of the subsection there shall be substituted "unless he fulfils such conditions as may be prescribed".'.
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this it will be convenient to take Government amendments Nos. 38, 39 to 41, and 55.
  Mr. Fowler: When, in Committee, I accepted the original amendment relating to the age of PSV licence holders, I said that it would require alteration to take account of Community law. These amendments do that, and they also take account of the debate in Committee that centred on the need for bus companies to be able to employ younger drivers.
  The amendments therefore restrict the driving of large passenger vehicles to people employed by PSV operators. I believe that we may be confident that those drivers will be carefully selected and trained, and will take tests of competence.
  The minimum age for holding a PSV licence has been removed, but—as was explained in Committee—Community law prevents 18-year-olds from driving PSVs in some circumstances. The amendments to the Road Traffic Act
  1326
  1972 enable 18-year-old employees of PSV operators to be trained to drive public service vehicles. When qualified they would therefore be able to drive on regular passenger services on distances up to 50 kilometres. They are also authorised, when qualified, to drive empty buses between depots.
  Mr. Michael McNair-Wilson: Amendment No. 38 seeks to ensure that a professionally regulated training schedule approved by the Ministry of Transport should apply to those who are intending to take the PSV vehicle test. I tabled this amendment because, surprising as it may seem, there is no statutory requirement on local authorities to enforce tests for the issue of public service vehicle licences. There is no Ministry-structured training scheme that those seeking PSV licences must enter, nor is there a Ministry-approved training code.
  From these two statements I would not like to give the impression that I know of any local authorities that do not insist on tests. I merely make the point because it seems incredible that it is possible for a local authority to allow a PSV licence to be obtained without a test. As the law now stands it is purely at the discretion of the traffic commissioners.
  The situation varies from area to area, and in the South-East the National Bus Company told me that either its drivers have to take a test organised by the Metropolitan Traffic Commissioners or, if they come within the area of the South-Eastern Traffic Commissioners, the training and testing of the driver is done by the National Bus Company.
  I am also told that London Transport has, dare I say it, so little faith in the PSV licence, as such, that it insists that its drivers take a further test although they might already possess a PSV licence. London Transport has been known to fail drivers who hold such a licence.
  On the other hand a small coach company in my constituency called "Swansdown" told me that it devises the training schedule for its drivers but that the testing is done under the auspices of the South-Eastern Traffic Commissioners at Swindon and Reading, who impose a one-and-a-half-hour test.
  I hope that in those few words I have at least made it clear to the House that

  1327
  the pattern for training and testing varies. While small companies may embark on such training as they believe to be necessary, the larger companies follow training procedures laid down by the Road Transport Industry Training Board and if they use a qualified instructor they are given a grant by that board.
  By the same token, if training is an arbitrary business, so is testing. It appears that, depending on the area, one's luck in getting a PSV licence may or may not be good, since some examiners are known to impose much stricter tests than others. Of course, it may be said that even if the situation is as arbitrary as I have described the system has worked well and that, by and large, the safety rate for buses in this country is at a reasonable and low level and that we should therefore, leave well alone.
  I do not dissent entirely from that argument, However, if 18-year-olds are to be allowed to have PSV licences to drive on regular bus routes and perhaps drive school buses we should rationalise the training and testing procedure to give it more structure.
  Eighteen-year-olds are likely to have only recently won their driving licences, and their road experience is likely to be minimal. In the bus industry maturity and experience are considered to be two of the greatest assets that drivers can possess, and yet we are giving young people the ability to drive large vehicles—with some limitations—and are not insisting on a training procedure approved by the Ministry of Transport or a statutory direction to local authorities that tests must be carried out under the auspices of the traffic commissioners. If we are to make a change in the age at which PSV licences can be granted we should make another nationwide change.
  No charge is made for the test. As a result, applicants apply for tests but do not turn up. There is no penalty. It is not surprising that my local coach company says that the waiting time in the area is from six to eight weeks. A company might not be able to employ a driver because he cannot take an early test, although another driver might not bother to turn up. The time has come to impose not only a structured training procedure but a charge for the test.
  One of the organisations representing
  1328
  the bus industry says that it does not oppose reducing the minimum age to 18 but that it believes that for safety the first year after a PSV licence has been awarded should be probationary. During that time the young driver should acquire practical knowledge before taking passengers on a regular route or driving a school bus.
  I hope that the Minister will accept the spirit of my amendment. He said that we have brought clause 29 provisions within the European directive. In addition to the 50-kilometre stipulation, is the Minister agreeing that young drivers should not drive public vehicles that can carry more than 15 passengers? I understand that that is in the directive, and yet it does not appear to be covered by the amendment.
  Mr. Booth: I have sympathy with the arguments advanced by the hon. Member for Newbury (Mr. McNair-Wilson). I regret that there has been so little consultation by the Government on the proposition. The major operators have not assented to it. They believe that there is a case for allowing people to begin training before 21 years of age and for allowing them to drive vehicles only in certain circumstances. They suggested that they should drive buses from maintenance depots to bus sheds and on similar journeys that would give the drivers experience of handling the vehicles in advance of driving buses containing large numbers of passengers in difficult traffic conditions.
  11 pm
  I go along with the argument of the hon. Member for Newbury that if younger people are to drive public service vehicles we should ensure that there are high standards of training. I am tempted to feel rather conservative in the arguments that I advance. However, I rest to some extent on the accident statistics and the views of insurance companies, which think that a young driver, or someone who does not have considerable experience in this area, is a considerable insurance risk and often load insurance premiums accordingly. There are a number of opportunities to introduce young people to driving skills in advance of allowing them to drive public service vehicles. The matter was introduced suddenly on Report.
  It is nonsense to apply the EEC

  1329
  regulations in an unqualified way. Those regulations appear to say that it is quite all right for a young driver to drive a bus full of passengers around Marble Arch in the rush hour but that it is not all right for him to drive a much smaller bus along a country road on a 32-kilometre route. That seems to be the effect of the EEC regulations. Yet the Minister is now introducing them in an unqualified way into the United Kingdom driving situation.
  For those reasons I hope that the Minister will give us assurances that he will consider more carefully the special problems that apply to driving public service vehicles in British urban and rural driving conditions. He must ensure that nobody takes a bus out in those conditions unless he is trained. He must be thoroughly satisfied that there will not be an increased risk from relatively untrained and inexperienced drivers conveying their passengers on stage and other bus service routes.
  Mr. Iain Mills: I regret having to rise to reply to the comments made. However, having moved an amendment in Committee on behalf of my right hon. and hon. Friends I feel that I should say a few words.
  First, I heartily condemn the use of the term "young driver". Surely in this age we should be talking of trained or untrained drivers. To imply that youth automatically means incompetence is quite wrong. One should apply the regulations for PSV licences to drivers of all ages, on a basis of competence, not age. There must be many young men and women who at the age of 18 are far more competent, both physically and in their manual dexterity skills, than some people with bad eyesight or health, or who lack training or experience. I also condemn any suggestion that age automatically brings experience. In terms of public service vehicles, surely skill is a result of experience.
  From Back Benchers' investigations before we proposed the amendment, it was clear that the use of young drivers of 18 would occur for three reasons. First, the National Bus Company has a great shortage of drivers. It finds it difficult to get them. In some areas there is a shortage of up to 2,000 people. Secondly, the
  1330
  career development is difficult. If drivers may start work only at 21, what can they do from the age of 18? Presumably they must sit on oil drums in the garage and do nothing. Thirdly, the unsocial hours during which drivers must operate are much more easily tackled by young people. Finally—and probably this is the most telling remark—we seem to be out of line with our EEC compatriots on many of our regulations in this respect.
  I seriously ask the House to be very careful in its judgment of young drivers. It is a question not of experience but of competence, and I hope the Minister will cover that point.
  Mr. Fowler: First, I will give an assurance to my hon. Friend the Member for Newbury (Mr. McNair-Wilson) on the question of fees. He will not be surprised to know that my Department has taken that on board and that in the Bill there is a fees clause under which a charge can and will be made.
  The second assurance that I should like to give him and the right hon. Gentleman is that most certainly we agree that training is important, particularly for young drivers. The amendments that I have moved make it clear that young people without PSV drivers' licences must drive large passenger vehicles under supervision. I would consider a more formal scheme, and I certainly gladly give my hon. Friend the assurance that I shall consider his suggestion to see whether there is further movement that we can make to meet the point that he and the right hon. Gentleman made.
  Amendment agreed to.
  Amendments made:
  No. 39, in page 28, line 22 leave out 'In the Table in section 96(1)' and insert 'Subsection (1) of section 96'.
  No. 40, in page 28, line 24, leave out from first 'vehicles)' to '"large' in line 29 and insert—
  'shall have effect as if in the Table in that subsection, in item 6, the age of 18 were substituted for the age of 21 in relation to a large passenger vehicle where—

  (a) the driver is not engaged in the carriage of passengers and either holds a PSV driver's licence or is acting under the supervision of a person who holds a PSV driver's licence, or

  (b) the driver holds a PSV driver's licence and is engaged in the carriage of passengers on

  1331
  a regular service over a route which does not exceed 50 kilometres, and in either case the operator of the vehicle holds a PSV operator's licence granted by the traffic commissioners for any area not being a licence which is of no effect by reason of its suspension.

  (3) In subsection (2)—'.
  No. 41, in page 28, line 32 at end insert—
  '"PSV driver's licence" means a licence to drive a public service vehicle granted under section 144 of the 1960 Act.
  (4) The provisions of subsections (2) and (3) may be amended or repealed by regulations under section 96(2) of the Road Traffic Act 1972.'.—[Mr. Fowler.]

Clause 35

  INTERPRETATION OF PART I
  Mr. Kenneth Clarke: I beg to move amendment No. 50, in page 31 leave out lines 39 and 40 and insert—
  '"excursion or tour" means a stage or express carriage service on which the passengers travel together on a journey, with or without breaks, from one or more places to one or more other places and back;'.
  Mr. Deputy Speaker: With this we may take Government amendment No. 73.
  Mr. Clarke: These amendments substitute a new definition of "excursion" or "tour" in the Bill to replace that which is in the 1968 Act. The new definition is reasonably clear and succinct. It replaces 21 lines of unintelligible gobbledegook in the old Act and I hope that the House will therefore accept it as an improvement.
  Mr. Booth: I congratulate the Government on this amendment. In Committee we found that the most appalling difficulties arose from the original definition, which has been carried forward in British law for a considerable time. I think it is worthy of note that the Government have applied their mind to it and come forward with a definition that makes considerable sense, and that I hope will be interpreted by the British courts in the way in which it is obviously intended to be interpreted.
  Amendment agreed to.
  Mr. Kenneth Clarke: I beg to move amendment No. 52, in page 32, line 25 leave out
  'of another member State or'.
  Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 53.
  Mr. Clarke: In the Standing Committee the hon. Member for Birmingham, Stechford (Mr. Davis) asked me why the relevant convictions in terms of an application for an operator's licence had to be in the EEC area and why, for instance, countries such as Switzerland, outside the EEC, were not equally relevant places. He and the other members of the Committee will well remember that I could not think of the slightest intelligent reply. We have therefore produced these two amendments, which meet the point and extend relevant convictions to relevant convictions in any country.
  Amendment agreed to.
  Amendments made:
  No. 53, in page 32, line 26, after 'Ireland', insert
  ',or of a country or territory outside the United Kingdom,'.
  No. 55, in page 33, line 3, leave out from 'vehicle' to 'is' in line 4. [Mr. Fowler.]

Clause 36

  TRANSFER OF THE UNDERTAKING OF NATIONAL FREIGHT CORPORATION
  Mr. Fowler: I beg to move amendment No. 76A, in page 33, line 34, at end insert 'and nominated'.
  This amendment is entirely consequential on the amendment accepted in Committee by my hon. Friend the Parliamentary Secretary to substitute "formed" for "nominated" in subsection (1) and should not delay the House for very long.
  Amendment agreed to.

Clause 37

  INITIAL GOVERNMENT HOLDING IN SUCCESSOR COMPANY
  Mr. Booth: I beg to move amendment No. 77, in page 34, line 34, at end insert—
  '(4A) Where the Minister proposes to exercise any power to dispose of shares in the

  1333
  successor company he shall not issue or register to any person or nominee of that person more than 5 per cent. of the shares in the company, and any shares issued or registered in contravention of this subsection shall be deemed for all purposes to be owned by the Minister.'.
  The purpose of the amendment is to prevent the sale of more than 5 per cent. of the shares in the National Freight Corporation to any one person and so to ensure a spread of ownership when the Government's holding in the NFC is dispersed and make certain that no one obtains a dominant position. The operation of the NFC is commonly agreed in the House, by people who have followed its activities closely, to be efficient, and it is more likely to remain that way if the ownership is spread. That is why we are proposing the amendment.
  Mr. Fowler: Although I have some sympathy with the purpose underlying the amendment, I am afraid that the Government cannot accept it. It is certainly the intention, in accordance with normal practice, to give preference to small applications in the event that the initial offer for sale is oversubscribed, but I do not agree that it would be desirable to impose a maximum limit on the proportion of shares any applicant can purchase. Such a limit might deter some institutions from subscribing and might result in some shares on offer not being taken up. I see no reason why the Government should be subject to special restrictions in this respect and thus risk securing a poorer return for the taxpayer than could otherwise be obtained.
  Mr. Cowan: Will the Minister give an assurance that the terms and conditions of service and rates of pay of employees of the NFC will not be undermined in the event of the Government's policy being carried out?
  Mr. Fowler: That takes us back several hours to an earlier debate. I can only refer the hon. Gentleman to what was said then, when we went over this question in some detail. We are dealing now not with that question but with the amendment proposed by the right hon. Gentleman. I do not believe that it is justified, and I fear that we cannot accept it.
  Amendment negatived.

Clause 38

  TRANSITIONAL PROVISIONS WITH RESPECT TO RESERVES ETC.
  Mr. Booth: I beg to move amendment No. 78, in page 35, line 28, at end insert:
  '(6) Notwithstanding any other provisions of this Act any tax losses which before the appointed day were available to the Corporation shall not for the purposes of the Taxes Acts be available to the successor company.'.
  The purpose of the amendment is to prevent the tax losses of the NFC being transferred to the successor company. In an earlier debate this afternoon I was told, I think by the hon. Member for Horsham and Crawley (Mr. Hordern), that the existence of the tax losses was evidence of the NFC's unprofitable operation in the past.
  I was assured by the Minister that all the subsidiary companies of the NFC now in operation are operating profitably, so I suggest to the House that there can be no possible justification for handing over the tax losses of the NFC to a successor company. By handing them over to a successor company to which the Government's securities will be sold we shall in effect be sanctioning the offsetting of tax liabilities by other people. I put it to hon. Members who are interested now, and might be interested in 12 hours' time in the special tax arrangements that we shall have over the period during which the Minister will be selling off this public asset, that if people are able, because they buy shares in the NFC, to acquire tax losses, they will be buying into a position in which they can avoid a tax liability that would normally be placed upon them as a result of other operations that they have carried on.
  I remember being told by Conservative Members that people who evade taxes do not remove the need for taxes. They merely push the burden on to others. The Government are conniving at an arrangement whereby those people who purchase shares in the successor company to the NFC will be given, as a bonus, a duty of other people to pay the tax burden that they would otherwise normally have to pay. It is unjustifiable on any grounds of public propriety, or any reasonable financial basis, that those

  1335
  people who purchase shares when the NFC is transferred from a nationalised industry to a Companies Act company should have a special facility accorded to them that will not be accorded to anyone else in the country.
  11.15 pm
  They will be relieved of taxation as a result of a transaction to which they have made no contribution and to which the public has paid in the past in dealing with the losses that were made by the National Freight Corporation. I can see no reason why the public should be further disadvantaged by the Government passing on those tax losses.
  Mr. Fowler: The amendment springs from a misconception that we thought we had cleared up in Committee. It seeks to withhold from the successor company any tax losses incurred by the NFC before the appointed day.
  As we pointed out in Committee, tax losses made by NFC subsidiaries, principally National Carriers, can be set off only against future trading profits of the same business. Therefore, there is no way in which another company can buy a controlling interest in the successor company and in some way use the NFC's past tax losses to offset future profits in another subsidiary or another part of the business. Those tax losses cannot, therefore, be considered as some sort of asset that a purchaser might wish to acquire so as to avoid paying taxes on his other businesses.
  If the amendment were accepted, it would create a positive tax disadvantage for subsidiaries of the successor company that would not otherwise exist. If the amendment were to become effective, companies such as National Carriers would not be able to set off past tax losses against future trading profits. Their competitiveness would suffer, and prospects for both companies involved and their employees would be severely worsened. I cannot believe that Labour Members wish that to happen. I am prepared to talk further with them, but I should have thought that at this stage they might wish to ask leave to withdraw their amendment.
  Amendment negatived.

Clause 41

  MEANING OF "THE RELEVANT PENSION OBLIGATIONS"
  Mr. Fowler: I beg to move amendment No. 79, in page 38, line 1, leave out from "pay" to "employment" in line 2 and insert
  "contributions in respect of current periods of".
  Mr. Deputy Speaker: With this, we may take Government amendment No. 80.
  Mr. Fowler: These amendments clear up an ambiguity to which the Opposition drew our attention in Committee. For the reasons that I gave in the earlier debate on British Rail pensions, it is not the intention that current service pensions will be covered by the provisions of the Bill. There was a possible doubt about the provision of so-called antedating contributions. It is our intention that antedating contributions will not be treated as current service pensions, and that they will be covered as relevant pensions obligations by the Bill. The amendments resolve that doubt, and meet the undertakings that we gave to the Committee.
  Amendment agreed to.
  Amendment made: No. 80, in page 41, line 16, leave out from 'pay' to 'employment' in line 17 and insert
  'contributions in respect of current periods of'—[Mr. Fowler.]

Clause 45

  UNFUNDED PROPORTION OF RELEVANT PENSION OBLIGATIONS
  Mr. Deputy Speaker: I understand that amendment No. 81 is not desired to be moved.
  Mr. Kenneth Clarke: A slip has been made in the tabling of amendment No. 81, Mr. Deputy Speaker. It was intended to follow up an offer of a manuscript amendment that was made in Committee. At that stage the Government sought to insert the words contained in this amendment, or similar words, in line 25 on page 42 of the Bill. Unfortunately in drafting the amendment for Report an error was made, and the Amendment Paper refers to the words appearing in line 20. The

  1337
  words would make sense, as a matter of law, in line 20, and if I recollect the Committee proceedings, that would be more welcome to the Opposition.
  In Committee the Government undertook to enter into a duty to consult the various bodies concerned before the final, second determination of the unfunded proportion of each pension fund. We made it clear that we were not prepared to enter into an undertaking that bound us to consult by statute on the first rough and ready determination of the unfunded proportion.
  We intend the words in the amendment to apply only to clause 45(1)(b) and not to (1)(a) as well. If the Opposition are prepared to treat what I am now saying as moving a manuscript amendment in the terms of amendment No. 81 by substituting line 25 for line 20, I commend the manuscript amendment to the House.
  Mr. Deputy Speaker: I am not quite sure what has been proposed.
  Mr. Clarke: I shall move amendment No. 81, Mr. Deputy Speaker. I shall then seek the leave of the House to withdraw it. I shall then move a manuscript amendment that will be in the same terms except that it will have line 25 in the place of line 20.
  I beg to move amendment No. 81, in page 42, line 20, at beginning insert:
  'After consulting with the persons administering the scheme and the Board or, as the case may be, the successor company'.
  Mr. Deputy Speaker: At the moment I think that we are discussing amendment No. 81. The Chair has been informed of the manuscript amendment and has selected it. We are dealing with amendment No. 81 and amendment (a).
  Mr. Booth: I am tempted to take advantage of the amendment, but I shall not do so. I acknowledge that there was a genuine mistake. When I first read the amendment I found it enlightening. It seemed that all our arguments in Committee about the importance of consultation on the initial determination of the unfunded proportion had fallen not on stony ground, as we thought, but on fertile ground. It has never been our claim that the Government are infallible. I accept that in this instance an error has been made. The Opposition will not seek
  1338
  to oppose the withdrawal of the amendment.
  Mr. Clarke: I beg to ask leave to withdraw the amendment. I shall seek to be allowed to move formally the manuscript amendment.
  Amendment, by leave, withdrawn.
  Manuscript amendment made: In page 42, line 25, at beginning insert:
  'After consulting with the persons administering the scheme and the Board or, as the case may be, the successor company'.—[Mr. Kenneth Clarke.]

Clause 47

  REDUCTION OF PAYMENTS IN RESPECT OF CERTAIN SUPPLEMENTATION SCHEMES
  Mr. Booth: I beg to move amendment No. 82, in page 43, line 35 leave out 'exceed its liabilities' and insert—
  'exceeded its liabilities on 31st December 1979'.
  Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 83, in page 43, line 44, at end insert—
  '(2A) If the actuary to the basic scheme certifies that following a reduction as specified in subsection (2) of this section in payments to the persons administrating the supplementation scheme the basic scheme has liabilities exceeding its assets at any time later than one year after the reduction was made, the payments to the persons administering the supplementation scheme made under section 43(1) shall he increased for each financial year after the date of the actuary's certificate by the aggregrate amount for that year of such of the increases mentioned in subsection (1) as become payable from that date or, if less, the relevant proportion of those increases.'.
  No. 84, in page 44, line 2, leave out from first 'by' to end of line 3 and insert
  '85 per cent. of the amount by which the assets of that scheme exceed its liabilities'.
  Amendment (a) to amendment No. 84, leave out '85 per cent.' and insert '70 per cent.'.
  No. 85, in page 44, line 7, leave out 'exceed its liabilities' and insert
  'exceeded its liabilities on 31st December 1979'.
  No. 86, in page 44, leave out lines 11 to 13.
  Mr. Booth: The amendments all relate to a group of railway pension

  1339
  schemes. A serious problem is posed. Where a reduction has been made in payments to a supplementation scheme and consequently the basic scheme runs into deficit, amendments Nos. 82 and 83 require that the payments to the supplementation scheme must be increased. That probably is a somewhat abstruse proposition to those who did not serve in Committee. Therefore, I shall offer some explanation.
  It has been the practice for a number of years for pension increases granted by the British Railways Board under schemes of supplementation to be reduced by the amount of any increase that pensioners have had from their basic schemes after retirement. The basic schemes are those that pay fixed pensions. Supplementation schemes have been set up with the sole objective of adding to the payments made under the basic scheme to maintain their purchasing power.
  The justification for reducing the supplementation scheme payments is the increase in the basic scheme. The payment under the supplementation and the payment under the basic scheme, added together, maintain what was the original purchasing power of the basic scheme.
  In practice, the offsetting of the increase in the supplementary pension payments against increases in the basic pensions has been less than complete. That is partly because the offsetting does not occur until the supplementation scheme is reviewed, and partly because there is no offsetting in the case of people who have not yet retired. It does not apply to active members of a scheme.
  The net effect of these factors is that in the various distributions of surplus that have occurred in railway pension schemes over the past few years the proportion of the surplus that has been offset averaged 60 per cent., or perhaps a little less.
  I shall give an example that may help to make the position clearer. On 1 January 1976 the Great Western Railway Salaried Staff Widows and Orphans Pension Society increased its benefits. The cost was met out of a surplus revealed at an actuarial valuation. A comparatively small part of the increase related to serving employees, and was not offset. The majority of the improvement related to pensioners, and consisted of an increase
  1340
  of 29 per cent. in the pensions payable from the society.
  The board did not seek to reduce the existing supplement that had been granted because of cost of living increases. Instead, the offsetting was achieved by not granting any supplement in December 1976 and by granting only a much reduced supplement on 1 December 1977. There was a delay of about 18 months before the whole of the pension increase was fully offset against supplementation. That was a significant factor. The net effect was that only 59 per cent. of the total surplus revealed for active members and pensioners was clawed back on that occasion.
  There was no uniformity of practice between the clawback in the various schemes, and I have information on that matter. In the case of the North Eastern Railway Servants' Pension Society, the clawback averaged about 49 per cent.; in the London and North Western Railway Provident Society for providing Pensions for Widows and Orphans of Members of the Salaried Staff, 78 per cent.; in the Great Western Railway Salaried Staff Widows and Orphans' Pension Society, 44 per cent.; in the Great Western Railway Enginemen and Firemen's Mutual Assurance, Sick and Superannuation Society—I am throwing that in to prove that I am not being too selective—there was no clawback. In the LMSR (North Staffordshire Section) Friendly Society there was no clawback; in the Thomas Bantock and Co. Benevolent and Pension Fund the clawback was 61 per cent.; and in the Great Western Railway Widows and Orphans' Benevolent Fund, it was 75 per cent. In practice, there has been a range of clawback of the additional amounts paid out under the supplementation schemes following an increase in the basic scheme.
  Having regard to that history, it is fair to say that if the Bill is not to worsen the position of the pensioners in the older schemes, not more than about 60 per cent. of the surplus should be clawed back by the Government.
  The way in which the Government propose to claw back the surplus is to reduce the payments that they make to those administering the pensions in the basic schemes. Has the Minister ensured that there is a mechanism that allows such a cutback in payments to be covered by

  1341
  the other scheme? I presume that there is, but I would like it confirmed and on the record. If there is not, it would be difficult for those administering the funds to take money from another fund to make up for the reduced Government payment.
  11.30 pm
  That is not the principal issue that we are raising in the amendment. We are raising two principal issues. One is the amount of the clawback and the number of occasions on which it may occur. We propose in amendment (a) to amendment No. 48 to reduce the amount that the Government can claw back from the surplus in the supplementation scheme from 85 per cent. to 70 per cent. That is splitting the difference to some extent. We think that this is a reasonable request to make to the Government against the historic position where only about 60 per cent. has been clawed back.
  Coupled with that there is a provision in amendments Nos. 85 and 86 that the clawback should take place only once. As the Bill is drafted, the Government can decide to claw back on any occasion when the Government Actuary certifies for them that these funds have assets in excess of their liabilities.
  These are matters of argument. A matter about which there can be no argument is that there will he a considerable problem for people who have to administer these supplementation funds if on some future occasion the actuary certifies that the fund has assets in excess of its liabilities and the Government then claw back and at a future date the basic scheme runs into deficit and, because of what the Government have clawed back in the past from the supplementation fund, that fund is unable to sustain the purchasing power of the pension.
  Amendments Nos. 82 and 83 provide that in those specific cases where the clawback has taken place and subsequently the combined operation has run into deficit—that is, where the supplementation fund out of which the Government have taken the money by clawback is then unable to carry out the purpose for which it was set up—the Government should reinstate—in other words, the Government should then adjust the
  1342
  deduction in payments which they have made to the basic fund. That is the least that the Government can do.
  Surely it cannot be the intention of a Government whose Minister of Transport has said that whatever else the Bill will do it will not worsen the position of the pensioners, to use their majority in the House to claw back up to 80 per cent.—the point applies even though it is only 60 per cent. or 70 per cent. of the surplus in a fund set up specifically for supplementation of basic pension schemes—and to leave schemes in a position where they will not be able to fulfil the purpose for which they were set up—that is, to supplement basic schemes to maintain their purchasing power.
  I do not know how much money is involved. I have been amazed by some of the sums we have had to talk about in Committee on the wider historic pension rights. Some of these are relatively small schemes. The principle is crucial. In Committee the Minister rejected a proposition that I thought was highly equitable—that if he was to have the right to claw back from those that were in surplus he should make some contribution to those that were in deficit. The Minister would have nothing to do with that. However, tonight the Minister has the opportunity to show that it is not his intention to use this clawback provision in such a way as to destroy the basic purpose for which some of these supplementation schemes were set up.
  If the Minister uses his power here and, as a result—although I admit that at the time he makes the claw-back from a supplementation scheme he may not be able to foresee that two or three years later the basic scheme that it exists to supplement will run into deficit; we cannot necessarily foresee what will happen to basic schemes any more than we can foresee what happens to wider funded schemes—a scheme inadvertently runs into deficit, it is of crucial importance that he should then put the payments back to the position that they were in at the time the Bill was passed and pay to the basic schemes the proportion that he should fund under the provisions of the Bill but for this very peculiar provision wthin the clause which allows him to claw back part of surpluses by reducing his liability to make payments to basic schemes.
  Mr. R. A. McCrindle: I have been keeping a watching brief on this part of the Bill that relates to pension matters on behalf of the British Transport Police pensioners, to whose federation I offer some parliamentary advice. My impression is that few of the members of the British Transport Police appear to be other than convinced that as a result of the provisions they will be no worse off in terms of the pensions that they are likely to receive. They have, however, expressed concern on some points. I beg the indulgence of the House to mention them.
  Under the best pension schemes in the private sector, not only is there some form of protection for rising prices after the person has retired, albeit less generous than is normally the case in public service pension schemes; there is also a tendency in the best private schemes to improve benefits, sometimes benefits outwith retirement benefits, as the scheme progresses. It is possible to achieve improvements only by allocating surpluses as they are thrown up. The point made by some British Transport policemen is that with the sizeable proportion of any foreseeable surplus being taken away under the provisions proposed by the Government the possibility of improving the provisions of the scheme becomes remote.
  The second point that the British Transport Police pensioners wish me to draw to the attention of the House is the magnitude of the surplus offset at the level of 85 per cent., which, it is contended, almost eliminates the chance of making some of the improvements to which I have already referred. We are discussing in this collection of amendments not only the Government amendment that specifies 85 per cent. but amendment (a) to that amendment, which refers to 70 per cent.
  I have no wish to put before the House any particular percentage, although it is instructive that even the percentage proposed by the Opposition may be seen as comparatively high in some quarters. I am not pressing on my hon. Friends that they should opt for this or that percentage. I am suggesting, even at this advanced stage of discussion of the Bill, that there might be some advantage if
  1344
  they were to retain a degree of flexibility so that they do not feel that they should specify any particular percentage but could lay down a maximum that the percentage would be allowed to reach, thereby leaving them with flexibility of operation.
  My last point relates to a problem particular to the British Transport Police. I should like to quote one short paragraph from a letter directed to my right hon. Friend the Minister of Transport by the chairman of the British Transport Police Superannuation Fund, in which he says:
  "As you probably know, the Police Fund is divided into two sections. The 1968 section which now mainly comprises pensioners and which is closed to new entrants, and the 1970 section which is open to new entrants. The former does not provide any pensions increases, whilst the latter makes provision within the rules for the same increases to be paid as are granted to retired civil servants. Although there are these two sections, the Fund is treated as one entity for valuation and investment purposes. It seems to me, and to my colleagues on the Management Committee to be totally wrong for such a large slice of future surpluses to be used in the manner which you propose".
  The point that I wish to make can be summarised in two brief sentences. Can the Minister guarantee that if there is a surplus in the British Transport Police Superannuation Fund 1970 section it will not be used to pay increases to pensions payable from the British Transport Police Superannuation Fund 1968 section? If he cannot, many will feel that this is discrimination against the officers who joined the 1970 section and accepted higher contributions in order to safeguard increases to their pensions after retirement.
  To have any of this money used to pay increases to pensioners under the 1968 section would be a misuse of members' contributions paid to the 1970 section.
  I conclude by reminding the House that under the Wright report last year the British Transport Police were placed on all fours with the civil police in relation to pay, conditions and experience. One area in which they do not receive comparable treatment is pensions. It is contended that unless the Minister can meet the perfectly valid points that I have made tonight the gap on pensions will be widened between the civil police and the British Transport Police. I am sure that Ministers would not wish that to happen.
  Mr. Kenneth Clarke: I begin by agreeing with my hon. Friend the Member for Brentwood and Ongar (Mr. McCrindle) that normally the position in a pension scheme which builds up a surplus is that that surplus is used to inflation-proof as far as possible the benefits in payment. Also part of the surplus is used to improve the benefits of the scheme for those still in service.
  In this case we are dealing with a set of exceptional circumstances that have arisen in the transport area where in a number of basic pension schemes that paid non-inflation-proof pensions it became the custom to pay inflation-proof pensions, and special supplementation schemes were set up to pay those inflation-proof additions to benefit. The Government then took over the obligation to pay the supplementation schemes and the inflation proofing of the benefits in payment.
  As inflation has gone up, the cost to the Government of giving that inflation proofing has gone up considerably. At the same time, that same inflation has enabled the basic schemes to start building up surpluses over and above their non-inflation-proofed pension entitlements. Given that the Government are paying a large part of the bill to inflation-proof benefits under these schemes, the Government should also have a good share of what inflation has brought to the basic schemes, and most of what the basic schemes earn by way of surplus should be devoted to defray the Government's expenditure in meeting the cost of supplementation.
  What is the proper division between the Government and the pension schemes? The main problem arises when one considers the position of those who are in service contributing to basic schemes and not receiving pensions. Those who have retired and are receiving pensions are getting all the benefit of the inflation proofing, and any surpluses under the scheme should go to the Government who are paying for the inflation proofing.
  Those still in service are paying contributions from which they are getting no benefit if every time a surplus arises nothing is done to improve their potential final benefit. We have tried to produce a fair division that would meet the position of the funds and the members still in service on the one hand, and
  1346
  the Government and the taxpayer on the other.
  11.45 pm
  All kinds of possibilities have been canvassed, but in the end those who manage these schemes preferred some fixed rule applied to all the schemes rather than a complicated formula. For that reason, in amendment No. 84 we have gone back to suggesting that 85 per cent. of any surplus in a basic scheme should be used to defray the Government's expenses for supplementing benefits under that scheme.
  Having said that, I can give one piece of good news. All the concern in the Committee turned on the LNER new section, which has surpluses of £30 million, and it was thought that the large number of members of that scheme who were in service would be deprived if 85 per cent. of that surplus went to the Treasury. However, we discovered that so great was the surplus under that scheme that it could cover the cost of supplementation many times over, so in practice the percentage taken by the Government from that—the biggest scheme of all—will be far below 85 per cent. and will not in any way damage the serving members. The benefits to the taxpayer arising out of amendment No. 84 are comparatively modest and, for the reasons that I have given, entirely fair.
  Dealing with the other points raised by the right hon. Member for Barrow-in-Furness (Mr. Booth), I cannot meet his point about what happens when a basic scheme goes back into deficit. Summarised, the argument is that if we were to accept this amendment, or anything along the lines proposed, it would be possible, as soon as a basic scheme got into surplus, for the fund managers hastily to rearrange matters, to start giving out improvements in benefits to their members, and to make sure that they were in deficit again fairly smartly to prevent the Treasury from taking its 85 per cent. We would have to take powers to control the scheme to prevent that temptation arising, and we would rather not do that.
  The right hon. Gentleman's point about pensioners who get their pensions from two funds gives rise to some complications. Clause 47 needs tidying up, and we shall table some amendments in another place to meet that point.

  1347
  I thought that we had covered every conceivable possibility of basic schemes am supplementation schemes in our debates on the clause. However, my hon. Friend the Member for Brentwood and Ongar has produced a new variety of railway pension fund—the British Transport Police Superannuation Fund, which turns out to have part of its fund paying out index-linked pensions and the other part not doing so but relying on supplementation by the Government. I should have relied on my hon. Friend to produce a new animal to make our problems worse, because I remember his expertise in this area when he and I were involved with the social security legislation in 1975.
  My hon. Friend is quite right. Clause 47 as it stands would not meet the problem and would give rise to the sense of grievance that was expressed in the letter that he read to the House. For that reason I give him an undertaking that we will table appropriate amendments in another place. We shall have to devise arrangements whereby any such surplus can be divided into two parts, one part of which is subject to the 85 per cent. that has to go to the taxpayer when it produces a surplus and the other part of which can devote its surplus to improving benefits because there will be no claim upon it by the taxpayer. I see that my hon. Friend agrees that that meets his point. On that basis I ask the House, to accept amendment No. 84 but to resist the other amendments that the right hon. Member for Barrow-in-Furness has canvassed.
  Mr. Booth: With the leave of the House, Mr. Deputy Speaker, may I say that the Parliamentary Secretary has not addressed himself to the Point of amendments Nos. 85 and 86? I will remind him. The Bill as presently drafted would allow the Government to extend the clawing back to future services and not just to the surplus at the time when the Bill is enacted. I remind him and the Minister of the assurance that they gave us time and again in Committee. They assured us that they would not worsen the position beyond the point that was guaran-
  teed by the 1974 Act.
  We have had many arguments about other improvements subsequent to that Act, but never before tonight have we had the Government doing something that could worsen the position. Under the 1974 Act, although an allowance may have been made in calculating the fund in debt for any surpluses existing at the end of 1979—that was clearly allowed under the 1979 Act—no account could have been taken for clawback purposes of any surpluses made after 1979. If the Bill is left in this form it will worsen the position guaranteed by the 1974 Act.
  I ask the Parliamentary Secretary to accept amendments Nos. 85 and 86. If he does not, I shall invite my hon. Friends to vote in favour of them, just as we would vote for the reduction of the claw-back percentage.
  Mr. Kenneth Clarke: I am sorry that I overlooked that point. The answer is "No." I do not accept that what we are doing will worsen the position compared with the 1974 Act. I shall not go once again into the technical differences between the settlement under the 1974 Act and that embodied in this Bill. We seek to achieve the same end by a different method.
  The argument of the right hon. Member for Barrow-in-Furness (Mr. Booth) overlooks what the board has been doing under the settlement in the 1974 Act to ensure that any surpluses arising on basic schemes are diverted to British Railways 1974 fund. That is the basic supplementation fund. I notice that the right hon. Gentleman nods his head. Perhaps he will not press these amendments to a Division. If we had carried on without the Bill the board would have taken steps to ensure that surpluses under the basic schemes were devoted to improving the supplementation scheme. We are changing the mechanics. We are using the method set out in the Bill to achieve precisely the same result.
  Question put, That the amendment be made:—
  The House divided: Ayes 211, Noes 276.

  Division NO.245]

  AYES

  [11.51 pm

  Abse, leo

  Anderson, Donald

  Ashley, Rt Hon Jack

  Adams, Allen

  Archer, Rt Hon peter

  Atkinson, Norman(H'get, Tott'ham

  Allaun, Frank

  Armstrong, Rt Hon Ernest

  Barnett, Guy (Greenwich)

  Barnett, Rt Hon Joel (Heywood)

  Harrison, Rt Hon Walter

  Pavitt, Laurie

  Benn, Rt Hon Anthony Wedgwood

  Haynes, Frank

  Pendry, Tom

  Bidwell, Sydney

  Heffer, Eric S.

  Penhallgon, David

  Booth, Rt Hon Albert

  Hogg, Norman (E Dunbartonshire)

  Powell, Raymond (Ogmore)

  Boothroyd, Miss Betty

  Holland, Stuart (L'beth, Vauxhall)

  Prescott, John

  Bradley, Tom

  Home Robertson, John

  Race, Reg

  Bray, Dr Jeremy

  Homewood, William

  Radice, Giles

  Erown, Hugh D. (Provan)

  Hooley, Frank

  Rees, Rt Hon Meriyn (Leeds South)

  Brown, Ronald W. (Hackney S)

  Horam, John

  Richardson, Jo

  Brown, Ron (Edinburgh, Leith)

  Huckfield, Lea

  Roberts, Albert (Normanton)

  Buchan, Norman

  Hudson Davies, Gwilym Ednyfed

  Roberts, Ernest (Hackney North)

  Callaghan, Jim (Middleton & P)

  Hughes, Mark (Durham)

  Roberts, Gwilym (Cannock)

  Campbell, Ian

  Hughes, Robert (Aberdeen North)

  Robertson, George

  Campbell-Savours, Dale

  Hughes, Roy (Newport)

  Robinson, Geoffrey (Coventry NW)

  Carmlchael, Neil

  Janner, Hon Greville

  Rodgers, Rt Hon William

  Cartwright, John

  John, Brynmor

  Rooker, J. W.

  Clark, Dr David (South Shields)

  Johnson, James (Hull West)

  Rowlands,Ted

  Cocks, Rt Hon Michael (Bristol S)

  Johnson, Walter (Derby South)

  Ryman, John

  Cohen, Stanley

  Jones, Rt Hon Alec (Rhondda)

  Sandelson, Neville

  Coleman, Donald

  Jones, Dan (Burnley)

  Sever, John

  Concannon, Rt Hon J. D.

  Kaufman, Rt Hon Gerald

  Sheerman, Barry

  Conlan, Bernard

  Kerr, Russell

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

  Cowans, Harry

  Kilroy-Silk, Robert

  Shore, Rt Hon Peter (Step and Pop)

  Crowther, J. S.

  Lamble, David

  Silkin, Rt Hon John (Deptford)

  Cryer, Bob

  Lamborn, Harry

  Silkin, Rt Hon S. C. (Dulwich)

  Cunliffe, Lawrence

  Leadbitter, Ted

  Silverman, Julius

  Cunningham, George (Islington S)

  Leighton, Ronald

  Snape, Peter

  Cunningham, Dr John (Whitehaven)

  Lestor, Miss Joan (Eton & Slough)

  Soley, Clive

  Dalyell, Tam

  Lewis, Ron (Carlisle)

  Spearing, Nigel)

  Davidson, Arthur

  Litherland, Robert

  Spriggs, Leslie

  Davies, lfor (Gower)

  Lofthouse, Geoffrey

  Stallard, A. W.

  Davis, Clinton (Hackney Central)

  Lyon, Alexander (York)

  Stoddart, David

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

  Lyons, Edward (Bradford West)

  Stott, Roger

  Deakins, Eric

  McCartney, Hugh

  Strang, Gavin

  Dempsey, Jame

  McDonald, Dr Oonagh

  Straw, Jack

  Dewar, Donald

  McGuIre, Michael (Ince)

  Summerskill, Hon Dr Shirley

  Dixon, Donald

  McKay, Alien (Penistone)

  Taylor, Mrs Ann (Bolton West)

  Dobson, Frank

  McKeivey, William

  Thomas, Jeffrey (Abertillery)

  Douglas, Dick

  MacKenzie, Rt Hon Gregor

  Thomas, Mike (Newcastle East)

  Douglas-Mann, Bruce

  Maclennan, Robert

  Thomas, Dr Roger (Carmarthen)

  Dubs, Alfred

  McMillan, Tom (Glasgow, Central)

  Thorne, Stan (Preston South)

  Dunnett, Jack

  McNally, Thomas

  Tilley, John

  Dunwoody, Mrs Gwyneth

  Magee, Bryan

  Tinn, James

  Eadie, Alex

  Marks, Kenneth

  Torney, Tom

  Eastham, Ken

  Marshall, David (Gl'sgow.Sbettles'n)

  Urwin, Rt Hon Tom

  Ellis, Raymond (NE Derbyshire)

  Marshall, Dr Edmund (Goole)

  Varley, Rt Hon Eric G.

  Ellis, Tom (Wrexham)

  Marshall, Jim (Leicester South)

  Walker, Rt Hon Harold (Doncaster)

  Evans, loan (Aberdare)

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

  Watkins, David

  Evans, John (Newton)

  Maxton, John

  Weetch, Ken

  Ewing, Harry

  Maynard, Miss Joan

  Wellbeloved, James

  Field, Frank

  Meacher, Michael

  Welsh, Michael

  Flannery, Martin

  Meliish, Rt Hon Robert

  White, Frank R. (Bury & Radcliffe)

  Fletcher, Ted (Darlington)

  Mlkardo, Ian

  White, James (Glasgow, Pollok)

  Foot, Rt Hon Michael

  Millan, Rt Hon Bruce

  Whitehead, Phillip

  Ford, Ben

  Miller, Dr M. S. (East Kilbride)

  Whitlock, William

  Forrester, John

  Mitchell, Austin (Grimsby)

  Willey, Rt Hon Frederick

  Foster, Derek

  Mitchell, R. C. (Soton, Itchen)

  Williams, Rt Hon Alan (Swansea W)

  Foulkes, George

  Morris, Rt Hon Alfred (Wythenshawe)

  Williams, Sir Thomas (Warrington)

  Fraser, John (Lambeth, Norwood)

  Morris, RI Hon Charles (Openshaw)

  Wilson, Rt Hon Sir Harold (Huyton)

  Garrett, John (Norwich S)

  Morris, Rt Hon John (Aberavon)

  Wilson, William (Coventry SE)

  Garrett, W. E. (Wallsend)

  Morton, George

  Wlnnick, David

  George, Bruce

  Moyle, Rt Hon Roland

  Woolmer, Kenneth

  Gilbert, Rt Hon Dr John

  Newens, Stanley

  Wright, Sheila

  Ginsburg, David

  Oakes, Rt Hon Gordon

  Young, David (Bolton East)

  Golding, John

  O'Neill, Martin

  Graham, Ted

  Orme, Rt Hon Stanley

  TELLERS FOR THE AYES:

  Grant, George (Morpeth)

  Owen, Rt Hon Dr David

  Mr. Joseph Dean and

  Grant, John (Islington C)

  Palmer, Arthur

  Mr. James Hamilton.

  Hamilton, W. W. (Central Fife)

  Park, George

  NOES

  Aitken, Jonathan

  Benyon, W. (Buckingham)

  Bright, Graham

  Alexander, Richard

  Berry, Hon Anthony

  Brinton, Tim

  Ancram, Michael

  Best, Keith

  Brittan, Leon

  Arnold, Tom

  Biffen, Rt Hon John

  Brocklebank-Fowler, Christopher

  Aspinwall, Jack

  Biggs-Davison, John

  Brown, Michael (Brigg & Sc'thorpe)

  Atkins, Robert (Preston North)

  Blackburn, John

  Browne, John (Winchester)

  Atkinson, David (B'mouth, East)

  Blaker, Peter

  Bruce-Gardyne, John

  Baker, Kenneth (St. Marylebone)

  Body, Richard

  Buck, Antony

  Baker, Nicholas (North Dorset)

  Bonsor Sir Nicholas

  Budgen, Nick

  Beaumont-Dark, Anthony

  Boscawen, Hon Robert

  Bulmer, Esmond

  Bell, Sir Ronald

  Bottomley, Peter (Woolwich West)

  Burden, F. A.

  Bendall, Vivian

  Bowden, Andrew

  Butcher, John

  Benyon, Thomas (Abingdon)

  Boyson, Dr Rhodes

  Butler, Hon Adam

  Cadbury, Jocelyn

  Irving, Charles (Cheltenham)

  Proctor, K. Harvey

  Carlisle, John (Luton West)

  Johnson Smith, Geoffrey

  Raison, Timothy

  Carlisle, Kenneth (Lincoln)

  Jopling, Rt Hon Michael

  Rathbone, Tim

  Carlisle, Rt Hon Mark (Runcorn)

  Kaberry, Sir Donald

  Rees, Peter (Dover and Deal)

  Chalker, Mrs Lynda

  Kershaw, Anthony

  Rees-Davies, W. R.

  Channon, Paul

  Kimball, Marcus

  Renton, Tim

  Chapman, Sydney

  King, Rt Hon Tom

  Rhodes, James, Robert

  Churchill, W. S.

  Kitson, Sir Timothy

  Rhys Williams, Sir Brandon

  Clark, Hon Alan (Plymouth, Sutton)

  Knight, Mrs Jill

  Ridley, Hon Nicholas

  Clark, Sir William (Croydon South)

  Knox, David

  Ridsdale, Jullian

  Clarke, Kenneth (Rushcliffe)

  Lamont, Norman

  Rifkind, Malcolm

  Clegg, Sir Walter

  Lang, Ian

  Roberts, Michael (Cardiff NW)

  Colvin, Michael

  Langford-Holt, Sir John

  Roberts, Wyn (Conway)

  Cope,John

  Latham, Michael

  Ross, Wm. (Londonderry)

  Corrie, John

  Lawrence, Ivan

  Rossi, Hugh

  Costain, A.P.

  Lawson, Nigel

  Rost, Peter

  Critchley, Julian

  Lee, John

  Sainsbury, Hon Timothy

  Crouch, David

  Le Marchant, Spencer

  St. John-Stevas, Rt Hon Norman

  Dickens, Geoffrey

  Lennox-Boyd, Hon Mark

  Scott, Nicholas

  Dorrell, Stephen

  Lester, Jim (Beeston)

  Shaw, Michael (Scarborough)

  Dover, Denshore

  Lewis, Kenneth (Rutland)

  Shelton, William (Streatham)

  du Cann, Rt Hon Edward

  Lloyd, Ian (Havant & Waterloo)

  Shepherd, Colin (Hereford)

  Dunn, Robert (Dartford)

  Lloyd, Peter (Fareham)

  Shepherd, Richard(Aldridge-Br'hills)

  Dykes, Hugh

  Loveridge, John

  Shersby, Michael

  Eden, Rt Hon Sir John

  Luce, Richard

  Silvester, Fred

  Edwards, Rt Hon N. (Pembroke)

  Lyell, Nicholas

  Skeet, T. H. H.

  Eggar, Timothy

  McCrindle, Robert

  Speller, Tony

  Elliott, Sir William

  Macfarlane, Neil

  Spence, John

  Emery, Peter

  MacGregor, John

  Spicer, Michael (S Worcestershire)

  Fairbairn, Nicholas

  MacKay, John (Argyll)

  Sproat, Iain

  Fairgrieve, Russell

  McNair-Wilson, Michael (Newbury)

  Squire, Robin

  Faith, Mrs Sheila

  McNair-Wilson, Patrick (New Forest)

  Stainton, Keith

  Farr, John

  McQuarrie, Albert

  Stanbrook, Ivor

  Fell, Anthony

  Madel, David

  Stanley, John

  Fenner, Mrs Peggy

  Major, John

  Steen, Anthony

  Finsberg, Geoffrey

  Marlow, Tony

  Stevens, Martin

  Fisher, Sir Nigel

  Marshall, Michael (Arundel)

  Stewart, Ian (Hitchin)

  Fletcher, Alexander (Edinburgh N)

  Mather, Carol

  Stewart, John (East Renfrewshire)

  Fookes, Miss Janet

  Maude, Rt Hon Angus

  Stokes, John

  Forman, Nigel

  Mawby, Ray

  Stradling Thomas, J.

  Fowler, Rt Hon Norman

  Mawhinney, Dr Brian

  Tapsell, Peter

  Fox, Marcus

  Maxwell-Hyslop, Robin

  Taylor, Teddy (Southend East)

  Fraser, Peter (South Angus)

  Mayhew, Patrick

  Tebbit, Norman

  Fry, Peter

  Meyer, Sir Anthony

  Temple-Morris, Peter

  Gardiner, George (Reigate)

  Miller, Hal (Bromsgrove & Redditch)

  Thatcher, Rt Hon Mrs Margaret

  Gardner, Edward (South Fylde)

  Mills, Iain (Meriden)

  Thomas, Rt Hon Peter (Hendon S)

  Garel-Jones, Tristan

  Mills, Peter (West Devon)

  Thompson, Donald

  Goodhart, Philip

  Miscampbell, Norman

  Thorne, Nell (Ilford South)

  Goodhew, Victor

  Mitchell, David (Basingstoke)

  Thornton, Malcolm

  Gorst. John

  Moate, Roger

  Townend, John (Bridlington)

  Gow, Ian

  Molyneaux, James

  Townsend, Cyril D. (Bexleyheath)

  Gower, Sir Raymond

  Monro, Hector

  Trippler, David

  Gray, Hamish

  Montgomery, Fergus

  Trotter, Neville

  Greenway, Harry

  Morris, Michael (Northampton, Sth)

  van Straubenzee, W. R.

  Grieve, Percy

  Morrison, Hon Charles (Devizes)

  Vaughan, Dr Gerard

  Griffiths, Eldon (Bury St Edmunds)

  Morrison, Hon Peter (City of Chester)

  Viggers, Peter

  Griffiths, Peter (Portsmouth N)

  Mudd, David

  Waddington, David

  Grist, Ian

  Murphy, Christopher

  Wakeham, John

  Grylls, Michael

  Myles, David

  Waldegrave, Hon William

  Gummer, John Selwyn

  Neale, Gerrard

  Walker, Bill (Perth & E Perthshire)

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

  Needham, Richard

  Waller, Garry

  Hamilton, Michael (Salisbury)

  Nelson, Anthony

  Walters, Dennis

  Hannam, John

  Neubert, Michael

  Ward, John

  Haselhurst, Alan

  Newton, Tony

  Watson, John

  Hastings, Stephen

  Oppenheim, Rt Hon Mrs Sally

  Wells, John (Maidstone)

  Havers, Rt Hon Sir Michael

  Page, John (Harrow, West)

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

  Hawksley, Warren

  Page, Rt Hon Sir R. Graham

  Wheeler, John

  Hayhoe, Barney

  Page, Richard (SW Hertfordshire)

  Whitney, Raymond

  Heddle, John

  Parkinson, Cecil

  Wickenden, Keith

  Henderson, Barry

  Parris, Matthew

  Wiggin, Jerry

  Heseltine, Rt Hon Michael

  Patten, Christopher (Bath)

  Wilkinson, John

  Hicks, Robert

  Patten, John (Oxford)

  Williams, Delwyn (Montgomery)

  Higgins, Rt Hon Terence L.

  Pattie, Geoffrey

  Winterton, Nicholas

  Hogg, Hon Douglas (Grantham)

  Pawsey, James

  Wolfson, Mark

  Hooson, Tom

  Percival, Sir Ian

  Young, Sir George (Acton)

  Hordern, Peter

  Pollock, Alexander

  Younger, Rt Hon George

  Howell, Rt Hon David (Guildford)

  Porter, George

  Howell, Ralph (North Norfolk)

  Powell, Rt Hon J. Enoch (S Down)

  TELLERS FOR THE NOES:

  Hunt, David (Wirral)

  Price, David (Eastleigh)

  Lord James Douglas-Hamilton and

  Hunt, John (Ravensbourne)

  Prior, Rt Hon James

  Mr. Peter Brooke

  Question accordingly negatived
  Amendment proposed: No. 84, in page 44, line 2 leave out from first "by" to end of line 3 and insert
  "85 per cent. of the amount by which the assets of that scheme exceed its liabilities" [Mr. Kenneth Clarke.]
  Amendment proposed to the proposed amendment: (a), leave out "85 per
  cent. "and insert "70 per cent.". [Mr. Booth.]
  Question put, That the amendment to the proposed amendment be made:
  The House divided: Ayes 207, Noes 275.

  Division No. 246]

  AYES

  [12.03 am

  Abse, Leo

  Gilbert, Rt Hon Dr John

  Oakes, Rt Hon Gordon

  Adams, Allen

  Golding, John

  O'Neill, Martin

  Allaun, Frank

  Graham, Ted

  Orme, Rt Hon Stanley

  Anderson, Donald

  Grant, George (Morpeth)

  Owen, Rt Hon Dr David

  Archer, Rt Hon Peter

  Grant, John (Islington C)

  Palmer, Arthur

  Armstrong, Rt Hon Ernest

  Hamilton, James (Bothwell)

  Park, George

  Ashley, Rt Hon Jack]

  Hamilton, W. W. (Central Fife)

  Pavitt, Laurie

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

  Harrison, Rt Hon Walter

  Pendry, Tom

  Barnett, Guy (Greenwich)

  Haynes, Frank

  Powell, Raymond (Ogmore)

  Barnett, Rt Hon Joel (Heywood)

  Heffer, Eric S.

