Sitting of 19 May 1980

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  ENERGY

    North Sea Oil Reserves
    Mr. Dubsasked the Secretary of State for Energy what is his latest estimate of the date when North Sea oil reserves will be exhausted.
    The Secretary of State for Energy (Mr. David Howell): It is not practicable to give a date for the exhaustion of reserves as this depends on future rates of discovery and extraction, but I expect production to continue well into the next century.
    Mr. Dubs: Is the Secretary of State not aware that in the next century we shall be an impoverished nation without any oil? Does he intend to preside over this squandering of our valuable resources without doing anything to ensure
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    that energy conservation is higher on the agenda than it is now?
    Mr. Howell: There are questions on the Order Paper relating to the broad question of energy conservation. When the hon. Gentleman hears the facts he will realise that conservation is making a major contribution to energy policy. There are two sides to the question of the exhaustion of oil reserves. One is exploration, to encourage future discoveries, and the other is good oilfield practice and management of oil resources, to see that they last. These are being carefully handled, consistent with our major national interest.
    Sir Brandon Rhys Williams: Is my right hon. Friend looking at other sources of energy? Is he satisfied with the rate of study of a major project, the Severn barrage?
    Mr. Howell: That is a different question. The Department finances an examination of a whole range of alternatives, including the Severn barrage feasibility study, which is going ahead.
    Mr. Gordon Wilson: Does not the Secretary of State believe that one of the roots of the problem of developing a proper depletion policy is the reckless manner in which the Varley assurances were given several years ago? What countenance has the Department of Energy taken of the fact that the United Kingdom will be importing 50 per cent. of its oil requirement by 1995? Does

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    not that show that a depletion policy is badly needed?
    Mr. Howell: The Varley assurances stand, and have been reaffirmed by this Government. The root of the problem in predicting and managing our North Sea resources is the vast uncertainty on both the production and the development and exploration side. These matters must be approached with prudence and flexibility in order to get the best results and to maintain self-sufficiency for the nation.
    Dr. Glyn: Is my right hon. Frend satisfied with the exploration aspect? It seems to me important to find out what are the reserves. To what extent are private industry and the Government working together to make some assessment of future resources?
    Mr. Howell: The Government and private industry are working in co-operation. The seventh round is a reflection of both the Government's determination and industry's willingness to get ahead with exploration so that we know the extent of our North Sea reserves and can move to development and production in a sensible manner, consistent with maintaining our self-sufficiency as far ahead as possible.
    Dr. Owen: When will the Secretary of State tell the industry that he does not wish to see it export all the peak production projected for the years 1982 to 1987 and that he hopes that it will conserve this energy and spread it? Will the Secretary of State, in order to give an assurance for the future, drop his vendetta against BNOC and tell the House that having failed to get legislative time to split the BNOC, he will not split the BNOC and will not float and BNOC shares on the Stock Exchange?
    Mr. Howell: On the second point, we are pressing ahead with our plans for the improved reorganisation of BNOC.
    Mr. Russell Kerr: Shame.
    Mr. Howell: These will be consistent with allowing the public a wider share in what is already theirs. The right hon. Gentleman's first question related to depletion policy. I have begun discussions with the industry and I expect to make a statement on depletion policy to the House in due course.