  Prescott, John

  Benn, Rt Hon Anthony Wedgwood

  Hogg, Norman (E Dunbartonshire)

  Race, Reg

  Bidwell, Sydney

  Holland, Stuart (L'beth, Vauxhall)

  Radice, Giles

  Booth, Rt Hon Albert

  Home Robertson, John

  Rees, Rt Hon Merlyn (Leeds South)

  Boothroyd, Miss Betty

  Homewood, William

  Richardson, Jo

  Bradley, Tom

  Hooley, Frank

  Roberts, Ernest (Hackney North)

  Bray, Dr Jeremy

  Horam, John

  Roberts, Gwilym (Cannock)

  Brown, Hugh D. (Provan)

  Huckfield, Les

  Robertson, George

  Brown, Ronald W. (Hackney S)

  Hudson Davies, Gwilym Ednyfed

  Robinson, Geoffrey (Coventry KW)

  Brown, Ron (Edinburgh, Leith)

  Hughes, Mark (Durham)

  Rodgers, Rt Hon William

  Buchan, Norman

  Hughes, Robert (Aberdeen North)

  Rooker, J. W.

  Callaghan, Jim (Middleton & P)

  Hughes, Roy (Newport)

  Rowlands, Ted

  Campbell, Ian

  Janner, Hon Greville

  Sandelson, Neville

  Campbell-Savours, Dale

  John, Brynmor

  Sever, John

  Carmichael, Nell

  Johnson, James (Hull West)

  Sheerman, Barry

  Cartwright, John

  Johnson, Walter (Derby South)

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

  Clark, Dr David (South Shields)

  Jones, Rt Hon Alec (Rhondda)

  Shore, Rt Hon Peter (Step and Pop)

  Cocks, Rt Hon Michael (Bristol S)

  Jones, Dan (Burnley)

  Silkin, Rt Hon John (Deptford)

  Cohen, Stanley

  Kaufman, Rt Hon Gerald

  Silkin, Rt Hon S. C. (Dulwich)

  Coleman, Donald

  Kerr, Russell

  Silverman, Julius

  Concannon, Rt Hon J. D.

  Kilroy-Silk, Robert

  Snape, Peter

  Conlan, Bernard

  Lambie, David

  Soley, Clive

  Cowans, Harry

  Lamborn, Harry

  Spearing, Nigel

  Crowther, J. S.

  Leadbitter, Ted

  Spriggs, Leslie

  Cryer, Bob

  Leighton, Ronald

  Stallard, A. W.

  Cunliffe, Lawrence

  Lestor, Miss Joan (Eton & Slough)

  Stoddart, David

  Cunningham, George (Islington S)

  Lewis, Ron (Carlisle)

  Stott, Roger

  Cunningham, Dr John (Whitehaven)

  Litherland, Robert

  Strang, Gavin

  Dalyell, Tam

  Lofthouse, Geoffrey

  Straw, Jack

  Davidson, Arthur

  Lyon, Alexander (York)

  Summerskill, Hon Dr Shirley

  Davies, Ifor (Gower)

  Lyons, Edward (Bradford West)

  Taylor, Mrs Ann (Bolton West)

  Davis, Clinton (Hackney Central)

  McCartney, Hugh

  Thomas, Jeffrey (Abertillery)

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

  McDonald, Dr Oonagh

  Thomas, Mike (Newcastle East)

  Deakins, Eric

  McGuire, Michael (Ince)

  Thomas, Dr Roger (Carmarthen)

  Dempsey, James

  McKay, Allen (Penistone)

  Thorne, Stan (Preston South)

  Dewar, Donald

  McKelvey, William

  Tilley, John

  Dixon, Donald

  MacKenzie, Rt Hon Gregor

  Torney, Tom

  Dobson. Frank

  Maclennan, Robert

  Urwin, Rt Hon Tom

  Douglas, Dick

  McMillan, Tom (Glasgow, Central)

  Varley, Rt Hon Eric G.

  Douglas-Mann, Bruce

  McNally, Thomas

  Walker, Rt Hon Harold (Doncaster)

  Dubs, Alfred

  Magee, Bryan

  Watkins, David

  Dunnett, Jack

  Marks, Kenneth

  Weetch, Ken

  Dunwoody, Mrs Gwyneth

  Marshall, David (GI'sgow,Shett!es'n)

  Wellbeloved, James

  Eadie, Alex

  Marshall, Dr Edmund (Goole)

  Welsh, Michael

  Eastham, Ken

  Marshall, Jim (Leicester South)

  White, Frank R. (Bury & Radcliffe)

  Ellis, Raymond (NE Derbyshire)

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

  White, James (Glasgow, Pollok)

  Ellis, Tom (Wrexham)

  Maxton, John

  Whitehead, Phillip

  Evans, loan (Aberdare)

  Maynard, Miss Joan

  Whitlock, William

  Evans, John (Newton)

  Meacher, Michael

  Willey, Rt Hon Frederick

  Ewing, Harry

  Hellish, Rt Hon Robert

  Williams, Rt Hon Alan (Swansea W)

  Field, Frank

  Mikardo, Ian

  Williams, Sir Thomas (Warrington)

  Flannery, Martin

  Millan, Rt Hon Bruce

  Wilson, Rt Hon Sir Harold (Huyton)

  Fletcher, Ted (Darlington)

  Miller, Dr M. S. (East Kilbride)

  Wilson, William (Coventry SE)

  Fool, Rt Hon Michael

  Mitchell, Austin (Grimsby)

  Winnick, David

  Ford, Ben

  Mitchell, R. C. (Solon, Itchen)

  Woolmer, Kenneth

  Forrester, John

  Morris, Rt Hon Alfred (Wythenshawe)

  Wright, Sheila

  Foster, Derek

  Morris, Rt Hon Charles (Openshaw)

  Young, David (Bolton East)

  Foulkes, George

  Morris, Rt Hon John (Aberavon)

  Fraser, John (Lambeth, Norwood)

  Morton, George

  TELLERS FOR THE AYES:

  Garrett, John (Norwich S)

  Moyle, Rt Hon Roland

  Mr. Joseph Dean and

  Garrett, W. E. (Wallsend)

  Newens, Stanley

  Mr. James Tinn.

  George, Bruce

  NOES

  Aitken, Jonathan

  Fry, Peter

  Mitchell, David (Basingstoke)

  Alexander, Richard

  Gardiner, George (Reigate)

  Moate, Roger

  Ancram, Michael

  Gardner, Edward (South Fylde)

  Molyneaux, James

  Arnold, Tom

  Garel-Jones, Tristan

  Monro, Hector

  Aspinwall, Jack

  Goodhart, Philip

  Montgomery, Fergus

  Atkins, Robert (Preston North)

  Goodhew, Victor

  Morris, Michael (Northampton, Sth)

  Atkinson, David (B'mouth, East)

  Gorst, John

  Morrison, Hon Charles (Devizes)

  Baker, Kenneth (St. Marylebone)

  Gow, Ian

  Morrison, Hon Peter (City of Chester)

  Baker, Nicholas (North Dorset)

  Gower, Sir Raymond

  Mudd, David

  Beaumont-Dark, Anthony

  Gray, Hamish

  Murphy, Christopher

  Bell, Sir Ronald

  Greenway, Harry

  Myles, David

  Bendall, Vivian

  Grieve, Percy

  Neale, Gerrard

  Benyon, Thomas (Abingdon)

  Griffiths, Eldon (Bury St Edmunds)

  Needham, Richard

  Benyon, W. (Buckingham)

  Griffiths, Peter (Portsmouth N)

  Nelson, Anthony

  Berry, Hon Anthony

  Grist, Ian

  Neubert, Michael

  Best, Keith

  Grylls, Michael

  Newton, Tony

  Bitten, Rt Hon John

  Gummer, John Selwyn

  Oppenheim, Rt Hon Mrs Sally

  Biggs-Davison, John

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

  Page, John (Harrow, West)

  Blackburn, John

  Hamilton, Michael (Salisbury)

  Page, Rt Hon Sir R. Graham

  Blake-, Peter

  Hannam,John

  Page, Richard (SW Hertfordshire)

  Body, Richard

  Haselhurst, Alan

  Parkinson, Cecil

  Bonsor, Sir Nicholas

  Havers, Rt Hon Sir Michael

  Parris, Matthew

  Boscawen, Hon Robert

  Hawksley, Warren

  Patten, Christopher (Bath)

  Bottomley, Peter (Woolwich West)

  Hayhoe, Barney

  Patten, John (Oxford)

  Bowden, Andrew

  Heddle, John

  Pattie, Geoffrey

  Boyson, Dr Rhodes

  Henderson, Barry

  Pawsey, James

  Bright, Graham

  Heseltine, Rt Hon Michael

  Penhaligon, David

  Brinton, Tim

  Hicks, Robert

  Percival, Sir Ian

  Brittan, Leon

  Higgins, Rt Hon Terence L.

  Pollock, Alexander

  Brocklebank-Fowler, Christopher

  Hogg, Hon Douglas (Grantham)

  Porter, George

  Brooke, Hon Peter

  Hooson, Tom

  Powell, Rt Hon J. Enoch(S Down)

  Brown, Michael (Brigg & Sc'thorpe)

  Hordern, Peter

  Price, David (Eastleigh)

  Browne, John (Winchester)

  Howell, Rt Hon David (Guildford)

  Prior, Rt Hon James

  Bruce-Gardyne, John

  Howell, Ralph (North Norfolk)

  Proctor, K. Harvey

  Buck, Antony

  Hunt, David (Wirral)

  Raison, Timothy

  Budgen, Nick

  Hunt, John (Ravensbourne)

  Rathbone, Tim

  Bulmer, Esmond

  Irving, Charles (Cheltenham)

  Rees, Peter (Dover and Deal)

  Burden, F. A.

  Johnson Smith, Geoffrey

  Rees-Davies, W. R.

  Butcher, John

  Jopling, Rt Hon Michael

  Renton, Tim

  Butler, Hon Adam

  Kaberry, Sir Donald]

  Rhodes, James, Robert

  Cadbury, Jocelyn

  Kershaw, Anthony

  Rhys Williams, Sir Brandon

  Carlisle, John (Luton West)

  King, Rt Hon Tom

  Ridley, Hon Nicholas

  Carlisle, Kenneth (Lincoln)

  Kitson, Sir Timothy

  Ridsdale, Julian

  Carlisle, Rt Hon Mark (Runcorn)

  Knight, Mrs Jill

  Rifkind, Malcolm

  Chalker, Mrs Lynda

  Knox, David

  Roberts, Michael (Cardiff NW)

  Channon, Paul

  Lamont. Norman

  Roberts, Wyn (Conway)

  Chapman, Sydney

  Lang, Ian

  Ross, Wm. (Londonderry)

  Churchill, W. S.

  Langford-Holt, Sir John

  Rossi, Hugh

  Clark, Hon Alan (Plymouth, Sutton)

  Latham, Michael

  Rost, Peter

  Clark, Sir William (Croydon South)

  Lawrence, Ivan

  Sainsbury, Hon Timothy

  Clarke, Kenneth (Rushcliffe)

  Lawson. Nigel

  St. John-Stevas, Rt Hon Norman

  Clegg, Sir Walter

  Lee, John

  Scott, Nicholas

  Colvin Michael

  Le Marchant, Spencer

  Shaw, Michael (Scarborough)

  Cope, John

  Lennox-Boyd, Hon Mark

  Shelton, William (Streatham)

  Come. John

  Lester, Jim (Beeston)

  Shepherd, Colin (Hereford)

  Costain, A.P.

  Lewis, Kenneth (Rutland)

  Shepherd, Richard (Aldridge-Br'hills)

  Critchley. Julian

  Lloyd, Ian (Havant & Waterloo)

  Shersby, Michael

  Crouch, David

  Lloyd, Peter (Fareham)

  Silvester, Fred

  Dickens, Geoffrey

  Loveridge, John

  Skeet, T. H. H.

  Dorrell, Stephen

  Luce, Richard

  Speller, Tony

  Dover, Denshore

  Lyell, Nicholas

  Spence, John

  du Cann, Rt Hon Edward

  McCrindle, Robert

  Spicer, Michael (S Worcestershire)

  Dunn, Robert (Dartford)

  Macfarlane, Neil

  Sproat, Iain

  Dykes, Hugh

  MacKay, John (Argyll)

  Squire, Robin

  Eden, Rt Hon Sir John

  McNair-Wilson, Michael (Newbury)

  Stainton, Keith

  Edwards, Rt Hon N. (Pembroke)

  McNair-Wilson, Patrick (New Forest)

  Stanbrook, Ivor

  Eggar, Timothy

  McQuarrie, Albert

  Stanley, John

  Elliott, Sir William

  Madel, David

  Steen, Anthony

  Emery, Peter

  Major, John

  Stevens, Martin

  Fairbairn, Nicholas

  Marlow, Tony

  Stewart, Ian (Hitchin)

  Fairgrieve, Russell

  Marshall, Michael (Arundel)

  Stewart, John (East Renfrewshire)

  Faith, Mrs Sheila

  Mather, Carol

  Stokes, John

  Farr, John

  Maude, Rt Hon Angus]

  Stradling Thomas, J.

  Fell, Anthony

  Mawby, Ray

  Tapsell, Peter

  Fenner, Mrs Peggy

  Mawhinney, Dr Brian

  Tebbit, Norman

  Finsberg, Geoffrey

  Maxwell-Hyslop, Robin

  Temple-Morris, Peter

  Fisher, Sir Nigel

  Mayhew, Patrick

  Thatcher, Rt Hon Mrs Margaret

  Fletcher, Alexander (Edinburgh N)

  Mellor, David

  Thomas, Rt Hon Peter (Hendon S)

  Fookes, Miss Janet]

  Meyer, Sir Anthony

  Thompson, Donald

  Forman, Nigel

  Miller, Hal (Bromsgrove & Redditch)

  Thorne, Nell (Ilford South)

  Fowler, Rt Hon Norman

  Mills, Iain (Meriden)

  Thornton, Malcolm

  Fox, Marcus

  Mills, Peter (West Devon)

  Townend, John (Bridlington)

  Fraser, Peter (South Angus)

  Miscampbell, Norman

  Townsend, Cyril D. (Bexleyheath)

  Trippier, David

  Waller, Garry

  Wilkinson, John

  Trotter, Neville

  Walters, Dennis

  Williams, Delwyn (Montgomery)

  Taylor, Teddy (Southend East)

  Ward, John

  Winterton, Nicholas

  van Straubenzee, W. R.

  Watson, John

  Wolfson, Mark

  Vaughan, Dr Gerard

  Wells, John (Maidstone)

  Young, Sir George (Acton)

  Viggers, Peter

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

  Younger, Rt Hon George

  Waddington, David

  Wheeler, John

  Wakeham, John

  Whitney, Raymond

  TELLERS FOR THE NOES:

  Waldegrave, Hon William

  Wickenden, Keith

  Lord James Douglas-Hamilton and

  Walker, Bill (Perth & E Perthshire)

  Wiggin, Jerry

  Mr. John MacGregor.

  Question accordingly negatived.
  Proposed amendment agreed to.

Schedule 1

  PUBLIC SERVICE VEHICLES: CONDITIONS AFFECTING STATUS OR CLASSIFICATION
  12.15 am
  Amendment proposed: No. 56, in page 50, leave out lines 7 to 28.—[Mr. Bendall.]
  Question, That the amendment be made, put and negatived.

Schedule 2

  ORDERS DESIGNATING TRIAL AREAS
  Amendments made:
  No. 59, in page 51, line 18, leave out paragraph 4 and insert—
  '4. Before making an application to the Minister for an order under section 12(3A) varying or revoking a designation order the local authority concerned—

  (a) shall notify—

  (i) every local authority (if any) whose area adjoins the trial area in question;

  (ii) every district council whose area adjoins the trial area;

  (iii) any person who is for the time being providing a stage carriage service in the trial area; and

  (iv) such organisations as appear to the local authority concerned appropriate as representing persons providing or employed in the provision of public passenger transport services (within the meaning of paragraph 2) in the trial area; and

  (b) shall consult with every district council whose area is wholly or partly comprised in the trial area.

  5. Paragraph 3 shall apply in relation to an application for, and the making of, an order under section 12 (3A) as it applies in relation to an application for, and the making of, a designation order.'.
  No. 60, in page 51, line 24, at beginning insert—
  1358
  '(1) Subject to sub-paragraph (2)'.
  No. 61, in page 51, line 26, at end insert—
  '(2) An order under section 12(3A) which revokes a designation order or varies it so as to exclude from the area designated by it any part of that area shall contain such transitional provisions as the Minister thinks fit for securing that any person who has throughout the relevant period ending with the date of the order provided a stage carriage service which he will be unable to continue to provide after the time when the revocation or variation takes effect unless granted a road service licence in respect of it, can obtain as of right a road service licence that will enable him to continue to provide that service for as long as the licence remains in force after that time.
  (3) In sub-paragraph (2) "the relevant period", in relation to an order under section 12 (3A), means such period of not less than three months as may be specified in the order.'.—[Mr. Fowler.]

Schedule 4

  INCREASE OF PENALTIES IN THE 1960 ACT
  Mr. Kenneth Clarke: I beg to move amendment No. 68, in page 54, line 6, column 4, leave out '£200' and insert '£500'.
  Mr. Deputy Speaker: With this it will be convenient to take amendment No. 69.
  Mr. Clarke: This is a matter of no controversy, I think, and I ask the support of the House for it.
  Amendment agreed to.
  Amendment made: No. 69, in page 54 line 7, column 5, leave out '£200 and insert '£500'.—[Mr. Fowler.]

Schedule 5

  MINOR AND CONSEQUENTIAL AMENDMENTS RELATING TO PUBLIC SERVICE VEHICLES
  Mr. Iain Mills: I beg to move amendment No. 70, in page 56, line 24, leave out paragraph 6 and insert—
  '6.—(1) Section 146 (regulations of conduct of drivers and conductors) and section 147 (regulations of conduct of passengers) shall apply in relation to inspectors as they apply in relation to conductors.

  1359
  (2) In sub-paragraph (1) "inspector", in relation to a public service vehicle, means a person authorised to act as such by the holder of the PSV operator's licence under which the vehicle is being used.
  (3) In section 14'7(1)(d) the words "or other person authorised by the licensee of the vehicle" shall be omitted.'.
  Mr. Deputy Speaker: With this it will be convenient to take amendment No. 90, in schedule 9, page 68, line 46, column 3, at end insert—
  'In section 147(1)(d) the words "or other person authorised by the licensee of the vehicle".'.
  Mr. Mills: In moving this amendment I promise that I will take no longer than is necessary for the House to appreciate its importance. The amendment makes only small changes to two sections of the Road Traffic Act 1960 but these changes, I can assure right hon. and hon. Members opposite, are of real consequence to bus operators and their staff. Recent events have highlighted the difficulties and dangers the public transport staff face in dealing with some sections of the travelling public. [Interruption.] It is important. I must tell right hon. and hon. Gentlemen opposite that this is not a laughing matter. If hon. Members were driving the buses they might well appreciate the situation and pay a little more attention to these points. I can assure hon. Members that my speech will last as long as their interjections.
  The dangers that the public transport staff face in dealing with some sections of the travelling public are real, and it is important that those public servants should be backed by sufficient and unambiguous authority. Bus drivers and conductors are given a range of powers under the regulations mentioned in sections 146 and 147—[Interruption.]
  Mr. Deputy Speaker: Order. It is convenient if the Chair at least can hear what is going on.
  Mr. Mills: I can assure right hon. and hon. Members that bus drivers will not appreciate the sort of concern that they are showing. I say again that my speech will take as long as hon. Members' interjections.
  Bus drivers and conductors are given a range of powers under the regulations mentioned in sections 146 and 147 of the 1960 Act.
  I should like to express here my gratitude to the right hon. Gentleman who
  1360
  leads for the Opposition on these matters for bringing to my attention the slight confusion over the application of sections 146 and 147. Section 146 empowers the Minister to make regulations providing for the conduct of drivers and conductors and section 147 empowers the Minister to make regulations providing for the conduct of passengers, and then goes on to other matters.
  By amendment No. 90 it is intended to delete the words
  "or other person authorised by the licensee of the vehicle"
  in section 174. Bus drivers and conductors have a range of powers under the Vehicles (Conduct of Drivers, Conductors and Passengers) Regulations 1936, as amended in 1946 and 1975. The powers include the right to check passengers' tickets, demand fares, take names and addresses of passengers who may be committing an offence, and so on.
  Unfortunately, under present regulations it is not clear—this is the crux of the matter—whether inspectors are also covered. As inspectors are having increasing contact with passengers, and one-man buses become more usual, because of this lack of clarity—
  Mr. Deputy Speaker: Order. There still seems to be a slight background of noise.
  Mr. Mills: For the third time—I am determined to continue. We should proceed far more quickly if hon. and right hon. Members could hear me. I am delighted to detain the House because, as a new Member, I have heard right hon. and hon. Members making long speeches. They are being most discourteous.
  Inspectors are having increased contact with passengers on one-man operated buses, and we must therefore make unambiguous the regulations governing their powers. The amendment ensures that in future the regulations will apply to inspectors as they apply to conductors and drivers. I sincerely beg the House to support the amendment.
  Mr. Kenneth Clarke: I am grateful to my hon. Friend for raising the matter. He is quite right; there is genuine doubt under the present law whether the powers extend to inspectors. With more one-man operation the more likely it is that inspectors will have contact with the public and need these powers. I commend the

  1361
  amendment to the House.
  Amendment agreed to.
  Amendments made:
  No. 71, in page 58, leave out line 1.
  No. 72, in page 58, line 10, leave out 'or disc'.
  No. 73, in page 59, line 34, at end insert—

  'TRANSPORT ACT 1968 (c.73)
  In section 159(1) (interpretation) for the definition of "excursion or tour" substitute—"'excursion or tour' means a stage or express carriage service on which the passengers travel together on a journey, with or without breaks, from one or more places to one or more other places and back; ".'.—[Mr. Fowler.]
  Mr. Fowler: I beg to move amendment No. 74, in page 61, line 31, at end insert—
  '1. In section 1(5) (power of non-metropolitan counties to make grants) for paragraph (b) substitute—
  "(b) to persons providing facilities for sharing motor vehicles not adapted to carry more than eight passengers with a view to meeting the social and welfare needs of one or more communities.".'.
  The amendment concerns social car schemes and is fairly non-controversial. I ask the House to support it.
  Amendment agreed to.
  Amendments made:
  No. 75, in page 61, line 32, leave out from 'For' to (1) 'in line 33 and in-sert—
  'subsections (1) to (9) of section 5 (community bus services) substitute the following subsections—'.
  No. 76, in page 63, line 48, at end insert—
  '2. Section 6 shall be omitted.'.—[Mr. Fowler.]

Schedule 8

  B. R. PENSION SCHEMES
  Mr. Kenneth Clarke: I beg to move amendment No. 89, in page 68, line 10, at end insert—
  'Southern Railway (South Eastern & Chatham Section) Enginemen & Motormen's Pension Fund Society'.
  The amendment seeks to add to the list of pension schemes under the Bill the Southern Railway (South Eastern &
  1362
  Chatham Section) Enginemen & Motormen's Pension Fund Society. This is an important pension scheme which the Government forgot when they first drafted the Bill. We have discovered that it is run from Wandsworth Common station and we have yet to discover how many beneficiaries it has.
  There is an obligation upon British Rail to maintain the fund if interest rates should drop below 4 per cent. This liability has not been called upon for some time, and we should like to add it to Schedule 8 in case it is. I commend the amendment to the House.
  Amendment agreed to.

Schedule 9

  REPEALS
  Amendments made, No. 90, in page 68, line 46, column 3 at end insert—
  'In section 147(1)(d) the words "or other person authorised by the licensee of the vehicle".'.—[Mr. Iain Mills.]
  No. 91, in page 70, line 26, column 3, after 44(4)' insert'—

  (a) the words from "to public service vehicles" to "passengers or";

  (b) the words from "but shall apply" to "1978";

  (c)'.

  No. 92, in page 70, line 50, column 3, at beginning insert—
  'Section 5(10).
  Section 6.'.—[Mr. Fowler.]
  Mr. Kenneth Clarke: I beg to move amendment No. 94, in page 77, line 26, at end insert—
  '1977 c. 20 Transport (Financial Provisions) Act 1977. Section 2.'
  The amendment repeals an obsolete section of the 1977 Act.
  Amendment agreed to.
  12.25 am
  Mr. Fowler: I beg to move, That the Bill be now read the Third time.
  The merits of the Bill are self-evident and overwhelming, and I ask the House to support it.
  Mr. Booth: The Bill rejects the appearance and judgment of public transport operators in Britain. It frustrates local authorities that seek to develop good transport services. It creates a major

  1363
  problem for those people who run railway pension schemes. It throws an efficient and properly run public sector of the freight transport industry to the private sector. It will win some cheers at the Tory Party conference, but those cheers will be purchased at a high price for the public service operators and the
  people who are served by them. I therefore ask my hon. Friends to vote against the Bill.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 272, Noes 207.

  Division No. 247]

  AYES

  [12.26 am

  Alexander, Richard

  Farr, John

  Lyell, Nicholas

  Ancram, Michael

  Fell, Anthony

  McCrindle, Robert

  Arnold, Tom

  Fenner, Mrs Peggy

  Macfarlane, Nell

  Aspinwall, Jack

  Finsberg, Geoffrey

  MacGregor, John

  Atkins, Robert (Preston North)

  Fisher, Sir Nigel

  MacKay, John (Argyll)

  Atkinson, David (B'mouth, East)

  Fletcher, Alexander (Edinburgh N)

  McNair-Wilson, Michael (Newbury)

  Baker, Kenneth (St. Marylebone)

  Fookes, Miss Janet

  McNair-Wilson, Patrick (New Forest)

  Baker, Nicholas (North Dorset)

  Forman, Nigel

  McQuarrie, Albert

  Beaumont-Dark, Anthony

  Fowler, Rt Hon Norman

  Madel, David

  Bell, Sir Ronald

  Fox, Marcus

  Major, John

  Bendall, Vivian

  Fraser, Peter (South Angus)

  Marlow, Tony

  Benyon, Thomas (Abingdon)

  Fry, Peter

  Marshall, Michael (Arundel)

  Benyon, W. (Buckingham)

  Gardiner, George (Reigate)

  Mather, Carol

  Best, Keith

  Gardner, Edward (South Fylde)

  Maude, Rt Hon Angus

  Biffen, Rt Hon John

  Garel-Jones, Tristan

  Mawby, Ray

  Biggs-Davison, John

  Goodhart, Philip

  Mawhinney, Dr Brian

  Blackburn, John

  Goodhew, Victor

  Maxwell-Hyslop, Robin

  Blaker, Peter

  Gorst, John

  Mayhew, Patrick

  Body, Richard

  Gow, Ian

  Mellor, David

  Bonsor, Sir Nicholas

  Gower, Sir Raymond

  Meyer, Sir Anthony

  Boscawen, Hon Robert

  Gray, Hamish

  Miller, Hal (Bromsgrove & Redditch)

  Bottomley, Peter (Woolwich West)

  Greenway, Harry

  Mills, Iain (Meriden)

  Bowden, Andrew

  Grieve, Percy

  Mills, Peter (West Devon)

  Boyson, Dr Rhodes

  Griffiths, Eldon (Bury St Edmunds)

  Miscampbell, Norman

  Bright, Graham

  Griffiths, Peter (Portsmouth N)

  Mitchell, David (Basingstoke)

  Brinton, Tim

  Grist, Ian

  Moate, Roger

  Brittan, Leon

  Grylls, Michael

  Molyneaux, James

  Brocklebank-Fowler, Christopher

  Gummer, John Selwyn

  Monro, Hector

  Brooke, Hon Peter

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

  Montgomery, Fergus

  Brown, Michael (Brigg & Sc'thorpe)

  Hamilton, Michael (Salisbury)

  Morris, Michael (Northampton, Sth) Morrison, Hon Charles (Devizes)

  Browne, John (Winchester)

  Hannam, John

  Bruce-Gardyne, John

  Haselhurst, Alan

  Morrison, Hon Peter (City of Chester)

  Buck, Antony

  Havers, Rt Hon Sir Michael

  Mudd, David

  Budgen, Nick

  Hawksley, Warren

  Murphy, Christopher

  Bulmer, Esmond

  Hayhoe, Barney

  Myles, David

  Burden, F. A.

  Heddle, John

  Neale, Gerrard

  Butcher, John

  Henderson, Barry

  Needham, Richard

  Butler, Hon Adam

  Heseltine, Rt Hon Michael

  Nelson, Anthony Neubert, Michael

  Cadbury, Jocelyn

  Hicks, Robert

  Carlisle, John (Luton West)

  Higgins, Rt Hon Terence L.

  Newton Tony

  Carlisle, Kenneth (Lincoln)

  Hogg, Hon Douglas (Grantham)

  Oppenheim, Rt Hon Mrs Sally

  Carlisle, Rt Hon Mark (Runcorn)

  Hooson, Tom

  Page John (Harrow, West)

  Chalker, Mrs Lynda

  Hordern, Peter

  Page, Rt Hon Sir R. Graham

  Channon, Paul

  Howell, Rt Hon David (Guildford)

  Page, Richard (SW Hertfordshire)

  Chapman, Sydney

  Howell, Ralph (North Norfolk)

  Parkinson, Cecil

  Churchill, W. S.

  Hunt, David (Wirral)

  Parris, Matthew

  Clark, Hon Alan (Plymouth, Sutton)

  Hunt, John (Ravensbourne)

  Patten, Christopher (Bath)

  Clark, Sir William (Croydon South)

  Irving, Charles (Cheltenham)

  Patten, John (Oxford)

  Clarke, Kenneth (Rushcliffe)

  Johnson Smith, Geoffrey

  Pattie, Geoffrey

  Clegg, Sir Walter

  Jopling, Rt Hon Michael

  Pawsey, James

  Colvin, Michael

  Kaberry, Sir Donald

  Penhaligon, David

  Cope, John

  Kershaw, Anthony

  Corrie, John

  King, Rt Hon Tom

  Percival, Sir Ian

  Costain, A. P.

  Kitson, Sir Timothy

  Pollock, Alexander

  Critchley, Julian

  Knight, Mrs Jill

  Porter, George

  Crouch, David

  Knox, David

  Powell, Rt Hon J. Enoch (S Down)

  Dickens, Geoffrey

  Lamont, Norman

  Price, David (Eastleigh)

  Dorrell, Stephen

  Lang, Ian

  Prior, Rt Hon James

  Douglas-Hamilton, Lord James

  Langford-Holt, Sir John

  Proctor, K. Harvey

  Dover, Denshore

  Latham, Michael

  Raison, Timothy

  du Cann, Rt Hon Edward

  Lawrence, Ivan

  Rathbone, Tim

  Dunn, Robert (Dartlord)

  Lawson, Nigel

  Rees, Peter (Dover and Deal)

  Durant, Tony

  Lee, John

  Renton, Tim

  Eden, Rt Hon Sir John

  Le Marchant, Spencer

  Rhodes James, Robert

  Edwards, Rt Hon N. (Pembroke)

  Lennox-Boyd, Hon Mark

  Rhys Williams, Sir Brandon

  Eggar, Timothy

  Lester, Jim (Beeston)

  Ridley, Hon Nicholas

  Elliott, Sir William

  Lewis, Kenneth (Rutland)

  Ridsdale, Julian

  Emery, Peter

  Lloyd, Ian (Havant & Waterloo)

  Rifkind, Malcolm

  Fairbairn, Nicholas

  Lloyd, Peter (Fareham)

  Roberts, Michael (Cardiff NW)

  Fairgrieve, Russell

  Loveridge, John

  Roberts, Wyn (Conway)

  Faith, Mrs Sheila

  Luce, Richard

  Ross, Wm. (Londonderry)

  Rossi, Hugh

  Stewart, Ian (Hitchin)

  Waldegrave, Hon William

  Ron, Peter

  Stewart, John (East Renfrewshire)

  Walker, Bill (Perth & E Perthshire)

  Salisbury, Hon Timothy

  Stokes, John

  Waller, Gary

  St. John-Stevas, Rt Hon Norman

  Stradling Thomas, J.

  Walters, Dennis

  Scott, Nicholas

  Tapsell, Peter

  Ward, John

  Shaw, Michael (Scarborough)

  Tebbit, Norman

  Watson, John

  Sheiton. William (Streatham)

  Temple-Morris, Peter

  Wells, John (Maidstone)

  Shepherd, Colin (Hereford)

  Thatcher, Rt Hon Mrs Margaret

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

  Shepherd, Richard (Aldridge-Br-hills)

  Thomas, Rt Hon Peter (Hendon S)

  Wheeler, John

  Shersby, Michael

  Thompson, Donald

  Whitney, Raymond

  Silvester, Fred

  Thorne, Nell (Ilford South)

  Wiggin, Jerry

  Sheet, T. H. H.

  Thornton, Malcolm

  Wilkinson, John

  Speller Tony

  Townend, John (Bridlington)

  Williams, Delwyn (Montgomery)

  Spence, John

  Townsend, Cyril D. (Bexleyheath)

  Winterton, Nicholas

  Spicer, Michael (S Worcestershire)

  Trippler, David

  Wolfson, Mark

  Sproat, Iain

  Trotter, Neville

  Young, Sir George (Acton)

  Squire, Robin

  Taylor, Teddy (Southend East)

  Younger, Rt Hon George

  Stainton, Keith

  van Straubenzee, W. R.

  Stanbrook, Ivor

  Vaughan, Dr Gerard

  TELLERS FOR THE AYES:

  Stanley, John

  Viggers, Peter

  Mr. David Waddington and

  Steen, Anthony

  Wakeham, John

  Mr. Anthony Berry.

  Stevens, Martin

  NOES

  Abse, Leo

  Ewing, Harry

  Magee, Bryan

  Adams, Allen

  Field, Frank

  Marks, Kenneth

  Allaun, Frank

  Flannery, Martin

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

  Anderson, Donald

  Fletcher, Ted (Darlington)

  Marshall, Dr Edmund (Goole)

  Archer, Rt Hon Peler

  Foot, Rt Hon Michael

  Marshall, Jim (Leicester South)

  Armstrong, Rt Hon Ernest

  Ford, Ben

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

  Ashley, Rt Hon Jack

  Forrester, John

  Maxton, John

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

  Foster, Derek

  Maynard, Miss Joan

  Barnett, Guy (Greenwich)

  Foulkes, George

  Meacher, Michael

  Barnett, Rt Hon Joel (Heywood)

  Fraser, John (Lambeth, Norwood)

  Mellish, Rt Hon Robert

  Benn, Rt Hon Anthony Wedgwood

  Garrett, John (Norwich S)

  Mikardo, Ian

  Bidwell, Sydney

  Garrett, W. E. (Wallsend)

  Millan, Rt Hon Bruce

  Booth, Rt Hon Albert

  George, Bruce

  Miller, Dr M. S. (East Kilbride)

  Boothroyd, Miss Betty

  Gilbert, Rt Hon Dr John

  Mitchell, Austin (Grimsby)

  Bradley, Tom

  Golding, John

  Mitchell, R. C. (Soton, lichen)

  Bray, Dr Jeremy

  Graham, Ted

  Morris, Rt Hon Alfred (Wythenshawe)

  Brown, Hugh D. (Provan)

  Grant, George (Morpeth)

  Morris, Rt Hon Charles (Openshaw)

  Brown, Ronald W. (Hackney S)

  Grant, John (Islington C)

  Morris, Rt Hon John (Aberavon)

  Brown, Ron(Edinburgh, Leith)

  Hamilton, James (Bothwell)

  Moyle, Rt Hon Roland

  Buchan, Norman

  Hamilton, W. W. (Central Fife)

  Newens, Stanley

  Callaghan, Jim (Middleton & P)

  Harrison, Rt Hon Walter

  Oakes, Rt Hon Gordon

  Campbell, Ian

  Haynes, Frank

  O'Neill, Martin

  Campbell-Savours, Dale

  Heffer, Eric S.

  Orme, Rt Hon Stanley

  Carmlchael, Nell

  Hogg, Norman (E Dunbartonshire)

  Owen, Rt Hon Dr David

  Cartwright, John

  Holland, Stuart (L'beth, Vauxhall)

  Palmer, Arthur

  Clark, Dr David (South Shields)

  Home Robertson, John

  Park, George

  Cocks, Rt Hon Michael (Bristol S)

  Homewood, William

  Pavitt, Laurie

  Cohen, Stanley

  Hooley, Frank

  Pendry, Tom

  Coleman, Donald

  Horam, John

  Powell, Raymond (Ogmore)

  Concannon, Rt Hon J. D.

  Huckfield, Lea

  Prescott, John

  Conlan, Bernard

  Hudson Davies Gwllym Ednyfed

  Race, Reg

  Cowans, Harry

  Hughes, Mark (Durham)

  Radice, Giles

  Crowther, J. S.

  Hughes, Robert (Aberdeen North)

  Rees, Rt Hon Merlyn (Leeds South)

  Cryer, Bob

  Hughes, Roy (Newport)

  Richardson, Jo

  Cunliffe, Lawrence

  Janner, Hon Greville

  Roberts, Ernest (Hackney North)

  Cunningham, George (Islington S)

  John, Brynmor

  Roberts, Gwilym (Cannock)

  Cunningham, Dr John (Whitehaven)

  Johnson, James (Hull West)

  Robertson, George

  Dalyell, Tarn

  Johnson, Walter (Derby South)

  Robinson, Geoffrey (Coventry NW)

  Davidson, Arthur

  Jones, Rt Hon Alec (Rhondda)

  Rodgers, Rt Hon William

  Davles, Rt Hon Denzil (Llanelli)

  Jones, Dan (Burnley)

  Rooker, J. W.

  Davies, Ifor (Gower)

  Kaufman, Rt Hon Gerald

  Rowlands, Ted

  Davis, Clinton (Hackney Central)

  Kerr, Russell

  Sandelson, Neville

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

  Kilroy-Silk, Robert

  Sever, John

  Deakins, Eric

  Lambie, David

  Sheerman, Barry

  Dean, Joseph (Leeds West)

  Lamborn, Harry

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

  Dempsey, James

  Leadbitter, Ted

  Shore, Ft; Hon Peter (Step and Pop)

  Dewar, Donald

  Leighton, Ronald

  Silkin, Rt Hon John (Deptford)

  Dixon, Donald

  Lestor, Miss Joan (Eton & Slough)

  Silkin. Rt Hon S.C. (Dulwich)

  Dobson, Frank

  Lewis, Ron (Carlisle)

  Silverman, Julius

  Douglas, Dick

  Litherland, Robert

  Snape, Peter

  Douglas-Mann, Bruce

  Lofthouse, Geoffrey

  Soley, Clive

  Dubs, Alfred

  Lyon, Alexander (York)

  Spearing, Nigel

  Dunnett, Jack

  Lyons, Edward (Bradford West)

  Sprlggs, Leslie

  Dunwoody, Mrs Gwyneth

  McGuire, Michael (Ince)

  Stallard, A. W.

  Eadie, Alex

  McKay, Allen (Penistone)

  Stoddart, David

  Eastham, Ken

  McKelvey, William

  Stott, Roger

  Ellis, Raymond (NE Derbyshire)

  MacKenzie, Rt Hon Gregor

  Strang, Gavin

  Ellis, Tom (Wrexham)

  Maclennan, Robert

  Straw, Jack

  Evans, loan (Aberdare)

  McMillan, Tom (Glasgow, Central)

  Summerskill, Hon Dr Shirley

  Evan]), John (Newton)

  McNally, Thomas

  Taylor, Mrs Ann (Bolton West)

  Thomas, Jeffrey (Abertillery)

  Weetch, Ken

  Wilson, Rt Hon Sir Harold (Huyton)

  Thomas, Mike (Newcastle East)

  Wellbeloved, James

  Wilson, William (Coventry SE)

  Thomas. Dr Roger (Carmarthen)

  Walsh, Michael

  Winnick, David

  Thorne, Stan (Preston South)

  White, Frank R. (Bury & Radcliffe)

  Woolmer, Kenneth

  Tilley, John

  White, James (Glasgow, Pollok)

  Wright, Sheila

  Tinn, James

  Whitehead, Phillip

  Young, David (Bolton East)

  Torney, Tom

  Whitlock, William

  Urwin, Rt Hon Tom

  Willey, Rt Hon Frederick

  TELLERS FOR THE NOES:

  Varley, Rt Hon Eric G.

  Williams, Rt Hon Alan (Swansea W)

  Mr. George Morton and

  Walker, Rt Hon Harold (Doncaster)

  Williams, Sir Thomas (Warrington)

  Mr. Hugh McCartney.

  Watkins, David

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

NATIONAL HERITAGE BILL
Lords Amendments considered.
Clause 1

  ESTABLISHMENT OF NATIONAL HERITAGE MEMORIAL FUND
  Lords Amendment: No. 1, in page 1, line 7, leave out from beginning to "which" in line 8 and insert:
  "There shall be a fund known as the National Heritage Memorial Fund, to be a memorial to those who have died for the United Kingdom, established in succession to the National Land Fund,"
  12.37 am
  The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John-Stevas): I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker (Mr. Richard Crawshaw): With this we may take Lords amendment No. 3.
  Mr. St. John-Stevas: I do not think that these amendments, or any of the others, are especially controversial. The words are the fruit of much drafting in another place by Lady Birk, Lord Donaldson, Lord Reigate and others. They explain in what sense the fund serves as a memorial and bring in a reference to the National Land Fund.
  With regard to amendment No. 3, some may ask why we need this provision as well as the definition in subsection (2) of the interpretation clause—clause 18. It is good practice to have a definition where possible, when such terms as "the Ministers" first appear in the Bill, as well as in the interpretation clause.
  Mr. Tam Dalyell: In the absence of my hon. Friend the Member for Warley, East (Mr. Faulds), I wish to say that many of those who stood at the Bar of the other place and listened to the debate have considerable regard for the serious scrutiny that the other place gave the Bill. There is no doubt about that at all. Many of the Lords worked very hard on the matter. We are impressed by their work.
  1370
  The truth of the matter is that we do not wish to engage in any sort of pingpong with the Lords. They have reached a fairly sensible and satisfactory compromise with my right hon. and hon. Friends who worked on the Bill.
  We accept that it is the best compromise of all that the Prime Minister should be responsible. We accept the idea that the Crown responsibility has been taken out.
  Question put and agreed to.
  Lords amendment: No. 2, in page 2, leave out from "appointed" to end of line 15 and insert
  "by the Crown on the advice of the Prime Minister."
  Read a Second time.
  Amendment to the Lords amendment tirade: leave out
  'the Crown on the advice of '.—[Mr. St. JohnStevas.]
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment, as amended.
  Question put and agreed to.
  Consequential amendments made to the Bill:
  In schedule 1, page 12, line 23, leave out 'either of the Ministers' and insert 'the Prime Minister'.
  In page 12, line 25, leave out 'Ministers' and insert 'Prime Minister'.
  In page 12, line 26, leave out 'they are' and insert 'he is'.
  In page 12, line 37, leave out 'Ministers' and insert Prime Minister's'.
  In page 13, line 5, leave out 'either of the Ministers' and insert 'the Prime Minister'.—[Mr. St. John-Stevas.]
  Lords amendment No. 3 agreed to.

Clause 3

  GRANTS AND LOANS FROM THE FUND
  Lords amendment: No. 4, in page 2, line 33, leave out second "or".
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: With this we may take Lords amendments Nos. 5, 6, 7 and 8.
  Mr. St. John-Stevas: The purpose and effect of the amendment is to extend the range of interest over land in respect of which the trustees may give assistance to rights which it would be desirable to acquire for the benefit of outstanding land such as shooting rights near a bird sanctuary. These amendments bring within the scope of the fund's assistance a range of rights associated or connected with land which, while outstanding, might or might not be the subject of assistance from this fund. Examples are shooting rights and rights of way connecting pieces of land. This was a rather illusive concept, but I think that the clause pins it down.
  Mr. Dalyell: It would be churlish of me to do other than thank the Minister for the attitude that he has taken on this matter. It was discussed at considerable length in Committee. It was a point of view put forward strongly by both the English National Trust and the Scottish National Trust. We certainly welcome the amendment.
  Question put and agreed to.
  Lords amendments Nos. 5 to 8 agreed to.
  Lords amendment: No. 9, in page 3, line 5, leave out "or".
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: It may be for the convenience of the House to discuss with this amendment Lords amendment No. 10.
  Mr. St. John-Stevas: During the discussion on the various amendments in Committee many speakers suggested that we should declare explicitly that the trustees could take into account a case for limiting public access to property. Amongst the examples given were bird sanctuaries, other nature reserves, and houses with fragile furnishings. The word "controlling" is designed to convey this point.
  Mr. Dalyell: Once again, the Government clearly have listened to the feelings expressed on both sides of the Committee. Therefore, we accept the amendment.
  Question put and agreed to.
  Lords amendment No. 10 agreed to.
  Lords amendment: No. 11, in page 3, line 7, leave out subsection (4).
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  This amendment strengthens the trustees' independence. It was always anomalous to require Treasury consent to loans but not to grants.
  12.45 am
  Mr. Dalyell: At a quarter to one in the morning this is not the time to start a long argument on a related topic to this amendment, namely, the question of confidentiality on which the Treasury approached some hon. Members on 20 March. This is the subject of long correspondence between the Treasury and a number of hon. Members who served on the Committee. I ask the Leader of the House to note only that the issue of confidentiality is complex. There are various parliamentary means by which some hon. Members would like to return to it, but not tonight.
  Question put and agreed to.
  Lords Amendment: No. 12, in page 3, line 29, leave out from "gallery" to "a" in line 31 and insert
  ",library or other similar institution having as its purpose or one of its purposes the preservation for the public benefit of".
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: With this, it will be convenient to take Lords Amendments Nos. 13 to 15, 19, 20, 23 and 25.
  Mr. St. John-Stevas: The amendments are designed to ensure that private libraries such as cathedral libraries can secure assistance from the fund. The amendments to the provisions on indemnity are consequential, because the definitions of the eligible institutions for indemnities should be in line with those on assistance from the fund.
  Mr. Dalyell: I heard the bishop in the other place put forward his argument. It seems to have convinced many of the experts. We accept it.
  Question put and agreed to.
  Lords amendments Nos. 13 to 15 agreed to.

Clause 9

  DISPOSAL OF PROPERTY ACCEPTED BY COMMISSIONERS.
  Lords amendment: No. 16 in page 6, line 40, after "it" insert
  "to the National Art Collections Fund or the Friends of the National Libraries if they are willing to accept it,"
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  This amendment is designed to make clear that the Government may allocate objects to the National Arts Collection Fund or the Friends of the National Libraries if they are willing to accept. This makes the matter clear on the face of the Bill. These bodies are not final recipients. They will retain discretion to allocate the objects as they see fit subject to certain conditions that have been agreed with the Treasury.
  Mr. Dalyell: This case was argued strongly by the National Library for Wales and others. We accept it.
  Question put and agreed to.

Clause 12

  APPROVAL OF PROPERTY FOR ACCEPTANCE IN SATISFACTION OF TAX
  Lords amendment: No. 17 in page 8, line 20, at end insert—
  "(d) at the end of sub-paragraph (5) there shall be inserted the words "and, in determining under sub-paragraph (4) above whether an object or collection or group of objects is pre-eminent, regard shall be had to any significant association of the object, collection or group with a particular place","
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 18.
  Mr. St. John-Stevas: These amendments concern the definition of pre-eminence and the importance of leaving property in situ. They have been constant
  1374
  themes in our debates. The amendments are designed to clarify an obscure passage in the Finance Acts on which rests the Government's policy in situ. It is clear that in assessing an object of pre-eminence account can be taken of the significance of the setting. That is an important clarifying consideration. It was always our intention that this should be so. This puts the matter beyond doubt.
  Mr. Dalyell: My hon. Friend the Member for Warley, East (Mr. Faulds), for whom I am standing in, will be pleased at the acceptance of this Lords amendment. He and other hon. Members argued this case strongly in Committee. It is a matter on which the so-called heritage lobby felt strongly. We are glad that it is now in the Bill.
  Question put and agreed to.
  Lord amendment No. 18 agreed to.

Clause 16

  INDEMNITIES FOR OBJECTS ON LOAN
  Lords amendments Nos. 19 and 20 agreed to.
  Lords amendment: No. 21 in page 10, line 16, leave out "or" and insert "and"
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.
  Mr. Deputy Speaker: With this it will be convenient to take Lords amendment No. 22.
  Mr. St. John-Stevas: I do not think that the House need spend much time on these amendments, which substitute "and" for "or" and "to" for "and". These are drafting amendments, consequential on amendments made on Report in this House.
  Question put and agreed to.
  Lords amendments Nos. 22 and 23 agreed to.

Clause 18

  COMMENCEMENT
  Lords amendment: No. 24, in page 11, line 1, leave out Clause 18.
  Mr. St. John-Stevas: I beg to move, That this House doth agree with the Lords in the said amendment.

  1375
  The purpose of the amendment is to delete the provision for a commencement order. Therefore, the Bill will come into effect automatically on receiving the Royal Assent.
  When this Bill was originally introduced we were not sure whether it would move so rapidly that it would receive Royal Assent well before 31 March or so slowly that it would not receive Royal Assent until much later.
  Despite the thorough discussion that has taken place on the Bill in this House and another place, we are now on course to receive the Royal Assent on 31 March, as planned.
  The procedure involved with the commencement order is now no more than an unnecessary complication, which could delay the establishment of a fund and the transfer of acceptance in lieu to the departmental Ministers. Removing this clause means that the Bill's provisions will come into effect automatically on Royal Assent.
  I thank the hon. Member for West Lothian (Mr. Dalyell) for standing in on this occasion for his hon. Friend the Member for Warley, East (Mr. Faulds), whom we wish a speedy recovery. I pay
  1376
  tribute to the hon. Member for Warley, East for his services to this Bill and to the hon. Member for West Lothian, who has made such a valuable contribution.
  Mr. Dalyell: I thank the Leader of the House. The Opposition are glad that this Bill is on course. We realised that by having a very thorough discussion we might delay it in a way that most of us did not want.
  I pay tribute to the understanding and great care that has been taken throughout the passage of the Bill by the Under-Secretary of State for the Environment —the hon. Member for Dumfries (Mr. Monro)—who has been very accommodating. If the discussion was thorough it was certainly eased greatly by the attitude of the Minister, who bore the brunt of the Committee stage. He was invariably courteous and helpful. We were also greatly pleased by the attitude of many of the civil servants who helped us and who are obviously as keen to protect the heritage of this country as any of the politicians.
  Question put and agreed to.
  Lords amendment No. 25 agreed to.

HER MAJESTY'S STATIONERY OFFICE (TRADING FUND)
12.53 am
The Minister of State, Civil Service Department (Mr. Paul Channon): I beg to move,
That the draft HMSO Trading Fund Order 1980, which was laid before this House on 29th February, be approved.
I hope it will be convenient to the House if I introduce the order quite briefly and deal with any particular points that hon. Members may raise when I reply.
This is the fourth order to be moved under the Government Trading Funds Act 1973. The Act enables the responsible Minister to direct that a Crown service to which the Act applies shall be financed by a trading fund, when he considers that this will lead to improved commercial-style operation and public accountability. The introduction of such a trading fund requires the making of an order which is subject to approvel in draft by resolution of this House. There have been three such orders in the past. This order applies to Her Majesty's Stationery Office and it follows closely on the report of the Expenditure Committee in 1977, which unanimously recommended such a change.
The House will see that the services provided by the Stationery Office are briefly set out in the schedule to the draft order. They are essentially trading services, such as publishing and procurement, with a limited measure of production.
The Stationery Office is a Government Department existing to provide services to Parliament and the Government and there must be considerations other than purely commercial ones. But the Government are satisfied that it would now be right for Her Majesty's Stationery Office to move to a system of financing more appropriate to a trading service than the present system of annual Votes and appropriations. There has been some progress in this direction already by the introduction of new commercially oriented annual accounts. I hope that the establishment of the trading fund will continue this process and enable Her Majesty's Stationery Office management to operate more effectively and economically and improve accountability.
1378
I do not think that I need to go into all the details of the trading fund unless hon. Members wish me to do so. The point really is that in future the services that the Stationery Office provides to Govern ment Departments will no longer be avail able as free, so-called allied services; they will have to be paid for by those receiving them. I think that this is a significant change that will put financial accountability for stationery and printing where it properly belongs—with those who generate the demands rather than with the agency whose task it is to satisfy them.
For the time being, stationery and printing supplied to Parliament will con tinue to be provided as an allied service and the cost of this will be financed from a Vote which the Stationery Office will administer. In due course it may be con sidered appropriate for this Vote to be transferred to the responsibility of this House and another place, but that is a matter yet to be settled; no decision has yet been taken.
Mr. Nigel Spearing: Rather than leave the matter until the Minister winds up the debate, may I ask him to enlarge a little on that important sentence concerning Parliament? He said "For the time being" and then instanced the possibility of another arrangement. Can he enlarge on that a little, because it is important not only for this House but for the other place? It would be terminating an arrangement that has worked reasonably well for some time.
Mr. Channon: There is no decision to terminate the present arrangement. All I am saying is that, in the light of a decision to move to a trading fund in general, there remains the problem of what to do about Parliament. There will have to be a special Vote dealing with the printing and stationery services for this House and the other place. It may be decided in the future—it may not be, but there is that possibility—that it would be right to transfer responsibility to this House in the same way that Government Department responsibility has been transferred. No decision has been taken and clearly the views of the House would be necessary, but in principle I think that it is just as right for the House to have to face the consequences of seeing what the costs of stationery and printing are as it is for Government Departments. I can

1379
assure the hon. Gentleman that before any decision is taken we would wish to have the views of the House to see whether it thought appropriate that a change should be made. Therefore, if the hon. Gentleman has any views, I would be grateful for them tonight, or on any other appropriate occasion.
It is right in principle that services of this kind provided to Government Departments should be charged for so that Government Departments can see on what they are spending money, how much money they are spending and decide on a proper system of priorities. This principle goes far wider than the comparatively narrow issue of the Stationery Office with which we are dealing tonight, and there will be exceptions to the general rule. But the onus of proof must be on those who are against a repayment principle. I believe, and I think this is a generally shared view, that Departments should know what they are consuming, what resources they are using and what the costs are. Ministers will then be in a better position to make sensible decisions on priorities.
There is one other Vote that the Stationery Office will continue to have responsibility for and this is in respect of certain major services that are inevitably uneconomic. There is a considerable loss every year on the publishing and sale of Hansard for the House and Standing Committee debates. This is inevitable, given the overnight service that Parliament operates. There is also a long-standing arrangement, which I cannot believe the House would wish to disturb, under which public libraries have been able to buy Stationery Office publications at half price. Therefore, Vote provision is also being made available in this limited area.
The House will notice that the order is extremely short. There are four articles and a schedule. The fund will come into operation, if the House agrees, on 1st April 1980. As that is the first day of the new financial year, it is the most convenient starting date.
Article 4 sets a limit of £50 million on the amount that the trading fund may borrow from the National Loans Fund, over and above its originating debt without a further order being made. If hon. Members wish, I shall deal with the detailed accounting points. However, I
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suspect that they will not want me to do so. If they do, I shall answer any questions. At this late hour, I need say only that this proposal represents a step towards a proper and more commercial system of accountability for the Stationery Office. It also provides a better discipline for Government Departments. I hope that the House will join me in wishing the Stationery Office well in this venture.
Mr. Ron Leighton: What representations has the Minister received from the employer's organisation, the British Printing Industries Federation?
Mr. Channon: I have been able to assure the British Printing Industries Federation. It is particularly worried about the tying of Government Departments and whether it should continue to use the services of the Stationery Office. Any decision about that is irrelevant to this issue. We are moving Government Departments from a system of allied services to a repayment system. That will not affect the decision. There is no need for any concern by the—
Mr. John Garrett: Does not the hon. Gentleman agree that this process permits untying? Lucrative parts of Her Majesty's Stationery Office may therefore be handed over to the private sector.
Mr. Channon: It would be possible to untie. However, the Government have made no decision to do so. Were such a decision ever to be taken, it would be considered on its merits. Any such decision will be unaffected by this order. Until any other decision is taken, Government Departments will be bound by the tying arrangements that already exist. Under this system, or the past system, it would be open to the Government to change that practice. The Government will examine that possibility. However, no decision has been taken to change the system of untying. I cannot say that the system will remain for ever. A decision would not be affected by this order. It could, in theory, have been changed, even in the past.
I hope that hon. Members will join me in wishing the Stationery Office well in its new venture. The Department will have a new status. It will be asked to adopt a new commercial approach. I hope that

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[Mr. Channon.]
the House agrees that it is right to pass this draft order. I commend it to the House.
Mr. Spearing: Perhaps the Minister could clarify a point relating to untying. We understand that the order relates to trading funds. It is not specifically related to a possible venture of untying Government Department audits. Should that come to pass, what type of authority—it any—would be required from the House? What time scale does the Minister have in mind? Although it may not be related to this order, it is clearly related to the Government's attitude towards publicly owned services. They have made no secret of that attitude in the past.
Mr. Channon: Perhaps it will be deemed that I did not sit down. As far as I know, the Government could take a decision about untying without any reference to the House. However, I cannot believe that the issue would remain a secret. Obviously, we shall wish to examine that. We wanted to examine every Government activity. I assure the House that no decision has been taken. Any decision remains unaffected by tonight's debate. Whether it is right to tie or untie Departments from the Stationery Office will be decided on the merits of the case. I believe that if one has a centralised Department, such as the Stationery Office, Government Departments should use it; otherwise, there is little point in having it. That is a matter for Government examination. It is an important matter relating to the future of the Stationery Office and it should be examined by Ministers and officials. I shall bear the hon. Gentleman's views in mind.
1.4 am
Mr. Ian Wrigglesworth: As the Minister says, this change has been envisaged for some time, and we do not seek to oppose it. Hon. Members and the public greatly appreciate the work of the Stationery Office. We use its publications all the time and are familiar with the services provided. I was in the Government bookshop in London the other day and was reminded of this debate when I saw its plethora of publications. It provides an enormous service to the public, and should be congratulated.
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I enjoyed reading the first annual report of the Stationery Office produced pursuant to the change envisaged. Compared with the Appropriation Accounts and the lack of detail previously published, the move towards open government is welcome. Much more information about the activities of the Stationery Office is provided.
I was pleased to read the comment that its staff are the Office's most valuable resource. I also welcomed the comments on its various activities, including the Stationery Office's awareness of its wider social responsibilities. It mentions its policy of employing disabled people, furthering sheltered industries, recycling paper and other welcome activities, which demonstrate sensitivity to the wishes of the public and the House.
I wish to ask the Minister certain questions about the proposal. The draft order states that the debt shall be no more than £50 million. Hon. Members may also get the Stationery Office's estimated balance sheet from the Vote Office. It appears only to be half a balance sheet.
How will the net assets of £62.2 million be financed with a maximum debt of only £50 million? I assume that the insurance account, trading surplus and other items mentioned in the previous accounts in the annual report will also be taken into account in funding those assets. Will the Minister clarify the position?
There is mention in the schedule of certain subsidies. In the last sentence it says:
"other than such of the operations as are, or may from time to time be, the subject of subsidies".
Was the Minister referring to that when he talked of subsidies for Hansard and for the use of Government publications by libraries? What are those subsidies to be?
The estimated balance sheet is a sparse document. How will it be drawn up in future, who is responsible for valuation of the assets and who will check it? Will it be left simply to the Comptroller and Auditor General or will other organisations and individuals be involved in auditing those accounts?
Mr. Spearing: Is the document my hon. Friend refers to as "sparse" the document that has come with the order?

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Or is he referring to the rather fuller accounts contained in the annual report?
Mr. Wrigglesworth: I am referring to the document that accompanies the order, which is much sparser than the report and accounts for last year. I would be interested to learn why that is so. Will the Minister assure the House that the details contained in the annual report will also appear in subsequent annual reports?
How will the staff be affected by the change, if they are affected at all? It would be helpful—in view of the anxiety felt by the staff and their trade unions—if the Minister could make it clear that their terms and conditions of service will not be affected by the new style of management and acccounting. It is natural that there should be anxiety and if the Minister can give some assurances they would be welcomed. I feel sure that they would calm anxieties.
As we know, the Stationery Office has suffered from industrial action. There have been industrial relations difficulties and I see from the annual report that a proposed joint industrial council is still being considered by management and the trade unions. I assume that that will be a body designed to bring all trade unions together—not just white collar workers on the one hand and industrial workers on the other—into a wider forum. I would be grateful if the Minister would say something about industrial relations in the Stationary Office and about what is proposed for the joint industrial council. The details of the proposals would be of interest because of the known disruption that has occurred in the past.
My hon. Friend the Member for Newham, South (Mr. Spearing) raised the matter of hiving off, which naturally makes the staff of the Stationery Office anxious. The Opposition are concerned that the policy of tying which has been in operation for many years should be maintained. I was encouraged by the Minister's comment that there was not much point in not using the Stationery Office. There is considerable justification for sustaining that policy to maintain the benefits of scale which have accrued as a result of the tying arrangements.
As a result of that policy the Stationery Office, to its credit, has been able to maintain a lead among the front run-
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ners in printing technology and print buying. I am sure that that lead has been established as a result of the substantial scale of the Stationery Office's operations and I like to think that that could be maintained and that the benefits to the Government and to the country could continue.
It would be helpful if the Minister could tell the House what proportion of Government business is handled by the Stationery Office and what proportion of stationery comes directly from the Stationery Office. What proportion of the procurement of printing and the supply of stationery come from the Stationery Office's own resources and how much comes from outside? If the Minister can give an indication that those proportions will be maintained that would reassure the Opposition and help us feel that potentially lucrative contracts would not be hived off to the detriment of the public interest and the service provided by the Stationery Office to Government Departments. I wish Her Majesty's Stationery Office well. It has the good will of the House. It is to change its style of operation. We hope that it will succeed and continue to provide high quality services and facilities to the House and the country.
1.15 am
Mr. John Garrett: I have a constituency interest. Her Majesty's Stationery Office is an important and valuable employer in Norwich. It is to be put on a trading fund basis as a consequence of the need to establish managerial and public accountability. I agree with that. I must, because it follows the Fulton committee principles established over a decade ago which I had a hand in drafting. I served on the Expenditure Committee which reported in 1977 on this and other Civil Service issues. The principle of charging out was recommended and a trading fund is one aspect of this.
The Supply procedure of Estimates, Votes and Appropriation Accounts does not establish managerial accountability adequately. The common, or allied service, arrangements which have applied to property and information services and to the services of Her Majesty's Stationery Office do not establish accountability because the Vote is carried on the user Department. Trading funds are a means

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of ending allied or common arrangements.
Will the arrangement be used for untying? The Minister has said that the existence of the trading fund does not predicate untying but it makes it much simpler. That does great damage to an important national and Norwich institution—Her Majesty's Stationery Office. Under such an arrangement a Department could shop around and a potential supplier could take on some of Her Majesty's Stationery Office business on the basis of a single offer or pre-sale price. Accountability and trading funds are meant to clarify, not to assist "Privatisation"—the flogging off of lumps of Government enterprise to the private sector.
Let us consider a commercial analogy. I have no doubt that the Ford motor company's foundry is a cost centre and charges the price of castings to power, train and assembly divisions. That does not mean that engines can be bought on the basis of special offers from outside companies to gain business. There is a danger of distorting a useful reform so that it causes permanent damage to Her Majesty's Stationery Office. Untying could lead to loss of output, redundancies and loss of technical skills.
The Minister does not wish to be drawn on the question. I understand why. I hope that he will state his intentions for the future of Her Majesty's Stationery Office. Will it continue to be a major supplier to the Government, or will it be sacrificed to public expenditure cuts? Is the proposal to set up a trading fund a genuine attempt to continue the progress to ending the allied service arrangements and establishing an effective control system for public expenditure? Alternatively, is it a means of handing over lucrative business to the private sector so that Her Majesty's Stationery Office is left with the unprofitable business and becomes a target for further expenditure cuts?
Are we discussing a good managerial principle being used for short term political gain? The Minister is asked to prove his machismo by cutting Government bureaucrats, civil servants and technical staff at every opportunity. He should explain his general view about the relationship of Her Majesty's
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Stationery Office to the Departments which it has supplied for many years.
Mr. Spearing: This is a debate and this is a debating Chamber. I make no apology for interrupting my hon. Friend. This is an important matter concerning a £250 million a year business. Before he sits down, does my hon. Friend agree that the Minister answered this point in earlier exchanges? He cannot tell us, in terms of the order. Therefore will not the matter be left open?
Mr. Garrett: I do not think that the matter will be left open. The Government have already made up their mind to seek further economies in public expenditure wherever possible, and Her Majesty's Stationery Office is a sitting target under a trading fund arrangement.
1.21 am
Mr. Nigel Spearing: I am grateful for the remarks of my hon. Friend the Member for Norwich, South (Mr. Garrett). The debate has now taken a different turn from what some people imagined, even on entering the Chamber. My hon. Friend was right to draw the attention of the House to the trading fund technique which, if allied to overall accounting of a different type, allows proper management procedures to take place, to ensure efficiency within a public service. Whether we turn that public service into a revenue-raising commercial service which is required by a Government trading fund is another matter. There is a distinction between those two.
The history of the Government Trading Funds Act is unfortunate. By some act of irony, in 1973 the Bill went to a Second Reading Committee, which was summoned at very short notice. No Opposition Front Bench Members were present. Nobody knew the results of that Committee or could read about them as Hansard's printers were on strike. It was only on 23 July 1973 that a rather extended Report stage brought out the full implications of Government trading funds when applied to a range of quasi-Government services, of which Her Majesty's Stationery Office and Ordnance Survey are perhaps two of the most spectacular examples.
This debate is yet another chapter in that rather shady history. We are having

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a very late debate on a matter which may well be of much greater importance as time passes.
For a long time I have been a qualified admirer of Her Majesty's Stationery Office. Indeed, for some years before I came to this House I had an account, as a private citizen using my taxable income, paying £10 a year. I posted postcards and received White Papers and other matter almost by return of post. I do not know whether that admirable service is as quick now as it was then. I hope that it is. A democracy runs only on information which is complete and up to date and which can be obtained easily, quickly and in time—to use a parliamentary expression—to influence debate and discussion.
This is where something of my qualification of this organisation comes in. One of my first questions on entering the House 10 years ago was whether the Civil Service Department would open an Her Majesty's Stationery Office branch in Bridge Street for the many thousands of visitors who pass the area and the millions of Londoners who would like to obtain Her Majesty's Stationery Office publications there rather than from the rather inept and Eastern European-style Government bookshop in Holborn. That is, incidentally, difficult to find if one does not know where it is. That is the head office.
Every Civil Service Minister except the present one has received a question from me about opening up in Bridge Street. They have always said "No" to my request, and added that it was impossible to carry the whole range of publications. I replied that I did not want the whole range of publications. Let us have the things that are most attractive, particularly to visitors to London, and a range of White Papers and Hansards. We can order for collection or delivery by post the items which must be obtained from the warehouse or Holborn.
But there has been no change, no imagination, no initiative. Yet of all the printing organisations in the world Her Majesty's Stationery Office has perhaps the most magnificent range of very good publications, often produced in excellent quality and excellent print. It has a great tradition. Yet those responsible—and this is where my qualification comes in—or perhaps it is those above them,
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do not seem to be willing to make available the best of their production close to this House.
We must not forget, of course, that a vast proportion of Her Majesty's Stationery Office business is the supply of stationery and equipment to Government Departments and offices all over the country. Indeed, I know from the accounts that that is, in money terms, the more important part of its business, and perhaps the part which it would be easiest to transfer, because there are other people in other lines of business providing other sorts of offices with similar equipment. The Minister obviously has untying in mind, and that part of Her Majesty's Stationery Office's duties could very easily be transferred.
But, leaving that aside, the variety of publications by Her Majesty's Stationery Office is staggering. I did a check earlier today and I found that in the daily list there were no fewer than 50 ISBN publications, which works out on average at something like 250 a week, or 12,000 to 13,000 a year. Many publications are available, and rightly so, over a number of years. Recently some of the Acts of 1688 have been reprinted, and very interesting reading they are, being some of the basic Acts affecting our democracy. This means, of course, that overheads must be bigger.
If stocks are to be carried of relatively small books, the prices of which are not excessive, the storage costs and the overhead costs of sorting, recovery and despatching must be greater. These documents must be available. I am not talking about museum or scientific documents or historical manuscripts, but the official documents which Government Departments, this House, the public and all sorts of semi-official organisations require for the proper operation of our community machinery.
From what the Minister has said and as I understand the Government Trading Funds Act, it means that all this must be subsumed into some commercial venture. In many organisations an equalisation job can be done by using the profits from long prints and profitable lines to finance the others. But I would not imagine that there are many of the former in Her Majesty's Stationery Office. It publishes a selection of some of its more interesting publications. "Driving—The Department

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of Transport Manual" third edition, with a print of 250,000 and a price of £2.25, probably yields a modest profit, but I would not expect there to be a large number of publications with a large sale which would be sufficient to sustain the operations I have just described.
What does that mean? Leaving aside the whole question of equipment, if the publication side is to be sustained on a commercial basis—and I understand that is what this order is about—it can mean only that the standard of service will fall or the prices will go up. I suspect that both will happen. I think that would be to the public disadvantage. The Government may say—and if so I hope the Minister will confirm it when he winds up—that that is part of their policy. They do not wish to appropriate funds to Her Majesty's Stationery Office through the Appropriations Act and the Consolidated Fund, other than, perhaps, for Hansard or the services required by the House where there is a subvention either direct to Her Majesty's Stationery Office or through the House. With the exception of matters of that sort it appears that the Government have no intention of sustaining this public service and I have suggested two consequences that must follow from it.
I also noticed in the annual accounts the interesting surplus, which is much greater than it was a few years ago when the Government Trading Funds Bill was introduced. The appropriation quoted in the debates at that time for Her Majesty's Stationery Office was quite substantial, about £30 million on a £57 million sales figure with a turnover of £88 million. There is now a turnover of £250 million and a small trading surplus, and the Government are charging £3 million interest on that.
The plant and equipment—much of it of a large capacity—built up by Her Majesty's Stationery Office, no doubt on a freehold interest, is valued at current value or possibly at updated cost. But that £3 million is being taken out of interest in a notional way whereas, as I have outlined, the operations of Her Majesty's Stationery Office cannot really be commercial. I wonder why that has been done. Even if it was taken out in a commercial style, why cannot it be repaid
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to cover some of the natural costs and overheads I have outlined?
I hope that the publication of the interesting annual report referred to by my hon. Friend the Member for Thornaby (Mr. Wrigglesworth) will be continued, together with the suggestions mad by the Public Accounts Committee, even without the change to a trading services account. In the conclusion to the preface of the report of the Controller, Mr. Thimont, says:
"I referred in paragraph 3 above to the decision by the present Government that, subject to the approval of Parliament, Her Majesty's Stationery Office should move to a trading fund system of financing on 1 April 1980. This will mark the end of the allied service basis of operation which has continued for a century and a half. It means that from 1980–81 onwards Her Majesty's Stationery Office will finance its operations entirely from the income it gets by selling its goods and services to its customers and there will be no Vote for Stationery and Printing."
The final sentence is almost the ultimate in Civil Service diplomacy:
"This offers new challenges and new opportunities for Her Majesty's Stationery Office in a commercial style environment."
I make no comment on that. It says almost everything, allied to what I believe to be a general overall account of the non-commercial services for non-commercial people with which Her Majesty's Stationery Office is primarily concerned. That is why I share the concern of my hon. Friend the Member for Norwich. South. I am sorry that my hon. Friend the Member for Thornaby did not indicate the concern felt by other hon. Members. Perhaps I am being unfair, because I did not communicate it to him, but he should have discerned it almost from first principles.
The order is perhaps of greater interest than people would think. In the words of the Controller, it means the end of a century and a half of operations by Her Majesty's Stationery Office on the present basis. That by itself is an important decision. Secondly, it ushers in the new style of commercial operations, with the probable consequence that I have indicated. Thirdly, it was indicated only during the course of the debate, although no doubt experts could have predicted that it would happen, that there is a possibility, without any further consideration by the House, that a proportion of the

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services of Her Majesty's Stationery Office —printing, but more likely equipment—will be put up for tender.
The challenge is similar to the challenge that confronts some direct labour organisations or some of the quasi-commercial operations of publicly owned services. That raises a whole range of issues which it would not be in order to discuss tonight. However, if we cannot discuss them tonight, in view of what the Minister said earlier, I do not see how they can be discussed de jure by the House unless the subject is raised by a Member in private Members' time.
I am loth, without further consideration, to agree the order at this stage. There should have been greater consideration of its implications. I am not sure that any hon. Member would be justified in approving such an order—in view of the prospects of hiving off or of changing the nature of Her Majesty's Stationery Office that lie ahead without the Government's intentions being made clear in this respect. Knowing the intentions of the Government in respect of public service manpower, and in respect of the role of centralised services to the community, we have every expectation that hiving off is in their mind.
Until I have heard the Minister's reply, I wish to reserve my position on the order.
1.38 am
Mr. Michael Morris: The hon. Member for Newham, South (Mr. Spearing) made the point that this debate should be of interest to many hon. Members, although that is not reflected by the attendance in the Chamber.
There is unanimity about the approach to the changeover to the trading fund order, but Labour Members are not prepared to face the consequences of that unanimity. They seem to be saying that it is fine and dandy to establish an operation such as Her Majesty's Stationery Office on a proper financially attributable basis, but if there are deficiences and weaknesses, they should be denied.
The service that my constituents receive from Her Majesty's Stationery Office leaves much to be desired. The lawyers in Northampton have difficulty in obtaining publications through Her Majesty's Stationery Office in sufficient
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time to enable them to carry out their tasks and on many occasions they send junior clerks to London by train to collect publications from the London offices of Her Majesty's Stationery Office—mainly the Holborn branch.
I hope that we shall examine the opportunities that this new method of accounting will bring. The publications side is unexploited. Whether it should be exploited by Her Majesty's Stationery Office or hived off is another matter. When I am reminded of the equipment provision of Her Majesty's Stationery Office, I can think of no service that should be hived off more quickly. It should certainly be put out to tender. If Her Majesty's Stationery Office makes the most successful tender, good luck to it. If it does not, tough luck. That side of it should be wound up. I look forward to hearing what my hon. Friend the Minister has to say.
1.40 am
Mr. Channon: I shall try to answer all the arguments and questions that have arisen during the debate. If I omit to answer any tonight, I shall try to answer them at a later date. I shall, of course, study carefully the report of the debate.
I was sorry to hear from my hon. Friend the Member for Northampton, South (Mr. Morris) about the problem in his area. If he cares to give me the details, I shall ascertain whether there is anything that can be done to assist those who are faced with the problem that he has described.
I am grateful to the hon. Member for Thornaby (Mr. Wrigglesworth) and to others who have contributed to the debate for their tribute in general to the work of Her Majesty's Stationery Office, which has an international reputation. That is a reputation that is generally well recognised. We may have to face certain difficulties, but I am not sure that we all realise the extent of Her Majesty's Stationery Office's international reputation in so many respects.
I am sorry that Labour Members are so suspicious about the order. All that I am doing is implementing a unanimous recommendation of the ninth report of the Expenditure Committee in 1977. As I understand it, it was signed by hon. Members in all parts of the House, including the hon. Member for Norwich. South (Mr. Garrett). However, it seems

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to be represented by some Labour Members as a sinister Tory plot to do wicked things to the Stationery Office. I wish that Labour Members would not vote for recommendations of the Expenditure Committee if they do not want them implemented.
The main issue raised by Labour Members is that of tying. Even that is not new. The hon. Member for Norwich, South referred to it during the debates on the Expenditure Committee report in 1977. It is not a magical new issue that was thought of at the last moment. The Expenditure Committee divided and decided by 10 votes to five to remove the sentence that provided that Departments—like nationalised industries—should be free to determine whether they should use the Stationery Office. There was a genuine division of opinion within the Expenditure Committee at that time. I have referred to the Division list and at least one Labour Member took the minority view. It is not exactly a new topic.
The Government wil consider tying on its merits. We shall study it. The issue has no relevance to the debate. If the Government wanted to untie, they could do so irrespective of whether the order is accepted by the House. We are merely producing what might be described as a trading fund. The Government could easily take other steps to untie the Stationery Office without turning it into a trading fund. It is for the Government to decide whether to untie. We shall do so when we have considered all the evidence, which we shall study with the greatest care. However, tying is irrelevant to the debate. Hon. Members may vote for or against the order and sleep easy in their beds without thinking that they have taken a decision on tying.
Mr. Spearing: I recognise that the two issues can be separated in debate. However, does the hon. Gentleman agree that the situation would be different if the order had not come before the House, Her Majesty's Stationery Office was continuing in its present form and untying took place within that framework? Does he agree that untying within the framework of a trading fund produces a different situation?
Mr. Channon: That is possible. However, it is easy to untie without producing a trading fund. All that we have to do is produce a repayment without making a trading fund. The Government could untie without producing a trading fund. To untie may be right or may be wrong, and I do not wish to pre-judge that issue. That is a something which we shall study with care. I shall take note of the views of hon. Members. However, that is not a relevant consideration.
I was asked about the balance sheet, the £50 million debt and the elaborate accounting arrangements that take place as a result of the change. The £50 million borrowing power is arrived at because of the need for working capital. The Stationery Office will not be able to bring forward to the trading fund any cash balances from 1 April. It will, therefore, need to borrow immediately to pay its staff and contractors. In the early months there will be a large amount of borrowing. That will settle down to a permanent level. It is estimated that that will be about £14 million as the cash flow is established.
There may be another need during the next few years to finance an increase in stocks, a temporary interruption in income, or for some other purpose. That is why the £50 million borrowing power is included in the order. There is an extensive programme to modernise premises and plant. A large investment of about £30 million is required and there may be a need to borrow in the early stages.
The need for subsidised publishing arises for the House Hansard and Standing Committee reports. Their overnight production is extremely expensive. The cost cannot be recovered from the sale of the items concerned. HMSO received a payment of about £4 million in respect of expected losses on Hansard in 1980–81. There is also a subsidy for the sale of Government publications to public libraries at a 50 per cent. discount, involving about £500,000. That has been the case for about 100 years, and it would be a pity if the House were to decide that that was no longer acceptable.
Mr. Wrigglesworth: I thought that the Minister was about to explain the balance sheet. He gave the figures for working capital, and I can well understand that.

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I asked about the fixed assets and how they would be financed. The Minister did not deal with that subject.
Mr. Channon: The fixed assets have been valued in the way that is explained in the balance sheet. They have been transferred at a valuation that we think is as realistic as possible. Their value is related to the cost of replacing the assets. It is not a historic cost. It has been carried out on the basis of current market values and normal modern terms. If I have not answered the hon. Gentleman's question in full, I shall consider the matter in the light of the debate and write to him further. It is a technical matter that I should like to get right before I reply to him in detail.
I was asked about the financial objectives to be met by Her Majesty's Stationery Office. It will have to cover its outgoings chargeable to the revenue account, any additional depreciation on the difference between book value and the replacement cost of assets and on the cost of sales and monetary working capital adjustments. It will have to find 5 per cent. of the average net value of assets at current values. From that 5 per cent. the fund will have to pay the interest on its long term borrowing. It is a complicated matter, and if hon. Members wish to question me further I shall be delighted to try to give further information.
The staff will remain civil servants. There is no question of any change as a result of the order.
The JIC is a body designed to bring together the industrial trade unions. The non-industrial unions are covered already by the existing Whitley system. Discussion on the JIC continues, but to date no agreement has been reached. I should be delighted to see those discussions taken further and brought to a satisfactory conclusion.
About one-third of printing is produced in Her Majesty's Stationery Office presses, and about two-thirds is produced by the trade. I am told that the proportion has not changed by any substantial degree for many years.
The hon. Member for Newham, South (Mr. Spearing) raised a number of questions, especially about a shop in Bridge Street. I do not think that we lack imagination or initiative. If the hon. Gentleman can convince me that such a
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shop will pay, we shall start one. If he cannot do that, we will not start one. If we do so I may make the hon. Gentleman the manager and make him totally responsible for any losses. It is purely a question of whether such a shop would be profitable. If it can be shown that it could be profitable, we would consider the matter seriously.
Mr. Michael Morris: Will my hon. Friend also consider the possibility of offering the shop on an agency basis to discover whether that would be viable?
Mr. Channon: I shall consider any suggestions on the matter. I am told that it has been considered, but was not thought to be a profitable proposition.
Mr. Wrigglesworth: I am sorry to interrupt the Minister again. There was a Department of the Environment shop, which was a very attractive feature in Parliament Street. I do not know whether it is still there. That is an equally good position for tourists and others. It was a very small shop.
Mr. Channon: There was a brief moment, years ago, when I was responsible for that shop. I well remember it. I am reluctant to say tonight, without notice, whether it was a great commercial success. My recollection, for what it was worth—I am probably wrong—is that it was not. That makes me all the more suspicious about whether it is wise to have a Stationery Office shop there. I will check whether I am right about that point. Certainly I remember being very suspicious as to whether it was a wise idea. I was not the only one to take that view at that time.
There are a number of other points. I think that hon. Members have raised much the same points again. There is the question of privatising. All these other allegations have been made. All these matters should be considered by the Government. It must be right to consider whether Departments should be tied to the Stationery Office. That is a very important matter which should be settled on its merits. The Government will examine that on its merits. However, that is not a relevant issue tonight. If it ever were to be changed, that is obviously a matter the House would become aware of and hon. Members would have their opportunities to debate it, if

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that is what they wanted, in the same way as they can debate anything else.
Tonight I am merely asking the House to allow the Stationery Office to become a trading fund in the same way as there have been three other trading funds in the past. It was recommended unanimously by the Expenditure Committee. Even the hon. Member for Norwich, South supported it. I ask him to support it tonight with his vote and his voice. In fact, we brought it forward because we knew that he suggested it. If he had been against it, we should not have brought it forward in the first place. We knew the hon. Gentleman would not have suggested it if he had not been thoroughly convinced that the trading fund was in the interests of the Stationery Office and of his many constituents who work in it. To meet his request and that of hon. Members in all parts of the House, we have for once—it is very rare that a Government actually do it—met unanimously and in full the recommendations of a report of the Expenditure Committee.
Therefore, I hope that we shall get at least six marks out of 10 and that the House will allow us to form this trading fund so that the Stationery Office can operate in a commercial environment as from 1 April of this year. I hope that, if that is allowed, the House will wish it well and that it will be a great success.
Question put and agreed to.
Resolved,
That the draft HMSO Trading Fund Order 1980, which was laid before this House on 29th February, be approved.

FOOTWEAR INDUSTRY
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Waddington.]
1.52 am
Mr. John Garrett: I wish to raise the question of the condition of the footwear industry, with particular reference to Norwich. The footwear industry is of substantial economic significance in Britain. It consists of some 560 firms employing 74,000 people directly and a further 25,000 in
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supplying industries. It had a value of output of £728 million last year.
In spite of being bigger, for example, than the paper industry and the machine tool industry, the footwear industry until recently has received remarkably little attention from the Government or from the House. For years, in spite of a catastrophic decline in employment and severe trading problems, it was rightly called "the forgotten industry". Part of the reason for this neglect may well be its location, principally in country towns outside the great industrial areas—in Norwich, in Northampton, in Leicestershire, in Lancashire and in Somerset. These locations in predominantly non-industrial areas give it an even greater significance in the local economy, because it tends to be situated in low-wage areas. As an industry employing 56 per cent. female labour, it often provides a second, much-needed wage packet.
It is an industry with good labour relations and with a good record for improving labour productivity. As much as anything else, this has been due to the progressive attitude of the officials of the main trade union in the industry, NUFLAT, to whose general president, Mr. H. Comerford, all those who know the industry pay tribute.
The physical output of the industry peaked at 202 million pairs in 1964. Since that time output has declined steadily. In 1979, it fell to 151 million pairs, the lowest annual output since the war. Employment was over 100,000 in the late 1960s. Up to the mid-1970s, the decline in employment in footwear exceeded that of any of the main sectors of manufacturing industry. At least 25,000 jobs have been lost in the past decade. The contraction of the industry in Norwich has been much greater than the national average with a 35 per cent. loss of jobs in the decade. Today, the Norwich industry employs a little over 5,000 workers in 10 firms in 26 factories against an employment of over 8,000 in 1969. The Norwich industry is the fastest declining sector of the fastest declining industry in the country. Between 1971 and 1978, there were 11 factory closures in Norwich. In 1976 factories were closing at the rate of one every two months.
Against this background, a group of Labour Members in 1975 decided that something had to be done. We were concerned that the condition of the industry

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was never discussed in the House. We therefore secured an Adjournment debate and demanded action. As a result of this pressure from Labour Members, the Labour Government, to their everlasting credit, acknowledged that the industry needed help and set up a thorough study of the industry that led to the important report of the footwear study group, on which I had the honour to serve, and eventually to a scheme of assistance for the industry in the form of a footwear EDC that has produced its second annual report.
In this short debate, I wish to raise three issues: Government assistance to the industry, the structure and influence of the retail trade and trade matters—namely the uncontrolled flood of imports and obstacles to export. The footwear study group sat for two years and produced a comprehensive analysis of the industry and its problems and a most imaginative prescription for reviving and promoting growth in the industry. To be honest, it found that one of the most important problems of the industry was the weakness of its general management, its export management and design. It therefore proposed a scheme of Government assistance in nine sections, five of which involved the assembly of new management cadres for the industry in these functions. The total cost of the scheme, spread over five years or more, was only £11 million, which the industry would more than match. The cost for the whole industry would be little more than the cost of a modem fighting aircraft.
The Government response was much less imaginative, though welcome. In April 1978 the Secretary of State announced a scheme of financial assistance with an initial allocation—he clearly said an "initial allocation"—of £4·5 million for 50 per cent. of the cost of the use of consultants by small and medium-sized firms, for 25 per cent. of the cost of new machinery and for concessionary loans for rationalisation projects. This scheme was taken up enthusiastically by the industry. The response was the highest of all to such industry-wide schemes. By the end of last year, 329 applications for assistance had been received for projects costing a total of £19 million. Thirty-three applications, of which 21 have been approved, came from Norwich. The initial tranche of £4·5 million will run out at the end of this month and the Govern-
1400
ment have said that it will not be extended.
My first request to the Minister is that the scheme should be extended by further Government funds and developed in new areas such as the areas for development of the industry originally proposed by the footwear study group. This scheme has an exceptionally high cost-benefit ratio. The industry can effectively use a further tranche of Government funds and there is still much modernisation work to be done. In particular, the industry has requested of the Government further assistance for one crucially important but modest project—namely, a scheme to encourage freelance designers into the industry, originally proposed by the study group and now wholeheartedly endorsed by the footwear EDC. This scheme could markedly improve the design capability of the industry and be of particular importance to the fashion end of the trade in Norwich.
On 30 January the Minister attended a meeting of the EDC and refused a request for financial assistance for design. I urge the Government to change their mind and grant this modest but important request. The cost is no more than £½ million over five years—one might say half the cost of a battle tank spread over five years. The impact on the performance of the industry would be out of all proportion to the cost.
When we come to the structure and behaviour of the retail trade, we are on less tangible ground. The issue here centres on the enormous power of the footwear multiple retailers and the way they use that power. Two-thirds of all footwear sales are through specialist footwear shops, and of this two-thirds are through multiples. No less than 20 per cent. of the market is held by one company—the British Shoe Corporation, which totally dominates High Street trading.
The footwear study group was much concerned about this concentration of power. The independent consultants employed by the study group were highly critical of the use made by the British Shoe Corporation of its buying power. They considered that this had a detrimental effect on the manufacturing industry in that it enjoyed very high margins, but it reduced the profits of manufacturers and enfeebled British

1401
design by a policy of copying rather than innovating in design. The consultants proposed that no retail chain should have more than 300 to 400 shops. This would have led to the conclusion that the British Shoe Corporation should be broken up.
The footwear study group could not go so far as to accept that recommendation, although it was sufficiently impressed by the analogies to make a recommendation that a study should be carried out of the feasibility of referring footwear distribution to the Monopolies and Mergers Commission. The most telling aspect for a group which included Conservative Members of Parliament was that the study group suggested that the Government of the day should discuss a planning agreement with all distributors, including the British Shoe Corporation. Just imagine Conservative Members of Parliament signing a report calling for a planning agreement with a large private enterprise!
In June 1978 the Price Commission reported on footwear distribution. It found that in 1977 gross margins in footwear distribution ran at 40 to 53 per cent—the third highest of all retail trades. Net margins for multiples other than the British Shoe Corporation ran at 8 per cent. while the British Shoe Corporation managed a 16 per cent. net margin. The Price Commission concluded that gross margins achieved by footwear distribution multiples had become higher than could be achieved in a fully competitive market. It observed that the BSC was an efficient company and did not deploy its competitive strength in the market to the fullest extent. But it was not asked to comment on the behaviour of the British Shoe Corporation vis-a-vis its suppliers in this country, its purchasing practices or its threat to manufacturers.
One sore point is the extent to which the British Shoe Corporation and other multiples import their products. Today 50 to 60 per cent. of the stock of these multiples is brought from abroad. It was to this problem that the concept of a planning agreement was directed. The Department of Industry did not fancy producing a planning agreement—the civil servants in that Department did not know how to cope with it. The result was the retail commitment produced by the
1402
Footwear Distribtuion Federation in May 1978. This pledged co-operation and support for British manufacturers in an effort to buy British. The EDC now reports disappointment at the extent of progress under the retail commitment. It has certainly not fulfilled its objective in maintaining the volume of home manufactures at the level of 1976.
The position of the multiples in general and the British Shoe Corporation in particular calls for constant pressure and vigilance by the Government. I ask the Minister to make a standing reference to the Monopolies and Mergers Commission of the British Shoe Corporation and to call for an investigation by the Director General of Fair Trading of multiple retailers. If he really believes in limiting the abuse of market powers—this Government always say they are in favour of doing this—let him show us. I suggest that he also talks to the boards of the top two or three multiples in this country about the retail commitment and asks them whether they think that they are behaving in the national interest.
I come finally to the present crisis in the industry. The footwear industry is being ruined by a flood of uncontrolled imports, many of them unfairly priced or produced under substandard working conditions, and also by the loss of exports due to the rising value of the pound. That is partly caused by ours being a petro-currency and partly by the monetarist policies of the present Government and the draconian restrictions in foreign markets. Import penetration of the home market has reached 46 per cent. to a value of £350 million. Increasingly, imports are moving into the higher-quality leather sector.
The case of low-cost COMECON imports is well known. There is a limitation on COMECON imports. However, we limit them to a lesser extent than any other EEC country. The average cost, insurance and freight value for a pair of shoes from Poland and Czechoslovakia is now £3·50. It has risen by only 50p to 96p since 1977. Their costs must have risen as our have.
It is cumbersome to prove dumping from these countries. As in other cases, the process is extremely slow, by means of the Department of Trade and the EEC. Imports from the Far East are produced at low wages and in appalling conditions.

1403
Low-price shoes flood into Britain from Spain, Brazil and Portugal. Much of that trade is at unfair and probably dumped prices. Anti-dumping action is handled with sluggish deliberation by the Department of Trade.
Brazil is notorious for an export subsidy and for rigging its leather export trade. The major problem facing Norwich is that of increasing Italian imports. Last year 32 million pairs of shoes were imported. That is 30 per cent. up on 1978. Those imports occur right in the Norwich sector of high-quality women's fashion shoes.
On 24 February, The Sunday Times reported on the conditions under which Italian shoes are produced. They are produced in a "submerged economy". Home workers do piecework for 25p a shoe. A woman must work all day to earn £100 a month. Home workers have been paralysed by poisonous glue. They are inadequately protected in terms of health and safety. They do not pay social security contributions and neither do their employers. That is a clear example of unfair trading and should be limited.
At present, the Americans are threatening to limit imports of Italian footwear. For some reason, the Italians have already guaranteed that they will not send as much footwear to the United States next year as they did last year. At the end of last year, the Government ended surveillance licensing of footwear imports from some non-EEC countries. They did not consult the industry. Surveillance licensing—for which some of us argued for a long time —was abolished by the Government without any consultation. The British Footwear Manufacturers' Federation protested strongly. Of the world's shoe manufacturing capacity, 75 per cent. is protected from our exports. We have import quotas, for example, in Australia, New Zealand, Canada and Japan. The United Kingdom should also have some protection. The industry is putting its house in order. The EDC has been set up and is doing good work.
In Norwich, the industry produces high-quality footwear with increasingly modern styling. Its management has improved its performance in recent years. It is alert. Its work force is superlatively skilled. The industry simply needs more help. It is no good saying that import controls will cause retaliation from other countries.
1404
Retaliation has already begun.
The previous Labour Government did an enormous amount for the footwear industry. Do the Government consider the industry expendable in the interests of free market, non-interventionist ideology? I hope that the Minister has come prepared with some news of action in the three crucial areas that I have tried to identify.
2.8 am
Mr. Michael Morris: I am glad that the hon. Member for Norwich, South (Mr. Garrett) has raised an Adjournment debate on the problems facing the footwear industry. Norwich is probably the queen of the women's shoe industry. I hope that he will not think me too boastful if I say that Northampton is the king of the men's shoe industry.
The hon. Gentleman is right to say that the footwear study group was set up on an all-party basis and that it was highly successful. It is also true that it took three years to get it going. My hon. Friend the Under-Secretary has spent only nine months in office. He therefore has some time in hand.
On the multiple side, the hon. Gentleman is right to say that there was a firm commitment from the retail trade to co-operate. If the retail trade is not cooperating—according to our evidence—the Director General of Fair Trading should be informed.
As regards exports, I recognise that there is no doubt that this industry is still unusually skewed towards the former colonies and towards the richer nations of the world.
There are increasing restrictions in Australia, Canada and the United States, which the hon. Member for Norwich, South did not mention, which affect the sale of the sophisticated men's shoes that are made in Northampton. Yet the penetration into Europe is under 2 per cent. So the export of shoes is a major problem for the industry.
Conversely, we have enormous import penetration. As soon as we close one hole, another one appears. We closed the hole made by COMECON in 1975 and now it is Brazil that is carrying out a dumping operation. Who knows which country will be next if we manage to

1405
curtail Brazilian imports?
The Minister must be under no illusions. The footwear industry is important and significant. It has a long record of success in terms of man mangement and productivity. It needs help in organising itself. It may be that the Government will say that the £4·5 million needs to be analysed in terms of its success. If that is what my hon. Friend says, when he carries out his analysis he will discover that the money has been well spent. If necessary, the industry should look again at the other propositions laid down some time ago. Nevertheless, much of what the hon. Member for Norwich, South said deserves my hon. Friend's very serious consideration. I agree with much of what the hon. Member put forward.
2.11 am
The Under-Secretary of State for Industry (Mr. David Mitchell): I begin by congratulating the hon. Member for Norwich, South (Mr. Garrett) on bringing this important matter before the House, even at this somewhat early hour of the morning. I also congratulate my hon. Friend the Member for Northampton, South (Mr. Morris) on his perceptive contribution. He is also intensely interested in the footwear industry. The Government appreciate the importance to the United Kingdom economy of a healthy, viable footwear industry and we are anxious to encourage it.
The hon. Member for Norwich, South listed the size and importance of the industry and I agree that it is an important industry. It is a basic industry and we are anxious to ensure that it continues in a prosperous fashion.
I recently received a delegation from the footwear economic development committee and I visited the Footwear Manufacturers' Federation. I am, therefore, already aware and anxious to study more of the problems currently facing the industry and intend to take a personal interest in it. I expect that from time to time the hon. Member for Norwich, South and I will be able to discuss the industry further.
I appreciate the industry's worries about import penetration, the number of closures and the extent of short-time working. However, I understand that companies in Norwich are less hard-
1406
pressed than other parts of the footwear manufacturing industry. The hon Member for Norwich, South is exceedingly fortunate. As he will know, the Norwich travel-to-work area has a 4·4 per cent. unemployment rate, which is well below the national average of 6 per cent. Indeed, I am told that at present there are about 12 footwear manufacturers in the Norwich area employing about 3,000 people in the manufacture of children's shoes and ladies' quality fashion and comfort footwear.
Trade in Norwich is generally buoyant with almost all companies reporting to us having full or near-full order books for at least the next six months. This contrasts fairly substantially with other parts of the country. Significant business for the companies operating in Norwich has been secured in the EEC markets, but I am under no illusion about the problems facing other parts of the industry. There some 10,000 on short-time working and 2,000 are under notice of dismissal. Those are serious figures for the industry, but, as it happens, less so in Norwich. It causes me substantial concern.
At the invitation of my hon. Friend the Member for Rossendale (Mr. Trippier), I visited a shoe factory in his constituency to see for myself. I intend before long to visit the trade union headquarters.
Mr. Michael Morris: The headquarters are in the constituency of my hon. Friend the Member for Wellingborough (Mr. Fry). My hon. Friend will be welcome there, and I hope that he will spend a little time in Northampton discussing our problems.
Mr. Mitchell: I am grateful for that invitation. Perhaps we may discuss it in greater depth on another occasion.
The hon. Member for Norwich, South will appreciate that I am concerned about the industry and its problems. He first made a plea for further Government funds for modernisation. There are many applicants from different industries for Government funds. Regretfully, I tell the hon. Gentleman that money is not available for the long queue of industries and individuals seeking support. It is easy for a Government to dole out parcels of money if they merely print more money. We are suffering substantially

1407
from the previous Government resolving their problems in that way. The inevitable consequence is inflation. We are suffering the full flood tide of the printed money madness of the previous Government 18 months ago. It will lead us to levels of inflation of 20 per cent. and possibly 21 per cent. in the next couple of months. We shall not follow that path. We dare not risk the consequences of further money madness.
I am anxious to see modernisation in the industry, and there is a system of 100 per cent. allowances against investment in plant and machinery.
The hon. Gentleman's second point concerns the scheme for financial assistance for freelance design facilities. The hon. Gentleman is right to say that I met the economic development council for the industry. The hon. Gentleman used the phrase "only £½million", as if money grows on trees. It is a substantial sum when all the applications for a little bit here and a little bit there are added up.
Mr. John Garrett: I made the point about £½million compared to the size of the industry. Many smaller industries have received much greater subventions. That amount could make a substantial difference to the fashion end of an industry that employs 100,000 people.
Mr. Mitchell: I do not disagree. There is a need to raise the standards of design and fashion consciousness in the industry. I dispute that it is necessary to spend £½million of taxpayers' money to enable the industry to do what is in its own interests. In the United Kingdom we already have three freelance design operations. One is in the Northampton area and another in London, if my recollection serves me right. I am discussing with the EDC small practical plans to try to encourage more people to operate in that area.
Let us be clear about the fact that much of the design work is carried out by people who work for firms in the industry. Much of the work is concerned with going to fashion exhibitions and looking at the most advanced designs. The themes are picked up and then repeated in varying forms within the firm or the design capability in this country. I shall certainly look further at that point with representatives of the industry.
1408
The third point raised by the hon. Gentleman concerned the concentration of High Street retailing in the multiples. He named a particular company. This is a matter for the Department of Trade but I will make sure that its attention is drawn to the point made by the hon. Gentleman. He also referred to unfair imports and the draconian barriers to exports, as did my hon. Friend the Member for Northampton, South. I am bound to say that I am enormously impressed by the determination of the industry to succeed. I agree with the hon. Gentleman that the industry starts from the sound base of good industrial relations. That is one of the reasons why I plan to visit the trade union at its headquarters before very long. I have already visited the main trade association, which is an effective organisation. The EDC in its 1980 conference programme has emphasised design and the importance of technology.
I turn to the points about imports and the problem of closed overseas markets. I want to mention at the same time the growing opportunities for sales into Europe. I am pleased to see the increase that has already taken place in sales into Europe, but I have to say that they now account for 1·3 per cent. only of the European market. However, I hope that it may be possible for the industry to build on the expansion it has already achieved in that market.
I would draw the attention of the hon. Gentleman to the clothing industry. Last week I attended the launching of the first report of the clothing industry's resources agency. The agency did a survey of 23 English companies and one German company. Its report reveals some interesting facts about the capability of a major industry—with problems not dissimilar from the boot and shoe industry—for improving its own productivity, competitiveness and ability to export without Government aid.
The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at twenty-two minutes past Two o'clock.

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  Confidential Documents (Press Leakage)
  Senior Civil Servants (Computer Training)
  Senior Civil Servants (Computer Training)
  ALGARDI BUST
  ALGARDI BUST
  SOVIET INVASION OF AFGHANISTAN (SANCTIONS)
  SOVIET INVASION OF AFGHANISTAN (SANCTIONS)
FOREIGN AND COMMONWEALTH AFFAIRS
  Rhodesia (Resignations and Retirements)
  Rhodesia (Resignations and Retirements)
  Diego Garcia, Salamon and Peros Bunhos
  Diego Garcia, Salamon and Peros Bunhos
TRADE
  Trinity House (Employment Policy)
  Trinity House (Employment Policy)
  Trawler Fishing Vessels
  Trawler Fishing Vessels
  Woollen and Cotton Textiles
  Woollen and Cotton Textiles
  Outward Processing
  Outward Processing
  Import Controls (Department Staff)
  Import Controls (Department Staff)
  European Community Commission (Anti-Dumping Cases)
  European Community Commission (Anti-Dumping Cases)
  Textiles
  Textiles
  European Community-United Kingdom (Balance of Trade)
  European Community-United Kingdom (Balance of Trade)
  Credit Cards
  Credit Cards
  Romanian Suits
  Romanian Suits
TRANSPORT
  Austrian Road Haulage Permits
  Austrian Road Haulage Permits
  Motor Vehicles (Lighting Regulations)
  Motor Vehicles (Lighting Regulations)
  Local Authority Transport Programmes
  Local Authority Transport Programmes
  Toll Charges
  Toll Charges
  M6 Motorway, Corley (Coal Board Compensation)
  M6 Motorway, Corley (Coal Board Compensation)
WALES
  Llanrwst, Gwynedd (Bypass)
  Llanrwst, Gwynedd (Bypass)
  Homeless Households
  Homeless Households
  Steel Closures (Remedial Measures)
  Steel Closures (Remedial Measures)
  Community Homes
  Community Homes
  A55 (Conway Estuary Crossing)
  A55 (Conway Estuary Crossing)
  Hotels (Wales Tourist Board Grants)
  Hotels (Wales Tourist Board Grants)
  Road Signs
  Road Signs
DEFENCE
  Warsaw Pact Forces
  Warsaw Pact Forces
  Seawolf
  Seawolf
  Service Personnel (Travel Scheme)
  Service Personnel (Travel Scheme)
  Far East (Naval Deployments)
  Far East (Naval Deployments)
NORTHERN IRELAND
  Community Education and Research
  Community Education and Research
  Grant-Aid
  Grant-Aid
  Rates
  Rates
ENVIRONMENT
  Ancient Monuments and Archaeological Areas Act 1979
  Ancient Monuments and Archaeological Areas Act 1979
  Dog Licence Fees (Exemptions)
  Dog Licence Fees (Exemptions)
  Housing (One-Parent Families)
  Housing (One-Parent Families)
  Housing Corporation
  Housing Corporation
  Homeless Households
  Homeless Households
  Vitrification
  Vitrification
  Building Regulations (Insulation Standards)
  Building Regulations (Insulation Standards)
  Nuclear Power Stations (Waste Storage)
  Nuclear Power Stations (Waste Storage)
INDUSTRY
  Post Office
  Post Office
  Regional Development Grants
  Regional Development Grants
  Sector Working Parties
  Sector Working Parties
  National Anti-waste Campaign
  National Anti-waste Campaign
  Inmos
  Inmos

Preamble
The House met at half-past two of the clock: The CHAIRMAN OF COMMITTEES on the Woolsack.
Prayers—Read by the Reverend Lord Sandford.

ZIMBABWE-RHODESIA: COMMONWEALTH FORCES
Lord HATCH of LUSBY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether any request has been received from the new Zimbabwean Government for British and other Commonwealth troops to remain in that country and, if so, what answer has been given.
Lord TREFGARNE: My Lords, Her Majesty's Government have been asked to provide a continued British training presence to help in the integration of the various forces in Rhodesia. We shall respond positively.
Lord HATCH of LUSBY: My Lords, will the Minister accept my warmest congratulations on the courage of the Government in taking the decision that they have taken since this Question was put down, particularly in view of the fact that the Prime Minister promised her party that British forces would not be deployed in any way in this exercise? Further, may I ask him whether he will consider, when the deployment of British military technicians and trainers is being decided, the very special requirements of this extremely complex situation in Zimbabwe today? It is not, surely, just the conventional Sandhurst type of training which is required. Does the noble Lord agree that what is needed most now are people with imagination and experience in putting together these contending armies, and in reducing the number of the army, which we have seen in Nigeria can be a grave civil danger—
Several noble Lords: Speech!
Lord HATCH of LUSBY:—and will he advise those who are putting together the British team that a great deal of detailed knowledge is required when they are selecting the military advisers?
Lord TREFGARNE: My Lords, I appreciate the kind remarks with which the noble Lord opened his supplementary question. I can say that General Perkins has already made a preliminary report to the Government and General Fursdon is now in Rhodesia and will be submitting a further report when he returns shortly. These two reports are likely to lead to the appointment of a British military adviser and training team, who will be ready to discuss this matter in depth with the Rhodesians right away.
Lord GORONWY-ROBERTS: My Lords, may I very strongly support what my noble friend Lord Hatch has said on this matter, and the appreciation which he has voiced, which I think is shared throughout the House, of the way in which the new Government and the new Prime Minister of Zimbabwe have looked to this country of their own volition for help in the scope and nature of their own security forces, which no doubt Zimbabweans themselves will indicate to our military personnel. Is it not most encouraging that in Zimbabwe, this vital part of Africa, there is this good feeling towards this country which we all wish to reciprocate in every possible way?
Lord TREFGARNE: My Lords, I am sure the noble Lord is right, but I want to emphasise that the form that the new forces in Rhodesia take, will of course, in the last resort, be a matter for the new Government of Rhodesia themselves.
Lord BOYD-CARPENTER: My Lords, in view of the exemplary conduct of the military personnel concerned, from General Ackland downwards, are the Government favourably considering the grant of a Rhodesia medal to all who took part?
Lord TREFGARNE: My Lords, we are considering it, but a decision has not yet been taken.
Lord PAGET of NORTHAMPTON: My Lords, in view of the observations of my noble friend Lord Hatch in deploring

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the Sandhurst system, is it not a fact that, apart from asking for assistance in what is now Zimbabwe, they have asked to send officers for training to Sandhurst? So far as Africa is concerned, are not Sandhurst graduates very prominent in the later post-electoral development of African States?
Lord TREFGARNE: My Lords, I do not think that I want to be drawn into considering the different merits of various systems of officer training, but we shall be ready to provide whatever is appropriate in this case.
Lord HARMAR-NICHOLLS: My Lords, if my noble friend has any recommendations to make, will he insist that both the recruitment and the deployment are done mainly on sound military grounds, and will he not pay too much attention to the prosy observations of politicians, thousands of miles away from the point of action?
Lord TREFGARNE: My Lords, I am not quite sure to which politicians my noble friend is referring, and I sometimes think it is difficult to extricate politicians totally from this kind of situation. But, as I said, we shall be ready to provide whatever training and advice is appropriate.
Lord LEATHERLAND: My Lords, may I ask the noble Lord whether, while serving in Rhodesia, these British troops will receive any overseas allowances?
Lord TREFGARNE: My Lords, we have yet to decide the nature and size of our team, which we will in due course send to Rhodesia. No doubt they will be paid the proper allowances.
Lord HATCH of LUSBY: My Lords, may I ask the noble Lord one last question? As one who has spent a great deal of time with all sections of the forces in Rhodesia, may I ask him whether he will consider the advisability of helping the new Zimbabwe Government to set up training establishments in its own country, which have normally proved to be of more value than overseas training?
Lord TREFGARNE: My Lords, I am sure that the noble Lord is right. It will
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certainly be our aim that the advisory team, which I think we shall in due course send, shall seek to establish training facilities in Rhodesia itself.