    Coal Industry (Investment)
    Mr. Dormandasked the Secretary of State for Energy what recent consultations he has had with the National Coal Board concerning future investment in the industry.
    The Under-Secretary of State for Energy (Mr. John Moore): I am considering the board's capital investment programme in the normal way, but have yet to discuss it with the board.
    Mr. Dormand: Do not the figures, which show output up to 109 million tonnes and productivity up almost 4 per cent. last year, justify the level of investment in the industry in recent years, despite the carping criticism of a number of Conservative Members? Are not the miners and the National Coal Board to be heartily congratulated on such a splendid performance? In those circumstances, will the Minister assure the House that when he has the discussions with the board there will be no pressure from the Government for a cutback in investment?
    Mr. Moore: The Government have consistently made that clear. We have congratulated the coal industry, time and again from this Box, and I do so again with pleasure. Equally, the Government have made it clear in the announcement of their new stategy for coal, implied on First Reading of the Bill, that productive investment has been, and will be, continued and that we expect the nation to gain from that productive investment in our coal industry.
    Mr. Hannam: Will my hon. Friend confirm that the Government are showing great confidence in the future of a competitive coal industry by their additional finance for modernisation, redundancies and the pneumoconiosis scheme?
    Mr. Moore: Absolutely. The investment that we are now talking about for the rest of the period up to 1983–84 amounts to £600 million-plus a year. It is a sizeable investment in our productive industry. If we are to gain from the markets of the future, and if we are to retain the markets that we now have, our coal industry must be competitive and profitable. Happily, that is the route that it is taking.
    Mr. Edwin Wainwright: Will the Minister accept that, in addition to investment in the coalmining industry to produce coal, more money should be spent on obtaining by-products from coal? Does he agree that it is time that we started building chemical plants beside some of our large coalfields, to take advantage of those by-products? Does it not also mean that to close chemical byproducts plants without replacing them will not be to the good of the industry as a whole?
    Mr. Moore: I am sure that all hon. Members will have noticed reports in the press in the last week on the world coal study discussions and seen the exciting opportunities for coal, not just in chemical feedstocks, but in SNG and liquefaction. The Government are seriously involved. I chaired the third meeting of the research and development tripartite committee last week, which considered such areas. Obviously when the next stage of decision is ready, at liquefaction, it must be viewed with the seriousness that such long-term markets will have for this country.
    Mr. Forman: Is my hon. Friend aware that we welcome the strong support that he and the Secretary of State have given to the coal industry since the Government came to power? Will he go further and ensure that we do everything possible to open up a European market or markets for British coal via sensible EEC schemes?
    Mr. Moore: Crucial to being able to avail ourselves of the European market is that we have a competitive and profitable coal industry. My hon. Friend will be aware of my right hon. Friend's initiative, currently on the table in Europe, for improved production capacity for our European coal industry. As the prime producer of coal in the Community, we seek to gain from that.

    Energy Conservation
    Mr. Nicholas Bakerasked the Secretary of State for Energy what discussions he has had with the chairman of British Gas about his energy-saving campaign.
    The Under-Secretary of State for Energy (Mr. Norman Lamont): My right hon. Friend the Secretary of State and I
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    met the chairman of British Gas on 1 April, when the corporation's energy conservation campaign was among the subjects discussed.
    Mr. Baker: Bearing in mind the need to balance one energy supply with another, and also the energy savings campaign to which my hon. Friend has referred, is it not somewhat illogical for the British Gas Corporation to spend large sums of money on selling and advertising gas?
    Mr. Lamont: The British Gas Corporation is not spending large amounts of money each year on advertising gas. Its advertising has been cut back, and is now confined to conservation and appliances. There is no advertising for domestic consumption generally. The advertising for appliances is not geared to the domestic central heating market, which is 85 per cent. of the domestic market.
    Mr. Douglas: When the Minister met the chairman, did he give him assurances that in no way would the British Gas Corporation be inhibited from playing a major part in the gas-gathering system at present under discussion?
    Mr. Lamont: That matter does not arise out of this question, and it was not the subject of the meeting.
    Mr. Viggers: My hon. Friend will remember the conversion programme to North Sea gas which the British Gas Corporation carried out so effectively. Does he agree that the need for conservation and insulation is now so great that it would be worth while considering the possibility of getting the corporation to carry out a national programme to insulate homes on the same basis?
    Mr. Lamont: There is force in what my hon. Friend has said. He will know that the British Gas Corporation advertises and sells insulation material and that it is anxious to demonstrate to people the great savings that can result from energy conservation.

    Pressurised Water Reactor
    Mr. Rostasked the Secretary of State for Energy if he will outline the timetable for proceeding with the public inquiry on the pressurised water reactor.
    Mr. Norman Lamont: My right hon. Friend will announce the date of the inquiry in due course. The CEGB has not yet applied for consent. Timing will depend on a number of factors, including completion of necessary work on safety clearance.
    Mr. Rost: How will the Government monitor the cost of the PWR power station and the time scale for construction so that we can get some idea of comparative performance with the AGR stations, which are about to be ordered as well?
    Mr. Lamont: On both aspects the industry keeps us informed of the details of projects both as regards cost and time, and we shall be acutely interested to see how it is developing on the PWR as well. We are engaged in discussions about the different stages that must be gone through on both design and safety work before construction can start. We are working out the precise timetable for that.
    Mr. Waldegrave: Does my hon. Friend agree that in any discussion about a PWR, or any other kind of reactor programme, forecasts of electricity demand are crucial to a sensible assessment of the situation? Does he also agree that the industry's predictions about electricity demand seem to be shifting and that it might be in order for the Government to publish a White Paper on the subject in the fairly near future?
    Mr. Lamont: My hon. Friend is right about electricity demand being crucial. He knows that that was one of the factors that led to the review of the two AGRs. However, after considering it, we decided that it was right to confirm the investment approval that was given to the two AGRs. We are in the process of reexamining the forecasts. My hon. Friend will be aware that the energy projections are revised each year in the light of economic conditions.