LIBYA: PURCHASE OF KINGSLEY SCHOOL, CHELSEA
2.43 p.m.
Lord CHALFONT: 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 can confirm that the Libyan Government has purchased school premises in Chelsea; whether they are aware of the purposes for which these premises will be used; and whether they are satisfied that this transaction is fully consistent with local and national interests.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, the position, as I understand it, is that the Libyan Embassy has bought the old Kingsley School in Glebe Place, Chelsea, and intends to use it for educational purposes. The school was sold by the Inner London Education Authority last year to a third party who in turn sold it to the Libyans. This is a matter of essentially local interest and as such is for the local authority. Her Majesty's Government see no reason to regard the transaction as such as being inconsistent with the national interest.
Lord CHALFONT: My Lords, I thank the noble Lord for that reply, but may I ask him if he would not agree that this is not simply a matter of local interest? Is he aware that these premises have been bought by a Government which has a certain reputation in international affairs, especially in connection with its support for international terrorism? Is the noble Lord further aware that these premises are suitable for all kinds of users? Is he satisfied with the use that is proposed for them? And, perhaps the most important question of all, can Her Majesty's Government give an assurance that these premises will not be given diplomatic immunity?
Lord BELLWIN: My Lords, whether or not the premises are suitable for the purpose specified is for the local authority itself to decide. It is for the local authority to decide whether an educational establishment is suitable for education. But if at any time there is evidence to suggest that the premises are being used for improper purposes, as the noble Lord, Lord Chalfont, suggests, then I would agree with him that then, and only then, would be the time for any appropriate action. Beyond that, I think that the Government at this stage cannot go because it is still very much a matter for the local authority at this time.
Lord GORONWY-ROBERTS: My Lords, in view of the fact that the Minister, in answering a most responsible Question from a most responsible source, a Question which is echoed in the minds of some of us in this House, said that these educational premises will be deemed to be used for educational purposes, would they not, even though they are to be used for private education, be subject to a form of periodic inspection as to what goes on there?
Lord BELLWIN: My Lords, in answering the previous question I did not cover one point which was made by the noble Lord, Lord Chalfont. He asked whether or not the premises would be given in effect diplomatic status. The answer is, no, they would not. We do not regard schools as the premises of a diplomatic mission. However, turning to the point which was raised by the noble Lord, Lord Goronwy-Roberts—namely, whether this was something which should be watched—any local authority which grants planning permission or user permission for any purpose presumably always has an obligation to ensure that it is used for that purpose. Should there be any complaint which would lead to there being evidence to the contrary, it would indeed be a matter in the first instance for the authority, and if it were another kind of matter it would then be for the Government to consider.
Lord SHINWELL: My Lords, can the noble Lord the Minister say how they define" educational purposes" in Libya? Does it mean indulging in mischief all over the place—causing trouble? Is that what they mean by "educational pur-
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poses"? Had he not better keep an eye on them?
Lord BELLWIN: My Lords, I do not know how they define "educational purposes" in Libya, but for the purposes of this approval it has to be how we in this country define them. One can understand the concern—one properly does—but one of the penalties which we pay for being the kind of society we are is that in fact we do allow things to be worked equally for whoever is here; and so long as they conform, then we will always go along with them.
The Earl of KIMBERLEY: My Lords, can my noble friend say who sold these premises to the Libyan Government?
Lord BELLWIN: Yes, my Lords. At the end of the day it was the Inner London Education Authority which sold the school.
Lord JANNER: My Lords, is not the noble Lord aware that emissaries are being sent to this country from those who are practising, encouraging and training people in terrorism, in order to persuade the population here to take up their cause? Is not Libya a place which is well known to be the centre of terrorist organisations? Why do they want a special school? Has the noble Lord inquired? And is it not a national matter rather than a purely local one?
Lord BELLWIN: My Lords, as I said in answering the noble Lord, Lord Chalfont, it would become a national matter if the use were contrary to normal educational standards as we know them. Then it would be something quite else. But for somebody to apply and to be given permission by a local authority to use premises for educational purposes is the way in which our system works, and at the moment we have to go along that way.
Lord GLADWYN: My Lords, what do the Government understand to be the declared object of this request? Is it to educate the Libyans in London, or what?
Lord BELLWIN: My Lords, my information is that the premises are to be used as a school. Who is to be taught there and, indeed, if it comes to that, what is

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to be taught there, I am not in a position to say, and I am sure your Lordships would not expect me to be. It may well be a question which my colleagues at the Foreign and Commonwealth Office may have to speak about. However, so far as I am concerned, an application was made for the school. Permission has been given for that purpose, and that is as far as I can go.
Lord GORE-BOOTH: My Lords, speaking as an ex-resident of Chelsea and as one who knows it rather well, would the Minister feel able to give us an assurance not simply that the Government would look after this question after something had happened but that they would arrange in some way to keep an eye on these people, who have a baddish reputation for the kind of things which we fear, so that we are not suddenly told that it is too late?
Lord BELLWIN: My Lords, I should have to say that the responsibility for "keeping an eye on" the use must be that of the local authority. They are the ones who are giving the permission and presumably they are the ones who have ascertained the validity of the application, and theirs is the responsibility.
Lord STEWART of FULHAM: My Lords, the Minister has said that these premises are to be a school. Can we at least have an assurance that at that school there will be no assisted places under Clause 17 of the Education Bill?
Lord CHALFONT: My Lords, I should like to thank the Minister for dealing in the way that he has with an extremely complicated and knotty question. I should also like to thank him for his categorical assurance that these premises will not be given diplomatic immunity. May I ask him one final simple question for information only; namely, as the local education authority has the duty to inspect regularly private educational establishments as well as public educational establishments, can the Government give an assurance that they will discharge their responsibility in respect of this particular school?
Lord BELLWIN: My Lords, I can certainly say that we shall take careful note of the point made by the noble Lord
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and I am sure it will be passed on to the appropriate authorities.

BUSINESS
Lord DENHAM: My Lords, it may be for the convenience of your Lordships to know that dinner will be available at the usual time this evening.
It is proposed that the Report stage of the Education Bill will be adjourned at about 7 o'clock for approximately an hour. The Second Reading of the Highlands and Islands Air Services (Scotland) Bill will be taken during this adjournment.

LOCAL GOVERNMENT GRANTS (ETHNIC GROUPS) BILL [H.L.]
Lord AVEBURY: My Lords, I beg to introduce a Bill to authorise the payment to local authorities in Great Britain of grants towards expenditure attributable to the presence of ethnic groups within their areas and for connected purposes. I beg to move that this Bill he now read a first time.
Moved, That the Bill be now read la.—(Lord Avebary.)
On Question, Bill read 1a, and to be printed.

EDUCATION (No. 2) BILL
2.52 p.m.
The MINISTER of STATE, DEPARTMENT of EDUCATION and SCIENCE (Baroness Young): My Lords, I beg to move that the Bill be now further considered on Report.
Moved accordingly, and, on Question, Motion agreed to.
Clause 17 [Assisted places at independent schools]:
[Amendment No. 39 not moved.]
Baroness BIRK Baroness BIRK moved Amendment No. 40:
Page 18, line 10, at end insert—
("; and

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(c) the Secretary of State reports to Parliament on an annual basis details of—

(i) the number and names of schools participating;

(ii) the total number of pupils and the sex, age and geographical distribution of the intake into the scheme;

(iii) the total cost of the scheme; and

(iv) the details of the fees charged by each school and the average cost per pupil.").

The noble Baroness said: My Lords, in the early hours of the morning of 12th March we discussed this matter on the Question that the clause stand part and no amendments to it have yet been discussed. Unfortunately, the clause now stands part of the Bill and we have this scheme, which is certainly abhorrent to me, and not only to my noble friends on this side of the House but to many other noble Lords in all parts of the House, particularly on the Cross-Benches. Also some of the noble friends of members of the Government expressed, during the Committee stage and on Second Reading, their reservations about this, including the noble Lord, Lord Butler of Saffron Walden, and the noble Lord, Lord Boyle, among others.
What this scheme does is to skim off the cream of our boys and girls at school, so far as that is possible, with the money available; but in so doing that, although the noble Baroness, Lady Young, said during the Committee stage that the scheme would not start until 1981, and £3 million would be allocated for it at that point, the total amount of money which is to be put into the scheme is in the area of £55 million. A great deal was said, and no doubt will be said in future, about how this money could be used to better effect in the maintained part of our education scheme.
What I am concerned about is that this puts an educational bomb into the State system. We still have a ferocious class consciousness and class system in our society. This is debilitating to the country and it affects our economy and our industrial effort. Education should erode class and social divisiveness, but what the assisted places scheme does, although I readily admit that at the moment it is in quite a small way, is to bolster all the things which we have rightly been trying to iron out of the education system.
One point that so much runs through this Bill is the opportunity given for parental choice and parental participation in the education system. But in bringing in this assisted places scheme we are to some degree going hack to the situation where parents and their children are put in a competitive situation as far as education is concerned. The sense of failure among those children who are not "lifted out" to get an assisted place can be very severe and we have the flavour of the old 11-plus. As has been pointed out before, in many ways this is much more iniquitous than a direct grant scheme because it is saying, strongly and specifically, that the maintained sector is not able to cope with children of high ability. This is quite outrageous, and I really believe that it is highly damaging to the maintained sector which everybody should be trying to build up.
One way of getting improvement in the education service, in the National Health Service and in many of our services, is through people who are articulate and are not afraid to state what they feel, and they should participate in the maintained sector. By doing this, one is not just creaming off the children, but undermining the voices of those very parents who could probably stand up and speak and bring a considerable influence to bear on increasing the quality of the State system.
The amendment is directed to people having the right to know the facts of the scheme. Until now we have known very little about it. In another place the Minister, Dr. Rhodes Boyson, the Parliamentary Secretary of State for Education, in reply to a Question for Written Answer on the number of school places for boys and girls which have been provisionally offered by private schools in each of the areas of England and Wales, replied that:
"direct grant grammar schools and independent secondary schools were invited by the Department's letter of 6th December to indicate, on a provisional basis and without commitment, whether they would be likely to be interested in joining the assisted places scheme and, if so, approximately how many assisted places annually they might offer".
In the table which was given as part of his reply, it was shown that 371 schools have so far responded. I think I am right in saying that is about a third of those who were invited to participate; and I should

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be grateful if the noble Baroness, Lady Young, could perhaps tell us whether a more up-to-date figure is now available. As to the table which sets out the number of schools, there are already considerable grounds for concern in the variations of the schools responding. For example, 136 schools in the South-East have responded; in the East Midlands 15 have offered places, and in Wales 15 have offered places. In between there is a whole range of numbers, but the South-East is very much in the lead.
We are asking—I think, quite reasonably—that there should be included in the Bill the requirement for an annual report to be given by the Secretary of State to Parliament, giving the number and names of the schools participating, the total number of pupils, their sex, age, and the geographical distribution of the intake into the scheme, the total cost of the scheme, the details of the fees charged by each school and the average cost per pupil. I think this is very important if people are to have any idea of how the scheme is working, who it is affecting, how equitable the distribution is and whether it is working in the way that the Government expect it to work.
At the moment I think many of us feel that the whole thing is rather veiled. We do not know any of the relevant points that we need to know. This is not something to which one wants a once for all answer. I appreciate that it would be impossible for the Minister to give us these details today because the scheme is not under way yet, but it is important that this information should be available so that the parents are aware of it and schools are aware of it. It seems to me that this is an amendment which should be supported by all sides of the House because it is asking for information on an annual basis to which I believe Parliament, the schools and the parents are entitled. My Lords, I beg to move.
Viscount SIMON: My Lords, we on these Benches are as deeply opposed to the assisted places scheme as the other noble Lords whom the noble Baroness mentioned. I propose to take the view on this and the following amendments that we should accept the decision of the House to let this scheme go through, just as the Government have accepted the decision of the House about transport charges.
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I would not want to follow the noble Baroness in what she said at the beginning of her speech which appeared to be attacking the scheme altogether, which I would gladly follow, but I think it is inappropriate at this stage. We on these Benches will look at these amendments on their merits, as to whether they make the working of this scheme, which we dislike so much, more or less effective.
Baroness AIREY of ABINGDON: My Lords, I crave your indulgence; being such a new Member I can only speak from personal experience. I have in mind the faces of three children. A very short time ago I was asked to award prizes to spastic children, and they were absolutely amazing in what they had achieved. I shall never forget the faces of all those children, but particularly the face of the winner. Secondly, I should like to speak about a school that I knew well. It was not perhaps a very intellectual school but it had taken the precaution of having a farm attached to it. I remember that there was a sort of Victor Ludorem for the pupil who did the best; this particular pupil had done especially well in lambing, and he was brilliant at it. Thirdly, I remember the face of a child whose father was an electrician and formed a small business of his own. He happened to have a very brilliant son, and he entered him for the scholarship for Eton from a little remote village. I believe there were in fact 16 places, and it needed this humble and shy man to go with his wife for the interview. This boy, in fact, missed getting a place by one mark. This was a little while ago when schools were still independent, and they put him in for a school which was perhaps more ancient than Eton, an ancient grammar school. He got in and he has done brilliantly. In the intervening time, this child would not have had that opportunity. I know I have diversified a little with my first two children, but their faces are so vivid in my mind. I believe that we are thinking not only about the brilliant children, we are thinking about the others as well. I crave your Lordships' indulgence because I know this afternoon we are speaking about assisted places; this is what I wanted to say, that the brilliant child a few years ago would not have had the chance he has and I hope that in the future another such child will have.
Lord STEWART of FULHAM: My Lords, the noble Viscount, Lord Simon, said that he and his colleagues were going to consider the amendments on their merits. I would particularly commend this amendment to him, because whatever view any of us might hold of the merits of the assisted places scheme it must surely be desirable that we should be properly informed about how it works. It may be that some noble Lords will be proved right and some proved wrong, but it will be difficult to ascertain that unless Parliament does know what is happening. It is a good general principle when you are spending public money—and in the end it is going to be quite a lot of public money—that Parliament should know whether on any assumptions you are getting value for money. Moreover, the Act requires that the assisted places should be equitably distributed both with regard to different regions of the country and with regard to the sex of the pupils. What we are asking here is that we shall have an annual report from which we can judge whether these intentions in the Act are or are not being fulfilled.
I feel here again that this really is an amendment that the Government, without any loss of face, could accept. This amendment does not by itself challenge the assisted places scheme. We have made it plain enough from these Benches that we dislike the scheme, but all we are asking in this amendment is that as the scheme proceeds Parliament should know from year to year how it is being administered, whether the requirements of the Act as to equitable distribution are being met, and generally how has the whole thing worked out. I hope the noble Baroness the Minister of State will see her way to accepting this amendment.
Lord NUGENT of GUILDFORD: My Lords I feel a little doubtful about the amendment, because it only asks about numbers and finance. If I were to go completely along with the speech the noble Lord, Lord Stewart, has made, I would want to know how the children were doing, because that is where the good value comes in. My view is the opposite to that of the noble Baroness, Lady Birk; I do not think this scheme of assisted places is iniquitous, because I think the brilliant child does need education of a particularly high grade. There-
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fore, I am broadly in sympathy with what my noble friends are doing here. I would fear that this type of amendment, if this was just an annual report giving the number of places and the cost, might help to perpetuate a running campaign of hostility against the scheme which noble Lords opposite feel. I think that would be very damaging. I am interested to see this scheme succeed. I do not feel that it has the implication that comprehensive schools in the State system are inadequate; it is simply an additional complement to the State system to deal with the exceptional child.
When noble Lords opposite feel that this scheme is unfair in that it is giving certain children an advantage, one does have to look at it the other way round. The brilliant child does need something extra in education to what other children need. The brilliant children need extra attention from particularly high powered teachers; they need the extra challenge which they will get in those circumstances, which they will not get normally in a system which has to cater for a much broader range of intellect.
Therefore, in looking at this matter, one must think about the children who have these special talents. They should have the opportunity to develop them to the full, both in their own interests and in the interests of the whole community. Goodness knows! we want them to go through life with their special qualifications and to use their great gifts to the benefit of the whole community. Therefore, it is with those type of feelings at the back of my mind that I say that I am not entirely convinced of to what purpose this amendment would be put if it were placed on the statute book. I am not sure whether it would really be looking at how these children were getting on and whether they were making good progress or simply providing a peg to enable people to have another crack at a system that noble Lords opposite do not like. I shall listen with interest to what my noble friend says. However, I shall look very closely at the amendment before I agree to it.
Baroness BACON: My Lords, I think that I made it perfectly clear during the Second Reading debate that I consider this clause to be the worst part of a very bad Bill. However, like the noble Vis-

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count, Lord Simon, we have accepted what the House has done as regards the clause as a whole. Although this clause was passed in Committee, we do not know how the scheme will work. We have been told very little about it, and what little we have been told has been rather contradictory.
In the first place, £100 million was mentioned; then it was £50 million; and now we have been told that in the first year, which starts in 1981, the cost will be £3 million. We want to know not only what the scheme will cost, but how many children it will involve and how many children will go to each of the participating schools. What will it mean to the comprehensives and in some cases the local authority grammar schools? How many children is it anticipated will be creamed off from those schools?
What has not been mentioned here this afternoon, but which is very germane to the amendment, is the rumour—I do not know whether it is a fact or a rumour—that some report has been sitting in the offices of the Department of Education and Science which for some reason or other will not be published and made known by the Department until June. If rumour is true, that report shows that bright children do as well, if not better, in the comprehensive schools as they do in selective schools. I hope that this afternoon the noble Baroness, Lady Young, will tell us whether that is true. Is there such a report sitting in the Department of Education and Science? What does that report say? If there is such a report, it is very germane to this particular amendment. All that we are asking for is information. Your Lordships' House has given this Bill a Second Reading and in Committee your Lordships agreed that the clause stand part of the Bill. However, I suggest that we do not know very much about this scheme and this afternoon I ask for more information.
Lord EVANS of CLAUGHTON: My Lords, as has been said by my noble friend Lord Simon we shall consider each amendment on its merits and not on the basis of whether we are in favour or against the system, to which we have made quite clear we are opposed. We think that if the deed has to be done it should be done well. This proposal improves
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the scheme and certainly lets people know whether they are getting value for money and helps them to know whether the scheme is working effectively and properly. It would be interesting to see the details of the fees charged and how the average cost per pupil compares with the maintained sector. There were arguments during the introduction of the direct grant system, that, in fact, direct grant places cost less per head, according to one set of statistics, than the cost of places in maintained schools. That is the type of information that everyone should want to have and should be glad to receive, whatever their political views may be about the scheme.
I should like to take up one point with the noble Baroness, Lady Birk. I see the merits of the point coming, as I do, from an area where there is a very large number of excellent direct grant schools which have now become independent. The noble Baroness said that if we did not have the scheme it would bring back into the maintained sector the articulate concerned parent. That is very true, but is that not an argument that leads us inevitably to the point that, if we abolished the private sector entirely it would bring the top 5 per cent. who are probably the most interested of all in the future of the education of their children, into the maintained system. I do not know whether that is an argument that the Labour Benches would pursue as regards the abolition or otherwise of the private sector. However, it logically follows that, if one takes that view about that section, then the private sector itself is a diminution or a dilution of the effectiveness of the maintained system. Generally speaking, if the system is to be introduced we think that this would assist people to know what they are getting and what the country will have to pay for.
Lord DAVIES of LEEK: My Lords, Sections 51 and 52 of the 1944 Education Act—which was written when Britain historically said that never again would we have such inadequate educational opportunities for our people—said that it should be seen that children who had education were able to take the advantages thereof. In a nutshell, Clause 17 talks about awards and grants to the assisted places at independent schools.

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I have had experience of children who are able and quite brilliant, but who feel inadequate because their clothing, their maintenance, their pocket money, their rugby kit and so on, are not equal to that of children at independent schools. If noble Lords think that that is not something that hurts the heart of a child, I beg them to think again. It is important that if those "aces" are put into those independent schools where they will have the opportunity of building up their stature, their muscles and the adequacy of their minds, we should ensure that they are properly dressed, have adequate boots, shoes, gear and kit to enter the gymnasium, or use the football and the rugby fields. That is of paramount importance to a child. Those are the matters that he confesses at home to his mother and to his father when given the opportunity. I beg noble Lords to think again about this matter. It was enacted in the 1944 Act that local authorities should ensure that a child has the physical and mental equipment to fit into the milieu of that type of school.
Lord PARRY: My Lords, earlier in the debate I made the point that it ought to be unnecessary at any stage for anyone on either side of the House to assume that his side of the House had a prerogative in wanting to see the education system work and in wanting to see the children of this country have an even brighter future. It is surely unnecessary to introduce that remark or invitation at this stage. A Report stage is always difficult because it leads people to make Second Reading speeches about matters which are really concerned with the clauses to be inserted. As regards this clause, that gives me an opportunity to ask the noble Baroness, Lady Young, whether she is now able to answer, in the context of this clause, the question that I put to her on the redistribution of the amount of money available for the provision of education in this country from the public to the private or semi-private sector; and whether she can tell me if the £50 million, of which we have spoken, or indeed the £3 million for the one year of which we have spoken, is in addition to the £60 million-plus already being devoted from the public purse to the support of private education.
3.20 p.m.
Baroness YOUNG: My Lords, we all listened with great interest to the speech of the noble Baroness, Lady Birk, which was, of course, a Second Reading speech, on the assisted places scheme. I do not wish to rehearse all the arguments that we have already heard—not only at Second Reading but also on Committee—a third time round on Report. I should simply like to make three points about the assisted places scheme. The first is that it is intended to replace the old direct grant schools scheme. Whatever the feelings of the House may be about the assisted places scheme—and I have every reason to suppose that a majority of your Lordships support it—when the old direct grant scheme was phased out by the former Labour Government (and I remember the debate well) there were very few noble Lords who did not express their very great regret at the ending of the direct grant schools which had made such a notable contribution to the educational system of this country.
Secondly, the two systems—the direct grant school system and the maintained system—lived side by side very happily for many years. It is extraordinary to talk about creaming off from the maintained system and the ending of the good relationships because we are trying to reintroduce the scheme in a better form without some of the disadvantages that the direct grant schools system had. I was not absolutely sure of the point made by the noble Lord, Lord Evans of Claughton, but if he was implying that only the top 5 per cent. who send their children to independent schools care about their children's education, I would regret that. I think that most parents care very greatly about their children's education.
Lord EVANS of CLAUGHTON: My Lords, if I may interrupt the noble Baroness, I certainly was not implying that. I was saying that if one advances the argument, as the noble Baroness did, that the parents who formerly sent their children to direct grant schools and who now send them to these schools would be creamed off as the most concerned parents, then it should be remembered that parents in the private sector too, of course, are among the most concerned parents.
Baroness YOUNG: My Lords, I am glad to have that point cleared up. The point I want to make is that there are thousands of parents who send their children to the maintained system who care deeply. The provisions in the Bill that we are making both on school governors and on the right of parents to express a choice and the appeal system, which has been so greatly criticised by noble Lords, opposite, are designed to give some of the opportunities to parents who send their children to maintained schools that are currently enjoyed only by those who can afford to send their children to independent schools. It is very important to see the assisted places scheme in relation to other proposals. I have been asked for a great deal of information, and I shall give all the information I can this afternoon.
I turn to the amendment before us. An identical amendment to this was, of course, debated in another place, and the Government believe that it is unnecessary. The Secretary of State is already under an obligation under Section 5 of the Education Act 1944 to:
"make to Parliament an annual report giving an account of the exercise and performance of the powers and duties conferred and imposed upon him by this Act".
That provision applies to this Bill by virtue of Clause 38(3), which provides that this Bill, when it is enacted, is to be construed as one with the Education Act 1944. I believe that this is sufficient safeguard; we have shown already, I believe, that we are willing to be completely open about all aspects of the scheme, and we shall recognise the perfectly valid interest of Members of both Houses in this new scheme when preparing the Secretary of State's annual report to Parliament. Of course, noble Lords can also put questions about the scheme.
I shall give the most up-to-date figures that I have on the scheme. The latest figure for the schools that have expressed an interest in participating is 468. Those figures break down into 120 former direct grant grammar schools, 338 independent schools, one other direct school and nine maintained schools, making a total of 468. In fact, all independent secondary and direct grant schools were sent a letter on 6th December; no attempt was made to select suitable schools at this stage. The letter went to all secondary schools,
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whether or not they had sixth forms, and the response, which has been about 45 per cent., we believe is very satisfactory in this context.
As for the numbers of places offered—and these are provisional figures and are the latest I have—for the total of boys it is 5,894; for girls, 5,135; for mixed schools, 1,928. Therefore, noble Lords will see that the offers we have are far more than the places we could consider and, quite interestingly, there is almost an even balance as between boys and girls. It is our intention that there should be equal numbers of places for boys and for girls, and that there should be a proper geographical spread of these places.
On the costs of the scheme and how expensive it would be, I would refer those noble Lords who are interested in this matter to the reply given by my honourable friend Dr. Boyson in another place on 12th February 1980 at column 1487 of the Official Report, when he spoke about the
comparative costs of the maintained schools and the independent schools. He said:
"The average recoupment costs for children between the ages of 11 and 16 as between one county and another when real money has to go over and when counties become realistic…is £675. At 16-plus the cost is £1,155. The figures for six ex-direct grant schools in Manchester average £841".
We have, of course, published in full the income scales that will apply. I shall give any noble Lords who are interested the references in Hansard; it would take too long to read out all the details of the scheme this afternoon. I hope I have indicated that we are completely open about our proposals. We believe that they will stand up to public examination. We believe that there will be an opportunity for review of the scheme on this annual report, and I therefore hope that the noble Baroness will feel able to withdraw her amendment.
Baroness BACON: My Lords, before the noble Baroness sits down, will she answer my question about the report which, according to reports in newspapers, is at the Department of Education and Science and which is not to be published before June? Will she say whether or not the reports in newspapers are correct when they say that, in fact, this report says that bright children do

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as well, if not better, in comprehensive schools as in selective schools?
Baroness YOUNG: My Lords, the particular question is, of course, totally irrelevant to the amendment before us. However, I assume as the noble Baroness, Lady Bacon, has not named the report to which she is referring, that she is referring to the report of the National Children's Bureau. I would refer her to the answer that my right honourable and learned friend gave in another place on 18th March, at column 164 of the Official Report, in which he said:
"There is no truth whatsoever in the suggestion that I have withheld publication of this report by the National Children's Bureau. This research was carried out by the NCB and it is for it to publish the report".
The answer continues but I shall not quote the rest.
Lord PARRY: My Lords, during the Second Reading debate the noble Baroness promised that she would give me an answer to the specific question which I have again asked today. Yet again she seems not to have answered it.
Baroness YOUNG: My Lords, I am not at all clear what figures the noble Lord, Lord Parry, wants. We have given the cost, assuming that the assisted places scheme starts in September 1981, of £3.5 million. I gave him the current cost of sixth-form pupils in direct grant schools, and all these are figures which are known. I am not clear what other figure he wishes to have which is relevant to the assisted places scheme.
Lord PARRY: My Lords, perhaps the House will forgive me for reminding the noble Baroness of the specific question I asked. It was whether the overall cost, however assessed—as has been said, the assessment has varied, but the most constant figure is £50 million—or, if you like, the related cost of £3 million in the first year of operation is additional to the sum of money which both she and I know is at present, rightly and properly, spent within the constitution on assisted places.
Baroness YOUNG: The amount that has been put into the financial memorandum at the start of the Bill—£3½million
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in September 1981—and which we have accepted, will, when the scheme is in full operation, build up to £50 million, but this will not be until about 1989. The sum is in addition to the discretionary award which local authorities can now pay to send children to independent schools where they regard that as appropriate.
Lord DAVIES of LEEK: My Lords, I hate to question the noble Baroness again, but I think it is important. I would like to know whether, if children wanting these places do not have adequate facilities at home to take part in gymnastics and games at the same standard as those from better-off places, there are opportunities and grants which will be available as they were under the 1944 Education Act?
Lord DERWENT: My Lords, if I may interrupt the noble Lord, we are not at the Committee stage now.
Lord DAVIES of LEEK: My Lords, whether we are not at the Committee stage, an answer to the question is courteously requested.
Lord DERWENT: My Lords, one is only allowed to speak once on the Report stage.
Lord UNDERHILL: My Lords, the noble Baroness has said that the report of the National Children's Bureau is a matter for them to publish, but, irrespective of that point, will the noble Baroness confirm that the statement made by my noble friend Baroness Bacon is in that report, because travelling to the House today I heard on Radio 4 that very statement which was made by my noble friend?
Lord JAMES of RUSHOLME: My Lords, I think that when the noble Lord, Lord Underhill, comes to read the report of the National Children's Bureau he will find that the research concerned finished in 1974 or 1975, I am not quite sure which, while the direct grant schools were still in operation and before the comprehensive schools had really got under way and when their second year sixth forms were virtually grammar school sixth forms. The figures he is quoting or misquoting—I would not know—will when they are published need a great deal of interpretation and examination in a fairly expert way.
Viscount ECCLES: My Lords, may I ask my noble friend this question? I sympathise with the noble Lords who want full information about the working of the assisted places schemes. I believe also that my noble friend is right that the place in which to do that is in the annual review of the Secretary of State. But I think that what we want is an assurance that it will not be a perfunctory paragraph about this scheme. It is a new scheme, people are very interested in it. Can we have an assurance that the noble Baroness will ask the Secretary of State to give us full details, at any rate in the early years?
Lord HUGHES: My Lords, the question I wish to ask has relevance to what the noble Viscount, Lord Eccles, has just said. If I understand it properly, this clause does not apply to Scotland and if the Scotland Act had not been repealed I could be accused of asking a "West Lothian" type of question and interfering in English education while the English could not do anything about Scots education. My reason for asking the question is that I was rather surprised when the Minister said that the giving of information would be in relation to this general report which the Secretary of State makes. I therefore wonder exactly what was meant when we look at subsection (6) of the clause. This deals with the making of regulations and includes in paragraph (d) an obligation on the authorities concerned to furnish information to the Secretary of State. This would seem to be in addition to what is being done in these other Acts.
What is the sort of information which is referred to which is intended to be obtained, particularly from these regulations? To what extent do the items covered in the amendment proposed by my noble friends fall within this information sought under the regulations?
Baroness YOUNG: My Lords, with the leave of the House, I think we should remind ourselves that we are on Report and that this is not the Committee stage of the Bill.
Several Noble Lords: Hear, hear!
Baroness YOUNG: My Lords, I have, I hope, already given an assurance to my noble friend Viscount Eccles and to the House that when the Secretary of State's
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annual review of the education service is presented to Parliament there will be full information about the working of the scheme and the information that is required. In the meantime, there is nothing to prevent any noble Lord asking questions about it and seeking the information that he or she requires. I shall do my best to answer the other questions that have been asked.
I was asked by the noble Lord, Lord Davies of Leek, about the expenditure on equipment for pupils. Under Clause 18, the Secretary of State may make grants for clothing, et cetera. Of course, local education authorities will also be free to help by using their general powers under Section 81 of the 1944 Act. That is precisely to avoid the kind of situation that he has described.
So far as the regulating powers are concerned, the point raised by the noble Lord, Lord Hughes, under subsection (6) is, I believe, quite clear. There will have to be various regulations which prescribe the particular conditions that are set down. Of course, we shall be writing to the local education authorities notifying them and working with them on the schools that are selected for the scheme, the methods of selection and so on within their area. There will obviously be information which they will want to give us and we shall want from them. These are all matters that are covered in regulations, and the Bill makes that quite clear, I believe.
Baroness BIRK: My Lords, in view of the assurance which the Minister has given in reply to both the question I raised and the amendment moved, and in view also of her answer to the noble Viscount, Lord Eccles, who was pursuing the same path, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn. 3.37 p.m.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved Amendment No. 41:
Page 18, line 15, after ("scheme") insert ("after the completion of a satisfactory report on a participating school by Her Majesty's Inspectors").
The noble Lord said: My Lords, this amendment, together with Amendments

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Nos. 44 and 47, are concerned with the maintenance of standards at schools at which assisted places are to be taken up. Amendment No. 41 requires in the first place that it should be a condition of becoming a participating school that there should be a satisfactory report on it from Her Majesty's Inspectors. Amendment No. 44 prescribes the exclusion of a school on which an unsatisfactory report has been received, and Amendment No. 47 gives definition to the term "standards" which appears in the relevant schedule.
I am sorry the noble Lord, Lord Nugent, is no longer with us because I am encouraged, in moving this amendment, by something he said on the last one. He argued in favour of the assisted places scheme on the ground that maintained schools were all very well for many children but that there were gifted children who required exceptionally high quality teachers and a special kind of school. I do not accept that argument at all, but if the assisted places scheme is going to be justified on the ground these schools at which assisted places will be taken up are of an exceptionally high quality, we are entitled to ask for some verification of it.
One understands, of course, that assisted places would not be taken up at, say, the kind of school attended by H. G. Wells's hero, Mr. Polly, of whom it was said that at that school the studies of French and bookkeeping were pursued but never effectively overtaken. What is asked of these schools is something far more than that; that they should be so exceptional that they can give to the exceptionally gifted child something it cannot obtain elsewhere.
At the outset of our argument on this matter, the noble Lord, Lord Alexander of Potterhill, expressed doubt as to whether there were all that number of such superlative schools to be found anywhere. Let us put it to the test. What we are suggesting in these amendments is that a school at which assisted places are to be provided should be subject in the first instance to reports by Her Majesty's Inspectors; that they should not remain on the list of participating schools if there is an unsatisfactory report, and that the
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reference to standards in the schedule should be standards as defined by Her Majesty's Inspectorate.
I do not know what the Minister will be able to say today about the state of the inspection of schools outside the maintained system. It certainly was the original intention that such schools should be inspected, and that indeed final registration of the school should depend on a satisfactory report, but I am not sure how far that has worked out in practice. Is the noble Baroness perhaps going to tell us that this amendment would be impossible because there are not the resources in the Inspectorate? If that is so, then might it not be better to leave over the assisted places scheme until we can be sure of adequate reporting? Contrarywise, if it is practically possible for the Inspectorate to do the work we are imposing on them in these amendments, surely it should be done. I beg to move.
Lord MORRIS: My Lords, it would be impertinent to suggest that the noble Lord, Lord Stewart of Fulham, is unaware of Section 77 of the Education Act 1944 whereby Her Majesty's Inspectorate have a bounden duty to inspect all schools. As he knows far better than 1, this scheme has been going on for many years. In the light of this fact, purely on the ground of necessity I cannot see, as the information is already with the Secretary of State for Education, the point of this amendment, and what it would contribute to the Bill.
Lord ALEXANDER of POTTER HILL: My Lords, I think that this amendment should be looked at carefully. We are not dealing with the ordinary issue of inspection of independent schools or of any schools to see whether it is providing satisfactory education. We are dealing here with the issue of whether a particular school is capable of fully stretching a child who is certainly in the top 2 per cent. of ability, probably even more than that, in the top 1 per cent. This is a very special job. I gather that about 400 schools have offered to co-operate. The idea that there are 400 schools capable of fully stretching these children I would totally reject as not a practical proposition.
I have no doubt that under the clause there are circumstances whereby the

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Secretary of State can require whatever information he thinks necessary from schools before he enters into an agreement with them. Whether an actual inspection by Her Majesty's Inspectorate is necessary is for him to decide, but I would hope he would take great care to ensure that the schools invited to participate would be such schools as could fully educate children who have a very high level of ability and who need special provision.
3.44 p.m.
Baroness YOUNG: My Lords, I hope that I can give the House the assurances that are required on all the points that have been raised over this amendment. I understood that the noble Lord, Lord Stewart, was also speaking to Amendments Nos. 44 and 47. En selecting schools for the scheme, the Secretary of State will certainly seek and have regard to the advice of Her Majesty's Inspectorate. But in general we should be able to rely on the detailed information given by schools in support of their applications and on what Her Majesty's Inspectorate know of them already.
Schools will be required to provide detailed information on such matters as their sixth form provision, provision for 0-level and A-level examinations, and other academic courses, so that we shall know what they can offer. We therefore believe that it will neither be necessary nor practicable to arrange for Her Majesty's Inspectorate to carry out an inspection and render a report on every school with which it is proposed to make an agreement. Many schools are already well-known to the Inspectorate and this would be a misuse of Inspectorate manpower and a time-consuming and delaying task. As I have said, the advice of the Inspectorate will be taken and will be based on a special visit where in their judgment this is necessary. May I say as well that all independent schools are inspected before final registration, so that I think this is an important safeguard. Final registration always depends on a satisfactory report, except as provided under Clause 34 of the Bill.
I think therefore that it will be recognised that just as we wish the scheme to succeed—and after all we have no possible interest in having unsatisfactory schools in the scheme—if there is one
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thing we shall be able to measure it is the results. If the results are unsatisfactory we shall know at once if the school is unsatisfactory, because of course the scheme can be measured in terms of money that is put in and the qualifications that the children get at the end. As we all know about qualifications, they measure not only those taking the examination but those who are teaching for the examinations. So I think we have in a real sense a measure which we would all accept is important.
On the further amendments I think it would be difficult, for example, on Amendment No. 44, to define what exactly is meant by an unsatisfactory report on the school. It presumably applies to the general conduct or achievement of the school. But what about a critical report of a particular member of the staff who might leave, and then the school continues to be all right? I do not think that we could accept an amendment that is couched in those terms. On Amendment No. 47, the Secretary of State will always take the advice on whether or not a school has fallen below the standards considered appropriate for participation in the scheme, and he must have power to terminate a school's agreement if its standards fall off.
In the last analysis the Secretary of State must always act on his own judgment and not be bound to accept the advice of any of the officials; and this must be the way that public life works. The Secretary of State makes the agreement and must take the responsibility for deciding to terminate it. But it seems to me that the real assurance is the point I made earlier: we wish the scheme to be a success. If it is not a success then this would measure the schools as well as the pupils, and I suggest that those of us who support the scheme have an interest—as I am sure the noble Lord, Lord Stewart, does—in ensuring that the schools that are chosen can in fact do for the children what we would all like.
Lord STEWART of FULHAM: My Lords. I am not altogether reassured by that. The noble Baroness tells us that we shall find out after the children have been to the school whether the school was all right or not, but it would be rather late in the day. I would not have pressed

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this so much were it not for the point argued by the noble Lord, Lord Alexander of Potterhill. We are not being asked to list schools as reasonably all right. These are supposed to be schools that have the superlative quality of doing justice by the top 1 per cent. or 2 per cent. of the population measured by intelligence. Personally I think that all this stuff about measuring intelligence and top 1 per cent. or 2 per cent. is largely a load of rubbish, but the trouble is that it is on this load of rubbish that a great deal of this scheme depends. It really ought to live up to its own convictions. I am afraid that I must ask my noble friends to press this amendment.
Viscount ECCLES: My Lords, may I just say one word. I do not agree with my noble friend Lord Alexander of Potter-hill. In my opinion this scheme is needed not only for people who can be stretched to the very full but for those children, for instance, who cannot get good mathematics teaching. I suppose they will be selected to go to direct schools which have received this grant and where there is good mathematics teaching. We all know that in a great many of the secondary schools today you cannot get to A-level in maths. Therefore if the child appears to have a good chance to get to A-level in maths I hope that the Minister will say that that will be a reason for finding a school under this scheme.
Viscount SIMON: My Lords, before the Question is put, may I ask the noble Baroness to tell us what she has in mind as to how the scheme will work in these sort of circumstances? Suppose a school is chosen, as the noble Viscount, Lord Eccles, said, because there is a very brilliant young mathematician and this is a school with very good mathematics teaching. But suppose the head mathematics teacher, who is the boss of the whole thing, leaves that school. It may be difficult to find an equally good teacher to take his place. What, then, is the position in relation to the child who is at that school? My second question is the reverse of that coin: what happens to the pupil who has been sent to one of these schools and who, half way through his course, is found by the school not to be keeping up to the mark? Will he be removed from that
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school and put back into the maintained system?
Baroness BACON: My Lords, it is assumed that all these 464 schools cater for children of high academic ability. It may be that among those schools there are some of that kind, but surely a lot of them do not cater for children of high academic ability but for the children of parents who can afford to pay the fees.
Baroness YOUNG: By the leave of the House, my Lords, I thank my noble friend Lord Eccles for the point he made. Clearly, the assisted places scheme would be valuable in circumstances where, for one reason or another, a particular course was not available in the maintained system, and we have always accepted that this is one reason for the assisted places scheme. I would say to the noble Viscount, Lord Simon, that clearly a school would not be chosen just because there was one good teacher. I hope I have said enough to indicate that, in order to be registered, it would have to be a school inspected by the inspectors; that it would need to have a full range of courses on offer, including a sixth form; that it would need to have enough pupils in the sixth form courses so there would be the correct stimulus for them; and that it would need to have a whole range of academic attributes before it would be considered. As for a pupil who is unable for one reason or another to keep up, clearly the scheme must be flexible as regards arrangements; if the child is unhappy at a particular school, no one would wish the child to continue at that school. This must be a matter which can be dealt with by the head of the school and the parents in the way that is regarded appropriate.
I would remind the noble Baroness, Lady Bacon, that I gave the figures of the numbers of schools that had indicated an interest. Please do not interpret that as meaning the numbers of schools that will be selected, because we have not yet chosen those numbers of schools. The House asked for the information we had at the present time, and that is the total numbers of schools that have expressed an interest. As I have already indicated to the noble Viscount, Lord Simon, we shall be choosing schools of an academic character and we are particularly interested

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in those schools that were former direct grant schools that have now gone independent. I think everyone will have recognised that they were academic schools. That is the characteristic we are looking for and I do not think it contributes to the argument to make denigrating remarks about parents who may choose to pay to send their children to one of these
schools. That does not help the scheme, the parents or the children.
3.54 p.m.
On Question, Whether the said amendment (No. 41) shall be agreed to?
Their Lordships divided: Contents, 82; Not-Contents, 142.

CONTENTS

Airedale, L.

Gordon-Walker, L.

Phillips, B.

Allen of Fallowfield, L.

Goronwy-Roberts, L.

Ritchie-Calder, L.

Amherst, E.

Gosford, E.

Rochester, L.

Amulree, L.

Greenwood of Rossendale, L.

Ross of Marnock, L.

Ardwick, L.

Hale, L.

Sainsbury, L.

Aylestone, L.

Henderson, L.

Seear, B.

Bacon, B.

Hughes, L.

Shinwell, L.

Banks, L.

Irving of Dartford, L.

Simon, V.

Birk, B.

Jacques, L.

Stewart of Alvechurch, B.

Blease, L. [Teller.]

Janner, L.

Stewart of Fulham, L.

Boston of Faversham, L.

Jeger, B.

Stone, L.

Bowden, L.

Kirkhill, L.

Strabolgi, L.

Brimelow, L.

Leatherland, L.

Strauss, L.

Bruce of Donington, L.

Lee of Newton, L.

Taylor of Blackburn, L.

Byers, L.

Leonard, L.

Taylor of Gryfe, L.

Chitnis, L.

Listowel, E.

Taylor of Mansfield, L.

Cledwyn of Penrhos, L.

Lloyd of Kilgerran, L.

Underhill, L.

Collison, L.

Lovell-Davis, L.

Wallace of Coslany, L.

Cooper of Stockton Heath, L.

McNair, L.

Wedderburn of Charlton, L.

Crowther-Hunt, L.

Maybray-King, L.

Wells-Pestell, L. [Teller.]

David, B.

Milford, L.

White, B.

Davies of Leek, L.

Noel-Baker, L.

Wigoder, L.

Davies of Penrhys, L.

Northfield, L.

Willis, L.

Evans of Claughton, L.

Oram, L.

Wilson of Radcliffe, L.

Gaitskell, B.

Paget of Northampton, L.

Winstanley, L.

Galpern, L.

Parry, L.

Wootton of Abinger, B.

Gardiner, L.

Peart, L.

Wynne-Jones, L.

Gladwyn, L.

NOT-CONTENTS

Airey of Abingdon, B.

Denham, L. [Teller.]

Hayter, L.

Alexander of Potterhill, L.

Derwent, L.

Hill of Luton, L.

Alexander of Tunis, E.

Drumalbyn, L.

Hives, L.

Allerton, L.

Dundee, E.

Hylton, L.

Alport, L.

Dundonald, E.

Hylton-Foster, B.

Amory, V.

Ebbisham, L.

Ilchester, E.

Ampthill, L.

Eccles, V.

James of Risholme, L.

Armstrong, L.

Effingham, E.

Jessel, L.

Balerno, L.

Ellenborough, L.

Kimberley, E.

Balfour of Inchrye, L.

Elliot of Harwood, B.

Kinloss, Ly.

Barnby, L.

Elton, L.

Kinnaird, L.

Bellwin, L.

Enniskillen, E.

Kintore, E.

Belstead, L.

Evans of Hungershall, L.

Lindsey and Abingdon, E.

Berkeley, B.

Faithfull, B.

Long, V.

Bolton, L.

Falkland, V.

Loudoun, C.

Brookeborough, V.

Ferrers, E.

Lucas of Chilworth, L.

Caccia, L.

Forester, L.

Lyell, L.

Campbell of Croy, L.

Fortescue, E.

McFadzean, L.

Chesham, L.

Fraser of Kilmorack, L.

Mackay of Clashfern, L.

Clancarty, E.

Gage, V.

Macleod of Borve, B.

Clifford of Chudleigh, L.

Galloway, E.

MacLeod of Fuinary, L.

Clitheroe, L.

Glasgow, E.

Mancroft, L.

Clwyd, L.

Gore-Booth, L.

Mansfield, E.

Cork and Orrery, E.

Gormanston, V.

Margadale, L.

Cottesloe, L.

Gowrie, E.

Marley, L.

Cranbrook, E.

Gridley, L.

Massereene and Ferrard, V.

Cullen of Ashbourne, L.

Grimston of Westbury, L.

Middleton, L.

Daventry, V.

Halsbury, E.

Monk Bretton, L.

Davidson, V.

Hanworth, V.

Morris, L.

de Clifford, L.

Harvington, L.

Mountgarret, V.

Mowbray and Stourton, L.

St. Davids, V.

Strathcona and Mount Royal, L.

Moyne, L.

St. Just, L.

Strathspey, L.

Netherthorpe, L.

Saint Oswald, L.

Swansea, L.

Newall, L.

Saltoun, Ly.

Swinton, E.

Northchurch, B.

Sandford, L.

Tranmire, L.

Nugent of Guildford, L.

Sandys, L. [Teller.]

Trenchard, V.

O'Brien of Lothbury, L.

Selkirk, E.

Trumpington, B.

O'Neill of the Maine, L.

Sempill, Ly.

Tweedsmuir, L.

Orr-Ewing, L.

Sharples, B.

Vaizey, L.

Penrhyn, L.

Sligo, M.

Vaux of Harrowden, L.

Porritt, L.

Smith, L.

Vickers, B.

Reigate, L.

Snow, L.

Vivian, L.

Renton, L.

Somers, L.

Wakefield of Kendal, L.

Ridley, V.

Spens, L.

Westbury, L.

Roberthall, L.

Stamp, L.

Willoughby de Broke, L.

Rochdale, V.

Strathcarron, L.

Wolverton, L.

Romney, E.

Strathclyde, L.

Young, B.

St. Aldwyn, E.

Resolved in the negative, and amendment disagreed to accordingly.

4.3 p.m.
Baroness BACON Baroness BACON moved Amendment No. 42:
Page 18, line 19, at end insert ("and of ensuring that no pupil will have to travel further than 20 miles").
The noble Baroness said: My Lords, I beg to move this amendment, which would ensure that no pupil who is selected for one of the assisted places will have to travel more than 20 miles. I appreciate the point made by the noble Baroness towards the end of the discussion on the last amendment when she said that although there are figures for schools that wish to participate in the scheme, these schools are not necessarily the schools which will participate or the schools that will be selected. It may be that these figures will vary slightly, but the latest information we have about geographical distribution was given in reply to a Question for Written Answer in another place on 4th February, as reported at columns 81 and 82 of the Official Report. Those figures show that the different regions of the country vary considerably in regard to the number of schools that wish to participate in the scheme. For example, in the East Midlands 15 schools have applied; in Wales, too, 15 have applied; in Northern England 19 have applied; but in the North West of England the figure was 50, and in the South East 136.
As I say. I appreciate that these figures might not represent the proportions of the schools that will be selected. Nevertheless, the figures show that it seems inevitable that if there is to be a proper geographical distribution, as the noble Baroness im-
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plied, in some areas some children will have to travel a long way. I should like to ask what are the catchment areas to be? Is there to be any limit whatsoever on the number of miles which children will have to travel? More importantly, I should like to know who is to pay for the transport, because at the moment there is an anomalous position, in that the local authority will have no say whatsoever in the numbers of children who will be selected for the assisted places scheme. The local authority will be completely out of the matter. There will be applications from parents of children, and these applications will be accepted, or otherwise dealt with, by the schools concerned. Therefore, the local authorities will have no say whatsoever in the numbers of children going to the schools, nor in the distances to be covered, yet it appears that, according to law, the local authorities are responsible for the transporting of the children from their homes to the schools which they are attending.
I see the noble Baroness shaking her head, but perhaps she could clear up the question of who will pay for the transporting of the children to the schools where the assisted places are offered. I should like to know from the noble Baroness what the position will be. Will there be any limit whatsoever to the number of miles to be travelled? Will there be any limit at all in regard to those schools to which the parents can apply for their children to attend? And there is the important question, who is going to pay for the transport? I beg to move.
The MINISTER of STATE, SCOTTISH OFFICE (The Earl of Mansfield): My Lords, I take this amendment to be a probing amendment, and I assume that the

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noble Baroness does not literally mean 20 miles, because the effect of a 20-mile limit would vary very considerably according to the locality and the means of public transport, if it exists. The noble Baroness put a number of questions, some of which I shall endeavour to answer, and others of which, as she will no doubt appreciate, can be answered only when the assisted places scheme comes into effect.
Schools offering assisted places will often have to serve wide areas. One expects that children who live in urban areas will, numerically speaking, be in the vast majority in this respect, simply because these days more people live in towns and conurbations than in the country. However, putting that to one side, children who live in rural areas and who attend these schools will have to have an increased expectation in regard to travelling, but one hopes that few assisted place holders will be involved in journeys of more than 20 miles or so, and that for the great majority the travelling distances will be considerably shorter.
The difficulty—and I think the noble Baroness touched upon this—will arise in those parts of the country where there are not likely to be a great number of assisted places because there will not be a very large number of schools that can offer them. It would be idle of me to pretend that there will be a completely even distribution of assisted places around the country. There is no doubt that in some rural areas—perhaps in the North-East of England, for example—there will be an under-provision of places if there are not schools within striking distance of the homes of the pupils who wish to go to them. However, I can say at this stage that it is hoped that the main urban concentrations will be adequately provided for, and that if choices are to be made, it is perhaps right that priority be given to these areas. After all, the old direct grant scheme tended to be concentrated upon such areas as the North-West, parts of the South-West, and I think the London area. While we hope to achieve nationally a more even distribution than this, it will never be completely satisfactory.
The noble Baroness put some questions to me as to who is going to pay, and for what. Clause 17 of the Bill imposes a number of mandatory duties upon the Secretary of State. Clause 18—this is
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in fact outside the scope of this amendment, but as there are no amendments down to Clause 18 perhaps I may be forgiven for touching on it—which refers to incidental expenses of pupils holding assisted places, contains the power given to the Secretary of State, when he comes to make his regulations, to make grants, in effect, in respect of this kind of expense; and there is no doubt about it that in certain instances travelling expenses will be covered under the regulations in Clause 18.
Perhaps I can postulate this rhetorical question: Would one expect a Government who are setting up a scheme like this to provide the places for children to receive this type of education and then, if their parents cannot afford to send them, not to provide the transport to get them there? Answering my own rhetorical question, the answer is, "Of course not". It would, would it not, make a nonsense of the whole scheme?—and that I am quite sure my right honourable and learned friend does not intend to do. But I cannot go into great detail, as I have said, at this stage, because we do not even know which schools are going to come forward, the areas in which they will be situated and the distances which will be involved. But the discretionary duty on the Secretary of State is in fact laid down in Clause 18. The local education authorities will not have to assist holders of assisted places. That is the point I want to drive home to the noble Baroness, if I may. What the Secretary of State will do, in fact, is to provide such arrangements as he thinks are necessary under Clause 18. I hope that helps the noble Baroness.
Viscount RIDLEY: My Lords, my noble friend mentioned the North-East of England. I think I am right in saying that if the noble Baroness's amendment were carried it would rule out vast chunks of the North-East of England which cannot be within reach of any of these schools. Therefore, it seems to me that the rural lobby, which was fairly effective at our Committee stage, should spring to the defence of the Government on this one, and I hope it will do so.
Baroness MASHAM of ILTON: My Lords, I come from the North-East of England, from a very rural area, and I, too, can assure the noble Baroness that

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many of the children there have no choice at all. The only school that the local children in my part of the world go to is a rather moderate comprehensive school without a sixth-form. Do you think that the Secretary of State, when he makes these regulations, might think of giving grants for weekly boarders? This would then give the children from rural areas a chance.
Lord JAMES of RUSHOLME: My Lords, I come from an area even more rural still than that of the noble Baroness, because I am just up the road. There are in fact in the North-East two schools which were direct grant schools, one Barnard Castle and the other Pocklington, and both of them have boarding houses. Boarding (in my view, probably rightly) is specifically excluded, but I think that can be got round because when the direct grant schools were abolished they all had quite successful appeals so that they could continue to carry on their specific historic task of helping poor boys. If this scheme goes through and they are accepted, they will not need all the money for that purpose; and I imagine that some of those schools (the ones I have anything to do with, certainly) would use some of that money to assist boys from very rural areas, like that of the noble Baroness and my own, to go there as at any rate weekly boarders. After all, under the old direct grant system the fees to day boys were graded on an incomes scale, but the boarding fees were not. So we should really be going back to something like that, except that the State would not be providing the boarding fee. I think we can get over this; but, of course, any limitation such as 20 miles must be probing, because it would be silly. A number of York parents in fact send their children to Pocklington by chartered bus every day. I think that is slightly more than 20 miles, so that will not do. At any rate, I think these difficulties of geography can be got over.
Lord ALEXANDER of POTTER-HILL: My Lords, I wonder whether we are moving on to Amendment No. 43. It looks very like it to me. If the Minister is making any reference to that under this amendment, perhaps she would make it clear whether or not the effect of the clause excludes boarding education from
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the scheme. I would be most grateful if that were clarified before we come to Amendment No. 43.
Lord WOLVERTON: My Lords, I should like one thing cleared up. I thought that under the Bill local authorities were allowed to pay only for the day hoarding of these brilliant children, and not for their boarding as boarders for the week—only per day. Perhaps the Minister would answer that, because I do not think it is in the Bill that they should be allowed to pay for anything else but the day boarding.
The Earl of MANSFIELD: My Lords, with the leave of the House I will answer, although I am conscious that I am jolly nearly trespassing on Amendment No. 43, and it is not my intention so to do. May I take up the point about boarding fees. If we look at Clause 17(3)(a), we see that in fact the scheme specifically rules out boarding fees, and that answers both my noble friend and the noble Baroness, Lady Masham. But, like everything else in life, there are exceptions. It would I think be possible—in fact, I know it would be possible—that in a very small number of cases, if a child was in effect the recipient of a place under the scheme on a day basis and then either won or obtained a scholarship, or obtained the favour (if I may so term it) of other funds in order to, as it were, take up the boarding element of a boarding school, then there is no reason why that child should not attend a boarding school as a boarder. But I want to emphasise that the fees in respect of boarding cannot come from the assisted places scheme. That is barred.
The other point which I think is in answer to the noble Baroness, Lady Masham—it applies in fact to all education, but even more so to this—is that the more money that is spent on what I might call the infrastructure of the scheme (in other words, the more money which is spent on the incidentals under Clause 18) the less money there will be under the scheme for the education of the children under Clause 17.
Baroness BACON: My Lords, the noble Earl, Lord Mansfield, was quite correct when he said at the beginning that he assumed this was a probing

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amendment and that, of course, we did not mean an exact 20-mile limit. However, there was certain information which we had to have, and, in part, that information has been given. I particularly appreciate the fact that the noble Earl said that the travelling expenses would not fall on the local authority. He has referred me to Clause 18. Of course I was aware of Clause 18, but it was what Clause 18 said that made me unsure of what was going to happen. Clause 18 says at the beginning:
"The Secretary of State may make regulations requiring or enabling schools participating ",
et cetera. There is a very great difference between requiring a school to do something and enabling it to do something: one is mandatory and the other is not. However, we have had the assurance from the noble Earl that the travelling expenses will not fall on the local authority, and in view of that I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.20 p.m.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved Amendment No. 43:
Page 18, line 23, leave out from ("school") to ("and") in line 25.
The noble Lord said: My Lords, the last amendment was a probing amendment and it probed something out of the Government. If I understood the noble Earl correctly, he was saying that travel expenses certainly could be, and probably would be, dealt with under Clause 18 of the Bill. I do not think that that is an unfair paraphrase of what he said.
The Earl of MANSFIELD: My Lords, I interrupt merely to the extent of saying that it is not the Government's intention that the public should pay fees by way of travelling expenses in respect of children whose parents are perfectly able to afford them.
Lord STEWART of FULHAM: My Lords, perhaps I should amend what I said just now. The noble Earl seems to be saying that, where parents who cannot afford them get an assisted place for a child and there are necessary travelling expenses, those expenses could be dealt with, and probably would be dealt with, under Clause 18. We are saddled with
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another means test, another aspect of this generally tiresome Bill.
The amendment also probed out a bit of information about boarding education. As I understand it, it ruled beyond any doubt that the State cannot afford to pay boarding fees. That appears to be certain. I would assume, in view of the wording of Clause 17, that one could not bring in boarding fees by the back door under Clause 18 as an incidental expense. But I think that I am right in saying that nowhere does the Bill state that a boarding school, or a school with boarding facilities, cannot be a participating school. There does not appear to be anything to that effect. From the argument that we have just had, it seems possible that a school in a thinly-populated neighbourhood (where, if you were to attend it at all it might be desirable or necessary to be a weekly boarder), could be a participating school. There is nothing in the Act which forbids that. If that is not so and it is explicitly stated that no boarding school can be a participating school, or, if you prefer, no child who has an assisted place can be a boarder, I hope that it will be stated clearly.
If that is so, it would seem to me to be rather unfortunate if one grants the premises of the scheme because it has been pointed out in the previous argument that there might be a case where it would be desirable, and this worries me. If you have a child who has an assisted place and who, because it is a thinly-populated neighbourhood or for any other valid reason, ought to be a boarder or a weekly boarder, what is to happen? The local authority cannot pay the boarding fees or, at least, you could not be certain that it would. The State definitely cannot by virtue of Clause 17. What is to happen? Possibly, as the noble Earl has said, the child might earn some other scholarship or bursary to cover it. But suppose that he does not. What is to happen?
There is no use in saying: "The parent can afford to pay boarding fees because he will not have to keep the child at home." It is perfectly well-known that the fees for a child at boarding school are bound to be substantially more than what it costs to keep the child at home. You might get a situation where a child gets an assisted place (and it is an assisted place that it can take up only if it becomes

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a boarder or weekly boarder) where the parents cannot afford to pay boarding fees; the local authority almost certainly will not and the State cannot. This is going to mean that a parent of that kind will find his child excluded for financial reasons. The picture of the poor, bright children flocking to the assisted places, is going to be somewhat tarnished in this regard. I think I am on to a real point and I hope that the Government will sort it out.
Lord ALEXANDER of POTTER-HILL: My Lords, I should like to support this amendment strongly and I hope that the Government will look at it—and not because I expect that there will be a wide demand for places in boarding school. Perhaps I should begin by making it clear that at Second Reading I opposed this scheme altogether. I still do so. But if it is to operate, then it must surely be enabled to fulfil its purpose. There are two aspects, as I see it. First, I do not believe that, if you are really picking with care the schools that are adequate to do this job, you will find a school which can cover the whole of the country to be attended by day pupils. There will be areas where boarding is necessary, whether weekly boarding or not. This is true. More importantly, if you are concerned to give an opportunity to the very bright child from a home of limited means—and it may be a home of very limited means—then providing a good school as a day school may not be the right answer. The right answer might be to send it to a boarding school, so that the child can have the full opportunity that the boarding school offers. It may not have the adequate support at home for studying. If there is substantial travelling, the child's opportunities will be reduced.
If this amendment were accepted, the arrangements, which, after all, are in the hands of the Secretary of State, will enable the number—which could be quite limited—of cases of this kind to be dealt with. There may be no more than a dozen or 20 cases where this is necessary in the country. But it would enable them to be dealt with. The Minister may say that, where there is a need for boarding education, the local education authority can provide it. That is true, although I do not think that many authorities these days would provide it
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solely on the ground of the high ability of a child. In 1946 I did a report hoping that that might happen, but it did not work.
I therefore hope that the Government might consider accepting the amendment—which would still leave the control completely in the hands of the Secretary of State as to the limited numbers where this would apply; but where boarding can be provided and the boarding costs borne. If this is not done, there will be cases where a child, whom the assisted places scheme was designed to serve, cannot be assisted because of the limitation which the Government have imposed upon themselves.
Lord JAMES of RUSHOLME: My Lords, I, too, should like to support this amendment. As noble Lords know, I am 100 per cent. behind this scheme; but if I am 100 per cent. behind it, it must apply to all gifted children. Living where I do, I know well that the really gifted child in Wensleydale could not get the kind of education it needs—it simply could not—in mathematics, science, Greek or whatever. The only way it could do so would be by weekly boarding somewhere. As I indicated in my few remarks on the last amendment, it may be that the receiving schools may have some funds to help out. Where they have not, it seems to me that the door must be left open if this scheme is to be made a reality for help towards boarding for the child who is fortunate or unfortunate enough to live in a very sparsely populated area. I would support what Lord Alexander has said.
Baroness MASHAM of ILTON: My Lords, I, too, should like to support this amendment. I personally know a boy who is absolutely brilliant at music and singing. The North Yorkshire County Council sent him to Ampleforth College as there was no other place where he could follow his vocation. This boy is now in the sixth form and is going to take up music as a profession. There are lots of other children who could benefit from such places.
Viscount RIDLEY: My Lords, may I be counted among those who would support this? What I said just now about the urban areas very much applies to this. I will not accept, like the noble Lord, Lord James, that Yorkshire is the North-

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East of England. It is very much the Midlands, where I come from. We have greater problems than in Wensleydale. I think the noble Lord, Lord James, was right in saying that if the scheme is to apply, it must be consistent and apply as far as possible. I hope the Government will find a way round this difficult problem.
4.30 p.m.
The Earl of MANSFIELD: My Lords, I have great sympathy with those who support this amendment even when—in the case of noble Lords and Baronesses opposite—I am not sure that they do it with the purest of motives. May I clear up the position, first of all? Under the Bill, assisted places are in respect of fees for education. It is not envisaged—at least at the moment—that it would extend to boarding fees. At the same time, there is no reason why boarding schools under this Bill cannot become, as it were, under the terms of the schedule participating schools. As I said in regard to the last amendment, in certain circumstances a child qualifies (if I may use the term) under this scheme for an assisted place; and if the money can be provided in some other way for that child to become a boarder, then it could become (I do not wish to be patronising) the recipient of what I might call the hybrid largesse.
Having said that, may I now turn to the points my noble friends in particular have made. They would like to see this scheme extended to such schools as take in weekly boarders so that the boarding part of the fees would be paid for under the assisted places scheme. The Government have made it clear throughout the proceedings in the other place and in your Lordships' House that, in the interests of spreading the available resources as widely as possible, the scheme could not extend to boarding fees. The scheme is on a par with the old direct grant scheme, and that was confined to day places. It is right that, having made the decison, we were under a duty to make it clear in the Bill not to leave matters uncertain and not to raise expectations.
If I may continue with the theme of my remarks in dealing with the last amendment, if we provided for boarding fees under the assisted places scheme we would severely limit the number of places which could be offered, or would
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greatly increase the expenditure involved. The Government have taken a decision as to how much money they think can be devoted to this scheme and—goodness knows!—they have been criticised for devoting to it that comparatively modest sum of money. Nevertheless, this is what was decided. I respectfully suggest to the House that it is right.
It may be possible, as I have said, for some boarding schools to offer places in the scheme; but that part of it will be outside the terms of this particular clause. I should like to confirm what the noble Lord, Lord Alexander of Potterhill, said, that the assisted places scheme is in no way intended to deprive local education authorities under their powers which were contained in Section 81 of the 1944 Act. Under that section, there is no reason why a local education authority should not provide the boarding fees. One does not anticipate that they will feel inclined to do so in many cases, but there is nothing to stop them if they think a case merits it. If, for instance, there was a particularly bright or talented pupil, that child could be either sent to a boarding school, simpliciter, by the local education authority, or it could pay for the boarding part of the fees under the assisted places scheme.
The noble Lord's Amendment went slightly wider than tuition and boarding fees. I do not know whether he wished to pursue that. Clause 17(3) provides that the scheme will apply to tuition fees and
"other fees the payment of which is a condition of attendance at a participating scheme".
It is worded in these terms to provide for essential fees such as an initial registration or medical fee. But it would be inappropriate to leave this completely open-ended, and the amendment would sweep away the provision in the second half of Clause 17(3) that additional fees which the Secretary of State did not consider should be supported—for example, a fee for an extra such as swimming instruction or riding lessons—could be excluded under the participation agreement. I do not suppose that this is going to be a major problem, but it is essential that all concerned should know what fees are going to be covered and what will be provided for them. For this reason we shall encourage the practice of an all-inclusive

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fee system covering the essentials. Therefore, I hope that the noble Lord will see fit to withdraw his amendment.
Lord ALEXANDER of POTTERHILL: My Lords, with the leave of the House, we are not suggesting, as I understand it, that the Government should say that they will provide boarding fees. What this amendment does is to prevent the Government from saying, "In no circumstances will we provide boarding fees". As I understood the Minister earlier, the statement was made that the local authority would not be involved in expenditure for pupils who are given a place under this scheme. What he is now saying is they may well be involved in certain cases in paying more than the cost that the Government are bearing because the boarding cost—if that is necessary full time—will considerably exceed the cost of the day pupil.
On Question, amendment negatived.
[Amendment No. 44 not moved.]
4.37 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 45:
Page 19, line 5, after ("State") insert—
(" (f) that in the event of an assisted place being granted without the prior consent of the local education authority in whose area the child resides, the participating school shall reimburse the local education authority for the expenditure which it has made on that child's education up to the child's entering the independent school.").
The noble Lord said: My Lords, we have been treated over the past couple of days at the Report stage of this Bill, and previously at the Committee stage, to a paean of praise from the Front Bench opposite to the discretion of local authorities and especially local education authorities. That has been music to the ears of those who have been privileged to serve in local government over many years, and who have not always heard that from Ministers in the Government. It has been said that it would be quite wrong to interfere with the choice by local authorities of those who would be on the governing body. It would be wrong to direct them as to the type of people whom they should choose, because local authorities are quite capable of
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making that choice and of guiding themselves in that way without any need for anyone to interfere. We have been told that local authorities obviously have the knowledge and experience which is required—and nobody ought to interfere with it—in regard to the nature of the schools they want in their area.
This amendment deals with a situation where an assisted place may be given in a participating school where the local authority's consent has not yet been obtained. One may assume from the wording of this amendment that it would not be obtained. If local authorities are to have all this discretion in so many fields on the basis that they know what is good for the children in their area, your Lordships may feel that it must be right that, where in their view it is in the interests of the child that that child should not go to a participating school but does in fact go there, and the participating school accepts that child, the least that ought to be done, in justice, is that the participating school should be made to pay the appropriate cost of the tuition of that child up to the date when that child enters the participating school.
The participating school would be taking advantage of the education which that child has had to up that date and will have had its own purse, as it were, saved from the expenditure on the education of the child up to that stage. Your Lordships may therefore feel that this amendment is not only just but pays that tribute to the judgment and discretion of local authorities which during these debates the Government Benches have been so keen to emphasise.
Viscount SIMON: My Lords, I listened with interest to the noble Lord, Lord Mishcon, but I do not follow his logic at all. I would understand it if he had said that the local education authority should have a veto on the child being chosen for a selected place. But he did not suggest that, and I do not think that we would have agreed with him had he done so. When the local education authority has expressed disagreement with the fact that the Secretary of State proposes and the child's parents agree that the child should accept an assisted place, I see no logic in asking the selected school then to pay something. That does not appear to

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follow in the least. The LEA has not been making an investment in the child's education. The person who is making the investment is the child and the child carries that investment with him to the assisted place. The LEA has not lost anything.
Even if the noble Lord does not support the idea, I am sure he is aware that some children go to private preparatory schools and then on to private secondary schools. But nobody suggests that the secondary school should pay the preparatory school for the work it has done before the child goes to the secondary school. The child would normally be going, I understand, from a primary school into the assisted place. Therefore, it may be the same LEA but it is not the same school that is educating the child. I hope that one of the sponsors of this amendment will explain, purely for my benefit, the logic behind this proposal.
Viscount MASSEREENE and FERRARD: My Lords, I certainly cannot support this amendment. To be logical, one might as well say that if a doctor who has been trained in this county obtains a job in a hospital abroad, the latter should be asked to pay this country for that doctor's training. It does not add up.
4.43 p.m.
Baroness DAVID: My Lords, part of the reason for this amendment was to try to find out a little more about the position of the local authority as regards the assisted places scheme. So far as I can make out, the circular that went to independent schools on 6th December was sent to the local authorities with a short letter accompanying it explaining the intentions of the assisted places scheme. The only real reference to local education authorities in the documents comes in paragraph 4, which stated:
"Local education authorities will be notified of provisional responses to the letter of invitation from non-maintained schools in their locality and will he given an opportunity to make known to the Secretary of State their views about the operation of the scheme in their area if they wish to do so.".
They are given an opportunity to make their views known, but we do not know what attention will be paid to their views. I hope that the Minister will tell us.
The authorities' reaction has not been very enthusiastic, and the Association of
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County Councils—hardly a left-wing or radical body—said in one of its documents:
"The committee wished to emphasise that their main consideration and concern would remain the protection of the standards of provision in LEA schools and they would wish to examine any proposals in that light. In their view, any proposals for an assisted places scheme should not imply that the provision made within the maintained system was inferior. In particular they would be concerned about provision within any scheme for the lowest income group—consequential costs for LEAs, the way in which a decision would be reached on the admission of schools to a scheme, and the question of boarding need.".
That of course we have just been discussing, but the ACC clearly wants to protect the standards of provision in LEA schools, and obviously assumes that some people will see that provision as inferior because the Government have decided to set up the scheme. That is certainly the assumption which is being made by many people. It is wrong for Ministers who are in charge of providing State education to let that happen. This is curious when their theme song has been "We must raise standards in State education". Can we really believe that the raising of standards is their first priority?
It is not only the ACC that is critical of the fact that it is being ignored: the Association of Metropolitan Authorities published a document in which it said:
"A start in 1981–82 will call for additional expenditure at a time when the current economics will be having their most marked effect, and when finances will be under the greatest pressure; this is not the time to put resources into the independent sector, whether by increasing the capacity of the schools or by helping parents to pay for places who would probably pay in any event.
"Although it is hard at this stage to predict the effect of the scheme in creaming some of the most able pupils from maintained to independent schools, the fact remains that the latter schools are mainly in urban areas where some of the most difficult problems arising from falling rolls are already being tackled. By 1991, because of the continuing fall in the secondary school population, the transfer of maintained-school pupils to independent schools is likely in practice to be from among the top 10 per cent. who stay on to study for A level. Entry at 16 plus to assisted places may well create additional strains on the viability of sixth forms in maintained schools. If an independent school has all its places designated as assisted"—
that was one of the justifications for the scheme—
"the effects on LEA plans and plant will be very great. There is already movement at 16 plus both into and out of the maintained sector; one would

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not want to increase the movement in one direction."
The AMA has also expressed concern that the curriculum in maintained primary schools may be distorted if pressure is applied for exam classes. The letter of 6th December says that selection tests must not be biased against the curriculum in maintained primary schools, but we know what some heads can do.
The AMA went on to ask that LEAs should be involved in the present consultations between the DES and independent school interests and in any national forum established to keep the scheme under review as well as at local level on an individual basis in the operation of the scheme. The authorities want to have consultation and are very much afraid of the effects on their schools, particularly as regards the sixth forms, and of the possible effect on assisted-place schools, including those newly aided schools that may be attracted into applying for membership of a scheme.
The Society of Education Officers, the people to whom the Department circular of 6th December was sent, came out with a very strong statement. It is unusual for them to take such a step. They are the people who are running State education all over the country and they said this:
"As educationalists, we believe that the educational basis of this scheme is not proven. We believe that there are other and more effective ways of providing for able children…The picture of LEAs running establishments little better than secondary modern schools while their able children go to independent schools is unacceptable … It would not be unreasonable to require governors of independent schools to reach agreement with the LEA on the nature of their entrance examinations".
They do want consultations; but are they going to get them? That is the question I want to ask the Minister. Are they going to have any redress for losing a number of their able pupils, as is suggested in this amendment that we are talking about?
In passing, I should like to call the attention of the House to what one local education authority is doing for its gifted children. Three years ago, Birmingham set up a working party on how to recognise gifted children at an early age. They have just produced a document: Gifted and Outstanding Children. I would
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suggest that perhaps the money which is being spent on the assisted places might instead go to supporting the sort of experiments which are going on and which might help more than the few thousands who may be helped by the assisted places scheme. My immediate question is: how are the local education authorities going to be involved and how are they going to be consulted? Have they any power at all?
Baroness PHILLIPS: My Lords, I should like to support my noble friend in her restatement of what the county councils and also the other educationists have said. Throughout the whole of this debate it has concerned me that on both sides of the House we have constantly reiterated the phrase "bright children". I was one of many Members of your Lordships House who went to grant-aided schools when they went through the terrible trauma of having to make a decision either to come into the State scheme or become independent. As I recall, about 50 per cent. went independent and 50 per cent. went into the State scheme. It seems to me that if we constantly suggest that only the independent school can provide education for the bright child we are downgrading those schools which did not remain independent. They cannot have changed very much, because it is only about a year or two years since this whole business was gone through. This clause makes no particular reference to bright or gifted children. It uses the phrase:
"for the purpose of enabling pupils who might otherwise not be able to benefit from education".
"Education" is a very wide term, and I do not think we should constantly harp on the fact that it is independent schools alone which can provide this sort of facility.
The LEAs have done a marvellous job in taking on the direct grant schools. I had the pleasure of visiting one the other day and the standard of education is very high. After all, the old grammar schools went to the local education authorities and therefore I think it is wrong to suggest, as we have seemed to do throughout this debate, that the only way you can deal with gifted children is to give them an assisted place. Ironically, it could be that the only place which is available for a very bright child would be in one of the

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original direct grant schools which is now part of the State system. Do they then get some sort of contribution from the Government for taking the child in?
Lord DAVIES of LEEK: My Lords, I am pleased that my noble friend has raised this point, because people are forgetting the ability and talent that exists in the sixth form colleges, where the most esoteric subject can be taken, particularly physics and mathematics. I do not call them esoteric, but we need 4,000 students in the one and about 2,000 in the other right away. Therefore I do hope that we will not think only of the bright children being sent to these schools but that will remember that there are other places, including polytechnics, from which people have reached the topmost heights of their profession and of their technical abilities.
4.55 p.m.
Baroness YOUNG: My Lords, I think we have moved rather a long way from the original amendment which was moved by the noble Lord, Lord Mishcon. If this amendment were to be carried it would be a wrecking amendment as regards the whole scheme. Perhaps that was the intention, but the noble Lord asked a number of questions about it and I should just like to say to him that, if he really believes we should have a scheme in which, when the participating schools have some children from the local education authority which that authority wishes were not in the school, the school would then pay to the local education authority what it would have cost that authority to educate the children involved, we are really shuffling children around like pawns in a chess game. I would remind your Lordships that at the end of the day we are talking about children. Those who will be going into the schools are going to be 11 years old: that is what we are talking about, and I really do not think it contributes to an education debate to be discussing them in the kind of way implied by this amendment. I was very pleased to hear the words of the noble Viscount, Lord Simon, on this.
May I say to the noble Baroness, Lady David, that she has raised a quite separate point and has used the amendment as a means of probing the Government's view about their consultations with the local education authorities? I shall do
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my best to answer the point she has made. My right honourable and learned friend made it very clear when introducing this Bill in another place that we hoped there would be full co-operation with local education authorities in the establishment and development of the scheme. Local education authorities will be free to comment on the scheme as they think fit, but they will also be asked to say if there are any specific ways in which they would like to see the scheme develop locally: for example, by meeting shortages in particular subject areas.
Of course, local authority comments will be carefully considered before the scheme is established and before agreements are signed with individual schools. We believe—this was a point I made at Second Reading—that as regards sixth forms it is worth remembering that all pupils in the sixth forms of what were formerly direct grant schools are still there, paid for by the Government. Therefore, whatever problems there may be in the future, the maintained sixth forms are currently operating at the same time that the type of child who could be in the assisted places scheme is still in the old direct grant school system.
I really do think it is important to understand that it is perfectly possible for the two systems to exist side by side without the kind of fears that are being expressed. Furthermore, on the cost, one really must remember that we are talking about children who will have to be educated in the maintained system if they are not in the assisted places scheme, because the incomes scale in the assisted places scheme makes it perfectly clear that the only parents who will be eligible would be those parents not otherwise able to pay for their child to go to an independent school. So, whatever happens, the child has to be educated somewhere and the cost will be either in the maintained system or in the assisted places scheme.
I hope, that with the assurances I have given—because I believe the noble Baroness has raised an important point about the relationships with local authorities—she will recognise that we are discussing the scheme with them, we shall certainly take into account what they have to say and we hope to have their help and co-operation in making the scheme work successfully.
Lord MISHCON: My Lords, I hope that nobody thought this was supposed to be a wrecking amendment. I specifically said—and I would have hoped that the noble Baroness would have heard me—in my introductory remarks that the discretion that was being left to local authorities was very much a part of the case which was being made by the Government in respect of so many clauses of this Bill. The purpose of my amendments has, I hope, been achieved, in that it has enabled a discussion to take place as to what really the discretion and powers of local education authorities are when it comes to the question of assisted places. I am delighted that the discussion has therefore arisen in your Lordships' House, which has clarified matters, although many of us may feel that enough discretion is still not being given to local education authorities in regard to these matters.
I assure the noble Baroness the Minister that all the people who are participating in the debates in your Lordships' House have one primary consideration, and that is the children. Many of us feel that we have the idea of children so much in our minds the whole time, that we read children into the wording of Bills. We read the pride of children and their pride in their schools in the wording of Bills, and how that pride may be upset when the brighter children in a school are removed from it, as though they are something which the school is ejecting becaue it is incapable of dealing with them, and only the ones who are not so bright remain. I assure the Minister that she certainly does not have to lecture this side on the interests of children and, if I may say so, she certainly does not have to lecture me. In those circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 46 and 47 not moved.]
5.1 p.m.
Baroness DAVID Baroness DAVID moved Amendment No. 48:
After Clause 19, insert the following new clause—
(" Awards for continuing or resuming full-time education
—(1) A local education authority to whom this subsection is applied by an order made by the Secretary of State—
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(a) shall be under a duty, subject to and in accordance with regulations so made, to bestow on persons who belong to the area of the authority, or to any part of it specified by the order, awards in respect of their attendance at courses to which this subsection applies and which are specified for the purposes of this paragraph by or under the regulations; and

(b) shall have power, subject to and in accordance with the regulations, to bestow awards on such persons in respect of their attendance at courses to which this sub-section applies and which are not so specified.

(2) Subsection (1) above applies to any course of full-time education provided by a school, establishment for further education or other institution in the United Kingdom, not being a course designated by or under regulations made for the purposes of section 1 or section 3 of the Education Act 1962 (awards for further and higher education); and for the purposes of that subsection it is immaterial—

(a) whether an award is designated by that name or as a scholarship, studentship, exhibition or bursary or by any similar description; or

(b) in what terms the bestowal of an award is expressed.

(3) Subsection (1) above shall not require or authorise a local education authority to bestow an award on any person who, before the beginning of the academic year in which he first attends the course in question, attains the age of nineteen years or such lower age as may be specified in relation to that year by the regulations; and regulations made for the purposes of that subsection shall not require or authorise a local education authority to make payments, in pursuance of an award bestowed on any person, in respect of any period—

(a) before he ceases to be of compulsory school age; or

(b) after he attains the age of twenty-one years.

In this subsection "academic year" means a period of twelve months beginning with 1st September.
(4) Regulations made for the purposes of subsection (1) above shall prescribe the conditions and exceptions subject to which the duty imposed and the power conferred by that subsection are to have effect, and the descriptions of payments to be made in pursuance of awards bestowed thereunder and, with respect to each description of payments, shall—

(a) make provision for determining, by or under the regulations, the circumstance in which, the period in respect of which and the person to whom it is to be payable;

(b) prescribe the amount of the payment or the scales or other provisions by reference to which that amount is to be determined; and

(c) indicate whether the payment is to be obligatory or is to be at the discretion of the authority bestowing the award;

and, subject to the exercise of any power conferred by the regulations to suspend or

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terminate awards, a local education authority by whom an award has been bestowed under subsection (1) above shall be under a duty, or shall have power, as the case may be, to make such payments as they are required or authorised to make in accordance with the regulations.
(5) In section 1(5)(b) of the Local Government Act 1974 (items excluded from relevant expenditure for purposes of rate support grants) after the words "Education Act 1962" there shall be inserted the words "or section [Awards for continuing or resuming full-time education] of the Education Act 1980 (awards for continuing or resuming full-time education)".
6) After section 8(2) of that Act (specific grants for purposes not covered by rate support grants) there shall be inserted—
"(2A) For the year 1979–80 and each subsequent year the Secretary of State shall pay to each local education authority a grant equal to 90 per cent. of the aggregate amount paid in that year by the authority in pursuance of awards bestowed under section [Awards for continuing or resuming full-time education] of the Education Act 1980 (awards for continuing or resuming full-time education.";
and in section 8(3) of that Act for the words "or subsection (2)" there shall be substituted the words" subsection (2) or subsection (2A)".").
The noble Baroness said: My Lords, many of us hoped that a new Education Bill would show some new thinking and would come forward with some new proposals for the 16 to 19 year-olds. The noble Lord, Lord Butler, in the Second Reading debate on the present Bill, said:
"I think that the most disappointing thing in this Bill, and in all the Bills since 1944, is the neglect of the child leaving school at 16, the child who almost falls into a pit and is lucky to get a job. Mr. H. A. L. Fisher, the distinguished author of The History of Europe and Warden of New College, introduced in his Bill in 1917 a continuation education scheme for young people. I introduced a similar, but rather more advanced scheme, in 1944. Practically nothing except a few sixth-form colleges has come to fill that gap. I believe that this Bill ought to have tackled the older end of the pupils with more determination, as well as the younger end. A child at 2 is at the age which is known by the Roman Catholic Church and by all who covet children as being in the vital years; but the age after education and before further education is equally vital".—[Official Report, 25/2/80; col. 1051.]
There is nothing in this Bill for the 16 to 19 year-olds and this new clause attempts in a modest way to fill that gap. I believe, with the noble Lord, Lord Alexander—and I am sorry that he is not in his place—that we need something much more than this to deal with the whole spectrum of educational provision for the 16 to 19 year-olds. But something must be done now, at a time of very
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high youth unemployment, to encourage young people to continue their education at a school or establishment for further education, or some other institution; or even, if they left school at 16, to go back for courses that would improve their skills and prospects and, therefore, be of more use to the country.
The idea of maintenance awards is not new. Section 81 of the 1944 Act empowers the Minister to make regulations,
"for the purpose of enabling pupils to take advantage without hardship to themselves or their parents of any educational facilities available to them",
and regulations were made for this purpose.
In 1957, the Minister of Education set up a working party under Sir Toby Weaver, who was then a senior official at the Ministry, to consider the matter of maintenance allowances and whether any changes should be made. The Weaver Report, which was a landmark in the history of educational maintenance allowances, reaffirmed the aims of Section 81 of the 1944 Act. It analysed expenses which fall upon parents whose children remain at school after the compulsory age. Within the different categories of food, clothing, pocket money, holidays, heating and lighting, it calculated the separate costs at different ages. It then calculated the minimum sum which parents, however poor, should be expected to contribute.
The all-party Education and Arts Sub-Committee of the Expenditure Committee of the House of Commons, reporting on educational maintenance allowances in July 1974, based their findings and recommendations on the Weaver Report. They recommended that all existing educational allowances should be embodied in a single maintenance allowance, that they should be mandatory and administered by the LEAs and that they should be available in September 1975. That did not happen and the Labour Bill of 1978, which sought to introduce them, fell.
What we must do is look at the situation as it is today for a not very highly motivated young person. He can stay on at school or sixth-form college or further education college, but inevitably he will be a heavy charge on the family

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budget. He will not have in his pocket the money that his friends who have left school and managed to get a job will have, that his friends will have who are on the dole and get £11.50 a week or, indeed, his friends who, having left school and been unemployed for six months, get on the youth opportunities scheme and draw £23.50 a week. I admit that the poor can get a small maintenance allowance from their LEA, if they have a kindly one, but it is inadequate and many who might benefit do not apply. Furthermore, it is only the very poor who can get it.
In 1974–75 only 2 per cent. of 16 year-olds who were in school and 7 per cent. of 16 to 18 year-olds who were in further education received maintenance grants. I should like there to be at least no positive disincentive to staying on in education. The Secretary of State, speaking to the Association of Colleges for Further and Higher Education on 22nd February, said that half of those reaching school-leaving age goon to jobs where they receive no training or they become unemployed.
The clause which I am introducing is lifted straight from the last Government's Bill—and, therefore, I hope that it is drafted correctly—as other clauses in this Bill have been lifted. But I hope that nobody will think the worse of it for that. The clause is so drafted that it can come into force only when the Secretary of State decides that there is no automatic immediate commitment. It extends only to authorities specified in an order made by the Secretary of State, and, if the order so provides, only to young people belonging to specified parts of their areas; for instance, inner city parts. The clause includes provisions in subsection (2) which prevent an overlap between it and Sections 1 and 3 of the Education Act 1962, which relate to awards for designated courses of further and higher education.
The existing discretionary powers of local education authorities to give assistance and to make awards are unaffected. I ndeed, authorities to whom the clause has been applied may exercise those powers so as to afford support additional to that provided by an award under this clause. The awards granted under this clause will rank for 90 per cent. specific grant, as do mandatory awards. They
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are specifically aimed at those above compulsory school age. A recipient must be under 19 when he embarks on a course, although having started on it he can go on with it till he is 21.
I can predict the Government's response: they are very concerned over 16 to 19 year-olds, committees are working on the problem but, of course, we cannot afford it. To that I say that the problem is urgent. Unemployment is with us and revenue is being paid out in dole money. We ought to be seen to be doing something now. This clause demands no immediate action, but it provides a framework for action. If the clause is accepted and goes into the Bill, action can be taken at any moment. If unemployment among the young gets worse, action might have to be taken very quickly. One point to remember when considering the future expense, is that the number of 16 to 19 year-olds will fall by 25 per cent. in the next 10 years.
As regards the money, the Explanatory and Financial Memorandum to the 1978 Bill said that the scheme would be applied as a pilot scheme to only a limited number of authorities, and the cost would be about £15 million in a full year. If you subtract the dole payments that may be made, would there be left a figure very much above, if at all above, what will be paid out on the assisted places scheme? My Lords, I beg to move.
Baroness YOUNG: My Lords, as the noble Baroness, Lady David, has said, this amendment repeats the last Administration's scheme for a system of mandatory awards for 16- to 18-year-olds continuing in full-time education. Clauses to this effect were included in their Education Bill of 1978. The mandatory awards would apply to pupils either at school or at college. This would be in addition to the discretionary powers which local authorities already have to pay grants.
This is a subject which arouses a great and understandable degree of concern, and I accept the very real consideration that the noble Baroness gave in her remarks when she was speaking to this amendment. I appreciate the strength of the arguments that the current arrangements for financial assistance for young people in this age group seem to load the dice against those who stay on at school or at college.

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It is very necessary, however, to consider the many factors which affect young people's decisions as to whether or not to stay on at school or college. Sometimes more important are the quality of the courses offered and young people's perceptions of their value to them in later life. The Government are concerned about the educational and training opportunities for young people but we believe that their needs and the provision made for them should be seen as a whole. As the noble Baroness referred to this, may I say that we have embarked upon a major review with the local authority associations of the relationships between school, further education and training for the 16- to 19year-olds.
We cannot just dismiss the cost of such new proposals as this. I think that the figure which the noble Baroness gave is very relevant to our consideration of them, and I accept that when she moved the amendment she said that they would be brought in at a date in the future to be determined. But the difficulty about accepting an arrangement like that is that once it is on the statute book the pressure is always on the Secretary of State to bring it in. I think it is fairer to indicate why one is unable to accept it at this stage rather than to lead people to hope that something will be available to them when, in the present financial circumstances, it cannot be available to them.
May I say a word about the comparisons between those who are in work and out of work. There are differences between the financial arrangements for young people continuing in full-time education and those who are unemployed and who may be undertaking part-time further education on the "three days" a week concession, or be on a Youth Opportunities Programme. In these cases, we are not comparing like with like. For a young person to be eligible for supplementary benefit, he must be and remain available for work. He may, however, take part-time further education, strictly for up to 21 hours a week, without forfeiting that eligibility. It seems right that he should be allowed to use his time profitably in this way while unemployed and drawing supplementary benefit in any case. Similar considerations apply to those young people benefiting from a Youth Opportunities Programme allowance. They would
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otherwise be unemployed and drawing supplementary benefit or unemployment benefit in their own right, and they remain available for work throughout the programme. The circumstances of young people in full-time education are different. They are not available for work and are therefore not eligible for those benefits in their own right.
I have tried to set out the arguments on this amendment as fully as I can and to make it clear that the Government are not ignoring the needs of these young people and that we recognise the disparities in financial provision available for those in full-time education as compared with their unemployed contemporaries. We opposed a similar measure when it was first introduced and I am afraid that we cannot accept this amendment today. It is only right for me to tell the House that we have no plans to change the present legislative provisions for those young people who continue their formal education beyond 16. Local education authorities have the discretion to make awards to this age group and to decide the extent to which to do so. We do not intend to remove this discretion, or to advise authorities how they should exercise it, or to make it mandatory.
As to the longer term, any proposals to change the present arrangements will need to be considered in the light of the current review we are undertaking into the relationship between schools, further education and training for this group and of the public expenditure policies then prevailing. As I have indicated, I am afraid that I cannot accept the amendment and I hope that the noble Baroness will feel able to withdraw it.
Baroness DAVID: My Lords, the answer was not, of course, entirely unexpected, but I do feel very strongly about the position of the 16- to 19-year-olds at this moment. I should therefore like to press my amendment.
5.15 p.m.
On Question, Whether the said amendment (No. 48) shall be agreed to?
Their Lordships divided: Contents, 85; Not-Contents, 135.

CONTENTS

Airedale, L.

Greenwood of Rossendale, L.

Peart, L.

Ardwick, L.

Gregson, L.

Ponsonby of Shulbrede, L. [Teller.]

Avebury, L.

Hale, L.

Aylestone, L.

Hampton, L.

Ritchie-Calder, L.

Bacon, B.

Hatch of Lusby, L.

Rochester, L.

Banks, L.

Henderson, L.

Ross of Marnock, L.

Birk. B.

Houghton of Sowerby, L.

Sainsbury, L.

Blease, L.

Hughes, L.

Seear, B.

Blyton, L.

Hylton, L.

Shinwell, L.

Boston of Faversham, L.

Irving of Dartford, L.

Simon, V.

Bowden, L.

Jacques, L.

Stewart of Alvechurch, B.

Brimelow, L.

Janner, L.

Stewart of Fulham, L.

Brooks of Tremorfa, L.

Jeger, B.

Stone, L.

Byers, L.

Kaldor, L.

Strabolgi, L.

Chitnis, L.

Kirkhill, L.

Strauss, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Taylor of Blackburn, L.

Collison, L.

Lee of Newton, L.

Taylor of Gryfe, L.

Cooper of Stockton Heath, L.

Listowel, E.

Taylor of Mansfield, L.

Crowther-Hunt, L.

Lloyd of Kilgerran, L.

Underhill, L.

David, B.

Lovell-Davis, L.

Wallace of Coslany, L.[Teller.]

Davies of Leek, L.

McGregor of Durris, L.

Wedderburn of Charlton, L.

Davies of Penrhys, L.

Maelor, L.

Wells-Pestell, L.

Evans of Claughton, L.

Maybray-King, L.

Whaddon, L.

Foot, L.

Meston, L.

White, B.

Galpern, L.

Milford, L.

Wigoder, L.

Gladwyn, L.

Mishcon, L.

Willis, L.

Gordon-Walker, L.

Northfield, L.

Wilson of Radcliffe, L.

Goronwy-Roberts, L.

Oram, L.

Wynne-Jones, L.

Gosford, E.

Parry, L.

NOT-CONTENTS

Abercorn, D.

Ellenborough, L.

Margadale, L.

Adeane, L.

Elliot of Harwood, B.

Marley, L.

Airey of Abingdon, B.

Elton, L.

Massereene and Ferrard, V.

Alexander of Tunis, E.

Enniskillen, E.

Middleton, L.

Allerton, L,

Exeter, M.

Monk Bretton, L.

Alport, L.

Faithfull, B.

Morris, L.

Amherst of Hackney, L.

Falkland, V.

Mottistone, L.

Amory, V.

Ferrers, E.

Mountgarret, V.

Ampthill, L.

Forester, L.

Mowbray and Stourton, L.

Armstrong, L.

Fortescue, E.

Newall, L.

Auckland, L.

Fraser of Kilmorack, L.

Northchurch, B.

Balerno, L.

Galloway, E.

Nugent of Guildford, L.

Balfour of Inchrye, L.

Gisborough, L.

O'Neill of the Maine, L.

Barnby, L.

Glasgow, E.

Orkney, E.

Bellwin, L.

Gormanston, V.

Pender, L.

Belstead, L.

Gowrie, E.

Penrhyn, L.

Bolton, L.

Gridley, L.

Rawlinson of Ewell, L.

Bradford, E.

Grimston of Westbury, L.

Redmayne, L.

Campbell of Croy, L.

Hanworth, V.

Reigate, L.

Chesham, L.

Harvington, L.

Renton, L.

Clifford of Chudleigh, L.

Hayter, L.

Ridley, V.

Clitheroe, L.

Henley, L.

Rochdale, V.

Cockfield, L.

Hill of Luton, L.

Romney, E.

Cork and Orrery, E.

Hylton-Foster, B.

St. Aldwyn, E.

Cottesloe, L.

Ilchester, E.

St. Davids, V.

Cranbrook, E.

James of Rusholme, L.

St. Just, L.

Croft, L.

Kimberley, E.

Saint Oswald, L.

Cullen of Ashbourne, L.

Kinloss, Ly.

Sandford, L.

Daventry, V.

Kinnaird, L.

Sandys, L.[Teller.]

Davidson, V.

Kinnoull, E.

Selkirk, E.

de Clifford, L.

Kintore, E.

Sempill, Ly.

Denham, L. [Teller.]

Lindsey and Abingdon, E.

Sharples, B.

Digby, L.

Long, V.

Somers, L.

Dowding, L.

Lucas of Chilworth, L.

Spens, L.

Drumalbyn, L.

Lyell, L.

Stamp, L.

Dulverton, L.

McFadzean, L.

Strathcarron, L.

Dundee, E.

Mackay of Clashfern, L.

Strathclyde, L.

Dundonald, E.

Macleod of Borve, B.

Strathcona and Mount Royal, L.

Ebbisham, L.

Mancroft, L.

Strathspey, L.

Eccles, V.

Mansfield, E.

Swinton, E.

664

665

Tranmire, L.

Vaizey, L.

Westbury, L.

Trefgarne, L.

Vaux of Harrowden, L.

Willoughby de Broke, L.

Trenchard, V.

Vernon, L.

Wolverton, L.

Trumpington, B.

Vickers, B.

Wrenbury, L.

Tweedsmuir, L.

Vivian, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
Schedule 5 [Provisions substituted in the Education Act 1962]:
5.25 p.m.
Lord VAIZEY Lord VAIZEY moved Amendment No. 49:
Page 41, line 44, at end insert—
("(e) such courses for professional training in dance, drama and music as may be approved by the Secretary of State.").
The noble Lord said: My Lords, this is an amendment which I think is of some importance. I did not move it at the Committee stage because there was a more general amendment which covered the whole field and, at that time, I thought it would be a mistake to take individual questions. Although this affects only a small number of students it affects that small number very deeply indeed, so that the degree of benefit which would come through the acceptance by the Government of this amendment would be considerable. The position at the moment is that most people studying for professional courses in music, the drama and the dance are not on degree courses. There are of course degree courses in all these subjects but by and large they are not taken by practitioners in the subject; they are taken by people who are going to teach the subjects or who are reading honours degrees, for example, in music, because it happens to be a general liberal education. I am concerned with the relatively small number of students who are each year preparing for professional positions in the professions which are associated with the theatre, with dance and with music. It is a small number and it is an area of our national life of great importance, in which I think Britain is one of the leading nations. One reason why it is one of the leading nations is quite clearly because the standards of training are, generally speaking, exceptionally high.
Because these are not degree courses the grants are discretionary and the result of this is really gross unfairness. If a
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person happens to come from one county and is accepted at a certain prestigious school, that person almost automatically gets a grant. For example, the ILEA has always been extremely liberal in this respect. A person coming from another authority might not get a grant at all, although there is absolutely no difference whatsoever in their ability. This kind of discrimination of course is not allowed in degree courses but it is allowed in these kinds of courses and one of the responses of the schools is to try to put the training courses into a degree course structure, which is a professional deformation which I think is much to be regretted. It is unnecessary to academicise extraordinarily successful professional courses.
This subject has been studied by the Gulbenkian Foundation. Two reports have been published, of which I was the chairman: one on music and one on drama and another is about to be published of which Mr Peter Brinson, the Director of the Gulbenkian Foundation is the Chairman, on dance. Broadly speaking, our conclusions were that too many people pursue these courses for the jobs available. There is substantial unemployment among potential professional musicians and, of course, among actors and actresses. We advocated the setting up of boards which would judge which schools were best, which should be approved and that these schools should then be eligible under a scheme for mandatory awards.
In the case of music and the drama the boards are already functioning. The National Council for Drama Training under the chairmanship of Mr. William van Straubenzee, the distinguished Member of another place and a former junior Minister in the Department of Education and Science, has tripartite membership with representatives of the union—Equity—of the employers, the Society of West End Management and other employers' organisations, and of the drama schools themselves and it is actively working. A similar organisation has been established for music with the support of the musicians union and the employers in that field,

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including the BBC. That is under the chairmanship of Mr. John Hosier, the principal of the Guildhall School of Music and a similar scheme will shortly be established for the dance. The scheme really depends for its success upon some acceptance at some stage by the DES of the notion that there will be mandatory grants for people who go to the schools or colleges which are recognised by these boards. The function of these boards is both to raise the standards of the schools which they recognise and to diminish the number of students who are studying these subjects because one of the principal aims in raising standards is to diminish the number of people who are seeking jobs—if I may say so, hopelessly, because there are just not the jobs around in drama, or in music or in the dance.
This amendment entails no extra public expenditure at all. First, because what is proposed is a permissive power to be given to the Secretary of State; secondly because the whole structure of what I might call the Gulbenkian schemes depends upon a diminution in the number of students and an increase in the quality of the students. So we would have fewer students on mandatory grants than we now have on discretionary grants, the difference being that any school would not be faced in any one year with the arbitrary element that some of its best students did not get discretionary grants and therefore it had to make up the numbers with inferior students or with people from overseas. This is an important amendment which I think has commended itself to all without exception who have studied the subject, and it has widespread support throughout the arts. I hope very much that the Minister will accept it. My Lords, I beg to move the amendment standing in my name on the Marshalled List.
Lord NUGENT of GUILDFORD: My Lords, as I have finally returned to my place on the Bench here, I should like to say a brief word in support of my noble friend Lord Vaizey. I am a governor of a school which provides dance, drama and music, which indeed is closely related, as the noble Lord would know, to the Gulbenkian Trust; they are very interested in it. I entirely support everything that Lord Vaizey has said; there is an unfortunate discrimination against such bodies,
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and students may be put at a great disadvantage because some local authorities give them grants and some do not. This may deprive the community in the future of an able young man or girl who might well find a great career in these artistic professions. I hope that my noble friend Lady Young will be able to say a sympathetic word for this, because there is a small but strong case here.
Viscount SIMON: My Lords, may I ask the noble Lord, Lord Vaizey, whether he could tell us if the schools that he has in mind are teaching general subjects as well as music, drama and dance, or are they entirely specialist schools? So far as dance is concerned, of course, children normally start learning dancing long before they have completed their normal, formal education.
Lord VAIZEY: My Lords, before the noble Viscount sits down—I am not allowed to speak twice, but perhaps I could use that magic formula to give the answer—the schools we have in mind are things like the Royal Academy of Music, the Royal College of Music, the Royal Ballet School, and similar institutions.
Lord TAYLOR of BLACKBURN: My Lords, may I support the noble Lord, Lord Vaizey, very strongly. I always have in mind the case that we had years ago in Lancashire with Kathleen Ferrier, who applied for a scholarship and did not get one, simply because of the reasons Lord Vaizey has stated today. I think this amendment is very important indeed and we should go all the way to support the noble Lord.
Baroness YOUNG: My Lords, I recognise the very great interest and knowledge that my noble friend Lord Vaizey has in this subject, and, as he has quite rightly said, the present situation is that awards should be mandatory for students taking full-time courses of first degree or equivalent level, or initial teacher training courses, whatever the subject of study. Nevertheless, a number of degree and degree equivalent courses in music attract mandatory awards. I realise that many courses in drama and dance, in particular, are designed for performers and, in consequence, do not require the achievement of an academic level which can be regarded as comparable to degree

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courses. They are therefore eligible for discretionary awards, and this is where the problem the noble Lord has stated arises.
It may be helpful to the House if I set out some of the complexities that arise if we consider the extension of mandatory awards to courses in the performing arts. At present, mandatory awards apply only to advanced level courses of further education. A very substantial departure from current policies would be involved in an extension into the field of non-advanced further education, which encompasses many of the performers' courses which might present themselves for designation for mandatory awards. If this were to lead to awards for all full-and part-time non-advanced studies, the costs would be counted in hundreds of millions of pounds, and we could not contemplate that. On the other hand, if such a wide extension were not envisaged, I do not see an equitable basis for distinguishing between one course and another.
The noble Lord's amendment would limit the Secretary of State's new power to courses in music, dance and drama, but not just to full-time advanced level courses. Even if it were proposed to consider for mandatory awards only full-time advanced courses for performers, it would still be inequitable to consider these in isolation. The areas of study for professional and vocational qualifications for which mandatory awards are not available extends far beyond the arts; and I would find it difficult to accept an amendment which would give special treatment to actors, dancers and musicians, while recognising the great importance that they have, while ignoring the claims of others; and we have a long list of them, lawyers, social workers, technicians of various kinds, speech therapists, librarians and others.
I recognise the point that the noble Lord has made about the working party, which I believe he chaired, which was to identify the circumstances in which mandatory awards might be given for certain pupils who qualify in some particular way. The working party recommended that once institutions had been accredited by bodies which would be recognised by the department and by the local authorities and the professions, consideration should be given to recognising their courses for mandatory awards. This, however, must
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be considered in the context of the Council of Local Education Authorities' recommendation that all other full-time advanced courses should attract mandatory awards and that students engaged in part-time study for degrees should be able to look to local education authorities for mandatory assistance. So long as these recommendations cannot be implemented, the best that can be hoped for is that local education authorities use the accreditation lists as the basis for making discretionary awards, as indeed was originally envisaged.
I realise this is a very disappointing answer to give to my noble friend. Perhaps he will not be surprised to hear it in the context of everything else. This is a matter which I recognise is of importance, as indeed are the other amendments which the House has before it this afternoon. The noble Lord says this would not cost anything because the date of implementation would be decided by the Secretary of State. The difficulty of all these awards is that once we had agreed that they should be on the statute book the pressure for implementaton would be very great indeed, which is always the case, and it would of course be very difficult to resist.
Lord VAIZEY: My Lords, before the noble Baroness sits down, could she take on board the fact that I did not say it was just the date of implementation, but that the actual number of students would be reduced and total public expenditure would actually fall.
Baroness YOUNG: My Lords, I did take that point. But even if my noble friend is right in saying that the total number of students within the particular areas that he is talking about would be reduced, the point which has been made by the local authorities and others is that once we extended the scheme of mandatory awards to one group we would in fairness have to look at other groups, which would mean at the end of the day that the total number would inevitably be increased. It is because I think it would be so difficult, once this was on the statute book, for the Secretary of State to resist its implementation, because naturally the pressure for it would be very great, that I am unable to accept it this afternoon. I hope therefore that my noble friend will feel able to withdraw the amendment.
Lord VAIZEY: My Lords, the Government are committed to a high profile on the arts. We have recently passed the National Heritage Bill and also implemented the public lending right. The Chancellor of the Duchy has recently announced substantially increased support to the Arts Council. I cannot see why this amendment, which actually involves a reduction in public expenditure, is unacceptable. I think the argument that it is inequitable
because other people are interested is a phoney one. So I regret I shall have to ask the House to divide.
5.39 p.m.
On Question, Whether the said amendment (No. 49) be agreed to?
Their Lordships divided: Contents, 77; Not-Contents, 121.

CONTENTS

Annan, L.

Greenwood of Rossendale, L.

Ponsonby of Shulbrede, L.

Ardwick, L.

Gregson, L.

Ritchie-Calder, L.

Avebury, L.

Hale, L.

Rochester, L.

Aylestone, L.

Hampton, L.

Ross of Marnock, L.

Bacon, B.

Hatch of Lusby, L.

Sainsbury, L.

Balogh, L.

Hughes, L.

Seear, B.

Barrington, V.

Irving of Dartford, L.

Spens, L.

Birk, B.

Janner, L.

Stamp, L.

Blease, L.

Jeger, B.

Stewart of Alvechurch, B.

Blyton, L.

Kaldor, L.

Stewart of Fulham, L.

Boston of Faversham, L.

Leatherland, L.

Strabolgi, L.

Boyle of Handsworth, L.

Lee of Newton, L.

Strauss, L.

Brimelow, L.

Listowel, E.

Taylor of Blackburn, L.

Chitnis, L.

Longford, E.

Taylor of Gryfe, L.

Cledwyn of Penrhos, L.

Lovell-Davis, L.

Underhill, L.

Collison, L.

McGregor of Durris, L.

Vaizey, L.[Teller.]

Cooper of Stockton Heath, L.

Maelor, L.

Wallace of Coslany, L.[Teller.]

Crowther-Hunt, L.

Masham of Hton, B.

Wedderburn of Charlton, L.

David, B.

Milford, L.

Wells-Pestell, L.

Davies of Leek, L.

Mishcon, L.

Whaddon, L.

Davies of Penrhys, L.

Northfield, L.

White, B.

Evans of Claughton, L.

O'Brien of Lothbury, L.

Wigoder, L.

Foot, L.

Oram, L.

Willis, L.

Galpern, L.

Parry, L.

Wilson of Radcliffe, L.

Goronwy-Roberts, L.

Peart, L.

Wynne- Jones, L.

Gosford, E.

I Phillips, B.

NOT-CONTENTS

Abercorn, D.

Daventry, V.

Hill of Luton, L.

Abinger, L.

Davidson, V.

Hives, L.

Adeane, L.

de Clifford, L.

Home of the Hirsel, L.

Airey of Abingdon, B.

Denham, L.[Teller.]

Hornsby-Smith, B.

Alexander of Tunis, E.

Digby, L.

Hylton-Foster, B.

Allerton, L.

Drumalbyn, L.

James of Rusholme, L.

Alport, L.

Dulverton, L.

Kimberley, E.

Amherst of Hackney, L.

Dundee, E.

Kinloss, Ly.

Amory, V.

Ebbisham, L.

Kinnard, L.

Ampthill, L.

Eccles, V.

Kinnoull, E.

Armstrong, L.

Ellenborough, L.

Kintore, E.

Balerno, L.

Elliot of Harwood, B.

Lindsey and Abingdon, E.

Balfour of Inchrye, L.

Elton, L.

Long, V.

Barnby, L.

Enniskillen, E.

Lyell, L.

Bellwin, L.

Falkland, V.

McFadzean, L.

Belstead, L.

Ferrers, E.

Mackay of Clashfern, L.

Bolcon, L.

Forester, L.

Mancroft, L.

Bradford, E.

Fortescue. E.

Mansfield, E.

Butler of Saffron Waldon, L.

Fraser of Kilmorack, L.

Margadale, L.

Buxton of Alsa, L.

Galloway, E.

Marley, L.

Campbell of Croy, L.

Glasgow, E.

Massereene and Ferrard, V.

Chesham, L.

Glenkinglas, L.

Middleton, L.

Clifford of Chudleigh, L.

Gormanston, V.

Monk Bretton, L.

Clitheroe, L.

Gowrie, E.

Mottistone, L.

Cork and Orrery, E.

Gridley, L.

I Mountgarret, V.

Cottesloe, L.

Grimston of Westbury, L.

Mowbray and Stourton, L.

Cranbrook, E.

Hanworth, V.

Newall, L.

Croft L.

Harvington, L.

Northchurch, B.

Cullen of Ashbourne, L.

Henley, L.

O'Neill of the Maine, L.

Orkney, E.

Saint Oswald, L.

Trefgarne, L.

Pender, L.

Sandford, L.

Trenchard, V.

Penrhyn, L.

Sandys, L.[Teller.]

Tweedsmuir, L.

Rawlinson of Ewell, L.

Selkirk, E.

Vaux of Harrowden, L.

Redmayne, L.

Sempill, Ly.

Vernon, L.

Reigate, L.

Strathcarron, L.

Vickers, B.

Renton, L.

Strathclyde, L.

Vivian, L.

Ridley, V.

Strathcona and Mount Royal, L.

Willoughby de Broke, L.

Rochdale, V.

Strathspey, L.

Wolverton, L.

St. Aldwyn, E.

Swinton, E.

Wrenbury, L.

St. Davids, V.

Tranmire, L.

Young, B.

St. Just, L.

Moved accordingly and, on Question, Motion agreed to.