    Oil Supplies
    Mr. Cadburyasked the Secretary of State for Energy whether he will make a statement on the implications for future oil supplies of recent developments in the Middle East.
    Mr. David Howell: We expect the market to be roughly in balance this year, even allowing for some further production
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    cuts by OPEC. But the balance is fragile and could be upset at any time, for example, through political developments in producing countries.
    Mr. Cadbury: My right hon. Friend will be aware that Saudi Arabia is producing an extra 1 million barrels of oil a day to help to stabilise the world price of oil. Is he confident that this extra oil will continue to be produced beyond June when that commitment officially comes to an end?
    Mr. Howell: There can be no certainty about levels of world oil production. Saudi Arabian production has been maintained at this higher level for a year now, and that has obviously contributed towards maintaining the supply-demand balance that I have described and offsetting to some extent, but not entirely, the upward drive from nerve buying for oil, even though the demand is not there, simply to increase stocks. The Saudi Arabian extra 1 million barrels of oil a day have helped the matter, and I hope that that will be maintained.
    Mr. Dalyell: Does the Cabinet agree with those commentators in the Royal Institute of International Affairs and elsewhere who see a real danger of action against Iran involving reaction by the Saudis and other Arabs who, in the final analysis, might show solidarity with Iran?
    Mr. Howell: I am not sure that that is an immediate question about oil, although it is related to oil since the availability of oil is near the heart of the Middle East and Iranian problems. The general answer that I must give is that there are grave dangers in the Persian Gulf and in the oil-producing areas all the time. We must plan our supplies and energy future on the assumption that there will be political upsets and constant upward pressures in the oil market.
    Mr. Sproat: In view of the uncertainties and instability in the Middle East, what new measures does my right hon. Friend have in mind to encourage even more exploration in the North Sea?
    Mr. Howell: The new measures that we have in mind are strongly reflected in the seventh round of licences, which has recently been announced and for which applications will be taken and awards made towards the end of the year.

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    I am confident that with this new round and with additional incentives to explore in existing territory we shall see a substantial move forward in exploration. In fact, we have already seen a halt to the years of decline in exploration drilling. The mood is changing, and I think that we shall see a continued improvement in exploration.
    Mr. Ashton: Is the Minister aware that although it takes five weeks for a tanker to get from Saudi Arabia to Britain, it took the oil companies two days only to put up the price of oil last week? The Saudis put up the price by 2½p a gallon approximately on Thursday and the oil companies put up the price by 4p on Saturday. What action does the Minister intend to take to end this closed shop of big brothers who are holding the motorist to ransom?
    Mr. Howell: I do not know whether the hon. Member knows the North of England. If he does, he will know that in a number of areas there is strong competition at the pumps, and that competition is taking pence off the price of a gallon of petrol at the pump. The hon. Gentleman will realise that if he drives around his own constituency. The recent price rises announced by some companies—though not all—are not connected with the Saudi Arabian oil price change. They reflect the higher cost of oil working through the pipeline all the time. Those are the factors that are driving up the price, and we in Britain cannot be insulated from the higher price of energy.

    Gas Supplies
    Mr. Hal Millerasked the Secretary of State for Energy whether he has had representations from industry on the need to make available more regular supplies of gas.
    Mr. Norman Lamont: My right hon. Friend and I have had representations from industry about a number of issues relating to gas supplies.
    Mr. Miller: Does my hon. Friend understand that, apart from the increase in gas prices, which has placed a heavy burden on costings in industry, there is far greater concern about the availability of gas? Firms seeking to expand, particularly those in my constituency, have
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    been unable to obtain supplies of gas for that purpose. Can my hon. Friend do anything about that?
    Mr. Lamont: I understand the concern of my hon. Friend. Because gas is so much cheaper than competing fuels, there has been a run away demand for it. In the next four years British Gas intends to supply an extra 1 billion therms to the industrial market. It also intends to invest ·4,000 million on extra transmission and various other projects to increase supplies. But it takes time to increase supplies of gas. We continue to discuss this matter with British Gas.
    Mr. Park: Does the Minister agree that as well as availability, the price of gas is of equal importance? Surely it is inconsistent with Government policy, which is to create the right climate for industry, to impose swingeing increases and then cream off the money as a means of back-door taxation.
    Mr. Lamont: The pricing policy adopted by the British Gas Corporation under this Administration is the same as the pricing policy that was followed previously, namely, that in the industrial market the price of gas should be related to the competing oil product. We intend to introduce the gas levy because there is a strong element of the economic rent of the monopoly profit in those figures. That is why we have done that.
    Mr. Skeet: Has the Minister read the observation of the Chemical Industries Association about attempts to increase the supply of natural gas from the continental shelf and, in selected zones, to allow the free distribution of gas by the companies concerned and not by the British Gas Corporation?
    Mr. Lamont: I admire the persistence of my hon. Friend. I think that he asked me about that in the debate last Wednesday. I confirmed to him that we were aware of the observation and were studying it urgently.
    Mr. William Hamilton: Is the Minister aware that a junior Minister said at the weekend that gas prices would increase tenfold in the foreseeable future? Can the Minister give any justification for that statement?
    Mr. Lamont: I have not seen the text of any such speech, and I do not think

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    that it is likely that gas prices will increase tenfold. Obviously, the trend of all fossil fuel prices is likely to be upward in the foreseeable future.

    Nuclear Power Stations
    Mr. Cryerasked the Secretary of State for Energy what representations he has received regarding his announcement of a nuclear power generating construction programme; and if he is satisfied that the programme is technically and economically feasible.
    Mr. Norman Lamont: I regularly receive representations about our nuclear programme from the public, Members of Parliament and those concerned with the industry. There is a strong economic case for nuclear power, and I believe that our nuclear industry will meet the challenge that our programme represents.
    Mr. Cryer: Will the Minister confirm that in 1979 there was the lowest average number of nuclear installation inspections for seven years? Will he confirm also that the Nuclear Installations Inspectorate is well below strength and that it cannot possibly cope with an expanded programme? Does the Minister agree that the programme that he announced was for two purposes: first, to satisfy the nuclear ambitions of Sir Arnold Weinstock and GEC and, secondly, to attack the mining industry. and in particular the miners?
    Mr. Lamont: The hon. Gentleman's last two observations are pure fantasy and do not deserve a serious reply. The answer to the hon. Gentleman's serious question about the Nuclear Installations Inspectorate is that there are 17 vacancies out of a total theoretical establishment of 104. There have been no further resignations in 1980. There has recently been a pay increase, which will increase pay at all grades by about £2,000 per annum. Clearly the strength of the Nuclear Installations Inspectorate is extremely important to us. We are working on it, and are engaged in discussions about it. The inspectorate is vital for the nuclear programme, and it is nonsense to say that the programme cannot go ahead with the level of inspectorate manpower as it stands.
    Mr. Gummer: Does my hon. Friend agree that if the programme is to be technically
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    and economically feasible in those areas where nuclear power stations are likely to be sited the period of waiting and wondering whether there is to be a proposal should be as short as possible? Will my hon. Friend, therefore, bring as much pressure as possible to bear on the CEGB to announce its plans as quickly as possible and not hold up discussions in affected areas?
    Mr. Lamont: I know what my hon. Friend is referring to. I have discussed the case that he has in mind with the CEGB. He will be aware that the CEGB has a bank of sites and that it does not always apply immediately for planning permission or consent for a station on those sites. However, I shall communicate his concern to the CEGB.
    Mr. Ashton: Will the Minister give an assurance that nuclear inspection will be kept firmly under the control of the Government? Will he confirm that outside agencies will not be employed as supervisors?
    Mr. Lamont: The inspectorate is an independent agency, and that position will continue.
    Mr. Rost: Does my hon. Friend accept that the programme will not be economically or technically feasible unless there is a major improvement in the organisation of the industry, and that the appointment of a new chairman to the National Nuclear Corporation is but a first step towards that objective?
    Mr. Lamont: I agree with my hon. Friend. The problem is not confined to the construction of nuclear power stations, as recent events have sadly emphasised. There are serious construction delays and cost overruns in conventional and oil-fired power stations as well. We need to strengthen the management further beyond the appointment of a chairman, and he is working on that. We hope that the announcement of a programme will, at long last, encourage confidence in the industry.