I Resolved in the negative, and amendment disagreed to accordingly.
5.48 p.m.
Lord WIGODER Lord WIGODER moved Amendment No. 50:
Page 41, line 44, at end insert—
("(e) full time courses leading to either the Common Professional Examination for the profession of Solicitor or Barrister, or to the final examination of either of the said professions.").
The noble Lord said: My Lords, this amendment was not moved in Committee; instead a rather more general amendment was moved by the noble Lord, Lord Mishcon, who rose to his feet at 5.18 in the morning of 12th March and it is perhaps hardly surprising that, during the brief debate that followed, the noble Baroness, Lady Young—whose efforts, if I may say so, in the course of these proceedings we all so much admire—indicated that it was not quite the appropriate moment to do full justice to this particular matter. Therefore, I do not apologise for returning to the topic at this stage, although I think that I can do so with some brevity.
The object of the amendment is to include in the list of those who may receive mandatory grants from local education authorities, law students, so that they can be added as a category to the existing categories set out in Schedule 5 to the present Bill. I hope that I do not need to stress that this is a matter of consequence to all of your Lordships and not simply to the legal profession, because it is hardly necessary, I think, to exaggerate the importance to all of us of having a free and fearless legal profession and a wholly independent and impartial judiciary. I believe it means that that can be achieved only if that is a career which is open to people from all sections of society, quite irrespective of their means.
Indeed, the Bar has, perhaps, a particular difficulty in this respect, because by its very structure it is an extremely precarious profession for any young man who is embarking upon it, despite all that the Bar seeks to do by way of scholarships, grants, loans and so forth. Therefore, I suggest that there is a case for this amendment in the general public interest, not simply in the interest of the legal profession alone.
In fact, the present position is that discretionary grants are payable and many local authorities, to their credit, make such grants. However, particularly in recent times of increasing financial stringency, it has become something of a gamble. The person who aspires to join the legal profession will succeed or fail in his application depending on which part of the country he happens to live. Indeed, it has become so much of a gamble that not very long ago a decision was made in one local education authority that discretionary awards would be made to Bar students; the authority began to make the awards in alphabetical order of the names before it, but when it reached the letter "H" it decided that it could not afford any more, and as a result all the other applicants were unsuccessful. As someone whose name begins with the letter "W", I regard that as a highly unfair method of procedure.
There is respectable support for the principle set out in this amendment. No doubt your Lordships will recollect that when the 1978 Education Bill was before Parliament it contained a Clause 15 and a Schedule 2, Clause 15 being almost indistinguishable from this present amendment. That was then a clause which met with the enthusiastic support of the present Secretary of State for Education, Mr. Carlisle, and support from Dr. Rhodes Boyson; indeed, not one member of the Conservative Party at that stage spoke

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in any way against this proposal. It had that support from that source. There is support from the Royal Commission on Legal Services, which in its recent report came out very strongly in favour of mandatory grants for the vocational stage of legal training.
I should add, of course, that I entirely accept the Government's argument that it is impractical to embark on any substantial new expenditure at this particular stage of our economic problems. I do not ask for that. I simply ask that the Government should recognise the need and the claim of law students, and should include the profession among those to which mandatory grants can be payable when, in due course, regulations are made by the Government. I do not ask that such regulations should be made at the moment. I ask that as and when the economic situation improves they should be made, but that recognition should be given now to the acceptance by the Government of that obligation. In the course of the debate in the other place it was suggested that it would be difficult to do this because apparently there is very little prospect of the economy improving in the foreseeable future.
I am sure that the noble Baroness, Lady Young, does not wish to take that approach on behalf of the Government of which she is such a distinguished member. In the other place it was also suggested as an alternative that instead of including this in the present Bill—although the Government recognise the need for such a proposal—it could be included in some future Education Bill. I am sure it is not intended that there should be a major Education Bill every two or three years of this Government's life. Indeed, I am sure that the noble Baroness would be appalled at such a prospect! I ask her to consider whether, if there is merit in the proposal—as there clearly is because it has been accepted by her own Secretary of State, her own Minister that there is merit in the proposal—it could not be included in some form in this Bill, to be brought into effect at a future stage when economic considerations permit. I beg to move.
Lord RENTON: My Lords, the noble Lord, Lord Wigoder, has made this case in, if I may say so, a very restrained manner.
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I should like to support him in his staking a claim for the future, because, in effect, that is what he has done. However, I should like to add just one or two brief comments. First, it has become notorious that some local education authorities have found it impossible to do anything to help those who wish to enter the legal profession. Other authorities have been generous and others have put forward a sort of notional solution—they have given a very small discretionary grant. Clearly, that is not just or satisfactory.
The other point I wish to make is, 1 am afraid, the same as the one I made in the early hours of the morning last week. It is that it is right in relation to both branches of the profession—either branch being able to produce judges—that the people of this country should feel that they have a broad spread not only of talent, but a broad social spread of young people entering both branches of the profession. We shall not get complete satisfaction until, at some future date, grants become mandatory.
5.57 p.m.
Lord JANNER: My Lords, I speak not only as a member of the solicitors' profession, but as an ex-Member of the other place. I do not believe that the position of the legal profession in this country and the particular part it plays in respect of the community as a whole is yet appreciated. Let me be perfectly clear about this. Most Members of Parliament have had experience of people coming to them in order to take advice and possibly the same applies to Members of this House. In my experience, I have had thousands of such cases. It is true that I was a Member of the other place for a very long time and I have been a member of the solicitiors' profession for over 60 years. Those of us who have held surgeries, as we call them, will realise that a very large number of the so-called men-in-the-street have problems which have to be solved by legal advice.
Let me say at once that I have an interest in this. I happen to have been alternatively the chairman or the vice-chairman, when the various Governments have come to power, of the Solicitors' Group of Members of both Houses. We are anxious, and I am sure that the country is anxious, that there should be full opportunity for a person to be properly advised

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and represented when he has either a legitimate grievance or a grievance which he thinks is legitimate, in which latter case he consults a professional person who can explain to him why his grievance is not legally important. Every person must be given the opportunity to consult professional people with a view to understanding whether his or her grievance is legally right or wrong and, if it is right, to have his case properly attended to. It is not just a matter of little concern; on the contrary, it is of very deep concern. I am sure that every Member of this House is anxious that nobody should be prevented from obtaining proper advice in relation to these problems which range over a very large scale.
I said a moment or two ago that I was speaking as a solicitor who has been in practice for some 60 years. I can tell your Lordships that, while it is perfectly true that the majority of people have no occasion to consult lawyers over their problems, a vast number of people do, and the whole situation goes practically from the cradle to the grave with problems at every stage of life. The question, therefore, is: Are we doing the right thing? If I may say so with respect, I entirely agree with the noble Lord, Lord Wigoder, except on a matter which I gather he has left alone because it was not carried last time at five o'clock in the morning. I think it was because people were not fully aware of the situation that his amendment was not carried.
Are we or are we not concerned—this is the point—with justice being given to all through the best advice that can possibly be obtained? Are not the professions the right people to consider this question and to place it before the Government? Surely it is not going very far to say that the principle—I would go very much farther, of course, as did my noble friend Lord Mishcon—is an indication that when times are better people shout: "It's no good." We know the financial position is bad, but justice is a very important point to consider when deciding whether or not you are going to support a particular profession or case which is put before you.
I say to you that this is a case which requires the utmost consideration and that the amendment should be immediately observed by your Lordships and by the
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noble Baroness and the noble Lords on the other side of the House. What does it do? It lays down the principle that with proper representation of people who have complaints which have to be dealt with legally, we shall sooner or later have the opportunity of dealing with the position by having young people trained irrespective of their financial means. It is a shame that some people have been and are going to be lost to the profession because they have not had the means to carry on. Surely, they should have the opportunity sooner or later. I know this amendment will give us the chance to ask the Government about the matter from time to time. Is that what has frightened them? If it is, I think they are wrong because it should be open to us to say to the Government, "Look, the financial position has improved or whatever it may be, "and we think the grants should become mandatory."
We know very well that some local authorities—we have heard this already, and I shall not go over ground that has been covered—have not taken this view. Consequently, I hope that when the noble Baroness replies she will agree that it is not difficult for her to decide in favour of the amendment but that the Government themselves should he pleased that it has been moved.
Baroness TRUMPINGTON: My Lords, I hope you will forgive me if I speak on a personal basis. I shall speak against this amendment. I have a son who is a "baby" barrister; he passed out in the top 8 per cent. of his class in his Bar finals. He has not been able to get into chambers. He is nearly 25 and has not earned a penny yet. That is no fault of his. He is surrounded by friends from his university who also are unable to get into chambers. In my view—and I say this in all humility—there are too many barristers at the moment. There is not enough work for them. When I occasionally sit in the Crown Courts with judges they tell me they are heads of chambers and they are going back to their offices to tell their pupils that they have no work for them and that they will have to leave.
I personally think that this amendment is unnecessary at the present time. I cannot speak for the solicitors' side of the profession, but it is my belief that there

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are too many young men wrongly going into the barristers' side of the law, because there is not enough work for them.
Lord GARDINER: My Lords, the case for the amendment has already been so fully made by the Members of all three political parties that I do not propose to add to it. May I reply to what has just been said. The Bar, having no senior partners and no employers, and standing on their own feet, have always been regulated by the laws of supply and demand. There have always been times when there are too many barristers, too many solicitors, and times when there have been too few. We are legislating for the future. I should have thought we ought to have regard to the general position, and I rise in particular because I should not like anybody to be under any misapprehension that I strongly support this amendment.
6.8 p.m.
Lord SHINWELL: My Lords, so far in the course of these debates the controversy has been largely confined to the two Front Benches with occasional interruptions from those on the Back Benches. My only intervention occurred when this subject, or something very much like it, came before us one day last week when I ventured to offer a few observations. It requires some courage, believe me—not physical courage; that is easy, or at any rate I have always found it comparatively easy—but moral courage, to face up to three famous legal luminaries—Lord Wigoder, Lord Renton, a colleague of mine in another place, and an ex-Lord Chancellor. I ask you! So if in the course of my observations there are defects, grammatically, logically, philosophically and certainly legally, I hope I may be forgiven.
It will be noted that neither of those who have spoken in favour of this amendment has offered any opinion as to the cost involved. The noble Lord, Lord Renton, did touch on it when he criticised, by implication, some local authority who had provided a derisory grant. Of course, his suggestion was that it was not enough. How much will it cost? That is very important.
Training a person to become a barrister, I always understood, meant—what do
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they call it?—"eating in Inns" one had to consume, metaphorically and figureatively speaking, a number of meals. The whole business—I nearly said stinks, but I must not use that word; I have the word!—reeks of finance, cost, and periods when it is almost impossible to make it a gainful occupation.
We talk about barristers. One has only to look at another place. It is cluttered up with them. Briefless barristers. All the training in the world has forced them to become candidates; some on the Conservative side, some on the Labour side. Some by mistake. It often happened accidentally. They were not quite sure which side to be on. They weighed it up and said, "That's the kind of Government we are going to have shortly, and I am going to be on the winning side." I know some of them. I have known them. Some have disappeared.
I speak as one who knows very little about education. I had practically none myself. I have made the best of it, with struggle, sacrifice, hardship and traumatic experiences. But although I have a limited knowledge of educational matters, I believe that if we are going to use this legislation wisely and sensibly—to use the term used by Lord Robbins the other day in the course of his speech—and if our education system is going to be effective and efficient, then we have to take the long view. What sort of people do we want 25 and 30 years hence? We shall be wanting engineers, scientists, technicians and technologists. These are what the country needs. The more of them the better.
The whole purpose of education however—let me qualify my previous observations— is not to create careers for particular professions. The purpose of education is to acquire knowledge, and then to use that knowledge to the best advantage, and it is for the person who acquires knowledge and becomes intelligent to decide which profession, which industry, which occupation suits his ability and his outlook. The noble Baroness opposite who opposed the amendment—and did so rightly—said that we had too many barristers. I would not go so far as that, except to say that those of the legal profession who have spoken had better be careful: do not encourage more

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competition. When I heard my noble friend Lord Janner speaking, if I may say so with great respect, he took a long time to say very little on the subject. It is sometimes too much. Do not let us go too far.
Let those young people to whom reference has been made who acquire knowledge, get their O-levels and go through all the schools, even the highest of our scholastic institutions, and have to make their contribution, them consider what contribution can be made in the general interest of our country, and not decide that one particular profession is for them. For example—and with this I think I shall have said enough; I feel there will be general agreement about that—why do we not add to this amendment that they should qualify to become politicians? That is needed more than providing more barristers. For heaven knows—and one must be careful in saying this; it might be regarded as a matter to be considered by the Privileges Committee—a vast number of them could do with a little more education and knowledge not of a legal character but of a kind that would enable them to understand what people need and what the country requires. That is what we want.
I venture to say, with the utmost respect to the members of the legal profession, whom I have had to use myself in the course of my lifetime—and I have had to pay them; I never got anything for nothing out of them; it is a remarkable thing that you never get anything for nothing out of the legal profession, though you would not expect to anyhow—that it is unnecessary to accept this amendment, but if it is decided to accept it, then all I can say is that I will remain on the fence. I shall be neutral. I shall vote neither on one side nor the other.
Lord WYNNE-JONES: My Lords—
6.17 p.m.
Baroness YOUNG: My Lords, I think it might be for the convenience of the House if I intervened at this stage. I am sure that I should take Lord Shinwell's advice. I am not sure whether his education for politicians was directed at me or not, but I shall carefully read what he has said in Hansard tomorrow morning. I am sure that one should take his advice
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and be rather careful when engaging in argument with so many distinguished lawyers. I listened with great care to what the noble Lord, Lord Wigoder, said in introducing this amendment. I and my colleagues accept the importance of the legal profession and its role in society, and we recognise that it is arguable that we might include in this Bill a reserve power, to be used when resources become available, to make mandatory awards for those taking the professional qualifications to become barristers or solicitors. On the other hand one has to view this once again in its wider context.
The noble Lord, Lord Wigoder, reminded the House that when the former Labour Administration had an Education Bill in 1978 they included a power to extend mandatory awards to advance professional and vocational courses. Not surprisingly, the omission of this clause from the Bill has prompted amendments during the Committee and Report stages of the Bill both in another place and here. During the debates on these amendments the Government have maintained that, although they welcomed the provision contained in the 1978 Education Bill because it seemed in principle to be a reasonable development, in the light of the present economic circumstances they feel that they cannot bring forward a similar amendment in this Bill.
It might therefore be helpful for me to say what the cost would be. We estimate that the cost of extending mandatory awards to training for barristers and solicitors is estimated at some £3 million to £4 million, and for all full-time advanced professional and vocational courses the cost would be at least £10 million or more. It is not for me to comment on my noble friend's most interesting remarks about the numbers of barristers and her family in particular, but I would confirm the point she made that most courses remain full despite the fact that it is discretionary awards that are granted for them. This must be a measure of the fact that for the courses that there are, the numbers of discretionary awards that are given are enough to make sure that there are no vacant places.
I recognise the point made by the noble Lords, Lord Wigoder and Lord Renton, that because we are talking about discretionary awards, not all authorities will

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award them and therefore there could be a variation and there might not be the same social spread as there would be if every authority made the award. On this matter, as on other amendments in the group, the Government believe it would not be right at this stage to agree to this power being included in the Bill for the reasons I have advanced earlier; namely, that if we accepted the amendment we would be under great pressure to bring in the duty to make a mandatory award, and in the present financial circumstances of the country we would be unable to do so. I hope the noble Lord will accept that explanation and withdraw the amendment.
Lord WYNNE-JONES: My Lords, the remarks made by my noble friend Lord Shinwell were fascinating. Everyone knows that the famous Manny Shinwell could have excelled in any field he wished without any specific training; he obviously did not require the training in politics which he advises others to have, and I doubt that even if they had the training they would achieve what Manny Shinwell has achieved throughout his life.
However, this amendment is dealing with a matter of considerable significance which cannot be brushed aside and dismissed as trivial. I have to admit that if it dealt retrospectively with what happened in the past, I should be involved because my wife is now engaged in her final year of a barrister's course, but the amendment cannot affect here. We are dealing with something which is an essential part of the qualifications of a lawyer. A person may spend three years at university, take the course and do extremely well, but he does not qualify as a barrister, for he has then to take a further year to become a qualified barrister.
I was trained as a chemist and at the end of three years I got my degree and could have taken a job as a chemist. I was lucky enough to get a grant to go on and do research, and it was not until after a further two years that I had the training and qualification which was regarded as acceptable, for example by ICI, to get a good job in the chemical industry.I would not have got a job, which I did later, as a university lecturer unless I had had a further two years' training. To pretend that in three years you can have a training
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which qualifies you for any profession, other than politics, is absurd. No other country in the world gives anyone in three years a qualification which enables him to take a good job. On the Continent of Europe the minimum period is about five years and is often seven years, and in America the minimum period to get an initial qualification, which does not qualify you to practice very far, is four years.
In the legal profession you must have this qualification of a further one year course. It is essential to become a barrister; you are not a barrister when you have a degree from the university. Only the other day I received a letter from the professor of law at the university with which I was associated for 25 years, the University of Newcastle-upon-Tyne, and he asked me to intervene in this matter, pointing out that he had himself only a year ago had a student who took first-class honours in law. If he wanted to become a barrister he had to spend another year, and that year had to be paid for by his family, who were working-class and could not afford it, or by himself, and he was earning no money and could not earn money while he was working for his qualification. It is ridiculous to pretend that this is just something which people can somehow find out of their pockets and hand over. That just is not true.
If the amendment is not accepted, we shall be denying to those people who do not have the money—this may not be important to some people and although the noble Baroness, Lady Young, shakes her head in dissent, I repeat it the right to become a barrister. It means, in other words—and I am sure my noble friend Lord Shinwell would be the last to approve of this—that the people who can afford to become barristers, people with rich families, are those who can go on and take this final year. That is surely against every principle we have upheld in this country until the present Government came to office. It is the principle we have supported over the years, the principle that it is the right of everyone to acquire these qualifications. I do not want to see a legal profession staffed entirely by people who are so well-heeled that they are able to afford it. I want to see in the profession those who can qualify, and unless the amendment is agreed to

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we shall be denying this right to those who have no money.
Baroness YOUNG: My Lords, perhaps I might correct two mis-statements of fact. The history of this matter is that no Government have as yet agreed a mandatory award for these particular courses. All Governments have made it possible for local education authorities to give discretionary awards. So there can be no question of a clear cut-off between those who can afford to pay and those who cannot; discretionary awards are available.
Lord WYNNE-JONES: With financial cuts, my Lords.
Lord WIGODER: My Lords, I am grateful to all noble Lords who have taken part in this short debate. I would only say to the noble Baroness, Lady Trumpington, and the noble Lord, Lord Shinwell, that all I am anxious to ensure, and all the legal profession wants to ensure is that anyone who wishes to enter the profession and has the necessary talent is not debarred from doing so by the lack of appropriate support from a local education authority.
Having said that, I do not propose to divide the House on this amendment. This does not seem to me to be a matter which it would be appropriate to settle by trooping through the Division Lobbies. I am grateful to the noble Baroness for a not unsympathetic reply to the debate. I am sure that she and her colleagues will reflect upon what has been said, and that in due course, when the time is appropriate, steps will be taken to meet the difficulty which the amendment tried to deal with. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.31 p.m.
Lord EVANS of CLAUGHTON Lord EVANS of CLAUGHTON moved Amendment No. 51:
Page 43, line 3, at end insert—
("Provided always that nothing in this section shall prevent a local education authority bestowing awards for secondary education on persons over the age of eighteen years.").
The noble Lord said: My Lords, this amendment was not moved at the Committee stage of the Bill, partly because of the lateness of the hour, and partly because
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of my feeling that I could not do justice to the moving of it and that your Lordships might not have been able to do justice in listening to what it provides and deciding upon it. I move the amendment as an amendment to Schedule 5 because this schedule deals with people over school age seeking grants. The schedule, and certainly the Bill in total, excludes from its consideration for the enjoyment of discretionary grants in appropriate places a very important group of people in the education system of this country, or rather people who have escaped from, or fallen out of, the education system.
I wish to assure your Lordships that this is not an argument for paying grants to sixth formers, which was dealt with in a previous amendment moved by the noble Baroness, Lady David, though of course we supported that case. This is quite a separate matter. The aim is to empower local education authorities to make grants at their discretion to people over 18 years of age who, for whatever reason, left full-time education without attaining 0-levels or, as appropriate, A-levels and to enable them after the age of 18 to return to full-time education in order to qualify them for further education later in their lives.
I think that your Lordships will be well aware that in inner urban areas in particular many children leave school without any qualifications at ordinary or advance level, or indeed without qualifications of any kind. This is not because they are not bright enough to attain them, but rather because they are bored with school and see their contemporaries out of school, in employment—or certainly with money in their pockets. Alternatively, they may enter a business which seems promising at the time, but which turns out to offer no future; or, most likely of all, they do not have qualifications because they came from a family which lacked parental support or enthusiasm for pushing them on. More often than not such people come from under-privileged homes where not only is there no parental support for the concept of education after the compulsory age level of 16, but there is actual hostility in the family—and quite often I encounter this hostility in the part of the world in which I live—towards children remaining at school a minute beyond the compulsory period.
Because they are intelligent, because they want to get on, because they want to further their education and improve themselves in some way, these people may wish later in life to enter a full-time course of secondary education, at either ordinary or advance level; and at that time they most probably will be out of employment. It would be a tragedy if they were to be excluded from possibly obtaining a discretionary grant to further their educational career. I consider that they are a very deserving group of people, many of whom in the earlier part of their lives have suffered and now want to recover from the disadvantages. They may have suffered those disadvantages through no fault of their own, or perhaps there was a lack of knowledge earlier; but in any case they now want to im themselves and to become more use ore skilled members of the community.
One of the major problems in many of the urban areas of this country is the very low number of skilled people as against the very high proportion of unskilled people, and I believe that for people of this kind aged over 18 grants should be available to enable them to pursue secondary education courses. As drawn at present the schedule prevents discretionary grants being made for that purpose. My Lords, I beg to move.
Baroness YOUNG: My Lords, I well understand both the point that the noble Lord, Lord Evans of Claughton, makes and his concern that young people over the age of 18 who remain in full-time education at school continue to be regarded as dependent upon their families, whereas those who have left school, either to enter employment or to continue their full-time education at a college of further education, may be eligible for benefits in their own right. I am also aware that some more mature people may return to school and that these, too, may not be given grants, except to prevent or relieve hardship, and then only if their parents' means are taken into account.
The effect of the amendment would be to empower local education authorities to make awards at their discretion, but without any statutory constraint, to young
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people of 18 years of age who were continuing in, or resuming, full-time education at school. Its widest application would be to those reaching 18 during their last year in school, and in that context it touches on the underlying philosophy concerning the independence of young people of different ages from their families. I am sure that for this reason many people would be sympathetic towards the amendment. Nevertheless, the very fact that it would create in this particular way distinctions among those in their last year at school raises difficulties. Young people in the upper sixth form at school would be divided between those who were eligible for assistance in their own right and those whose parents were deemed still to be responsible for them, and, as I am sure the noble Lord will appreciate, this could lead to difficulties within the school.
Authorities already have power to pay educational maintenance allowances to the parents of young people in full-time education. These are paid at local education authorities' discretion and must have regard to parental means. I realise that the level of assistance paid under educational maintenance allowances can vary very considerably between different areas of the country and that this is not entirely satisfactory. However, the proposed amendment would not ease this difficulty; indeed it could exacerbate it. So far as the comparison between young people in school and those pursuing their courses in further education establishments is concerned, the local authority associations advise their members to treat them alike so far as possible. The proposed amendment would not therefore offer any particular benefit in that context. If the practice of returning to school at a more mature age becomes more widespread—and I acknowledge that this may have attractions at a time when falling rolls open up some spare capacity in schools—then we may need to reconsider the arrangements for providing financial support. But for the moment I do not think this is necessary; nor would we wish to take precipitate action which might not, in the light of experience, represent the best approach to the problem. Perhaps I should add that anyone returning to full-time education in a further education college or technical college, where he can do "o" and "A" levels, can obtain discretionary awards under existing

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powers. So that meets part of the problem.
While I accept that there may be scope for rationalising the range of benefits available to young people continuing in full-time education beyond school-leaving age—and this indeed is something which we as a Government very much have in mind—I do not think it would be right for me this evening to accept the amendment, which would leave unresolved a great many of the problems which I think we all recognise. I hope that the noble Lord, Lord Evans of Claughton, will accept this explanation and will withdraw his amendment.
Lord EVANS of CLAUGHTON: My Lords, my purpose in putting down the amendment was to open a door to enable your Lordships to realise that there is this lacuna or gap facing people who have left school and who want to return to secondary education. The reply of the noble Baroness was very helpful and most sympathetic. I see that the door is open, that the Government are aware of the problem and are considering it. The problem applies in particular to a group of people who are suffering in today's society—people who, through no fault of their own, have missed the opportunities of secondary education. I understand that the Government appreciate the problem and are sympathetic towards it, and I hope they will continue to explore it. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.40 p.m.
Viscount SIMON Viscount SIMON moved Amendment No. 52:
Page 43, line 29, at end insert—
("(d) to bestow awards on persons taking courses provided by the Open University;")
The noble Viscount said: My Lords, it is only a matter of chance that your Lordships are listening to the third of three Liberal amendments in succession, with a fourth to follow. It just happens that that is how they have fallen. This amendment takes us into a rather different field. Up to now, in dealing with recent amendments, we have been talking about local education authority grants, but we now turn over to grants from the Secretary of State under paragraph 3 of Schedule 5.
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The Open University is in a rather peculiar position, and it does not fit neatly into any plan. I think noble Lords on all sides of the House will agree that the Open University was a bold and imaginative innovation, and that it has been outstandingly successful. But, of course, the essence of it is that it works only for part-time students, and the general set-up of the arrangements for grants does not cover part-time students. The students of the Open University, and the association which represents them, have for a long time been campaigning to get this difference recognised and for special arrangements to be made for Open University students to get grants. There are discretionary grants from local authorities, but they, like other discretionary grants from local authorities, are offered in a rather haphazard way. Some authorities help; others do not help.
My noble friend Lord Beaumont of Whitley and I have had conversations with representatives of the Open University Students' Association, and we have learned that there are many hard cases where people could pursue valuable courses—valuable to themselves and, I believe, valuable to the community, because they are increasing the breadth of their knowledge and experience in the world—but where they are prevented from doing so because they cannot get a grant. So, after discussion, my noble friend and I thought that the best thing to do was to add to the third paragraph of Schedule 5, where the awards are made by the Secretary of State. These are all discretionary awards, so they do not in fact involve the Government in any expenditure immediately. Indeed, there is a further hurdle to be got over, because the paragraph begins:
"Provision may be made by regulations under this Act for authorising the Secretary of State—",
et cetera. So, even if the Government and the House accept this amendment, there is no immediate position in which the Secretary of State is required to make grants. In fact, he is never going to be required to make grants, but he cannot make them until he has first made the regulations which enable them to be made.
I believe there is a real case here for doing something for the Open University students. It may be that this is not the

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right way to do it, and certainly from what the Government have been saying recently they are not going to be very favourably disposed to accepting this amendment; but if they feel that there is a real case to be met here, I hope they will be able to think of some way to do it. Before I move the amendment and leave it, may I be allowed to make one other comment? If your Lordships have before you the third paragraph of this Schedule, on page 43. your Lordships will see that at line 19 there is a reference to courses" comparable to post-graduate courses". I think it is important in all legislation that we should try to use the English language correctly, and that it is especially important in an education Bill. I would ask the noble Baroness whether, indeed, the proper preposition to use after "comparable" is not "with" rather than "to". We compare one course with another, and I should have thought it should be courses "comparable with post-graduate courses". I may say that the same error (as it is in my view) appears in five or six places in this Schedule. If the noble Baroness comes to the conclusion that I am right, a few amendments could be put down on Third Reading which I am sure will go through without any discussion. My Lords, I beg to move.
Lord DAVIES of LEEK: My Lords, I welcome this amendment, particularly now that both sides of the House pretty well accept the existence of the Open University as a fact, and not as an experiment. This may he an appropriate place, in passing, and if I am not ruled out of order, to pay a tribute to my noble friend Lady Jennie Lee who was so persistent during her period of office in her determination to create the Open University. I have looked through this Bill, and, having been a tutor in adult education for some 17 years, I would have wished that I could have seen a little more in the form of help for adult students. Here is one place where it can be given, and where the Secretary of State himself can take action irrespective of whether or not the local authorities are sympathetic. Going back to the days of the dear old Master of Baliol and Professor Tawney, I think the magnificent work they did in the field of adult education came to an apex, in a way, in the setting up of the Open University.
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I do not want to delay the House, but I wanted to make that point. I sincerely hope that the House will take this amendment seriously, and that we shall have a sympathetic reply on it in regard to the Open University, as well as some clue as to the attitude of the Government to the massive work done in adult education that is non-vocational, to which tribute has been paid by many Members on both sides of the House at different times.
Lord GARDINER: My Lords, having been Chancellor of the Open University for five years and also a student, I should like to support the amendment proposed by the noble Viscount, Lord Simon. These discretionary grants by local authorities have really not proved to be satisfactory. May I take two students, one a teacher and the other an ordinary housewife. I can fairly take them because our biggest group of students are teachers and our second biggest group are ordinary housewives. So far as the teacher is concerned, he is the only student who stands to gain financially by getting a degree from the Open University. He is normally a teacher who, apart from his teacher's training certificate, has not got a university degree himself; but if he gets a degree then this will qualify him for additional remuneration. So he stands to gain by it.
The housewife, of course, may well be in difficulties in being able to pursue her studies through lack of means to pay the fees. What happens in practice is that there are many local authorities who give grants to teachers because they are their own teachers, and who therefore support them financially although, of course, a man who is a teacher and in paid employment can probably well afford to pay the fees himself. But, then, they do not give anything to the housewife. This is very unsatisfactory, and not how the thing ought to work; and it is hardly fair on anybody except the teachers. They have all through been in this rather privileged position that, earning a good income, they can afford to pay the fees, but they have them paid for them by their own local authority; whereas the people who ought to get the grants—the second largest group, the housewives—do not. I therefore very much hope that the Government will give sympathetic consideration to this amendment.
Lord HYLTON; My Lords, I think it is perhaps fitting that someone from this side of the House should say something on this amendment. I believe the Open University is a brilliant British innovation which has led the whole world in many ways, and which is very much envied and admired by some other countries. On those grounds, I hope that my noble friends on the Front Bench, and the Government generally, will look on this amendment more favourably and give it greater consideration than other special cases. The second point is that students of the Open University, being by their nature solitary people, require tremendous motivation to proceed with their studies right through to the end. Therefore, there could still be scope for regulations making money or grants available after students have shown determination for six months or a year to prove themselves.
Lord PARRY: My Lords, as a current member of the council of the Open University and having only this morning attended their meeting in London, I would wish to support this amendment and add a few words. The council itself and the whole structure of the Open University are conscious of the need to conduct their own affairs according to the stringent financial conditions of our time. They are treating this very soberly and making their own internal adjustments. There will be pressure on recruitment, on student courses and on graduates within the university. I support the amendment because it is essential that the spirit of the Open University should be kept up.
6.51 p.m.
Baroness YOUNG: My Lords, I have listened with interest to noble Lords who have spoken and I should like to say that I, too, am a supporter of the Open University and recognise the great and important work that it is doing. I recognise immediately the same kind of difficulties that we have had over the amendments that we were debating earlier on. For the Open University, students may receive relief from their employers or they may receive discretionary awards from local education authorities, but, as the noble and learned Lord, Lord Gardiner, pointed out, there are many people who do not receive awards at all—and this is the point that the noble Viscount, Lord Simon, was making—and for them the position
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is difficult; because discretionary, locally-administered awards have their drawbacks particularly if they result in inconsistencies between one authority and another. It is also a cause for concern if support from local education authorities proves unreliable because, for example, a local education authority feels unable to guarantee support for the full length of a course which, for the Open University can be six years or eight years. It is true that some local authorities now feel it necessary to curtail and even sometimes to withdraw support from Open University students and that the extent of their support is diminished.
The noble Lords who proposed this measure have suggested one which, in effect, would transfer to the Secretary of State the local authorities' responsibilities to support these students. No doubt, a scheme operated by central Government would be more consistent but there is no guarantee at all that it would be more generous than the present local authority arrangements. Indeed, at the present time we could not contemplate a generous and all-embracing scheme. Nevertheless, if power to support Open University students were to be vested in the Secretary of State, the local authorities would almost certainly consider themselves relieved of their responsibilities and would quickly withdraw their existing support.
Turning to the cost—because I have no doubt that many would like to see a scheme under which awards could automatically be given to Open University students—we believe that for Open University students (who would be part-time) the cost would be up to £5 million but if other part-time students were to be included it would cost more than that. This is something which at the present moment we do not feel we can justify.
I should also say that the amendment proposed would represent a substantial departure from the long-standing division of responsibility between central and local government. At present, the duty or power to bestow awards rests primarily with the local authorities. The Secretary of State has only limited powers to pay grants and to bestow awards and these are exercised only in respect of certain post-graduate students and those on full-time courses at the long-term, adult, residential colleges. We would not lightly

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depart from the accepted division of responsibilities in this case. It would present two severe practical problems: first, the problem of size. Open University students number some 60,000 and other part-time students on advanced-level courses could bring the numbers to be supported by central Government schemes to over 140,000. A centrally-administered scheme could therefore become very unwieldy. Secondly, there is a great variety of needs and circumstances.
I am sure that all of us have sympathy with the intentions behind this amendment. Nobody is going to argue against the value of the Open University or the advantages which it has for many people to get qualifications that they have been unable to get before or who wish to retrain to get further qualification; but it would not be right for me to accept an amendment which would commit the Government in some way to this further money. The pressures to introduce such mandatory awards would be very great and we could not contemplate this at the moment.
I would say to the noble Viscount, Lord Simon, because he raised a separate point about the grammar in the clause, that I have had advice on this and I understand that Schedule 5 merely repeats the language used by Parliament in 1962 when the Education Act of that year was passed. He might like to see what conclusions he draws from that statement and perhaps at another stage we could debate the relevant merits of either "with" or "to" in the circumstances. On the important issue, of the principle of his amendment, I hope that he will accept my explanation and withdraw the amendment.
Lord STEWART of FULHAM: My Lords, may I say that the conclusion I would draw about the language of 1962 and of 1980, is that the Conservative Government have learnt nothing in 18 years?
Baroness YOUNG: My Lords, before the noble Lord sits down, I think he might say that if it was right in the first place, it is right now.
Viscount SIMON: My Lords, I am grateful to the noble Baroness. I wish
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that she had found it possible to suggest some way in which these students could be helped. Perhaps in the course of time she may turn over this in her mind and discuss it with the department to see what could be done for them. They are in considerable difficulty. I was obliged to the noble and learned Lord, Lord Gardiner, with his special experience, who, in the examples he gave, explained how difficult it is to get this right. In the hope that something will be done, and as we have had the opportunity of airing this, I shall in a few minutes' time seek to withdraw the amendment.
I want to say on the subject of "with" and "to" that I have consulted my noble friend Lord Airedale, who usually advises me and my noble friends on the use of the English language. He immediately quoted Shakespeare at me and he referred to somebody who was "compared to"—
A noble Lord: A summer's day.
Viscount SIMON: My Lords, everybody knows it except me. All I can say is that I do not know that Acts of Parliament ought to be drafted in Shakespearian language. The fact that this is taken from the 1962 Act I can understand. I came across a similar case once before when I found something which was completely wrong and was told it was only a repetition of what had been done before. I still leave the thought with the noble Baroness that we might strike a new note and try to write contemporary English in our Acts of Parliament. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness YOUNG: My Lords, I beg to move that further consideration on Report be now adjourned.

HIGHLANDS AND ISLANDS AIR SERVICES (SCOTLAND) BILL
7 p.m.
The Earl of MANSFIELD: My Lords, I beg to move that this Bill be now read a second time. I rise to commend to your Lordships a Bill which is not only short

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and uncomplicated, but is also likely to receive your Lordships' full support. It is of course entirely a financial measure. Its whole purpose is to enable the Secretary of State for Scotland to continue to provide financial assistance to operators of air services. As such, it does not require detailed consideration by your Lordships. I should nevertheless like to explain to the House the proposals in the Bill and some of the historical background.
In a report to the Government of the day in 1974, the Civil Aviation Authority drew attention to the importance of air services to the social and economic wellbeing of the Highlands and Islands of Scotland. The report said that this was an area of the United Kingdom which, because of its remoteness and its difficult weather conditions and terrain, could not be served at an acceptable level by surface transport alone. I am sure that many of your Lordships are familiar with this geographical fact. Surface transport—that is, transport by land or sea—is not in itself a complete answer to the transport needs of many parts of the Highlands and Islands.
The CAA concluded from its study that the provision of air services in the Highlands and Islands should be governed as far as possible by normal commercial criteria but that there were certain routes where there was no possibility of providing air services profitably. The CAA called these routes "social routes" and recommended that they should be directly supported from public funds administered by the Secretary of State for Scotland.
The report helped to emphasise the need for changes aimed at improving services in the Highlands and Islands and making them viable. Discussions were already taking place with British Airways on the progressive transfer to Loganair of most of their "third level "services, on which they were making heavy losses. I should explain that "third level" is the term applied to services operated by aircraft with fewer than 20 seats. The Loganair aircraft (Britten-Norman Islanders and Trislanders) were much more suited to such short-haul local services, and the success of most of the routes which were transferred to Loganair under these arrangements has fully justified this policy. It was recognised however
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that, as the CAA had reported, there were certain routes which could not make money even by using smaller aircraft, but that it was essential to maintain them for social and economic reasons. It was agreed therefore that from April 1975 Loganair should take from British Airways the Glasgow-Tiree and Glasgow-Barra services; and that Loganair should receive financial assistance towards operating those routes. With the transfer of the third level services it was decided that no subsidy should be paid to British Airways for any of their remaining routes.
That is the historical background. It led to the inclusion by the previous Government of the clause which became Section 21 of the Scottish Development Agency Act 1975. The section empowered the Secretary of State to pay subsidies to operators of air services in the Highlands and Islands. It is exercisable for only five years—that is, until December 1980—and it was the previous Government's intention that it should then be reviewed. This particular form of assistance was therefore an experiment; but, by undertaking to review it, the previous Government clearly had it in mind to extend the legislation if it proved to be successful.
When the present Government came into office, we immediately recognised the special problems of the Highlands and Islands, and I was given the task of coordinating Government action in relation to this part of Scotland. One of our first actions was to carry out the review of the subsidised air services which the previous Government had promised. We have concluded that the legislation was successful and, in this Bill, we seek to extend it indefinitely. We consulted all the local authorities, community councils and other bodies who have a direct interest in the air services which are at present assisted. There was general agreement that these air services are an essential and integral part of the transport provision for these communities and that the use made of the existing powers has successfully ensured their continuance.
The present powers were used sparingly. Only one operator—Loganair—has received subsidy and only towards a few services. Support is currently running at about £100,000 per annum, and in total the amount paid out to Loganair is less than £500,000. This selective use of the

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powers is, in our view, correct. First, it would not be appropriate to pay subsidy on operations running at a loss when those operations could be run profitably without causing social hardship. Secondly, these are not the only powers available— or indeed being used— to subsidise air services: the Local Government (Scotland) Act gave wide powers to Regional and Islands Councils which complement the powers available to the Secretary of State at national level.
Subsidy has therefore a limited but important part to play in order to maintain vital air services to remote island communities. May I again remind your Lordships that the important factors are geographical ones. The aim is to provide essential services— not merely services which provide greater convenience. I should like to add that Loganair do try in their fare structures to help the islanders themselves to benefit most from the subsidy by providing concessions where the journey starts on an island. But the subsidy also helps those who have to travel from the mainland, for instance to provide necessary services, such as chiropody veterinary, agricultural or building services, to which mainland communities have easier access.
I should like now to turn to the detailed provisions of the Bill, which are brief and straightforward. Clause 1 authorises the Secretary of State to assist persons engaged in providing air services in the Highlands and Islands. It is widely drafted to allow it to be administered flexibly in the light of any future developments or eventualities. We intend however to continue the present policy of giving assistance selectively to certain socially necessary air services which are clearly going to remain unprofitable for some considerable time. We also intend that, in the main, local services wholly within the area of a regional or islands authority shall remain the responsibility of those authorities. In practice therefore we propose to continue the existing subsidy to Loganair in respect of the services which are at present designated as eligible for assistance.
These services are the services between Glasgow and Barra, Skye and Tiree. Tiree is of course within Strathclyde Region and the service to it could reasonably be regarded as the responsibility of that
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authority. It receives central Government subsidy because for half the year it is only the first sector of the through service to Barra and its direct costs are relatively small. We do not therefore propose to ask the Strathclyde Regional Authority to take over responsibiltiy for assisting this service. On the other hand, there are no further services, existing or projected, which seem to be eligible for Central Government assistance under the criteria by which the currently assisted services were designated.
The other clauses, Nos. 2 to 5, are incidental. I wish only to draw the attention of the House to the commencement date in Clause 5(2). This is to be 15th December 1980. The Bill will therefore come into effect the day after the main provisions in the existing legislation cease to be exercisable, so that full continuity in the operation of the subsidy arrangements will be ensured. There is one further point which it might be helpful to explain to the House. Clause 4 provides that, when the Bill conies into operation on 15th December of this year, the existing provision in Section 21 of the Scottish Development Agency Act will be repealed. This is necessary because Section 21 contained a provision enabling the Secretary of State to give assistance by acquiring shares or stock in a company, in addition to or instead of giving assistance by grant or loan. This power was never used and we are not repeating it in this Bill. Section 21 provides however that after the five-year time limit the Secretary of State may still hold or dispose of shares or stock which he has acquired. Although no shares or stock have been acquired, or will be before December 1980, it is necessary for us to remove this continuing provision from the statute book by way of repeal.
As I have explained, the Bill is drafted in general terms, as indeed are the present powers, but its aims are modest. There are only a few air services which are both uneconomic to operate and vital to the communities they serve. They are vital because of the difficult terrain, the distances between communities and the long sea crossings, and they provide an essential component in the whole network of road, sea and air transport throughout the area. We have already recognised the transport difficulties in the Highland and Islands by increasing the grants to ferry operators, and the consultation paper on ferry

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support, which we have recently issued, shows the seriousness of our intent. This Bill can therefore be seen in the context of our developing policy for the Highlands and Islands, and I commend it to the House.
Moved, That the Bill be now read 2a (The Earl of Mansfield.)
7.10 p.m.
Lord ROSS of MARNOCK: My Lords, as I was Secretary of State at the time when the original powers were given to the Secretary of State to assist air transport in the areas covered by the Bill, I am very glad that the Government have brought forward this Bill. The original experiment was expected to last five years and, if nothing were done, the power to assist was to lapse.
I noted the remarks of the noble Earl, Lord Mansfield, about the changes in the Bill. So far as I can sec, there are only about three such changes. First, the word, "establishing" has been included; secondly, the power in respect of an option to buy shares and stocks has been dropped; and thirdly I note that, for drafting reasons, the word "received" has replaced the word "receipts" to the Secretary of State. However, I do not quibble over that.
It is interesting, however, to note that we are making this payment of £ 100,000 to Loganair, because we all know that Loganair now has nothing to do with Logan. We remember that pioneer and what he did for the Highlands, much of which came from the original work carried out by Torn Johnson's Hydro-board. That enabled a firm in the Highlands to build itself up to be one of the finest in the country. That company suffered greatly when its senior partner, Mr. Logan, was killed in one of his own aircraft.
Perhaps that was when the change took place, because Loganair is now owned by the Royal Bank of Scotland. The House may wish to know that the Royal Bank of Scotland Group has just announced pretax profits for 1979 of £ 96 ·6 million. It is a sobering thought that we are giving the Royal Bank of Scotland a sum of £ 100,000. It was as well that the Government decided to drop the transport provisions from the Education Bill or I might have made a few caustic comments on this Bill. En this respect we are not subsidising companies,
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but services. Therefore, there is a justifiable reason for deleting the option in respect of shares and stocks because that does not apply in this case.
I am glad that the Government have taken this step. I had the privilege of putting through the other place the Highlands and Islands Development Board legislation. That is one of the other changes. We are redefining the area and going back to the Highlands and Islands Development (Scotland) Act 1965 rather than using the 1975 legislation relating to the Scottish Development Agency. Originally, we listed the seven crofter counties and included a power for the Secretary of State by regulation to extend the area, and that has been done. In the Scottish Development Agency Act we listed the areas that were to be covered according to regions and districts. I believe that it was sensible to return to the 1965 definition. The area was extended to include Bute and the Isle of Arran.
If I recollect correctly, we also extended the services to Morayshire which has been drawn into the Highlands and Islands area. Therefore, the return to the original power will make the whole matter much more comprehensive. The fact that we took the power to assist the people of the Highlands and Islands to improve economic and social conditions and to enable the Highlands and Islands to play a more effective part in the economic and social development of the nation was a sensible move.
I read the debates on this Bill in another place, and some honourable Members there did not appear to appreciate that these provisions were included in the Scottish Development Agency Act. They were put into that legislation because that Bill was available and about to go through the House. Although those provisions had nothing to do with the Scottish Development Authority, that legislation was thought to be appropriate and we took the opportunity to include these matters. It is not always the right thing to do to put an extra clause in a piece of legislation that is going through Parliament but, if I recollect correctly, this was done on that occasion and it made the Secretary of State responsible for these matters.
The Secretary of State also has the power to give other grants to the Civil

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Aviation Authority. I was surprised that the Minister did not mention the fact that the present Government have upped by about £ 1 million the amount given to the CAA. The authority must be able to give a considerable amount of help not only to Logan-air but to the other airfields which are helped by the CAA. Indeed, I think that the total figure is about £ 2½ million, which will assist considerably with the increased land charges.
I am sure the Minister is aware that people in the Islands have a justifiable complaint about the cost of fares. The fares are getting beyond the reach of many people. I am worried more about Shetland than about Orkney. The Government have a special fund in respect of the Shetlands which is supported by legislation which passed through both Houses and which gave a certain amount of money to the island authority there. Therefore, if necessary, some of that money could be used. But when we consider the Western Isles and places such as Barra, Skye and Tiree, we all appreciate that one cannot run air services on an economic basis. They must be given support.
I do not know whether the Minister was concerned about the point raised in another place about the timetables of Loganair not always being of the best for the travelling public. The Minister has the right to lay down conditions in regard to the suitability of services for the travelling public in those areas. However, on the whole I think there is no reason for anybody to be other than glad that the Government have decided that this legislation should go forward. I have very great pleasure in supporting the Government on this Bill.
7.19 p.m.
The EARL of MANSFIELD: My Lords, I am very glad that the noble Lord, Lord Ross of Marnock, has given the Bill a welcome. No one has more experience of trying to help the people in the Highlands and Islands than the noble Lord in his long term of office as Secretary of State for Scotland. All noble Lords are agreed that this beautiful but sadly deprived area needs all the help it can get. If I did not mention the very
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recent help which the Government have been able to give in respect of airport charges, it was merely that I did not want to be accused of banging the party political drum on a matter which has nothing to do with this Bill.
As the noble Lord has raised the matter, I confirm his "guesstimate" that the subsidy amounts to £ 2.5 million for 1980– 81. It has enabled the Civil Aviation Authority to reduce from £ 3 to £ 1 its proposed passenger load charges for scheduled domestic flights at all of its eight aerodromes. This in turn has enabled the airlines to moderate their proposed fare increases; but the Scottish Office will be discussing with the Civil Aviation Authority the future operation of the aerodromes with a view to establishing a a long-term plan for financing them as regards charges and subsididy.
Turning briefly to the other matters raised by the noble Lord, the choice of language of the draftsman was purely for clarification. I am assured there is no sinister purpose in it. The pre-tax profits of the Royal Bank— of which I am not a shareholder, I regret to say— fall outside the consideration of this Bill, but, as the noble Lord was good enough to say eventually, this is a matter of services to the islanders and has really nothing to do with the Bank in its more ordinary character and operations.
I confirm, as the noble Lord said, that the area of the Highlands and Islands is within the area in relation to which the functions of the Highlands and Islands Development Board may be exercised by virtue of subsection (2) of Section 1 of the Highlands and Islands Development (Scotland) Act 1965. It means no more and no less than that. In the circumstances, I am glad that your Lordships have apparently given this modest measure your blessing.
On Question, Bill read 2a; Committee negatived.
Lord CULLEN of ASHBOURNE: My Lords, I beg to move that the House do now adjourn during pleasure until eight o'clock.
[The Sitting was suspended from 7.23 p.m. until 8 p.m.]