    Oil and Gas Resources (Depletion Policy)
    Mr. Gwilym Robertsasked the Secretary of State for Enegry if he will now make a statement on depletion policy for British oil and gas resources.
    Mr. David Howell: I am at present holding discussions with the industry and expect to make a statement on depletion policy shortly.
    Mr. Roberts: Will the right hon. Gentleman accept that there is some urgency about this matter, as the speed of the depletion programme is critical to the development of the coal and nuclear industries and all other aspects of energy? We must have an answer soon.
    Mr. Howell: I accept that we must soon get this matter clear, and that is why I intend to make a statement in a few weeks.
    Mr. Marlow: Will my right hon. Friend confirm that, in relation to the depletion policy, United Kingdom oil belongs to the United Kingdom and will be used for the benefit of the United Kingdom? Will he confirm also that no commitment has been, or will be, made to give United Kingdom oil to Common Market countries, without discretion being left fully with the United Kingdom Government?
    Mr. Howell: Yes, I can give that confirmation.
    Mr. J. Enoch Powell: Does the right hon. Gentleman recollect any instance where reserves of energy sources have not been grossly underestimated? If the current estimates have continuously to be revised upwards, will not many current policies, in all parts of the United Kingdom, also need to be revised?
    Mr. Howell: The uncertainties are undoubtedly great, particularly in the mining and extractive industries. That fact re-emphasises the need to keep all questions of depletion and management of these resources in the most flexible state. That is the policy adopted by the companies concerned, and that is the attitude of the Government.
    Mr. Sproat: Can my right hon. Friend confirm that last year British companies won about 80 per cent. of all the oil contracts in the North Sea? Is not that a splendid achievement for British industry? How do we hope to improve in the areas where we are weakest, namely, exploration and drilling?
    Mr. Howell: The figure for last year was 79 per cent. That was an excellent performance. I believe that we can do
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    as well this year, or even improve on that, but that depends upon competitiveness in our yards operating under full and fair opportunities against strong foreign competition. Nevertheless, 79 per cent. is not bad.
    Dr. Owen: Does the Secretary of State agree that while we continue to flare vast quantities of gas off our shores we must make an urgent decision on the gas-gathering pipeline scheme? In view of the increase in energy prices, does the Secretary of State agree that it is viable for a gas-gathering scheme to be financed by the United Kingdom and to be confined to the United Kingdom gasfields?
    Mr. Howell: I am sure that with the price of energy as it is, the gas-gathering scheme is viable. I am not sure whether the advantages of taking gas from other than United Kingdom gasfields can be dismissed. They might be important. In general, the Government recognise the importance of the project, its worthwhile nature, its profitability and its benefit to the national interest. We are pressing ahead with it as fast as we can.

    Nuclear Power Stations
    Mr. van Straubenzeeasked the Secretary of State for Energy when he intends to decide whether future nuclear power stations, to be built in Great Britain, after those already announced, should be of the pressurised water, gas-cooled or of some other type.
    Mr. Norman Lamont: As my right hon. Friend made clear in his statement of 18 December, decisions about the choice of reactor for later orders will be taken in due course.
    Mr. van Straubenzee: I understand my hon. Friend's problems, which stem, as much as anything, from decisions which should have been taken not being taken in previous years. However, will he accept that it is necessary for the future of our energy resources that the decisions are made as soon as is prudently practical.
    Mr. Lamont: Of course that is so. However, to be sure about the benefits of the pressurised water reactor we have to build one to see whether the claims made about costs are correct. We are continuing to maintain both options. Without

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    the AGR option there would be no work for that part of the construction industry. That is why we must have the two options.
    Mr. Wigley: When considering whether we need any nuclear stations, does the Minister agree that the critical parameter is the success or otherwise of the insulation programmes? What is the Government's assumption of the success as a percentage of the reduction in total electricity energy demand, of the insulation programme over the next decade?
    Mr. Lamont: The demand for electricity is a key factor in deciding what investment should be made in the supply of nuclear electricity. Our projections, published last year, assumed that by energy conservation, including a large degree of insulation, by the year 2000 demand for energy would be reduced by 20 per cent. below that which it would otherwise be.
    Mr. Hooley: Since it has taken 16 years to produce 1½ gigawatts of generating capacity through the AGR system, would it not be sensible to sort out that system—if it can be sorted out—before launching into another system?
    Mr. Lamont: The hon. Gentleman must bear in mind that although the record of nuclear power stations, through cost-overruns and delays in construction, has been poor—as it has been for every other type of power station—fossil fuel costs have risen. That still leaves a strong economic case for the nuclear stations, even after allowing for the delays.