EDUCATION (No. 2) BILL
Further considered on Report.
Consideration on Schedule 5 resumed:
8 p.m.
Lord AVEBURY Lord AVEBURY moved Amendment No. 53:
Page 43, line 29, at end insert—
(" d) to bestow an award on any person in respect of his or her attendance at a course provided by a college or other institution leading to the H.N.C., H.N.D. or T.E.C. qualifications, where that person was made redundant in the twelve months preceding the date on which the course began; and the amount of the award shall be equal to the average earnings of the person over the six months immediately preceding the date on which he or she became redundant.").
The noble Lord said: My Lords, the last time that we were talking about the question of technicians was at two minutes past six in the morning, when your Lordships may not have been at your best to consider such a weighty and important matter. I am glad to have this opportunity of returning to the subject. I should like to emphasise at the outset that, although your Lordships have listened to several cases of what might be termed special pleading on behalf of musicians, lawyers and so on, what I am attempting to do by this amendment is of a rather different nature. I am attempting to secure that the nation has the benefit of the people who would be sent on these HNC, HND and TEC courses, and thereby the very serious shortage of technicians would, we hope, be partially filled. So what I am talking about is not a provision to benefit a certain class of students by giving them exceptional payments, but to encourage people to take these courses and so to satisfy the needs of British industry.
I am confining the benefit to people who become redundant because, unfortunately, it is a fact of life that in many important industries, particularly the engineering industries, men and women are being thrown out of work by the economic crisis. I mentioned last time the case of the British Steel Corporation which, we all know, has to slim down, probably from its present level of 180,000-odd employees to something nearer 100,000, which is a tremendous loss of manpower and a tremendous waste of the skills and
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talents of the men involved if we cannot find some way of re-employing them elsewhere, particularly in manufacturing industry. After all, manufacturing industry, whether noble Lords like it or not, is the life-blood of this nation. If we do not have manufacturing industry, then we can forget about the musicians, the lawyers and all the rest of the very worthy objects that your Lordships were talking about a few minutes ago.
This matter was raised by the noble Lord, Lord Gregson, not so very long ago in a debate which he initiated on the Finniston Report. Engineering Our Future was its title. A few minutes ago on another amendment, the noble Lord, Lord Shinwell, asked what kind of people we are going to need in 25 years' time, and his reply was engineers, technologists and technicians. I wish that the noble Lord, Lord Shinwell, would come back and make that remark on this amendment, because if we hear someone of his stature who is not an engineer himself recognising the need, then there is hope. If non-engineers, people who have been trained in the arts, and people such as the noble Lord himself, who maintains that he has no particular training although he always speaks in your Lordships' House with great eloquence, can recognise the need to do something for the engineering industry, then surely the Government can see that this is something which is really important.
The Finniston Report was concerned with professional engineers and not with technician engineers, but they felt that the shortage of technicians was of such an acute nature that they said, in paragraph 3.29, that in the absence of a sufficient number of technicians companies were, of course, able to carry on, but sub-optimally with reduced professional engineering input. In many cases, the committee remarked, it was necessary for them to employ professional engineers in jobs that could have been perfectly satisfactorily done by technicians, which is an appalling waste of trained manpower when we do not have enough professional engineers either.
So what I hoped to do was to kill two birds with one stone, as it were, by taking off the unemployment register some people, there because they have been made redundant, who, by definition, have ex-

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perience of working in industry, and persuading them to go into the courses which I have mentioned for HNC, FIND and TEC qualifications, where the shortages are so acute, by making provision for the Secretary of State to pay them during the time that they were on these courses at the same rate as the remuneration which they had been receiving in the six months immediately before they became redundant.
It is only fair that the Secretary of State should bear this expenditure, rather than the local authorities. For reasons that we all know of, the local authorities are finding great difficulty in meeting their existing commitments. To lay a new burden on them of this nature would be totally unthinkable, but to put it on the Secretary of State would be perfectly right and proper. The Government would thereby be relieved of the expenditure on unemployment benefit, which they would otherwise have had to pay these men and women, and in the long term they could not only look forward to their own earning capacity being enhanced by the training that they had received, but also one hopes that the profits of industry would be thereby improved tremendously and the taxation base of the Government would thus be enhanced.
I dare say that all kinds of reasons will be given as to why we cannot do this. In particular, the matter of costs will be mentioned, as it may be in response to the recommendations of the Finniston Report as a whole. I must say that we are not very good in this country at cutting corners when an emergency arises, and it would be no exaggeration to call the shortage of technicians an emergency, so far as industry is concerned. We are bad at reacting quickly to a foreseen need. There are too many ways of finding the proverbial difficulty to every solution. I hope that in this case the Government will decide to take a first step in response to the very important recommendations of Finniston to enable industry to get the technicians that it needs, and to take a few off the unemployment register at the same time. My Lords, I beg to move.
8.10 p.m.
Lord TAYLOR of BLACKBURN: My Lords, may I support my noble friend
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on this question, because it is important. Today, I had lunch with two industrialists from East Lancashire and they were very much concerned with the engineering industry. Even though we have an unemployment problem of 7 per cent. in that area, we nevertheless find that there is still a shortage of skilled people going into engineering, especially at OND and HND levels.
We have got to encourage people to do this. The only way in which we can encourage them to do this is by accepting the suggestion put forward by my noble friend. I believe that the only way of encouraging them is by giving them some incentive to take up courses in colleges. There are many colleges that are crying out for students of this particular kind. I am the Deputy Pro-Chancellor of Lancaster University. At Lancaster University we have a very good course for higher degrees, but it is not the higher degrees that many engineering firms require. It is the basics that they require, and the basics are the OND and HND courses. Therefore, I support my noble friend in his amendment and hope that when the noble Baroness the Minister replies she will accept it.
Lord ROCHESTER: My Lords, I should like to support the amendment which has been moved by my noble friend Lord Avebury. I think I am right in saying that it was only yesterday that the Parliamentary Under-Secretary of State for Education, Mr. Neil Macfarlane, said that he and other Ministers were constantly disturbed by the discrepancy they found, going around the country, between the number of people who are unemployed and the number of vacancies for skilled workers. I suggest that the Government have a glorious opportunity here to alleviate the problem of unemployment and at the same time to deal with this mis-match within the labour market.
The need to create more wealth for the benefit of the community is something which many on this side of the House have in common with the Government. I hope that in her reply the noble Baroness will be able to say something which shows that she recognises the distinctive nature of this particular amendment compared with some that have gone before and what can be done under this heading for the benefit of British manufacturing industry. much take the point which has been made
Baroness YOUNG: My Lords, I very by the noble Lord, Lord Avebury, by the noble Lord, Lord Taylor of Blackburn, and the noble Lord, Lord Rochester, about the importance of strengthening the links between education and industry and of producing the numbers of technically qualified people that we need in support of manufacturing industry and the wealth-creating sectors of our society. The amendments before the House are concerned with educational and training opportunities and financial support for those who are unfortunate enough to have been made redundant and who may wish or, indeed, need to retrain for a new occupation.
Let me say that mandatory awards from local education authorities are already available for students taking courses leading to the Higher National Diploma and the Higher Diploma of the Technical Education Council, provided the student fulfils the conditions of the awards regulations. If for some reason a student does not qualify for a mandatory award, or if the course lie proposes to take is not designated for a mandatory award, local education authorities are free to make an award at their discretion.
Direct support for the unemployed is given by the Manpower Services Commission under their Youth Opportunities Scheme and Training Opportunities Scheme. The Training Opportunities Scheme provides training for adults who have been away from full-time education for a total of at least two years after the age of 16 and who want to take a Training Opportunities Scheme course to learn a new skill. It also provides financial support for those who wish to take full-time technical courses in further education of up to one year's duration. Indeed, the training of technicians of all kinds is regarded as a priority area by the Manpower Services Commission. There are also separate arrangements under the Youth Opportunities Programme for meeting the training and development needs of young people under the age of 19. The allowances paid under these schemes are generous and are intended to provide the wherewithal with which a trainee can finance himself for his training; and also to provide a measure of incentive, if needed.
I am very sympathetic to the problems of the unemployed and recognise the
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importance of the point that the noble Lord, Lord Avebury, is making in these amendments, but in view of the provision which is already being made by local education authorities, and particularly by the Manpower Services Commission, I do not feel that it would be right to create a further scheme to enable the Secretary of State for Education and Science to bestow awards. I hope, therefore, that on these grounds the noble Lord will feel able to withdraw his amendment.
Lord WYNNE-JONES: My Lords, the noble Baroness has made a very clear and definite statement about the present situation, but may I call her attention to certain points to which she has not referred. For a number of years I was in charge of a chemistry department where we employed no fewer than 40 technical staff and it was extremely important that they should be properly qualified. The qualification which we were looking for was the HNC. Unless they had the HNC qualification they were ineligible for promotion to higher positions.
Those noble Lords who may not be completely familiar with it may like to know that the HNC is a qualification which on the technical side is not very different from a university pass degree. It is an important technical qualification which allows people to take certain absolutely vital jobs in the technical field, jobs which are of extreme importance throughout the whole of our industry and throughout universities and all training places. I am told— and I should like to ask the noble Baroness if she is able to say whether or not this is right— that if a person is unemployed and enters upon a course like this, such a person loses unemployment pay. If that is true— and I have been told that it is by the principal of a college of further education— it is a very serious matter. It means that a person cannot get the qualification without surrendering the right to receive unemployment pay.
These qualifications are essential, and I am quite sure that the noble Baroness is aware of this. If she is not, I am sure that Dr. Young will tell her how important it is to have in his laboratory people who are well qualified and who have the ability to do this sort of job. If we in this country are serious when we say that we want technically qualified people in order

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to carry on the jobs which are essential to industry, then it seems to me that we must make available to them the opportunities to get their qualifications. I should have thought that this amendment was a very simple and clear way of guaranteeing that people who want such qualifications can get them and that therefore industry, which requires such people, can get them in the particular fields in which they are wanted.
Lord AVEBURY: My Lords, if I may briefly comment on the Minister's speech, she said that mandatory awards are already available for courses of this type, and that is perfectly true. But the student I am talking about in the amendment is somebody who has become redundant in, for example, the British Steel Corporation. He will have to accept a very catastrophic fall in his standard of living if he is to live on a grant as compared with the remuneration he was getting from his employment immediately prior to the date on which he became redundant. If I may say so with great respect, that is not very much of an incentive to somebody of this kind to take an HND course or its equivalent. As for the Manpower Services Commission's schemes which the noble Baroness mentioned— the Youth Opportunities Scheme and the Training Opportunities Scheme— yes, there is a payment associated with the courses that they provide, including the full-time technical courses, but it is certainly not a generous one.
A friend of mine recently went on a TOPS course and was paid about £ 30 a week. He was a single man, without dependants, of course, but nevertheless a payment of that nature will not attract an enormous number of people to take the technician courses that we are discussing. As the noble Lord, Lord Taylor of Blackburn, has reminded your Lordships, the courses leading to these qualifications are not being filled. There is an appalling wastage of resources in the technical colleges, in that provision is made for a certain number of students who are not actually entering those courses.
If we are to treat this matter as seriously as it deserves, I honestly think that we cannot rely on provisions of a general
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nature, such as the Oxford TOPS, but we have to single out the education of technicians for the most exceptional treatment to meet the exceptional needs of industry. I dare say that it would not be sensible to press this amendment but to return to the matter when we have an opportunity to discuss engineering education in a wider context. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 54 not moved.]
8.22 p.m.
Baroness FAITHFULL Baroness FAITHFULL moved Amendment No. 55:
After Clause 20, insert the following new clause:—
A wards for Students in Social work
"There shall be mandatory awards for mature non-graduate students wishing to train for social work").
The noble Baroness said: My Lords, I speak with some diffidence and I almost feel that I ought to apologise for bringing forward yet another amendment concerning mandatory awards. I only hope that I can be as restrained and considerate as was the noble Lord, Lord Wigoder. At Committee stage I moved Amendments Nos. 201 and 202, which were paving amendments to Amendment No. 207, which sought,
"Mandatory awards for other courses as the Secretary of State shall prescribe by regulations".
This amendment is, rightly or wrongly, in more specific terms, as many other amendments have been earlier this evening.
The amendment is put forward primarily in order to meet the needs of the most vulnerable in our society— that is, those who are assisted by social service departments and voluntary organisations. I hope your Lordships will forgive me if for one moment I tell you what those duties are. Under the Mental Health Act 1959 social workers are responsible for helping mental patients outside the hospital in the community, and the Jay Report has recommended that many more patients should be discharged from mental hospitals and helped in the community. If that were to be done there would be a great saving of money.
Under the Chronically Sick and Disabled Persons Act the disabled are helped in the

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community and, if the report of the Warnock Committee is to be implemented, social services departments will need to help the disabled children in the community while the school helps them with their education. The elderly are helped under the Health Services and Public Health Acts, and here again many old people's homes are closing, with the idea that people should be helped in the community. Finally, under the Children and Young Persons Acts, children are being helped in the community rather than in custodial care.
I should just like to mention one particular area of difficulty in the work of social workers and that is in the area of battered children. If any of your Lordships have ever had to make up your minds whether or not to remove a child from home, hearing on the one hand the mother saying that she never hurt the child at any time and on the other hand seeing the child bruised and hurt, you will have had to make up your mind which decision to take: to leave the child at home or to remove the child.
In the past few years there has been— I think rightly— a change of direction for social workers. The intention is that they should give a better and more skilled service within the community. That means very skilled work by skilled people who are trained, but not only trained: they must have experience of life and maturity within themselves. By the same token of course it means that the very seriously vulnerable are left in custodial care and therefore the residential social workers also need to have maturity.
I ask two things. First, that the Government should consider widening the range of courses attracting mandatory grants— and I appreciate that those grants for mature non-graduate students would come through the local education authorities— and, secondly, that the Government should encourage local authorities to consider the training of older men and women who are non-graduates, who have gained experience in their early years in other spheres of life. Those who have had personal experience of tending people— married women, men retiring from the Services and so on, 35 years of age and above, would, with training, be of inestimable value. I know that 75 per cent. of students who gain the certificate
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of training in social work are over 25 years of age and of that 75 per cent., 30 per cent. are over 35 years of age. But I think we need more than that percentage and perhaps I may just say that last year of the young graduates there were 70 less training and therefore 70 fewer grants from the Department of Health and Social Security, which is the department which provides grants for graduates.
The cost of this would be approximately £ 1 million and I maintain (although obviously it cannot be proved at the moment) that it would be cost effective. Perhaps I may give one example. I am the chairman of the Adoption Resource Exchange. Last year we placed 100 handicapped children for adoption. Had they remained in care until they were 18 years of age they would have cost the country £ 2 million. The country has been saved that £ 2 million.
I join with the noble Lord, Lord Wigoder; I know that at the moment the country must not be extravagant, must look to costs and must consider its priorities, and therefore I know the difficulty of the Minister in agreeing to such a proposal. Therefore I hope that, as with barristers, she will give it consideration and thought, if not immediately, at any rate in the long term. I beg to move.
Lord WELLS-PESTELL: My Lords, it is with some diffidence that I enter the debate on this particular clause, bearing in mind that there are still 51 amendments before your Lordships. Whether we shall get through by 11 o'clock tonight, which I believe is the intention of the Government, supported, if I may say so, by the Opposition, remains to be seen. So perhaps I had better be brief, but I wanted to get that remark in because I think it is important that we should bear in mind the fact that we have another 51 amendments before us.
I want merely to cross the t's and dot the i's of the noble Baroness, Lady Faithfull. This is one of the rare occasions on which we see eye to eye. The only point I want to make concerns the validity of her request. We have a vast field of social services in this country, and whatever people may say about them, many of us on both sides of your Lordships' Chamber are justly proud of the contri-

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bution that they are making to society every day. But the fact remains that more than half the social service workers are in fact without training. In the main they are young and they are without training and the noble Baroness rightly said that what we need at the present moment are the mature, non-graduate students who have some contribution to make because they are bringing to social work, once they have received the basic training which enables them to understand what it is all about, a great deal of experience of life. Although they may not have done social work before, nevertheless they are often in a position to make objective judgments.
It is on that basis that I think the noble Baroness is perfectly right when she makes an appeal for the mature non-graduate students who wish to train for social work. I realise the difficulties. I do not have to appeal to the noble Baroness the Minister. She herself has had vast experience. I can remember when she was chairman of the Children's Committee in Oxford; I can remember when she was chairman of the Social Services Committee in Oxford. There is no need for me to make out the case for this. I am sure she will be in complete agreement. I merely wanted to support the noble Baroness.
Baroness SEEAR: My Lords, I should like very briefly from these Benches to support as strongly as I can this amendment. In the many years that I worked at the London School of Economics I saw a number of these older people come forward for training. There is no doubt the good candidates take the training extremely well and make very good use of it. The combination of maturity and training means that they can do a first-class job. What is more they stick, they do not leave. The younger trainee works very well for a year or two getting experience and then very often is off, whereas the older woman coming back will stay for the rest of her working life, and that may be 25 years. It is a very good investment.
Baroness MACLEOD of BORVE: My Lords, may I add my voice very briefly from the point of view of the courts, because I have had to deal with rather young very immature people who go out at my request to make social services reports. If I had had mature people who were able
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to talk to shoplifters, able to talk to people with marital problems, I am sure a lot of my troubles would have been lessened, and certainly theirs would have been, too. I would have got very much better reports than I did get from people who did their very best but who were very young and very inexperienced in life.
Lord JANNER: My Lords, may I add one or two words. I do not think there is any need to add to what has been said so very well by the noble Baroness and others who have spoken. I think the argument is strengthened by the fact that the Association of Municipal Corporations, of which I have the honour of being a vice-president, are entirely in agreement with this amendment. I do not think it needs any additional words of mine, but simply for the House and the noble Baroness to realise that those who are actually in touch with the whole matter are entirely in agreement.
Baroness HYLTON-FOSTER: My Lords, I should like to support this amendment. The noble Baroness reminded me a little while ago about the Moorgate disaster. The Red Cross members did not go there in the end to do the first aid that they were expecting to do, but were invited to take charge of the care of the relatives of the casualties in the disaster. By the time the relatives arrived it was after hours and there were no social workers present, so it fell to these mature boys and girls to look after the relatives and to try to help and advise them as to what they should do the following morning, where they should go to find out about death grants, pensions, mortgages and many other things. This was after they had taken the relatives to sort out the belongings of the casualties, the deceased. They then took them to the mortuary to identify the bodies, some of which were dismembered. I feel that this was an example of the support and guidance of more mature people being such a very great help to the young graduates, who, although trained in all these matter, because they are still young are very apt to be emotionally upset when confronted with very distressing cases. I would point out that in social work continuity is of tremendous importance, and the young do like to move around. I ask the noble Baroness, Lady Young, to bear these points in

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mind when deciding on mandatory financial awards for mature students in social service work.
8.35 p.m.
Baroness YOUNG: My Lords, I think it may be for the convenience of the House if I intervene at this point. I should like to say at the start that I do very much appreciate the valuable work undertaken by social workers, and the points that were so well made by my noble friend Lady Faithfull. We have heard a number of experts, including of course the noble Lord, Lord Wells-Pestell, who speaks from long experience on this subject. The present position about awards for social workers is that students who obtain places on degree courses in social studies— and these course may lead to a certificate of qualification in social work as well as to a degree— are eligible for mandatory awards on exactly the same conditions as students reading for a first degree in other subjects. There is no age barrier for the receipt of a mandatory award, and in fact the award regulations make special provision to pay a higher rate of grant for students who are over 26 years of age and who have been in full-time employment for three to six years immediately preceding the first year of the course. It is true that courses for the non-graduate diploma in social work do not qualify for mandatory awards, but students taking a two-year certificate course may be released on salary if they are already employed by a local authority. Otherwise, they may apply for a discretionary award from their local education authority.
My noble friend Lady Faithful] referred to the Department of Health and Social Security, and they do make awards to graduates taking courses for the certificate of qualification in social work, because a course for post-graduate studies is acknowledged to be the responsibility of central rather than local government. A year or two ago the DHSS did agree to divert resources from elsewhere to provide an extra 200 awards for graduate social work courses. They did so because of concern then being expressed that cuts in discretionary awards would seriously affect recruitment to the profession. In the event there was no demand for this extra provision, and the extra funds could now be made available only at the expense of
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other equally important programmes. Nevertheless, the initiative of the DHSS does illustrate that central departments of Government take very seriously exactly the kind of concern expressed by the noble Baroness, Lady Faithfull, the noble Baroness, Lady Seear, and other speakers. For my part I have taken very careful note of the points made and of the views expressed, and I shall certainly pass these on to my colleagues at the Department of Health and Social Security.
Particular reference has been made to the need to train mature students. I understand that about 30 per cent. of students studying for the certificate of qualification in social work are over the age of 35, which suggests that mature students are not being neglected. Indeed, I was quite interested to see that the figures show that 75 per cent. of what are known as CQSW students are 25 or over, 50 per cent. are 30 or over and 30 per cent. are 35 or over, which does suggest a rather higher age range than one would expect on other courses. I recognise that this does not in any way meet the point that my noble friend is making in this amendment. I do realise the great interest that has been shown in it from all parts of the House by people who are very knowledgeable in this matter. It is clearly the kind of thing that, if money were available, we should like to do. But at the present time it is no use my making this promise, because we do not feel able to extend the lists for mandatory awards for the reasons I have given on the other amendments. I hope that at any rate on some of the narrower points I have been able to offer an explanation to my noble friend, and that, with this, she will feel able to withdraw her amendment.
Lord MOTTISTONE: My Lords, I noted when my noble friend was speaking that she indicated that support for mature students who were employed by local government was available, but she did not mention anyone else. I speak on behalf of the National Society for the Prevention of Cruelty to Children which, being a charity, has great difficulty in getting expert, extra knowledge for its representatives in the field who are all of the older generation— many are ex-Servicemen as my noble friend Lady Faithfull has suggested. I hope that my noble friend on the Front Bench will seek to convey to her colleagues in the DHSS

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that perhaps they might think to extend anything that they have going—and I appreciate that perhaps it must not be more than it is at present—to charitable organisations as well as to local authorities. They work very closely together, they are complementary and they are not in competition. However, the same sort of expertise is needed by both, and I hope that perhaps that could be followed through.
Baroness FAITHFULL: My Lords, I am most grateful to those who have spoken and to the Minister for her understanding of this problem. Who, more than she—as the noble Lord, Lord Wells-Pestell, said—who has been the chairman of a children's committee? I know only too well the financial constraints throughout the country, and having aired this problem I hope that her right honourable friend the Minister in another place will take note of what noble Lords have said. My Lords, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 22 [School meals: England and Wales]:
8.42 p.m.
Viscount MOUNTGARRET Viscount MOUNTGARRET moved Amendment No. 56:
Page 21, line 11, leave out ("may") and insert ("shall have a duty to").
The noble Viscount said: My Lords, there are just under 50 amendments or so to go, but I believe that it is important that we should not hurry through something which I feel is of fundamental importance to the Bill. When Clause 22 was last debated in your Lordships' House it was about 6.15 in the morning. At that hour I do not think that many of your Lordships were particularly keen to have a prolonged discussion. I am not sure that the amendments that have been tabled in my name have been really thought through in much detail. I ask your Lordships' permission not only to move Amendment No. 56, but to speak to Amendments Nos. 59 and 60 which are consequential upon Amendment No. 56. The situation is rather complicated—at least it is to me—because I am a bit of a novice in these matters. However, I ask your Lordships to look at Clause 22(1)(a)
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where we see that it says that a local education authority:
"may provide registered pupils at any school…with milk, meals or other refreshment".
In these three amendments I am trying to impose an obligation upon local authorities to provide pupils with milk if those pupils are aged 8 years and under, and meals,
"suitable as the main meal of the day on days when the schools are open for instruction".
So, your Lordships can see that the three amendments all really dovetail together.
I am very conscious of the need to allow local authorities the freedom to conduct their affairs as they think best in the interests of their locality and also to avoid having too much dictatorial, centralised government. But I feel very strongly that there are times when the Government must lay down certain definite rules. Providing milk for children under the age of eight while at school, in my view, falls into that cateogry. If the Bill were to go through as it stands a local education authority might, for some reason, choose not to make use of the power that this clause at present provides. I think that it would be wrong to permit that eventuality, especially where milk is concerned. It is, and this is well accepted, an essential ingredient to good health.
As far back as 1943 the late Sir Winston Churchill, speaking on the subject of establishing a National Health Service on broad and sound foundations, at one point said:
"There is no finer investment for any community than putting milk into babies. Healthy citizens are the greatest asset any country can have".
I am not suggesting for one moment that children attending school are necessarily babies, but I suggest that certainly up to the age of about eight there is still the requirement for a regular good supply of milk into young children. If people get off the mark in the right way they will be healthy, one hopes, for the rest of their lives; but if one denies them the opportunity, then I think that we shall have much cause for concern.
I am sorry to see that my noble friend Lord Butler of Saffron Walden is not in his seat at present, because I should like to remind your Lordships of what he said so well during the Committee stage

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on 13th March. He said that the first decision he had to take was whether he could honestly disband and remove the whole of the meals and milk service to which he attached so much importance nearly 36 years ago and which he introduced. I do not think that that ought lightly to be disregarded.
It seems to me rather strange that, in 1944 when there was a serious shortage of everything, including food and milk, the Government of the day decided that it was correct to have a clause in the Education Act to ensure that young children received a regular supply of milk. Here we are, 36 years later, with apparently nothing like the shortage that existed then, but we are seriously considering abandoning what I believe to be the principle of good health. I should like to say at this stage that I have no vested interest to declare. I might be a farmer, but I do not have a milk herd and so I am not out to ensure that I have a regular sale of milk. I thought that I would get that comment in.
Another very important point—and I think that it is probably the most important of all—is that I do not seek to suggest that school milk or indeed meals for that matter (we are speaking on Amendment No. 60 as well) should be provided free. I emphasise that point because it was with some concern that this afternoon no fewer than six noble Lords, four of whom sit on my Front Bench, said to me, "Oh, we cannot possibly accept this amendment. There is no money; we must cut down. You cannot have free milk." I said that there was no question of providing anything free.
I ask your Lordships to be kind enough to bear with me for a few moments. I refer your Lordships to subsection (3)(a) where it clearly says that a local education authority:
"may make such charges as they think fit".
As far as I am concerned that will stand. Under subsection (3)(b) a local education authority may
"remit the whole or part of any charge that would otherwise be made if, having regard to the particular circumstances of any pupil"—
and so on. That is fair enough and I wish to leave it. It is absolutely right. There is no question whatever of suggesting that this provision should be made free of charge.
I am very concerned that, if we do have to test the opinion of your Lordships' House on this matter, there may be many noble Lords who are present elsewhere in the House, who have not heard what I have said, and they may come into the Chamber and be under a misconception. I wonder whether my noble friend might not do some sterling work elsewhere while I am here. However, I should like to make that point abundantly clear. In my view there is no question of making it free. If, for instance, a child is provided with half a pint of milk a day in the middle of the morning, at present this would amount to a mere 50p a week, which I suggest is a drop in the ocean in most parents' pockets compared to the expenditures they choose to make in other spheres.
As I have said, provision is already made under this clause for an authority to provide milk free of charge for certain categories of children whose parents clearly cannot afford to pay. Therefore, I can see no reason why the provision of milk should, in fact, cost the Government anything. I am advised by one or two of my friends who are councillors that their respective education authorities would not dream of stopping milk or, for that matter, meals. If that is so, I do not think that by imposing a duty upon them so to do as opposed to a provision whereby they only "may", that will cause any offence or, indeed, hardship. Nor do I think that it will cost them any more if they plan to continue the supply of milk or meals and they choose not to stop it: if there is a duty so to do, in the few isolated cases where a local authority may wish to stop this provision, I suggest that we are talking of a very small amount of money.
Therefore, would it not be right to ask my noble friend Lady Young to take another look at this and ask the Government to think again on it? When the clause was debated during the Committee stage it was about 6.15 in the morning. I apologise to your Lordships for not being present at the Committee stage, but I unavoidably had to be elsewhere. It was probably as well that I was not present, otherwise I would have raised this amendment, and at that hour of the morning I would not have been very popular had I started a debate such

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as this; obviously, the sitting had gone on for quite long enough.
I turn to the question of meals. Again, there is only the power to provide—they "may" provide meals of unspecified quality and of unspecified quantity. Many children spend most of their day getting to school and returning home. I am, of course, talking of the rural community. I accept that children in urban areas are probably the metaphorical stone's throw from their school and, therefore, that this does not apply to them. However, we should not forget the rural communities. Such children spend a long time getting to school in the morning and back home again late in the evening. It is just not good enough if, having arrived at school, for some reason or another no proper meal of any description whatever is provided for them. They should expect to have a proper meal. It is no good thinking that it is the duty of the parents to provide them with food. Noble Lords may think that it is the parent's duty to provide them with food, but children living in urban areas who might have to go home to lunch, may find that the house is closed; their father would be out at work, as would their mother. The parents do not want and cannot afford to be tied to the home in order to give little Willie a decent tuck-in. They send the children off to school and that is the end of it; they have their jobs to do.
Reference has been made to a provision for local education authorities to provide a place in which children can eat their food. I am sure noble Lords will agree that unfortunately there are times—I hope not too many—when children are sent to school without even a proper breakfast, let alone the possibility of taking anything to fill their tummies during the middle of the day—frankly, that is wishful thinking. As far back as 1944 Section 49 of the Education Act stated quite clearly that meals at school in the middle of the day were to be provided as being suitable as the main meal of the day. Thirty-six years later, with all the difficulties and troubles of the war behind us, I do not understand why we should seek to overturn that principle. I do not believe that it imposes a burden of financial stress upon the local authority to provide such a service, particularly as in the case of
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milk and in the relevant clause, local authorities have the power to charge people who can afford to pay for the cost of those meals.
There is the question of the child who leaves his home early in the morning, at 7.30 or 7.45, in order to be at school at 9 o'clock. Let us suppose that the local education authority does not take up the power provided at present under the clause as it stands. The child will attempt to concentrate on his education on an empty stomach from the time he arrives right up to the time he leaves school and finally gets home at night. I know what I would do if I were a child at school and had a break at lunchtime and no proper meal; I would go straight to the local shops and get some grub, have some fun and probably not return to school, which would be conducive to truancy. That is the wrong way to treat children. It is not conducive to learning; it is not conducive to good health and, as I say, it is conducive to truancy.
I am sure that many noble Lords will have very good arguments in support of that, so I do not want to cover all the ground myself. I simply want to try to understand why it is that after 35 years of providing a first-class service of school meals and milk for children, we are in danger of throwing it all away, when I am not sure that there will be any saving of any significance attached to it. I believe that we shall incur the wrath of the parents up and down the country, and that we shall be rendering a disservice to the health of those who follow us. Both these things I see as being counter-productive—the former in the near future and the latter in the longer-term. Nor, indeed, do I wish to appear to be ratting on my awn party, because this is not even a minor part of the Government's economic strategy, which I most wholeheartedly support and endorse. However, I believe that it is necessary and can only do good. I very much hope that my noble friend Lady Young will accept this amendment in the spirit in which it is moved. I beg to move.
Baroness YOUNG: My Lords, for the convenience of the House, may I suggest that we speak also to Amendments Nos. 57 and 58?
Lord DAVIES of LEEK: My Lords, as Amendment No. 57 is an identical amend-

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ment, instead of taking up the time of the House on Report, I shall simply move it formally.
Lord DENHAM: My Lords, perhaps the noble Lord would speak now and move it later.
Lord DAVIES of LEEK: My Lords, I shall speak briefly to it or, as someone has said, forever hold my peace. I shall be brief. We want to insert the word "shall", because if there is a change in the economic climate, we may not have confidence in the judgment of local authorities to provide a service which can be shown to be discretionary when they are under pressure by the Government to make expenditure cuts. It may not be this year or next year, but unless this duty is clearly spelt out in the Bill, we shall find areas of the country which offer no provision at all for midday meals or compensatory grants for schoolchildren. I think that is clear enough without any more talking.
The Earl of MANSFIELD: My Lords, I would ask the noble Lord, Lord Ross, if he were minded to speak to Amendment No. 73, or any other noble Lord for that matter who has Scottish interests at heart to consider that.
9 p.m.
Baroness ELLIOT of HARWOOD: My Lords, I should like to add a very few words from the point of view of the dairy industry—the milk industry, if you like—and also because I support entirely the views that have been expressed by the noble Lord who moved this amendment on the subject of milk in schools. I have had a far longer association with milk in schools than anybody in this whole assembly since it was way back before the war that Lord Boyd-Orr, and my husband, made the original inquiries and tests about milk and the value of milk for growing children and came out with the scheme which has been running for years and years known as the "Milk in Schools Scheme". So I support that wholeheartedly.
However, there is one thing today which is different from even then. I do not know whether the noble Lords realise that a national contribution of 2p per pint gains for us an EEC subsidy of 8p per pint. Surely when we are all very worried about
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the amount of money we spend at the EEC, this is a very good thing indeed. If this goes through and milk is not provided in schools or is provided in a much smaller way, the milk producers will lose 90 million litres of milk a year, which is £3 million over the price of milk for manufacture. I am not in the dairy industry so I speak without any particular personal interest but the £3 million in the dairy industry will be a very severe knock to dairy farmers and will have to be made up in some way, probably by subsidies.
Then, as has been said, the children will lose a valuable source of nutrition and we in the United Kingdom at the moment spend £15 million at the existing rate, and we get £15 million back from the EEC. We also get an additional £60 million which we shall lose, because if we do not have this milk scheme which is being supported by the EEC then we are going to be in a very bad way. In other countries milk is being subsidised quite considerably by the EEC. In Denmark about two-thirds of the children get milk; in Germany I believe they do everywhere, except in Hamburg, and all subsidised by the EEC.
I think we would be doing very severe harm not only from the point of view of the schoolchildren—and I am not going to mention that, since it has been ably dealt with by the noble Viscount, Lord Mountgarret—but from the point of view of what we can get for the dairy industry from the EEC in grants. If we do not take this, I think we shall be doing very severe damage to the dairy industry, and I wholeheartedly support what has been said about this and hope very much that the Government will realise what this means to us.
Baroness PHILLIPS: My Lords, I should like to follow the noble Baroness and say that she has introduced a new, real and practical note which we always rely upon her to do in these debates. I am not very hopeful that the Government will take any notice of any of us on this. We all know that Governments only respond to the people using their feet and voting against them. As one of the noble Lords has said earlier, so many of their Lordships are partaking of their own milk supply at this moment that they are not able to be present to hear our arguments.

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We come back to the old argument in this clause. Of course, we know that the good local authorities will always provide the milk and the meals, but the moment you give some kind of option like this, those who want to save on it will certainly save on it. I am an ex-teacher and I should like to say that one of the things so often bandied about is that things are better today than they were. Yes, they are, but the fact that parents have more money does not always mean that they arc prepared to spend it either on children's milk or meals. If we are going to have some kind of measurement by which those who are on supplementary benefit or one parent families will receive these things, that is excellent. But I am afraid it will leave a lot of children without the necessary milk or meals because the parents either will not or cannot give them the money. In some cases, I am sorry to say it is because they will not.
The point was lightly touched upon about truancy. This is a very real point and I should like to tell the noble Viscount that urban schoolchildren also have to travel. My bus each morning is filled with children having quite a long journey to school, so if they had to get home in the lunch hour it would be virtually impossible because the lunch hour is not long enough. I think we must dispel this cosy illusion of children able to nip round the corner and have a meal. It is practically impossible now except for primary schoolchildren.
What do we see? Those children will be given what they are given now, they will probably be given 20p to spend on the meal. They cannot get a meal for 20p so they will buy a packet of crisps. I am not sure you can even buy that for 20p now and they will range about the streets getting into trouble. I can tell your Lordships there is more trouble during the lunch hours in our big cities than at any other time during the day, and I speak as one with knowledge of juvenile delinquency.
I would remind the Government yet again that it is a waste of money to give funds to the Home Office to research into juvenile deliquency, while at the same time restraining the amount of money that is available in this connection. So we must make it mandatory on the local education
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authorities to provide this. I would go even a little further than the noble Viscount and say that I should like to see it free as well. Let us face it; the total amount it will cost is really very little.
If the Minister, when replying, says that the previous Government had some kind of inquiry and then did not act on it because of the General Election. I can only reassure her that, had they acted on it, there were a number of us from behind them who would have spoken against it, because I think it is absolutely vital that schoolchildren should be fed and that they should have their milk.
We are told how healthy children are today. This is one of the reasons they are healthy, and I make a strong appeal—not very hopefully, because I am not quite sure how large our troops are—at least to let us go down fighting for the cause of the children.
9.8 p.m.
Viscount MASSEREENE and FERRARD: My Lords, I am sure that I am right in saying that under Clause 22(2) a local authority has to provide free meals if a family is drawing supplementary benefit or family income supplement. That means that they are earning £3,000 a year. Surely, any parents earning between £4,000 and £10,000 a year can afford to give their children a meal at midday. They can afford to pay the local authority for so doing. If they are so selfish when they are earning that amount of money that they will not do that, I think they ought to be brought to court. I do not think that that would be possible under our existing law, but I think that there should be a law to that effect.
It is far better if it is left to the discretion of the local authority because the teachers (I know that the noble Baroness, Lady Phillips, was a teacher) surely know the background of the children, the family background, and I should have thought it was far better to leave it to the discretion of the local authority, the administrators, and the teachers. My noble friend behind me said that when we debated this in the early hours of the morning—in fact, the rather late hours of the morning—it was not properly debated. But it was debated for a long time. I was there, and I remember it well. In fact, I will never forget it. The Committee came to a

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decisive decision then, and with respect to your Lordships I think we are rather wasting our time. I close by saying that I cannot support this amendment.
Baroness MASHAM of ILTON: My Lords, I think it is time for the CrossBenchers to speak, and especially as I had my name to the amendment. I fully disagree with the noble Viscount who has just sat down. I fully support all the amendments dealing with food and milk, both English and Scottish. First, I should like to ask the Government why there is no safeguard in the Bill that children will not go hungry while attending school? Dealing with food, this Bill as it stands seems to encourage material interests for local authorities rather than safeguarding the needs of children. This just is not realistic. Are our children not the best investment we have for our future?
Over school meals, I can assure your Lordships that there is great concern among teachers, and an ex-teacher has just explained this to us. I have just spoken to my noble friend Lady D'Arcy de Knayth, who has been attending a school governors' meeting at Maidenhead this afternoon. The head teacher at that school did a survey of children at his school who brought sandwiches; seventeen out of twenty-four of the six and seven year olds pack their own sandwiches. They select the food they take to school themselves. This, my Lords, is Maidenhead—an affluent middle-class area.
What happens to the children who find no food in the house? The same headmaster did another survey in another school and found that many of the children did not get one cooked meal from one Sunday to the next. This may be difficult for your Lordships to believe, but this is the sorry state of our modern society, and this is what we have sunk to. Not long ago I attended a study day at a special school near Stockton organised by general practitioners. We were all shocked at the short hours of the school working day undertaken by the children. The head teacher told us that very often the ambulance men who fetched the children had to get them out of bed and dress them while the parents slept off their drunkenness from the night before. The head teacher told us that he had to give these children breakfast. He could not teach hungry children. What will happen
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to small children who have no food when they come to school and whose parents are not on social security?
I have worked at a borstal for years. I have seen many 15 year-olds coming in with lice and sometimes scabies. Very often they are small and weedy. After a few months of regular meals these boys become fit and alert. I think that most local authorities will provide some sort of food. What is the reason the Government have not written this need into the Bill? Education surely is not just about academic subjects. It should be educating our children to be responsible, well organised citizens, not "sandwich kids", who do not know what a well-balanced cooked meal is. It seems to me that the job of the local authorities should be to try to encourage parents to take up the school meals for their children and to appreciate that that is good practice.
Lord MOYNE: My Lords, it seems to me that noble Lords who have supported the amendment have been speaking, and I have much sympathy with their view, in favour of the provision of milk or meals but the amendment would make it mandatory to have charges. It does not make it mandatory to have meals, unless I am misunderstanding the amendment, and I apologise if I am.
Lord ROSS of MARNOCK: My Lords, I think the changes we suggest would make mandatory the provision of meals, whereas at present, as I understand it, the Bill only empowers a local authority to do it. This is a step backwards in respect of both meals and milk. I was touched by what the noble Baroness, Lady Elliot of Harwood, said about milk. It was her husband, Walter Elliot, who, as Minister of Health, introduced milk in schools; it was one-third of a pint, one penny for those who paid and those who required it and could not pay for it got it for nothing. At that time I was teaching in the Gorbals in Glasgow and I know the value it was to the children in school.
I am appalled that in this day and age, when we are giving butter to the Russians at a cheap rate, we should be denying our own children the benefit of surpluses of milk in respect of which our own farmers must pay levies. Remembering that our dairy farming is based on liquid

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consumption, I do not know whether the Government realise what is happening to our dairy farmers today. Even dairy farmers in Ayrshire are going out of business, but there will be another time to discuss that. Considering the facts which the Minister gave us in relation to finance from the EEC, it is nonsense not to provide this milk free to all.
However, I want to speak also about the whole question of meals, because the provision of meals is much older in England, Wales and Scotland than the provision of milk. It started way back in 1906 when, prompted by the discovery that youngsters joining the army at the time of the Boer War had had to be thrown out because of their unfitness, a Royal Commission was established and recommended that local school boards, as they were in those days, should provide meals for necessitous children.
We are now going backwards, way back from 1980 to 1906, and I do not know what the Government are thinking about when we are talking of progress. We should speak not about free meals but about guaranteed meals, because there will be those who will get them free and they will not necessarily all be poor; the poverty trap is such that coupled with the changes that are being made, many who are just as poor will be denied what is being given under the clause. During the war it was realised that it was not just a question of dealing with those who were undernourished; we had to try to prevent that undernourishment. It was that which prompted the development of the school meals service.
At that time the take-up of meals was, I think, about 20 per cent. and the Government during the war—and goodness knows, if we are hard up now, they were harder up then—encouraged local education authorities to expand the meals service. We eventually got it up to 50 per cent. and indeed at that time, in 1943, it was expressed that the aim should be a take-up of 75 per cent., going on to make it free. The Tory Government in 1953, and again in 1971, took away the freedom of local authorities to do things as they thought fit. It was in 1971 that the Tory Government introduced the standard scheme. They had tried before on the basis of a model to get local authorities to get things together,
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but they found that of 35 local authorities in Scotland there were 22 different schemes and there was unfairness all round. The party opposite must live with their past and, in this matter, it is not a bad past; for 11 years there was no change in the cost of school meals, and during that time the take-up rose to its highest.
A Labour Government, as we have been told, increased the charge in 1968. But what the Minister failed to tell us was that at that time we also introduced increased family allowances.
There has always been a relationship between school meals and financial support for children. This is the dilemma that the Chancellor is facing today as a result of the decisions that are being taken now. Saving money on school meals, putting the burden more heavily on families, means that child support will have to be increased. The actual fact is that the Tory Government, from I think 1958, right through until 1964, made no change in the cost of school meals. It was left to a Labour Government to deal with the matter about four years later. I remember arguing about it at the time and drawing attention to the fact that eventually the cost would be greater because an increase in family allowance would be needed. That is what has happened.
Let us look at what is going to happen. Already the uptake of school meals is decreasing, and the children are suffering. I arrived in Glasgow last Friday wondering, because of the snow, whether I would be able to get a train down to where I live in Ayr. Meantime, my young daughter was travelling from Ayr to where she teaches at Auchinleck Academy, because the children were at school, having travelled through the snow. Many of them had left home at eight o'clock in the morning, travelling from Muirkirk and Glenbuck. Glenbuck is where they have a football team called Glenbuck Cherrypickers, or at least they had one. That is where Shankley comes from. We produce good footballers, as well as good men. They do not all come from Aberdeen.
The point is that there are children travelling from distant farms, from Catrine, from Mauchline, from Sorn. The noble Lord, Lord Strathclyde, will know what I am talking about. The

733
children from the area in which he lives receive their secondary education in Auchinleck. Children also travel from Drongan, from Ochiltree. When do they leave home? When do they get up? When do they have their breakfast? Indeed, as the noble Baroness, Lady Masham of Ilion, asked, do they get any breakfast? Breakfast will have to be at 7 or 7.30 in the morning. They do not get back home until 4.30 or 5 o'clock at night, and now there is no guarantee that there will be a hot school dinner for them. This is really disgraceful.
The Secretary of State for Scotland has more to answer for than has the Secretary of State for Education and Science, because he has all of the resources of the Scottish Office to play with. We established that the Secretary of State for Scotland can move resources from one department to another, from roads to education, and so on. That cannot be done in the department of the noble Baroness. They are tied to what they have there. I say to noble Lords, you can do many things in Scotland for the benefit of Scotland; you could learn much from us.
There has come from Downing Street a diktat that Scotland has to do the same as England. That is why we are covered in this Bill. Look at it, look at the clauses. There are only two now in respect of Scotland. We were dragged in here for this budgetary purpose of saving money; and this is the wrong way to save money.
The same is true of the Catholic schools. Consider secondary education in Kilmarnock. The children have to travel from as far as Stewarton, from Kilmaurs; they have to travel for miles and miles. I mentioned Kilmaurs; that is where Lord Boyd-Orr was born. So we have history on our side. We have representatives of both sides of your Lordships' House on our side on this one. I say to noble Lords drop this one, as you dropped the transport clause.
Viscount RIDLEY: My Lords, may I ask one or two questions which I think must be asked in this connection? First, is this Bill not about freedom for local authorities; the freedom to provide, within the inevitable limits of the economy, the best education service that they can? They may decide whether or not in certain
734
areas it is best to provide a hot meal. They may prefer to spend their money on teachers, or in other ways. I do not think that the amendment would do anything to help local authorities in the educational field. I do not think that the proposers of the amendment have at all considered what it might cost to provide a hot school meal which in fact may not be required. The waste, the expense which would be involved could be considerable.
Secondly, I wonder whether anyone who says that the school children must have a meal, otherwise they will starve—and we have heard many noble emotions on this point tonight—has considered what happens during the 16 weeks when the schools are closed. What happens on Saturdays and Sundays during the school terms? About half the year there are no school meals—there were not even under the previous Government, for that matter. What happens then to these children who are deprived? Is it necessary that we should keep the schools open for 365 days a year to provide meals? Because that is the logic of the amendment before us.
Viscount MOUNTGARRET: My Lords, would I be entirely out of order if I—
Viscount RIDLEY: Yes, my noble friend would. I shall be very brief. I apologise for speaking at all, but I think that in her reply the noble Baroness might be able to tell us something which I think we should know. What other countries in the Western World or in Western Europe provide school meals at all, whether they are free, hot, cold or otherwise? I do not think there are all that many, but I think we should like to know.
Lord HYLTON: My Lords, in reply to my noble friend Lord Ridley, there are two possible things at least which school kitchens can do, and which some of them are doing already. One is to provide meals-on-wheels for old people, and the other is to provide meals at a fixed point for lunch clubs, and such like.
Baroness YOUNG: My Lords, my noble friend Lord Mountgarret, in moving his amendment, said—I think I am quoting

735
him correctly—that he had not been here at the Committee stage of the Bill. I think it is very unfortunate that he has not heard the previous debates on this matter, and has not listened to the very serious argument. We come now to a very late stage in this Bill, and I am bound to tell him quite frankly that I am very surprised that he should raise these arguments on a major matter, because if his three amendments are pressed to a Division and are carried, they will of course completely wreck Clause 22. They are wrecking amendments to Clause 22. I understand noble Lords opposite, because they have never pretended that they liked Clause 22 and wished to have it in the Bill. They have, in fact, made it clear that they do not. Therefore, it is perfectly right that, if that is what they believe, then that is what they should say. But I really would ask my noble friends to pause and think what it is that they are trying to do in this particular case.
We have been asked to make economies in the education budget. We all know that the country is living wildly beyond its means, and you do not have to be what I think the noble and learned Lord, Lord Gardiner, described as an ordinary housewife to appreciate that. I should have thought that anybody with common sense would realise that economies have got to be made. We looked carefully at the education budget, and we decided that they would be made in three areas—meals, milk and transport. The House has decided, and the Government have accepted, that there will be no economies in transport. If these amendments were carried there would be no economies on meals or milk as well, and we would therefore be moving economies that local authorities are going to be required to make of the order of £200 million annually. Just pause and think what this is going to mean in terms of teachers, in terms of books and in terms of all the provisions. I really think that some of my noble friends ought to consider these matters very carefully before talking in the terms they have used.
The fact is that school meals cost £600 million annually, which is 11 per cent. of the school education budget. This is (we have had this) on the production of the traditional school dinner. One of the reasons why it costs so much is that it is in fact very labour-intensive. In 1978–79,
736
less than one-third of the cost of the meal was spent on the food; the rest went on salaries, wages and overheads. What the local authorities asked of us—and my noble friend Lord Ridley put this very well—is that they should have the power to provide meals, and not be required to provide a meal necessarily suitable to be the main meal of the day. What this clause does is to give local authorities the power to provide the type of meal that they think is best and to charge for it what they think is right, with two provisos. The first is that they must provide a suitable meal for families on supplementary benefit and family incomes supplement free of charge; and the second is that they must provide a place where families whose children bring sandwiches can eat their sandwiches. But apart from this, they have discretion to provide what they believe to be right.
Experiments in a number of schools with simpler meals, including cafeteria-style meals, in fact show that, as a consequence of changing from having a meal suitable to being the main meal of the day, the take-up is higher; and in almost every case of which I have heard of a school which has changed to this system, more children are eating a meal at school than ate one before. Whatever the noble Lord, Lord Ross, may say about Scotland—and far be it from me to speak about Scotland; my Department does not run in Scotland, and even what my noble friend Lady Masham said about England—the fact is that only half the number of secondary schoolchildren eat school meals nowadays and only three-quarters in the case of the primary school children. I do not know what happens to the other 25 per cent. of primary school children. I think it a terrible reflection on British family life to assume that most mothers do not give their children breakfast—and it is not very difficult to tip cornflakes into a bowl and that is what we are talking about—or fail to feed their children in the evening or give them nothing to eat at weekends or feed them during the school holidays. To base our policy on the assumption that no child is fed at any time except in school would not be conducive to a sensible policy.
Of course, we must look after those who are the poorest—and this we are doing. We have discretionary powers for the local authorities to limit charges in any cases where they believe this to be right, on

737
the basis of experienced local authorities knowing which children are at risk and which need to be helped. I think that we are suggesting in a most extraordinary way that local education authorities (assuming that this Bill is passed) will decide in the summer term to wind up the school meals system. I am sure we are not going to see anything like that. We are going to see that in the difficult economic situation that the Government face, we have an opportunity to make economies in the non-educational part of the budget. We are making provision for the poorest families; and giving a discretion which the local authorities have asked for. I would say to my noble friends who will not support us on this subject: "Remember you are committing the education budget to finding £200 millions in some other sphere; and this would be an irresponsible thing to do at this stage of the proceedings."
Baroness ELLIOT of HARWOOD: My Lords, my noble friend did not mention that we are going to lose £60 million from the EEC if we cut down on the distribution of milk.
Lord PITT of HAMPSTEAD: My Lords, the noble Baroness is usually straightforward in the way she replies to debates, but she was not really quite straightforward on this occasion; because the debate is not about whether or not there will be charges for meals. That has been settled. It is about whether or not, in addition to the local authorities being required to provide meals at midday for people on supplementary benefit, they should be required to provide it for others as well. That is the difference. This £200 million which she flashed in the air is not really true.
The EARL of SWINTON: My Lords, I am bound to be in trouble here. Whichever way I go, I shall offend on this occasion either my noble friend Lady Young or the equally noble Lady, my wife. I will take my courage in my hands and say that I side completely with my noble friend Lady Young.
Baroness MASHAM of ILTON: Oh!
The EARL of SWINTON: My Lords, I hope that whatever your Lordships
738
think about this, you will wish me well in the corning 24 hours. If I turn up for the forestry debate tomorrow with two black eyes, you will know what has happened. I feel that this is putting a duty on the local education authority. I was going to ask my noble friend Lord Mountgarret what would happen if this amendment were carried because it says that the local authorities "shall have a duty to" provide pupils at any school with milk and then this meal. What will happen to this milk which will be on offer and charged for, and what will happen to the meals which will be there, if the pupils decide they cannot afford to pay for them? —or perhaps their parents will not have sent the money. I hasten to say that I do not agree with my noble friend Lady Elliot about milk being good for you. I was brought up on milk—and look at me now! I can say in front of your Lordships' House that I do not think it did me a lot of good. Various friends have accused me of putting on weight in later life by overeating. But I can say that I was very nearly my present size when I went to primary school. That was because of free milk.
Milk cannot be taken on a sale or return basis. The local education authorities are going to have, by statute, to produce milk and meals for all children at school. There is going to be an awful waste and administrative expense. A lot of it is not going to be used. What are we going to do with it? I am not taken in by grants from the EEC. Perhaps I am letting down the NFU as well as my wife on this occasion. I am a member of the NFU, though I do not support this particular milk lobby. There is going to be awful wastage and a lot of food will be thrown away. It is going to be an unnecessary expense. Somebody has to administer it all. If this amendment is pressed to a Division, I shall vote with the Government and against my noble wife.
Viscount MOUNTGARRET: My Lords, may I ask my noble friend Lady Young whether I am to understand that, despite the fact that power is there for local authorities to make charges for meals or milk for pupils who can afford it, none the less it will cost the authorities some £200 million a year? I should like to be clear on that point?
Baroness YOUNG: My Lords, by leave of the House, my reference was that, if all these amendments taken together were passed, this would be the effect. They are interleaved amendments.
Lord HUGHES: My Lords, I should like to follow on that point. I do not understand the £200 million. The purport of the Bill, as it stands, is to leave discretion to the local education authorities. It should at least be a possibility that all of these authorities would exercise that discretion by continuing to give meals and milk. The Minister obviously is on fairly sure ground when she assumes that not all the education authorities will act in that way. On that basis I would not disagree with her. I do not understand how she is able to make the calculation that the authorities in exercising their discretion will save £200 million.
Several noble Lords: Vote!
The DEPUTY SPEAKER: (Viscount Hood): My Lords, is the noble Viscount
pressing his amendment or withdrawing it?
Viscount MOUNTGARRET: My Lords, I think that in view of what has been said may I please, by leave of the House, make —
Several noble Lords: No. Put the Question!
The DEPUTY SPEAKER: Is it your Lordships' pleasure that the amendment be withdrawn?
Several noble Lords: No!
The DEPUTY SPEAKER: The Question then is that this amendment shall be agreed to.
9.38 p.m.
On Question, Whether the said Amendment (No. 56) shall be agreed to?
Their Lordships divided: Contents, 63; Not-Contents, 88.

CONTENTS

Bacon, B.

Hatch of Lusby, L.

Ritchie-Calder, L.

Balogh, L.

Houghton of Sowcrby, L.

Rochester, L.

Barrington, V.

Howie of Troon, L.

Ross of Marnock, L.

Birk, B.

Hughes, L.

Seear, B.

Blease, L.

Hylton, L.

Sefton of Garston, L.

Bolton, L.

Janner, L.

Simon, V.

Boston of Faversham, L.

Jeger, B.

Stewart of Alvechurch, B.

Brooks of Tremorfa, L.

Kaldor, L.

Stewart of Fulham, L.

Coilison. L.

Kirkhill, L.

Stone, L.

Cooper of Stockton Heath, L.

Lee of Newton, L.

Strabolgi, L.

David. B.

McGregor of Durris, L.

Taylor of Blackburn, L.

Davics of Leek, L.

Maelor, L.

Taylor of Mansfield, L.

Elliot of Harwood, B.

Masham of Ilton, B.

Underhill, L.

Elwyn-Jones, L.

Mishcon, L.

Wallace of Coslany, L.

Evans of Claughton, L.

Morris of Kenwood, L.

Wells-Pestell, L.

Galpern, L.

Mountgarret, V.[Teller.]

Whaddon, L.

Gardiner, L.

Northfield, L.

White, B.

Goronwy-Roberts, L.

Peart, L.

Wilson of Radcliffe, L.

Gosford, E.

Phillips, B.

Winstanley, L.

Gregson, L.

Pitt of Hampstead, L.

Wynne-Jones, L.

Hale, L.

Ponsonby of Shulbrede, L. [Teller.]

Hampton, L.

NOT-CONTENTS

Abinger, L.

Cullen of Ashbourne, L.

Fraser of Kilmorack, L.

Airey of Abingdon, B.

de Clifford, L.

Gainford, L.

Amherst of Hackney, L.

De La Warr, E.

Galloway, E.

Armstrong, L.

Denham, L.[Teller.]

Gibson-Watt, L.

Balerno, L.

Drumalbyn, L.

Glasgow, E.

Bellwin, L.

Dulverton, L.

Glenkinglas, L.

Belstead. L.

Eccles, V.

Greenway, L.

Bradford, E.

Elton, L.

Gridley, L.

Campbell of Croy, L.

Enniskillen, E.

Grimston of Westbury, L.

Cathcart, E.

Faithfull, B.

Harvington, L.

Clitheroe, L.

Falkland, V.

Henley, L.

Cork and Orrery, E.

Ferrers, E.

Hill of Luton, L.

Cottesloe, L.

Fortescue, E.

Hives, L.

Holderness, L.

Mottistone, L.

Strathcarron, L.

Hood, V.

Mowbray and Stourton, L.

Strathclyde, L.

Hornsby-Smith, B.

Newall, L.

Sudeiey, L.

James of Rusholme, L.

Nugent of Guildford, L.

Swansea, L.

Kimberley, E.

Orkney, E.

Swinton, E.

Long, V.

Renton, L.

Teviot, L.

Lyell, L.

Ridley, V.

Tranmire, L.

McFadzean, L.

Rochdale, V.

Trefgarne, L.

Mackay of Clashfern, L.

St. Aldwyn, E.

Trenchard, V.

Macleod of Borve, B.

St. Just, L.

Trumpington, B.

Mancroft, L.

Saint Oswald, L.

Tweedsmuir, L.

Mansfield, E.

Sandford, L.

Vaux of Harrowden, L.

Margadale, L.

Sandys, L.[Teller.]

Vernon, L.

Massercene and Fcrrard, V.

Selkirk, E.

Vickers, B.

Middleton, L.

Sempill, Ly.

Vivian, L.

Montgomery of Alamein, V.

Spens, L.

Young, B.

Morris L.

Resolved in the negative, and amendment disagreed to accordingly.

9.46 p.m.
Lord DAVIES of LEEK Lord DAVIES of LEEK moved Amendment No. 57:
Page 21, line 11, leave out ("may") and insert ("shall")
The noble Lord said: My Lords, I beg to move Amendment No. 57 formally.
The DEPUTY SPEAKER (Viscount Hood): The Question is that Amendment No. 57 be agreed to. As many as are of that opinion will say "Content": to the contrary, "Not-Content". I think the Not-Contents have it.
Lord DAVIES of LEEK: Content!
The DEPUTY SPEAKER: Clear the Bar.
Tellers for the Contents have not been appointed, pursuant to Standing Order No. 50. A Division therefore cannot take place and I declare that the Not-Contents have it.
Amendment disagreed to accordingly.
Lord DAVIES of LEEK Lord DAVIES of LEEK moved Amendment No. 58:
Page 21, line 12, leave out ("milk, meals or other refreshment") and insert ("shall provide a meal in the middle of the day suitable in all respects as the main meal of the day").
9.51 p.m.
On Question, Whether the said amendment (No. 58) shall be agreed to?
Their Lordships divided: Contents, 50; Not-Contents, 84.

CONTENTS

Bacon, B.

Hale, L,

Pitt of Hampstead, L.

Balogh, L.

Hatch of Lusby, L.

Ponsonby of Shulbrede, L. [Teller.]

Birk, B.

Houghton of Sowerby, L.

Blease, L.

Howie of Troon, L.

Ritchie-Calder, L.

Bolton, L.

Hughes, L.

Ross of Marnock, L.

Boston of Faversham, L.

Irving of Dartford, L.

Sefton of Garston, L.

Brooks of Tremorfa, L.

Janner, L.

Stewart of Alvechurch, B.

Collison, L.

Jeger, B.

Stewart of Fulham, L.

Cooper of Stockton Heath, L.

Kaldor, L.

Stone, L.

David, B.

Kirkhill, L.

Strabolgi, L.

Davies of Leek, L.

McGregor of Durris, L.

Taylor of Blackburn, L.

Elliot of Harwood, B.

Masham of Ilton, B.

Underhill, L.

Elwyn-Jones, L.

Mishcon, L.

Wallace of Coslany, L.[Teller.]

Galpern, L.

Morris of Kenwood, L.

Wells-Pestell, L.

Goronwy-Roberts, L.

Northfield, L.

Whaddon. L.

Gosford, E.

Peart, L.

White, B.

Gregson. L.

Phillips, B.

Wynne-Jones, L.

NOT-CONTENTS

Airey of Abingdon, B.

Blackburn, Bp.

Cottesloe, L.

Amherst of Hackney, L.

Bradford, E.

Cullen of Ashbourne, L.

Armstrong, L.

Campbell of Croy, L.

de Clifford, L.

Bellwin, L.

Cathcart, E.

De La Warr, E.

Belstead, L.

Cork and Orrery, E.

Denham, L.[Teller.]

Drumalbyn, L.

Holderness, L.

Renton, L.

Dulverton, L.

Hood, V.

Ridley, V.

Eccles, V.

Hornsby-Smith, B.

Rochdale, V.

Elton, L.

Hylton, L.

St. Aldwyn, E.

Enniskillen, E.

James of Rusholme, L.

St. Just, L.

Faithfull, B.

Kimberley, E.

Sandford, L.

Falkland, V.

Long, V.

Sandys, L.[Teller

Ferrers, E.

Lyell, L.

Selkirk, E.

Fortescue, E.

McFadzean, L.

Spens, L.

Fraser of Kilmorack, L.