    North Sea Oil (Licensing)
    Mr. Eggarasked the Secretary of State for Energy what representations he has received from the United Kingdom Offshore Operators' Association regarding the arrangements for the seventh round of offshore licensing, announced by him on 1 May.
    Mr. David Howell: The United Kingdom Offshore Operators' Association raised with me a number of matters on the seventh offshore licensing round, including its size, the introduction of the cash element, the exercise of petroleum options and methods and conditions of licensing. These matters were discussed in detail with the association and fully considered in reaching our decisions on the round.
    Mr. Eggar: I thank my right hon. Friend for that full reply. Will he confirm that the Government's intention is to announce the seventh round awards, in order to permit preliminary seismic work to take place during the summer drilling season?
    Mr. Howell: No, it is not possible to reach that timetable. The applications will come in first. I cannot give a precise closing date for the applications, but it will probably be about August. I expect awards to be announced in the autumn and towards the end of the year. That will be in time to get sufficient exploration and seismic work going on a good path next year.
    Mr. Ioan Evans: Has the Secretary of State seen the report in the Sunday Express that a number of oil millionaires have been created as a result of North Sea oil exploration? Will he ensure that in future the community has the full benefit of North Sea oil?
    Mr. Howell: Our tax system is fair and brings substantial benefit to the Revenue. I see no great harm in having millionaires. Indeed, if their millions are earned through enterprise and the creation of jobs and wealth for many other people, they are a positive virtue to our society.

    Energy Conservation
    Mr. Hannamasked the Secretary of State for Energy to what degree the energy conservation policy of Her Majesty's Government is proving effective.
    Mr. Chapmanasked the Secretary of State for Energy if he is satisfied with progress in his energy conservation campaign.
    Mr. John Moore: There is evidence that consumers are responding to our energy conservation campaign. The downward trend in energy consumption seen towards the end of 1979 is continuing in 1980.
    Mr. Hannam: I accept that the previous Administration's energy conservation programme did not work as effectively as it should, but can my hon. Friend give further details of the results of the measures implemented in the last year?
    Mr. Moore: In looking for short-term results, we must try to recognise the nature of the long-term changes. I do not wish to hang statistics on the few months that we have been in office, but primary energy consumption early in 1979 was rising compared with 1978. In the last quarter, seasonally adjusted and temperature corrected, it was lower than in the year before. Oil consumption in the last quarter was 4·7 per cent. down. These trends are continuing markedly into 1980.
    Mr. Chapman: Does my hon. Friend consider that his energy conservation programmes are having an effect on the private motoring sector? Alternatively, as reported in the national press, have petrol sales to private motorists gone up by 7 per cent. in the past year?
    Mr. Moore: I was talking about seasonally adjusted figures. Today's papers talk of petrol sales being on the upswing. If one examines the statistics, as an ex-London School of Economics graduate should, one finds that although the figures are not yet seasonally adjusted, motor spirit represents only 22 per cent. of all oil products.
    The figures for all oil products for the first quarter are not seasonally adjusted, and are down 15 per cent. That is a clear indication of the effective working of the Government's energy conservation policies.
    Mr. Stoddart: Is not the drop in demand for primary energy due more to the recession than to any Government measures for conservation? Will the Minister confirm or deny that the Department of Energy is under pressure from the Prime Minister to spend even less on energy conservation than is being spent now?
    Mr. Moore: The Labour Party has more experience of recessions than I do. If one examines the data carefully, one can see the radical reductions in prime energy consumption in areas where adjustments can be made. We are talking about a long and difficult job. For example, gas-oil used by industry for space heating in the first quarter of this year was down 16·3 per cent. There is no point in going into the gutter area of leak politics. We must deal with facts.
    Mr. Geoffrey Johnson Smith: Today, or later this week, will my hon. Friend have a word with the Department of the Environment about speeding up new building regulations which can help to conserve energy? Does he agree that that is one of the weaknesses of the programme, although he sets an exemplary example?
    Mr. Moore: The House will welcome the Department of the Environment's consultation document and will recognise the valuable part in conservation that the new building regulations can play. The proposals are for minimum limits. Consultation is taking place on the 80mm suggestion and the Department of Energy's request for 100mm to be considered. When talking about minimum regulations and consultation, we should see what the final conclusion is before we make up our minds. We are talking about a 50 per cent. increase in the Department of the Environment's minimum recommendations.
    Mr. Hardy: Is the Minister aware that the cuts in the housing investment programme for local authorities will drastically reduce their capacity to help? Does he recognise that the fecklessness displayed by his right hon. Friend this afternoon, in seeking to encourage motorists to drive around in the forlorn hope of finding cheaper petrol, will not help? Is he aware that rural residents and those who use motorways are grossly disadvantaged by the policies of the Conservative Administration?
    Mr. Moore: In reply to your constant requests, Mr. Speaker, I shall answer the first part of the question, which relates to the supposed reduction in the housing insulation grant allocation. There have been allocations matching the take-up of last year. I should have thought that those concerned with reductions in public expenditure and with the wise use of public money would regard that as a rational and sensible way to spend public money.
    Mr. Forman: Is my hon. Friend aware that a helpful move in energy conservation in the commercial sector would be to amend the Offices, Shops and Railway Premises Act 1963 to reduce the minimum temperatures required by statute?
    Mr. Moore: As my hon. Friend knows, the Department of Energy is in the midst of consultations on that subject.
    Mr. Ashton: Is the Minister aware that at the beginning of this month many cities changed political control? Does he recognise that one of the reasons for the poor take-up of insulation grants last year was that Conservative councils would not spend the extra cash? We now have Labour councils that will spend the cash. Will he make more money available to the councils?
    Will the hon. Gentleman stop saying that there is a conservation policy simply because energy consumption has fallen due to unemployment, a mild winter and priee increases, which do not add up to a conservation policy?
    Mr. Moore: The hon. Gentleman continues to make the fundamental mistake of failing to recognise that conservation success is judged not by changes in Government-spend programmes, but by long-term changes in people's attitudes to the demand for energy. Those programmes are succeeding, and their success is baffling to the Opposition. The fundamental policies of the Government are succeeding in reducing primary energy consumption.

    Oil Exports
    Mr. Rentonasked the Secretary of of State for Energy what is his policy, in the light of the Iranian situation, as regards making United Kingdom oil more readily available to the European Economic Community, particularly West Germany, in view of that country's greater dependence on Iranian oil.
    Mr. Peter Lloydasked the Secretary of State for Energy whether he intends to discuss with the European Economic Community Energy Ministers the question of preferential access to North Sea oil for other member States of the European Economic Community.
    Mr. David Howell: The Government have already made clear both to the House and to our Community partners that they expect oil companies exporting North Sea oil to sell it in markets of our partners in the Community and the International Energy Agency, except where there is an existing pattern of trade outside those regions.
    Mr. Renton: I thank my right hon. Friend for that answer. Does he agree that the problem becomes more acute every day? Coincidental with settling other Community problems and getting the Community constructively to move forward again, would it be possible for my right hon. Friend to offer our EEC partners greater long-term access to our North Sea oil and gas than he has been able to do to date?
    Mr. Howell: My hon. Friend should not overlook the considerable quantities of North Sea oil already going to the markets of our EEC partners. About half of our exports go to our EEC partners' oil and petrol markets. We make a substantial contribution already. Much the best contribution that we could make in future would be to manage our North Sea oil resources in accordance with the best oilfield practice. We must ensure that production is maintained to the highest standards, and with maximum efficiency. In that way we can make a contribution to the overall production of energy in the EEC.
    Mr. Lloyd: Does my right hon. Friend accept that although there is support for helping our EEC partners to maintain the continuity of their oil supplies, there will be no support for selling North Sea oil to them at below market prices or entering into long-term contracts other than on a fully commercial basis?
    Mr. Howell: I confirm my hon. Friend's remarks.
    Mr. Benn: Will the Minister confirm that it is the Government's intention to retain full control of depletion and trading pattern policies, and that he will not allow the agreement for a 500 million tonnes per day import target set by the EEC to lead to an expansion of our depletion policy? Will the right hon. Gentleman confirm also that the Prime Minister will not trade off our oil interests in an attempt to achieve a better deal on the EEC budget?
    Mr. Howell: On the right hon. Gentleman's second point, my right hon. Friend has made it clear that our budget contribution will be decided on its merits, and that it will not be linked with other issues—whether this or any other. On the right hon. Gentleman's other point, I think that he confused the figure. I

    21
    think that he was referring to the 5 million tonne export target, which we have agreed as part of our overall targets for oil imports for the EEC until 1985. I gladly confirm that that is in no way influenced by, and in no way influences, our freedom to decide our depletion policies in line with our national interest.