Macleod of Borve, B.

Strathcarron, L.

Gainford, L.

Mancroft, L.

Strathclyde, L.

Galloway, E.

Mansfield, E.

Sudeley, L.

Gibson-Watt, L.

Margadale, L.

Swansea, L.

Glasgow, E.

Massereene and Ferrard, V.

Swinton, E.

Glenkinglas, L.

Middleton, L.

Teviot, L.

Gowrie, E.

Montgomery of Alamein, V.

Tranmire, L.

Greenway, L.

Morris, L.

Trefgarne, L.

Gridley, L.

Mottistone, L.

Trenchard, V.

Grimston of Westbury, L.

Mowbray and Stourton, L.

Vaux of Harrowden, L.

Harvington, L.

Moyne, L.

Vernon, L.

Henley, L.

Newall, L.

Vickers, B.

Hill of Luton, L.

Nugent of Guildford, L.

Vivian, L.

Hives, L.

Orkney, E.

Young. B.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendments Nos. 59 to 61 not moved.]
Clause 22 [School Meals: England and Wales]:
9.59 p.m.
Lord DAVIES of LEEK Lord DAVIES of LEEK moved Amendment No. 62:
Page 21, line 19, after ("supplement") insert ("or rent rebates or rate rebates.")
The noble Lord said: My Lords, in order to facilitate the proceedings, I think we could discuss together Amendments Nos. 62, 63 and 69. What this amendment does is to extend the possibility of aid to people who are on supplementary benefit or rent or rate rebates. The extension of the aid would be given and would provide the means to further categories. I beg to move.
Lord HYLTON: My Lords, I think this could be an important amendment and I say that because I believe it is the Government's intention to restore the real level of rent rebates to the value which they originally had when they were first introduced.
The EARL of MANSFIELD: My Lords, I shall address my remarks to Amendment No. 62 and with the greatest of speed say that Amendment No. 77 is four-square, but I am not going to say anything more after that! Amendment No. 62 seeks to impose on education authorities an obligation to ensure that provision is made free of charge for any pupil whose family is receiving a rent rebate or a rate rebate. Noble Lords will appreciate that this is an obligation which goes beyond even the authority's present duty and of course well beyond the duty imposed by the clause. Under the present law, authorities must provide free meals for two groups of children: the first group consists of those whose parents are receiving supplementary benefit and family income supplement and receipt of those benefits automatically confers entitlement to free school meals. These children are sometimes referred to as the "passport beneficiaries". Clause 25(2) continues to impose a duty in relation to these children.
The second group entitled to free school meals under the existing law consists of
746
those children whose parents qualify under the income scale set out under the milk and meals regulations. This generous scale at present extends entitlement to families with income well above the supplementary benefit or family income supplement level. Under Clause 23, an incomes scale would no longer limit undesirably the discretion which we wish local authorities to have to determine their own charging policy in the light of local circumstances and to remit the charges where they think it appropriate to do so.
The present amendment goes even beyond this and seeks to extend entitlement automatically to those children whose parents receive rate or rent rebates. I make no claim to understand the complicated rules concerning entitlement to benefit of various kinds, and still less can I explain them, but direct comparison between the scale governing entitlement to free school meals and that governing entitlement to rent and rate rebates is impossible because the former is calculated on the basis of net income and the latter on the basis of gross income. So, without knowing in some detail the circumstances of a particular family down to such matters as the cost of travel to work and the superannuation payments of the parents —items which are deducted with many others to arrive at the net income for the purposes of free school meals, it is quite impossible to say whether that family would be entitled to rent rebate and free school meals or to one only and not the other. I could go into the numbers in Scotland but, for the purposes of this argument, I do not think I need to.
The probability is that the amendment would require authorities to provide free meals for a larger number of pupils than they have to provide for under the present income scale, and of course it would impose a duty in relation to very many more pupils than the children covered by Clause 23(2) —that, of course, is the Scottish one —as at present before the House, those whose families are receiving supplementary benefit or family income supplement. So not only does this amendment apparently seek to restore the

747
position, it goes far beyond it. It runs completely counter to the Government's policy of giving authorities greater freedom to achieve the reductions in expenditure which we are requiring them to make. In the circumstances the noble Lord will perhaps see why the Government are not keen to accept this amendment.
Lord DAVIES of LEEK: My Lords, in view of the Minister's remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 63 and 64 not moved.]
10.7 p.m.
Viscount SIMON Viscount SIMON moved Amendment No. 65:
Page 21, line 30, at end insert ("or if they are satisfied that the effect of the charges under this section would be to cause that pupil's family to be poorer than they would he if their income were reduced to Family Income Supplement or Supplementary Benefit level".).
The noble Viscount said: My Lords, in moving this amendment perhaps I may for convenience also speak to Amendment No. 80, which deals with the position in Scotland. This amendment was drafted by my noble friend Lord Banks, who has an unrivalled knowledge about the operation of family income supplement and supplementary benefits. The object of the Amendment is to remove, so far as we can, the very serious poverty trap which arises because of the way in which this clause has been drafted. It is an increase in the poverty trap which is caused by the restriction of the right to free school meals and the freedom to charge for school meals at the local authorities' discretion.
When the right to free school meals is limited to those on family income supplement and supplementary benefit, I am given to understand that some 400,000 children who now get free school meals will have to pay. If the charge, to take an example, is 50 pence, this means payment of an extra £5 a week for a family with two children, and this is a considerable increase in the poverty trap at the lowest level, since immediately their income increases above supplementary
748
benefit and family income supplement level the family lose £5 a week as well as their other benefits.
The amendment has been drafted in order to ensure that the remission of charges would apply in all cases where the increased income which lifted the family off the supplementary benefit and family income supplement level would, after deduction of the charges for school meals, leave the income below those limiting levels; in fact, it would bring their income up to the family income supplement or supplementary benefit level. This would enable local authorities to taper off the meals charge by remitting in part or in whole, so that no family coming off supplementary benefit or family income supplement would be made poorer as a result.
It is an extremely complicated position, but I have great confidence in my noble friend Lord Banks, who most unfortunately could not be here today and who would have explained it with much greater skill and expertise than I. I hope something can be done to protect poorer families from this really rather frightening poverty trap should their income —perhaps because they have taken up work after being out of work —rise marginally above the supplementary income benefit level. I beg to move.
The Earl of MANSFIELD>: My Lords, I have considerable sympathy with the intention behind the amendment. There is no doubt that the poverty trap, which the amendment is designed to avoid, can present serious problems for the low-paid. As the noble Viscount has said, it can lead to families in receipt of supplementary benefit or family income supplement being worse off if their income increases because, as a result, they could lose the benefits that are linked to supplementary benefit or family income supplement as well as losing the actual benefit or supplement itself. Similarly, others not in receipt of either of those benefits might be better off earning less in order to qualify for them.
Nevertheless, there are some practical objections to attempting to deal with the problem in the way in which the amendment proposes. First, it would involve a local education authority in England in assessing family income according to two

749
different and complex sets of rules —that is to say, those in respect of supplementary benefit and family income supplement, neither of which are familiar to a local education authority because eligibility for these benefits is determined by the Department of Health and Social Security. That is the first point.
However, there are various ways in which a local education authority can alleviate the poverty trap problem. Under subsection (3)(b) a local education authority is required to remit the whole or part of the charge that would otherwise be made if, having regard to the circumstances, the authority considers it appropriate to do so. A number of local education authorities recognise the problems which can be caused by providing free school meals only for pupils whose parents are in receipt of supplementary benefit or family income supplement, and they are proposing to be more generous than this. I would commend their action to other authorities who, by simply complying with the provisions in Clause 22(2) and (3)(a) so far as the provision of free meals is concerned, may not have had adequate regard to the circumstances of pupils as is required by subsection (3)(b).
So, the most common method adopted by authorities is to retain an income scale form of assessment, albeit at a lower level than at present. But that is not the only method. It is consistent with our general approach to this clause —that is to say, of giving a local education authority the widest possible powers and expecting it then to use them responsibly in the light of local needs —that we should not prescribe what a local education authority should do other than to require it to remit charges, in whole or in part, where, having regard to the particular circumstances of a pupil or class of pupils, they consider this appropriate.
I do not think that I need address myself to Amendment No. 80. Clause 23(3) requires, in the same way, authorities to remit in whole or in part any charges for school meals which would otherwise be made, if they consider it appropriate to do so. That, I submit, gives ample scope for authorities to make appropriate arrangements if the situation which noble Lords fear appears likely to transpire, without burdening authorities with what I suggest would be an extremely cumbersome administrative commitment.
Baroness DAVID: My Lords, I should have thought that everything that the Minister has just said is a very good argument for having some sort of national scale. He has outlined the difficulties which the local authorities will face. They are not suited to doing calculations of this type. As regards these matters, it seems to me most important that there should be a national charge and a national scale for remitting charges.
Lord HUGHES: My Lords, the Minister, when talking to subsection (3)(b) and the power to remit, said that a number of authorities took account of the poverty trap and did remit. He then went on to say, "and I commend this to them". I cannot expect him to give an undertaking on behalf of this side of the Border. But, as regards the directions which are sent out in Scotland, will that commendation be carried out in writing rather than just in this statement to the House?
Lord ROSS of MARNOCK: My Lords, before the noble Earl answers that, are any directions to be issued in Scotland or for that matter in England and Wales? —because, if we are to give freedom to the local authorities, we do not then proceed to direct them. I remind the Minister that the position as he outlined it was the position that existed until 1971, when his Government decided that we should have a national scale, for the simple reason that, as I said before, in Scotland 22 different schemes came forward from 35 local authorities, despite the fact that the Government had issued a model scheme. The local authorities paid no attention to it. However, to get the best out of the Bill as it was then, the Tory Government introduced a national scheme. Now we are returning to the unsatisfactory position and flying flags declaring that this is progress. It really is nonsense.
The Earl of MANSFIELD: My Lords, perhaps I could respond to my two territorial comrades. Dealing, first, with the concern raised by the noble Lord, Lord Hughes, I do not think that my territorial ministerial status need put me off from conveying to my noble friend who sits next to me on this Bench what would seem to be, if I may say so, a sensible suggestion. I think that a circular will be issued, and in it these

751
matters will be made plain. The noble Lord, Lord Ross of Marnock, does not look wholly satisfied with that idea, but in the circumstances I think that it is the most practical one.
Lord ROSS of MARNOCK: My Lords, with the leave of the House —
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, order! With the greatest respect to the noble Lord, this is a Report stage and noble Lords can only speak once.
Lord ROSS of MARNOCK: My Lords, but what direction was used? —not a circular.
Viscount SIMON: My Lords, I do not know whether I am to take it that the speech of the noble Earl covered England and Wales as well as Scotland?
The EARL of MANSFIELD: My Lords, yes. With the leave of the House, may I make it plain —if I have to make it plain —that the greater part of my remarks were on the English amendment, which was moved by the noble Viscount, Lord Simon —Amendment No. 65 —and then I turned for a few sentences to deal with Amendment No. 80, because I hoped that thereby I would save the time of the House. However, in fact, everything that I said applies mutatis mutandis to both countries.
Viscount SIMON: My Lords, I am much obliged to the noble Earl. I have listened to the reply from the Government. Strangely enough, my noble friend Lord Banks, who has such great expertise in this matter, had anticipated that we might be told that there were great administrative difficulties in giving effect to his suggestion. He has studied the matter and he thinks that these administrative difficulties are not as great as they are made out to be. In a little note he sent me he says:
"It would seem that all that would be required would be a statement from the Department of Health and Social Security saying that supplementary benefit or family income supplement is of a specified amount and was being paid up to a specified date."
The local authority themselves are familiar with obtaining information about the income of someone applying for free
752
school meals because they have to do that in any case, and all they would have to do would be to deduct the first figure from the second figure in relation to the current levels. However, I appreciate that this would involve extra work. I was very happy to hear the noble Earl say that consideration would be given to advising local authorities, by way of a circular, that this is a desirable point with which to deal. On the assumption that he was speaking, as he told us, for England and Wales as well as for Scotland, I would be prepared to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 66 to 68 not moved.]
10.19 p.m.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved Amendment No. 69:
Page 22, line 3, at end insert —
("(6) The Secretary of State may make regulations extending the categories of pupils to whom subsection (2) above applies.").
The noble Lord said: My Lords, this is a very modest amendment, but it is also one that will test the Government's real intentions. As it stands, subsection (2) puts a duty on local authorities to make provision for children where the family is in receipt of supplementary benefit or family income supplement. What we are proposing in this amendment is not that those categories should be increased now, but that the Secretary of State should have the power to make regulations increasing the number of children for whom it shall be a duty for the local authority to make provision of meals.
Earlier in the debate the noble Baroness, Lady Young, was trying to frighten us all, particularly her noble friends, with the figure of £200 million. Quite a number of her noble friends were singularly unconvinced about the reality of this figure, which seemed to have been conjured out of the air. But that imaginary line of defence is not open to the Government on this amendment because it imposes no extra financial obligation at present. But it means of course that as the position of the country improves —I presume the noble Baroness shares the view that it will improve: we may have differences about that, but she presumably is of that opinion —it will be possible for more generous provision for school meals to be made.
This kind of provision in an Act of Parliament is very common in many different contexts. As regards decontrolled rents, for example, there was a provision that the Secretary of State could from time to time make orders extending decontrol as the circumstances seemed to warrant it. That is the kind of thing we are proposing here.
It seems to me that if the Government resist this amendment it is a reasonable assumption that they are resolved permanently to dismantle the school meals service. They can accept this amendment without any present financial obligation, undertaking merely an obligation as times improve to bring back the school meals service to what it is now. That is really all this amendment would put on them.
If they resist it, what conclusion are we to come to other than that the Government are not taking the action they are now taking because of an immediate financial emergency, but because they intend to make the dismantling of the school meals service permanent? If they do not intend to make it permanent, if the Government can say, "In these hard times we must reduce the size of the school meals service, but we are anxious, as soon as the country can afford it, to restore it", and if that is what they truly mean, I can see no reason why they should resist this amendment.
Lord MOTTISTONE: My Lords, surely when the prosperity returns to the country, when there is no chance of the noble Lords opposite ever being in power again, we shall get to a state where there are fewer people on supplementary benefit or receiving family income supplement —because the two must go together. The prosperity of the country is entirely centred upon people being in employment and receiving a full and decent wage so that they can pay for their own children's food. Surely, therefore, the entire purpose of this amendment is misconceived because it is based on a theory which assumes that there will be no prosperity, whereas if there is prosperity it is not needed.
Baroness YOUNG: My Lords, I should like to thank my noble friend Lord Mottistone for that argument, which I find really most useful at this moment.
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But perhaps I should say to the noble Lord, Lord Stewart, that although he is quite right in saying that there is no financial obligation contained in his amendment, we believe that we have made adequate provision and safeguards on school meals for poorer families, both by the provisions saying that those on supplementary benefit or family income supplement can receive free meals and, of course, by the discretionary provisions which are still available for local authorities to provide meals for those children who they feel need meals or who in certain circumstances need help. Those are there.
Secondly, the requirements in the Bill are, of course, minimum requirements. It is open to local authorities to provide free meals for children other than those on supplementary benefit and family income supplement. They are not prevented from doing that by anything in the Bill.
The answer to the last point of the noble Lord, Lord Stewart, is that what we are seeking to do on the whole of the school meals service is to make an economy in the non-educational part of the education budget; but we are leaving in the budget, even if local authorities do succeed in saving £200 million, £400 million, which is a very considerable subsidy indeed, which will go to help the poorer children for the discretionary provisions that local authorities may choose to make, and as a subsidy even for other children who will contribute no doubt more than they have in the past but may not in all cases pay a full economic cost.
I think we need not at this stage be drawn down the path suggesting that what we are proposing under the Bill is the dismantling of the school meals service. What we propose is something much more in keeping with the latter half of the 20th century. It is something that the local authorities have asked for, and I think we can accept that they will use their discretion sensibly. We believe that we shall have the type of school meal service much more suited to the rather more sophisticated children in our schools today providing the kind of meals they like, and I think we may find that the take-up increases. I see no reason for having a regulating power for the Secretary of State, which I think will simply appear to the local authorities that we do not trust them once again. I see no reason for supposing

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that they will not act responsibly, and I hope that the noble Lord, Lord Stewart, will feel that he can withdraw his amendment.
10.27 p.m.
Lord ROSS of MA RNOCK: My Lords, may I take it then that there will be no regulation directing local authorities to carry out their duties under subsections (2) and (3)(b)? In other words, there is only going to be maybe a circular, a recommendation, but no direction —no real recommendations as there were in 1953 and 1971, which were the framework of the creation of the service? This is vital because it means too that there will be no report from the local authorities to the Secretary of State be it in England, Wales or Scotland, as to how they are proceeding to carry out this power.
As the result of the refusal to intervene directly in this way by the Secretary of State —and this is a direct question to the Minister of State for Scotland —how many of the staff will he save in his catering advisory service? You might as well get rid of them all, and the same applies in England and Wales, because they have given reports on the dietary benefit of the school meals service and made recommendations against the "sandwich provision". Some of the things the noble Baroness has been saying tonight run counter to all the advice that she has in her own department from reports of the development of the school meals service.
The Earl of MANSFIELD: My Lords, may I answer the noble Lord's point? Under Clause 22 what we are giving the local authorities is a discretion, and therefore there is no question of a direction. You cannot invite a local authority to exercise a discretion and give it a direction at the same time. That would be a contradiction in terms, and that is why I said that there will be a circular which will make recommendations to the local authorities. I have no doubt that, as in Scotland on the whole they conduct their affairs in a fair, sensible and responsible manner, they will pay attention to the circular and comport themselves accordingly. As to the staffing results from this, I am afraid that I cannot answer that question tonight. I shall make inquiries
756
and either write to the noble Lord or possibly speak to him before the next stage of the Bill.
Lord BROOKS of TREMORFA: My Lords, the Government Front Bench has made great play throughout the whole of the passage of this Bill on the freedom it is giving to local authorities. But there is another Bill which will shortly come before your Lordships' House which is opposed in many respects by the local authority associations, and particularly by the Association of County Councillors, which is Conservative dominated. Is it not the case that many of the so-called freedoms which local government is being given in this Bill, much of which we would dispute, are going to be taken away from them in another Bill to come before your Lordships' House?
Apparently, there is to be a great reduction in the rate support grant and a new measure of the needs and resources of local government; there is to be a restriction on rate rises which local authorities may wish to impose on their ratepayers to maintain a level of services; and one must ask whether these two Bills are not inextricably bound up. Is there not a great deal of hypocrisy contained in this Bill, because local authorities will not at the end of the day have the freedom which Front Bench spokesmen opposite are saying they will have?
Lord STEWART of FULHAM: My Lords, the remarks of my noble friend Lord Brooks of Tremorfa were very much to the point. The noble Baroness, Lady Young, produced the usual argument: "The local authorities asked for it". If you make it quite clear to local authorities first of all that you are hanging them over the head by saying they will have a good deal less money, you will probably extract a request of some kind from them. The highwayman who says to his victim, "Your money or your life", could be fairly said to be giving his victim freedom of choice. That is rather the position in which local authorities have been placed, so I hope we will not have any more of that; it is intellectually beneath the level of the noble Baroness.
I rather preferred the more frank and robust reply of the noble Lord, Lord Mottistone, to the more elegant dressing

757
up by the noble Baroness, Lady Young. The noble Lord made it quite clear that if the country is hard up, we cannot afford a school meals service, except on a very limited scale. if the country is prosperous, we do not need it. It is quite clear, therefore, that he does not want a school meals service. When it comes to the point, he thinks it is more important to give income tax reliefs to people with incomes of over £10,000 a year than to provide school meals for children who may be in need. That is what it is all about.
Lord MOTTISTONE: If the noble Lord will give way —
Several noble Lords: No!
Lord MOTTISTONE: I think it is going rather far —
Several noble Lords: Order!
Lord ROSS of MARNOCK: Where is the Leader of the House?
Lord STEWART of FULHAM: My Lords, if it is not almost indelicate to mention such a subject in this House at this hour, the noble Lord's attitude comes dangerously near to a declaration of class war. Indeed, it is a remakable thing in this country today that people who would most bitterly repudiate the doctrines of Karl Marx seem most anxious to behave in a way which proves he was right. They quite brutally oppose the advantages of those who are already fortunate to the needs of those who are really in need, and that, as we all know, behind all these amendments and so on, is what we are really talking about. I therefore find the arguments of the noble Lord against the amendment morally repulsive and the arguments of the noble Baroness against it intellectually unsatisfying, and I invite my noble friends to press the amendment.
10.33 p.m.
On Question, Whether the said amendment (No. 69) shall be agreed to?
Their Lordships divided: Contents, 43; Not-Contents, 82.

CONTENTS

Avebury, L.

Irving of Dartford, L.

Seear, B.

Balogh, L.

Janner, L.

Sefton of Garston, L.

Blease, L.

Kaldor, L.

Simon, V.

Boston of Faversham, L.

Kirkhill, L.

Spens, L.

Brooks of Tremorfa, L.

Masham of Ilton, B.

Stewart of Alvechurch, B.

Clcdvvyn of Penrhos, L.

Mishcon, L.

Stewart of Fulham, L.

David, B.

Morris of Kenwood, L.

Stone, L.

Davies of Leek, L.

Northfield, L.

Strabolgi, L.

Elwyn-Jones, L.

Peart, L.

Taylor of Blackburn, L.

Evans of Claughton, L.

Phillips, B.

Underhill, L.

Galpcrn, L.

Pitt of Hampstead, L.

Wells-Pestell, L.[Teller.]

Hatch of Lusby, L.

Ponsonby of Shulbrede, L. [Teller.]

White, B.

Houghton of Sowerby, L.

Winstanley, L.

Howie of Troon, L.

Rochester, L.

Wynne-Jones, L.

Hughes, L.

Ross of Marnock, L.

NOT-CONTENTS

Abinger, L.

Dulverton, L.

Hives, L.

Airey of Abingdon, B.

Eccles, V.

Hood, V.

Amherst of Hackney, L.

Elliot of Harwood, B.

Hornsby-Smith, B.

Armstrong, L.

Elton, L.

James of Rusholme, L.

Atholl, D.

Enniskillen, E.

Kimberley, E.

Balerno, L.

Faithfull, B.

Long, V.

Bellwin, L.

Falkland, V.

Lyell, L.

Belstead, L.

Ferrers, E.

McFadzean, L.

Brougham and Vaux, L.

Fortescue, E.

Mackay of Clashfern, L.

Campbell of Croy, L.

Fraser of Kilmorack, L.

Macleod of Borve, B.

Cathcart, E.

Galloway, E.

Mansfield, E.

Clitheroe, L.

Gibson-Watt, L.

Margadale, L.

Cork and Orrery, E.

Gisborough, L.

Middleton, L.

Crawshaw, L.

Glasgow, E.

Monk Bretton, L.

Cullen of Ashbourne, L.

Glenkinglas, L.

Montgomery of Alamein, V.

de Clifford, L.

Gowrie, E.

Morris, L.

De La Warr, E.

Grimston of Westbury, L.

Mottistone, L.

Denham, L. [Teller.]

Harvington, L.

Mowbray and Stourton, L.

Drumalbyn, L.

Henley, L.

Moyne, L.

Newall, L.

Selkirk, E.

Trefgarne, L.

Orkney, E.

Sempill, Ly.

Trenchard, V.

Renton, L.

Strathcarron, L.

Trumpington, B.

Ridley, V.

Sudeley, L.

Vaux of Harrowden, L.

Rochdale, V.

Swansea, L.

Vernon, L.

St. Aldwyn, E.

Swinton, E.

Vickers, B.

St. Just, L.

Teviot, L.

Vivian, L.

Sandford, L.

Tranmire, L.

Young, B.

Sandys, L. [Teller.]

On Question, amendment agreed to.

10.42 p.m.
Lord WELLS-PESTELL: My Lords, with your Lordships' indulgence, perhaps I might ask the Acting Leader of the House whether he can give any indication as to what we are going to do tonight. As I understand it, there are something like 38 amendments remaining on the Marshalled List.
Earl FERRERS: My Lords, as I understand it, the arrangements were that we were going to finish the Report stage of the Bill this evening, and that is what we anticipate doing.
Lord WELLS-PESTELL: My Lords, my understanding was that we would finish it, but it was assumed that we would finish at somewhere around about 11 o'clock.
Earl FERRERS: Of course, this is very much a matter for the House, is it not, my Lords? One cannot control exactly how long noble Lords speak, but I think your Lordships will realise that some noble Lords have spoken more than once and we have had odd Divisions called by mistake, all of which has taken up time, and I do not think that that can fall to the blame of the Government.
Lord WELLS-PESTELL: My Lords, I think we must be reasonable about this. There was only one Division which was not proceeded with. Do not let us exaggerate; let us keep to the truth. This is a very important Bill, both from the Government's point of view and from the Opposition's point of view. We made it abundantly clear at the very beginning that this was a Bill which we would be contesting. If the Government have not allowed sufficient time so that we can do this in a reasonable period, the Opposition can hardly be blamed.
Earl FERRERS: My Lords, I do not think it is a question of how much time the Government have allowed for it. The noble Lord, Lord Wells-Pestell, knows perfectly well that we have allowed reasonable time. Of course, the business of any Government can be frustrated if noble Lords talk at length. Everyone knows perfectly well that if one talks—
Several noble Lords: Oh!
Earl FERRERS: With the greatest respect, my Lords, I am not suggesting that we have talked at inordinate length. All I am saying is that, if noble Lords do talk at inordinate length, then the business of any Government will be frustrated. What I would suggest to the noble Lord is that we have made reasonable progress, and I am sure that if we can go on for a short while longer that progress will be brought to fruition. But I really do not think it would be reasonable to suggest that we should stop at the moment.
10.45 p.m.
Baroness DAVID Baroness DAVID moved Amendment No. 70:
Page 22, line 3, at end insert—
(" (6) Where a local education authority remits charges for milk or meals provided by them to any category of pupils they shall be under a duty to ensure that such a scheme is administered as far as possible so that confidentiality is maintained for such pupils").
The noble Baroness said: My Lords, I think this is a completely uncontroversial amendment. I am sure that noble Lords opposite must agree that this is a desirable amendment and that it should be passed. As we know, fewer children will be having free meals under the new arrangements. Therefore, in a way they are going to be much more conspicuous. I therefore hope that the Government will see that the local authorities are under a duty to make sure that, so far as possible, the scheme is administered so that confidentiality is maintained.
I have had one letter, part of which I should like to read to your Lordships

761
because I think it shows the difficult situation in which many children are put if they are exposed. I think that the new cafeteria-type meals system, which will probably be introduced in a good many secondary schools as a result of the new arrangement, will probably make it more difficult and the local authorities must be more careful about making sensible arrangements. This is a letter from somebody in Reading. She says:
"I am a one-parent family with two children. They have up to now had free schools meals at different comprehensive schools. At my son's school they have got around any stigma by my son paying for his dinner and the school returning the money to me by monthly cheque. At my daughter's school they gave out dinner tickets with no payment for both 'free diners' and the girls whose parents paid by cheque at the end of the term. With this system she was able to appear as a cheque payer. Now, with the new system of buying individual items rather than a dinner as a whole, her school is stopping cheque payments at the end of this term and only free-school-dinner girls will receive dinner tickets. Everyone else will pay with cash. The thought of her classmates knowing about it is just too much for my shrinking violet of a daughter. Consequently, I am having to give up free dinners for her."
There will be other parents with children in the same situation. I think it is important that the local authorities are put under a duty to make sure that confidentiality is respected.
Baroness YOUNG: My Lords, the noble Baroness, Lady David, has read out the very sad case of the child who has been identified as one who received free school meals under the present arrangements. With her, I regret it very much when these incidents happen. It is difficult and embarrassing for the children. It is not a new situation, and she must have been as familiar with it in her time in local government as I was in mine. It has been difficult to find any complete solution to this. I believe that most local authorities try hard to keep confidentiality about the children who receive free school meals now. I think that frequently if there is a difficulty it is perhaps with somebody new and inexperienced who does not realise the problems that can arise when a child is identified in this way. I do not think there is any simple solution to this. I do not believe it can be solved by legislation. It is a matter of good practice. I think it is something of which most people in the education service are well aware. We would not feel it right to legislate, and for that reason I cannot accept this amendment.
Lord AVEBURY: Surely, my Lords, if it is a matter of good practice, as the Minister has said—and I accept that—you can require local authorities to adopt good practices. As I read this amendment, that is all that is being asked for: that they should be under a duty to ensure that, so far as possible, confidentiality is maintained. No uniform system of ensuring confidentiality is being imposed on the local authorities from above. They are simply being asked to do as the Minister said they ought to do in any case, which is to observe good practice. I do not see why she is making such heavy weather of it.
Baroness DAVID: My Lords, do I understand the Minister to say that the Government are not willing even to give guidance?
Lord UNDERHILL: My Lords, I should like to support this amendment. I had considered intervening on a previous debate when I saw the words: "the local authority considers it appropriate to do so"; but I did not do so in the interests of getting through the business. If the Government are going to take a hard line and are not going to move even when the Minister says there is reason in this matter, then the Minister ought to be taking another careful look at what is being proposed. The Minister has said that this proposal was sensible. Why not put it in the Bill so as to give guidance to the local authorities to do the decent thing?
Baroness YOUNG: By leave of the House, what I said was that I agreed with the noble Baroness, Lady David—I am sure the noble Lord, Lord Underhill, feels the same—that anybody who has had any experience of this matter knows that it is very undesirable for children who receive free school meals to be identified in any way. Good practice in schools ensures that this does not take place. It is a different proposition to legislate upon this and make it a duty. It is very difficult to legislate for good practice, and that is why we are not legislating for it. The noble Baroness, Lady David, asked whether we would give any guidance. Clearly, this is one among many matters that we shall consider if we issue a circular, which I believe we shall have to do, and this is the type of issue that we can consider in that circular.
Baroness DAVID: My Lords, with that assurance, I will withdraw that amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 71 and 72 not moved.]
Clause 23 [School Meals: Scotland]:
10.51 p.m.
Lord ROSS of MARNOCK Lord ROSS of MARNOCK moved Amendment No. 73:
Page 22, line 5, leave out ("may provide milk, meals or other refreshment") and insert ("shall provide a meal in the middle of the day suitable in all respects as the main meal of the day.").
The noble Lord said: I beg to move formally. I have no desire to create a division but I want the amendment negatived purely and simply.
On Question, amendment negatived.
[Amendments Nos. 74 to 79 not moved.]
Lord ROSS of MARNOCK Lord ROSS of MARNOCK moved Amendment No. 79A:
Page 22, line 16, after ("day") insert ("including days when the school does not meet")
The noble Lord said: I should like to know exactly what the Government are going to do about this in Scotland. This has been in the present legislation for a long time. Provision was made for the really poor children—we used to call them necessitous—to get a meal, even when the school was on holiday. The facilities were there and used. Is it the intention of the Government to drop this facility? Have they done it deliberately or is any provision being made that meals will be provided even though the school is on holiday?
The EARL of MANSFIELD: My Lords, as the noble Lord will know very well, Section 53 of the Education (Scotland) Act 1962, which is the enabling power to provide meals at present, specifically includes a duty in Section 53(2) on education authorities to
"make such arrangements for such period as they deem necessary for the provision …of milk and midday meals on days when the school does not meet"
for any pupil if, in the opinion of the authority, that pupil would otherwise be unable to take full advantage of the education provided. This duty has now
764
been subsumed in the general duty on education authorities to make free provision for those pupils whose parents are in receipt of supplementary benefit or family income supplement (subsection (2)) and for those pupils for whom they consider it appropriate (subsection (3)). The new power and duty to provide meals is not restricted to those days on which the school meets. There are, therefore, sufficiently wide powers and safeguards to ensure that such provision could be made if necessary. I hope that that will satisfy the noble Lord.
Lord ROSS of MARNOCK: My Lords, I am not entirely satisfied, bearing in mind that Section 53 is to be repealed. But the night being what it is, and the stubbornness of the Government not to allow us to debate this at a reasonable time, I have no option but to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 80 to 85 not moved.]
Clause 24 [Nursery education: England and [Vales]:
10.55 p.m.
Baroness DAVID Baroness DAVID moved Amendment No. 86:
Page 23, line 1, leave out ("have power to").
The noble Baroness said: My Lords, I wish to speak to this amendment and the next four, as they all go together to make the following sentence:
"A local education authority shall establish nursery schools or nursery classes, maintain such schools established by them or a former authority and assist any school which is not so established."
I am sorry that the noble Lord, Lord Alexander, has left because nursery classes were included particularly to satisfy him. He said that he would have supported us in Committee if nursery classes which he thought could be established in primary schools were in the amendment.
There is a great deal of disappointment in the country that the Government are choosing to take away the duty from the authorities. I have had a great many letters from all over the place, and I believe that it is a good thing in hard times to keep some ideals in order to cheer people.
The argument advanced by the noble Baroness, Lady Faithfull, on the last

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occasion when this matter was discussed—namely, that perhaps if there were nursery schools people might feel obliged to send their children to them and might feel a kind of inferiority complex if they did not do so—was absurd and not up to her usual level, if I may say so. It was too ingenious by half. The noble Baroness, Lady Seear, is here and can put the same argument that she advanced previously; I shall certainly not attempt to put it for her. Women are very pleased to have part-time jobs and to keep in touch, so that nursery classes fulfil a need that is quite different from that supplied by day nurseries. I beg to move.
Baroness YOUNG: My Lords, under Amendment No. 86 and the other amendments to which the noble Baroness, Lady David, has spoken, authorities would not only continue to be required to provide education for the under-fives but for the first time would be under a duty to provide nursery schools and nursery classes regardless of resources. At this late hour I shall not detain your Lordships by rehearsing yet again the Government's reasons for deciding that the duty imposed on local education authorities by Section 8(1)(a) of the Education Act 1944 should be replaced by a discretionary power to establish and maintain or assist nursery schools.
What we believe we are doing in the new clause and these new proposals is putting the law as people believed the law to be and not in fact as it was. There is no doubt at all that, although under the 1944 Act there was a duty to provide nursery education, in fact for two reasons—first, because resources have never been available, and, secondly, because parents are not obliged to send children to school until the age of five—this duty has never been fulfilled in the way that other duties would normally be fulfilled under Acts of Parliament. Therefore, we do not believe that the fact that local authorities will have a power and not a duty to provide nursery schools and classes will, in the event, make any difference in the reality of the situation. We are all agreed on the importance of nursery education, and what has prevented us from having more nursery schools and classes is the resources to provide them. But as an additional safeguard not only are we converting the duty into a power but under Clause 12 for the first time we
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are making the closure of nursery schools subject to the statutory procedures, so that it will not be possible, as it was before the Bill, to close a nursery school without any real safeguards for the parents.
I hope that I have said enough to indicate that the Government do believe in nursery classes, nursery schools and nursery education. Also we believe that the reality of the situation is that as resources allow so nursery education will expand, and the House may like to know that in 1979–80 we have a building programme of £4 ·6 million, which has been fully subscribed. We therefore expect to provide for about 6,000 more pupils this year. In 1980–81 we have a £2 million building programme, and so far 45 authorities have made bids totalling more than £6 million. We can assume that the whole of the building programme will be taken up and will provide another 3,000 extra places. I give these figures simply to indicate that the fact that there is a power and not a duty will not prevent the provision of extra nursery schools and classes. I hope, therefore, with these assurances, that the noble Baroness will withdraw her amendment.
Baroness SEEAR: My Lords, at this late hour I do not want to say very much. I think there is very little between us and I am sure that the noble Baroness really cares as much about nursery schools as we do on this side of the House. However, it seems the greatest pity that the duty should be removed. Had it not been there, no doubt this would hardly have been the moment to introduce it; but symbolically to remove it at the moment signals to authorities who are not very interested in it that it is not a good thing to do. That is really what we are talking about. It is a narrow point; but leaving it in would make no difference and taking it out indicates to those who are not very keen on it, and have done nothing, that they can go along in their old evil ways. I hope that the amendment will be accepted.
Lord AVEBURY: My Lords, I should like to take up one moment of your Lordships' time to draw attention to the "double-speak" of the noble Baroness the Minister when she speaks of the Government having been prevented from doing everything they would have liked

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in nursery education because of lack of resources, and saying that we are all seized of the necessity to expand nursery education as and when the resources become available.
Just imagine if one were to apply this kind of terminology to defence and say that we are all seized of the necessity for having an Air Force but resources are not available and therefore we have to do without one. It is so obviously ridiculous for anyone to make a statement like that. We must have an Air Force: it has to be there to defend this country—nobody questions the need for it, and so it is treated as being something which is immune from considerations of resources. Whatever the state of play of our economic fortunes, we have to have certain things, and they include an Air Force and they do not include nursery schools.
On Question, amendment negatived.
[Amendments Nos. 87 to 90 not moved.]
Baroness YOUNG Baroness YOUNG moved Amendment No. 91:
Page 23, line 7, after ("8") insert ("(1)(a)").
The noble Baroness said: My Lords, this is a purely technical drafting amendment. It was suggested by my noble friend Lord Morris in Committee and, after further consideration, the Government accept it in the spirit in which it was moved on that occasion.
11.4 p.m.
Lord ROSS of MARNOCK Lord ROSS of MARNOCK moved Amendment No. 91A:
Page 23, line 19, leave out subsection (1).
The noble Lord said: My Lords, this amendment is taken along with No. 94A. It would reinforce the present situation in Scotland. I may say that even that is unnecessary. There never was any doubt in Scotland as to what the law said. The noble Baroness said that people in England believed that it was a power and not a duty; that they were empowered but did not have a duty. There never was any doubt about it in Scotland. It comes in the first clause of the 1962 Act, and it says quite clearly that
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"It shall be the duty of every education authority to secure"—
that there is for their area adequate, efficient provision for school education. Then it defines "school education":
"In this Act ' school education ' means primary and secondary and includes activities in schools and classes hereafter in this Act called ' nursery schools ' and nursery classes '."
But the Secretary of State had powers under subsection (2) to prescribe standards and general requirements. So he had powers within his control, if effectively used, to develop as we could. I am sure that the Minister of State will agree that what I am saying is right. It is irrefutable.
Why are we in this Bill at all? Why is this clause here? This has nothing to do with money. We have a spineless Department and Secretary of State, which have just trailed along at the English heels. I can understand it in respect of transport, because this was a dictation from the Treasury and from the Cabinet—"You have got to save so much money on transport. You have got to save so much money on school meals." But there is nothing of that here. I really cannot understand the Scottish Office.
The Minister of State has already said, when I questioned him on the assisted places, "Don't worry. It is coming in future legislation." Why could this not wait till that piece of legislation, and then we could get a Scottish Bill with those things that are relevant to Scotland, instead of this? Now we have two clauses. Here is a Bill of 38 clauses and seven schedules, and two clauses apply to Scotland. This could have waited, and if it had waited it would never have been enacted, because it is quite unnecessary. Nobody was in any doubt as to what the position was, and nobody was unreasonably pressing. If they did, the Secretary of State already had the power to hold them back. My Lords, I beg to move.
The Earl of MANSFIELD: My Lords, I will, of course, convey the noble Lord's sentiments and token of admiration to my right honourable friend tomorrow morning at our Ministers' meeting. But the reason for Clause 25, which I think is obvious to the noble Lord, Lord Ross, is that it is intended merely to bring the law into line with the present position. As he said, education authorities have, in practice, extended a discretion in the

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matter of providing school education in nursery schools and nursery classes.
I do not think, even at this stage, that we have got over to the noble Lord, Lord Ross, that what we suffer from in this country is a lack of resources. What is needed to improve the provision of nursery education is additional resources, and we can consider making these available only when the economic situation of the country improves. This is not something to do with only Scotland or only England; it has to do with the United Kingdom. With respect, if the noble Lord had wanted, as it were, to re-introduce the duty in Section 1 of the 1962 Act, he would surely have moved to delete the whole of Clause 25. So I respectfully suggest that the amendment is misconceived and that the noble Lord misunderstands the position.
Lord ROSS of MARNOCK: My Lords, I do not misunderstand the position but I realise how farcical it is to carry on with this at this time of night. The last time we discussed nursery schools was at a quarter to eight in the morning, after an all-night sitting. But I suppose we had better go on with the farce, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 92 to 94A not moved.]
Clause 27 [School and further education regulations]:
11.9 p.m.
Lord STEWART of FULHAM Lord STEWART of FULHAM moved Amendment No. 95:
Page 24, line 43, after ("educational") insert ("and other").
The noble Lord said: My Lords, even at this late hour, I must in moving this amendment say a word of thanks to the noble Baroness, Lady Young, for the care and thought, as my noble friend Lady David and I know very well, which she has given to this matter since a comparable amendment was moved in Committee. Very briefly, the issue is this: The schools keep records about pupils. Some of them are educational records dealing with academic matters; others, of a more delicate nature, deal with character, health, family problems and so on. It is
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agreed that these records ought to be passed on to the relevant people. As the noble Baroness pointed out to us when we discussed this matter after the Committee stage, the tragic case of Maria Colwell illustrates very well the harm that can be done when information of this kind is not passed on from one department to another. That, then, is established. At the same time, it will be generally agreed that this information ought not to be disseminated casually but—I use deliberately the phrase—should be passed to the relevant people. There has got to be communication but at the same time the necessary confidentiality.
Our worry when we first saw the draft of the Bill was: On this important question, why has the Secretary of State got power to make regulations about educational records, which are the less delicate and difficult, but no power to make regulations about the other kinds of records where one would have thought more serious problems might arise? I know that the noble Baroness has been giving thought to this matter, and we shall all want to reach agreement upon its merits. I hope, therefore, that the noble Baroness will be able to give us the benefit of the further consideration she has given to the matter.
Lord HYLTON: My Lords, as I have written to my noble friend Lady Young since the Committee stage, I wonder whether she will be able to say anything to me in reply, particularly about the destruction of records—for instance, when a child finally leaves school?
Baroness MASHAM of ILTON: My Lords, as health was mentioned, I was under the impression that the school health records came under the health authority. I, also, would like to know what happens to the other educational records when a child reaches the age of 16.
Lord AVEBURY: My Lords, I do not know what the current state of play is in the Government's thinking with regard to the recommendations of the Data Protection Committee. This could be very relevant since many of the records that have been discussed here could be maintained on computers. Therefore the recommendations of the Data Protection Committee would be relevant. One of the recommendations which might certainly

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be incorporated in any regulations that would be made in accordance with this amendment is that the parents of a child should have the right to see a print-out of the information and be able to question it if they thought that there was any inaccuracy in it. I can see every necessity for the Government having the power to extend the making of regulations to all these other kinds of records which the noble Lord has mentioned.
11.13 p.m.
Baroness YOUNG: My Lords, this is a very important amendment. I was very glad to have the opportunity of discussing, between the Committee stage of the Bill and Report, with the noble Lord, Lord Stewart of Fulham, and the noble Baroness, Lady David, the various issues which arise from it, and I hope very much that we might be able to reach agreement upon it. As I explained during the Committee stage, this clause appears in the Bill because there is a clause in the Local Government and Planning Bill, going through another place, which repeals certain general provisions. We are re-enacting them in a new form under this Bill. We are all agreed about the importance of making regulations on educational records, for all the arguments that the noble Lord, Lord Stewart of Fulham, has set out. I do not believe that there is any disagreement in the House about this point.
In the case of a pupil who moves to another school, his new teachers may wish to know something about his educational progress, and Clause 27(1)(d) is intended to replace the provisions of Regulation 8 of the Schools Regulations (1959) which place a statutory duty on local education authorities to make relevant educational information available to any school to which a pupil moves. In addition, the Government hold that there should be a large degree of openness between schools and parents. Indeed, the educational records kept on most pupils will normally consist almost entirely of the information that is anyway made available to parents in termly reports, at parent-teacher evenings and the like. On both counts, the Government envisage that a case may be made for regulations under this clause.
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There is also a very wide range of additional information which may be available on pupils relating to non-educational matters. These are the type of matters to which the noble Baroness. Lady Masham of Ilton, has referred, and also the noble Lord, Lord Avebury, and my noble friend Lord Hylton. They may relate, for example, to medical records, to psychological assessment, to items arising from the school's pastoral role. Some of these records will be confidential, others will not. In a small number of cases, suspicions may arise that a child is being ill-treated at home or is otherwise at risk. Unfortunate cases of this nature serve to underline that it is not always easy to balance the general desirability for openness between schools and parents against the duty of the school to record and make use of certain information in the best interests of the pupil and to ensure in those circumstances that it is treated in confidence.
As it stands, Clause 27(1)(d) would empower the Secretary of State to make regulations on the keeping, disclosure and transfer of educational records about schoolchildren. This power is concerned with facts and judgments about the scholastic development of individual pupils in school, and it is capable of being exercised within reasonable and ascertainable limits. To widen this power to cover other records would, we believe, be to extend the powers of the Secretary of State into a new area: the term "other records", without qualification, could refer to any piece of recorded information about a pupil that is in the school's possession—and which may have originated from sources or agencies outside the school, and have little or even nothing to do with the pupil's educational needs or attainments. It is very difficult to see how regulations could be drafted to distinguish between all the varieties of recorded information and to specifiy how they should be handled, and at the same time allowing schools to maintain reasonable discretion in how they deal with individual cases in the light of local circumstances.
This is a matter that the Government have considered very carefully, particularly in view of the discussions that we had at Committee stage, and we have come to the conclusion that it would not be right to extend the regulations beyond the proposals that we have in the Bill. We

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believe that it would be particularly unfortunate if regulations on non-educational records were to lead to fears about the disclosure of sensitive or confidential material. This could have the effect of hampering communications, for example, from doctors to schools or between schools and statutory services. It might be to the detriment of a child's welfare, and indeed the noble Lord, Lord Stewart, has referred to the case of Maria Colwell. In that case and in others there is no doubt that the moral to be drawn from the tragedy is a lack of communication between authorities.
In weighing up all the arguments, it has certainly weighed very heavily on myself when considering this amendment as to whether anything we put into the Bill might make communication between either statutory authorities or non-statutory authorities any more difficult. For that reason, I hope very much that the noble Lord, Lord Stewart, and the noble Baroness, Lady David, on reflection on this matter will have reached the same conclusions. It is a matter on which I hope very much we shall all be agreed that we should leave the regulations to this area, which is a well-trodden area on educational matters, to what we believe to be good practice; because we believe that if we have to define all this in regulations it could well be that statutory authorities and non-statutory authorities might be less willing to give information to teachers, or teachers to give information to them if it was all going to be recorded and passed on and covered by regulations. I hope that the House will realise that this is really a very important matter for a number of children; not a matter on which it is easy to reach a decision, and I hope the House will feel that we have made the right decision, having weighed up all the arguments on it.
Lord STEWART of FULHAM: My Lords, before the noble Baroness sits down, can she say whether, short of regulations, she is thinking of issuing any kind of advice or guidance to local authorities about this?
Baroness YOUNG: My Lords, I think this is a matter that we shall want to consider very carefully, and I should like to reflect again over the discussion that we had the other day and the letter that
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I have received from my noble friend Lord Hylton and indeed the debate this evening. This is an area which, when we come to give advice, we should consider, and certainly I should like to take up this point.
Lord STEWART of FULHAM: My Lords, I am obliged to the noble Baroness for the consideration given to this matter, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 29 [Provision of clothing for physical training etc.] :
Baroness YOUNG Baroness YOUNG moved Amendment No. 96:
Page 26, line 41, after ("years") insert (" (other than a registered pupil at a school) ")
The noble Baroness said: My Lords, there was some discussion during Committee stage of the question of who should be liable to pay for PT clothing provided to persons over 18 in those cases where an authority might consider it appropriate to seek to recover the cost of provision in whole or in part. On reflection, the Government consider it would be right that the parent should continue to be liable so long as the recipient of the clothing is a registered pupil at school. In other cases of over 18 year-olds, it would be the recipient himself who would be liable to be asked to pay if the authority considered it appropriate to do so. This amendment meets that case. I beg to move.
Lord MISHCON: My Lords, as the noble Baroness said in regard to an earlier amendment I moved that I resembled a wrecker, would she at least give me the credit for being responsible for one small brick in the unsatisfactory edifice of the Education Bill?—because this is a point that I tried to make in the early hours of the morning. The noble Lord, Lord Bellwin, who made three attempts, half asleep at the time and very understandably so, failed to understand my point and saw no reason to amend at all. I am deeply grateful for the further consideration given to the matter, and I hope my description as a wrecker will not last until half past eleven tonight.
Clause 31 [Recouptnent between education authorities] :
Baroness DAVID Baroness DAVID moved Amendment No. 96A:
Page 27, line 16, after (" education ") insert (" or further education for pupils aged 16 to 19 years ")
The noble Baroness said: My Lords, at Committee stage we moved an amendment to put "further" after "primary or secondary education" in the first subsection of Clause 31, and that was not received very well. So now I am trying something rather gentler and suggesting that provision for primary or secondary education
"or further education for pupils aged 16 to 19 years"
would be a suitable amendment, because it would mean that young people of 16 to 19 are being treated in the same way whether they are attending secondary school or a further education establishment. I have as a result to amend subsection (3) by putting after "further education",
"of those students aged 19 years or over".
This is to remove the anomaly which was mentioned in Committee. I beg to move.
Baroness SEEAR: My Lords, I very much hope the Government will feel able to accept this amendment, for two reasons. One is that in these days of unemployment among school-leavers it is extremely important that those youngsters who have left school with nothing to do should be taking classes of further education or adult education of a more general kind. There never was a time when this sort of provision was more important.
The second point is an economic one: that it would be very foolish not to encourage payment across local authority boundaries of fees granted for further education. If this is not done there will not be specialisation in different colleges. Take the London area. It is perfectly possible for people to travel from one local authority area to another, and it is ridiculous that colleges should not specialise. A lot of further education is very costly in equipment, and if one college is providing a good course it is highly undesirable and expensive that other colleges should be doing it. If local authorities are not required to do this, either there will be no course in the other local authority or else they will duplicate each other in an extremely wasteful way. So this is particularly pertinent to the unemployment situation
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among school-leavers, which is one of the most serious problems in urban areas. It is also an economical measure because it will make much better concentration of the use of resources for further and adult education.
Baroness YOUNG: My Lords, this is a matter which we debated in Committee. I recognise that there is an anomaly in that there is automatic recoupment for 16 to 19 year-olds who are in school and who choose to go to a school in another authority, and for 16 to 19 year-olds who may be adjacent to a college of further education. But, I said in Committee that, although we recognise that there is an anomaly, we do not believe that this is the right place to deal with it, for two reasons. The first is that the Bill has not altered significantly the position on recoupment for further education, because the Bill does not lay on authorities new obligations with regard to parental preference, as is the case with primary and secondary pupils. It would not be satisfatory in the light of the lack of agreement between local education authorities about the rights and wrongs of automatic recoupment for further education, to which I referred in Committee, to impose an arrangement upon them in respect of some further education students, but not others. At the end of the day, if the amendment were agreed to—although we have anomalies, which I accept, in the Bill—it would create almost as many anomalies as it would solve.
The second reason why we feel that we cannot accept the amendment is that the working party under the chairmanship of my honourable friend Mr. Macfarlane is looking into the whole question of 16 to 19 year-olds and, as I said in Committee, it would be premature on these grounds to legislate upon this matter now. However, that is not to say that I do not recognise the point to which the noble Baronesses have drawn my attention. I believe that this is the wrong place to legislate, and I think that it would not be appropriate to do so unless we had agreement with the local education authorities. for those reasons, I must resist the amendments.
Baroness MASHAM of ILTON: My Lords, I should like to make a brief comment. I think that it is a great pity that this Bill has been rushed through

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Parliament. Perhaps it would have been a much better Bill if the Government had waited. They have admitted that we have had to wait for many, many things, including the Warnock Report. This is another amendment over which it seems that the Government will waste money.
Baroness DAVID: My Lords, I am not in the least convinced by the Minister's argument. I think that the noble Baroness, Lady Seear, made some excellent points. I also agree with the noble Baroness, Lady Masham of Ilton, that the Bill has been rushed through. We could have waited a little and, I should have thought, had a much better Bill. However, at this time of night I shall not press the amendments. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 96B not moved.]
Clause 34 [Definition and registration of independent schools]:
Baroness YOUNG Baroness YOUNG moved Amendment No. 97:
Page 30, line 12, after ("under") insert ("subsection (1) of").
The noble Baroness said: My Lords, this is another technical drafting amendment proposed in Committee by my noble friend Lord Morris, which the Government on further consideration accept. I beg to move.
Schedule 7 [Repeals]:
[Amendment No. 97A not moved.]
11.28 p.m.
Baroness YOUNG Baroness YOUNG moved Amendments Nos. 98 and 99:
Page 48, line 3, column 3, leave out (" entries relating to section 55(2) of and ") and insert (" entry relating to ").
Page 48, line 3, column 3, leave out line 13.
The noble Baroness said: My Lords, these two amendments are purely technical, being consequential on the decision at the Committee stage to delete Clause 23. They remove from the Bill such proposed repeals of the existing law relating to the provision of school transport in England and Wales as were not deleted at the Committee stage. I beg to move.
The Earl of MANSFIELD The Earl of MANSFIELD moved Amendment No. 100:
Page 48, line 20, leave out (" Section 51.").
The noble Earl said: My Lords, this is a consequential amendment following the decision of the House during the Committee stage of the Bill to remove Clause 25 (as it then was) from the Bill. It is therefore necessary to delete the reference to Section 51 of the Education (Scotland) Act 1962 contained in Schedule 7, so that the existing duty to provide school transport will be retained by education authorities. I beg to move.

HOUSE OF LORDS' OFFICES
Fifth Report from the Select Committee made and to be printed.
CANE HILL CEMETERY BILL [H.L.]
Returned from the Commons agreed to.
  PAKISTAN: NUCLEAR PROGRAMME
  PAKISTAN: NUCLEAR PROGRAMME
  CHEMICAL 245T: CONTAMINATION REPORT
  CHEMICAL 245T: CONTAMINATION REPORT
  PRIVATE MEMBERS' BILLS: ANOMALIES IN CONSIDERATION
  PRIVATE MEMBERS' BILLS: ANOMALIES IN CONSIDERATION
  STATUTES IN FORCE
  STATUTES IN FORCE
  PRIMATE BREEDING SCHEME
  PRIMATE BREEDING SCHEME
  DIQUAT POISONING DEATHS
  DIQUAT POISONING DEATHS
  REMANDS IN CUSTODY
  REMANDS IN CUSTODY
  ADMISSION UNDER IMMIGRATION RULES: CONFIDENTIALITY
  ADMISSION UNDER IMMIGRATION RULES: CONFIDENTIALITY
  SPECIAL SCHOOLS
  SPECIAL SCHOOLS
  SANITARY ARRANGEMENTS IN SCHOOLS
  SANITARY ARRANGEMENTS IN SCHOOLS
  WARREN SPRING LABORATORY: OIL POLLUTION UNIT
  WARREN SPRING LABORATORY: OIL POLLUTION UNIT