  HOUSE OF COMMONS

    Private Dining Rooms
    Mr. Cryerasked the Chancellor of the Duchy of Lancaster what action has been taken to diminish the loss of £110,743 for 1978–79 on the operation of the private dining rooms in the House.
    Mr. Charles Irving: I have been asked to reply.
    In accordance with the policy of the Catering Sub-Committee to reduce the loss not only on the Private Dining Rooms, but the whole Refreshment Department, substantial increases in the prices on drinks were agreed upon in February, and it has been agreed that further increases should be introduced after the Whitsun recess. These will apply to drink and food. I am hopeful that by the end of this financial year, the trading year ending 1981, we shall show a substantial trading profit for the first time.
    Mr. Cryer: Because of the loss of more than £100,000, is it not scandalous that the Catering Sub-Committee should try to keep bookings secret—possibly to protect those hon. Members who are parliamentary advisers to outside organisations? That means that the taxpayer has been benefiting public relations organisations through the enormous losses of the Private Dining Rooms. If the loss it to be brought to an end, why not put the matter completely above board and make bookings open to the public and to hon. Members?
    Mr. Irving: I do not think that the question of secrecy will make the slightest difference to our profit and loss account. For as long as can be remembered it has been the custom that the Catering Sub-Committee does not publish the names of the organisers of functions. The Sub-Committee agrees in many respects with the hon. Gentleman's remarks and would
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    deprecate any use of the Dining Rooms that would be likely to bring the House into disrepute. I do not think that the Catering Sub-Committee is likely to change its views on a matter that has been discussed ad nauseam.
    Mr. Freud: Will the Chairman of the Catering Sub-Committee confirm that the huge loss in the year in question, and the arguable profits in the current year, were achieved without paying anything for rates, rent, insurance, heat, gas, light, repairs or renewal? Will he say how long it has been since a new appointment at senior managerial level has been effected in the Catering Department?
    Mr. Irving: I have greater admiration for the hon. Gentleman when I see him on television than I do when I listen to his questions, which are irrelevant to the difficulties in the Catering Department, of which he, if anyone, should be fully aware.
    On several occasions I have given the Commission an assurance that, with the arrangement that has been agreed by the whole House, we shall show a trading profit at the end of the financial year. If the hon. Gentleman requires all the details for which he has asked, I shall be happy to furnish him with them.
    I assure the hon. Gentleman that the Catering Sub-Committee is using in the Catering Department only the best industrial practices which apply to every outside organisation. There is nothing special about the arrangements that we have made for trying to run the Catering Department properly for the first time in a long time.
    Mr. Aitken: Will my hon. Friend confirm that the pay and conditions of those who work in the Catering Department have recently received a long overdue improvement? Is he aware that if the improved pay and conditions are the cause of the price increases, many of us will consider that a good cause?
    Mr. Irving: It is significant that at the commencement of this Parliament the Catering Department faced a disgraceful inheritance from the previous Administration, namely, a debt of £3 million. Whatever steps we take, they cannot possibly be as bad as the steps that were taken in the past. I assure the House that, thanks to the Leader of the House and to

    23
    the Commission, the staff of the Catering Department have, for the first time, been rewarded and given a pension, of which they have been deprived by Opposition Members over the years.
    Mr. Foot rose—
    Mr. Speaker: Order. I am afraid that we have run out of time for these questions. However, I will allow one minute extra later during Question Time so that the right hon. Member for Ebbw Vale (Mr. Foot) can ask his question now.
    Mr. Foot: Thank you, Mr. Speaker. Before the hon. Gentleman continues on the line that he has taken with the House, will he take into account the fact that a member of his party was Chairman of the Catering Sub-Committee before the election? When he speaks as he did about the way that these matters were conducted previously, is he answering for all the other members of his Committee? Will he take into account that if he answers questions in that manner he will not have a Kitchen Committee left?
    Mr. Irving: I am sorry to say that, not having previously answered any questions in the House, I have few hon. Members who attend the Kitchen Committee anyway. The untiring efforts of Labour Members to make difficult the work of almost the only attender of meetings of the Kitchen Committee are succeeding. I owe a special debt of gratitude to the hon. Member for Leeds, West (Mr. Dean). With few exceptions, he and I run it together. We are doing our best in a difficult job, which has been recognised as difficult for many years. It is sad that Opposition Members cannot be more helpful.
    Mr. Speaker: I shall have to allow two minutes extra.
    Later—
    Mr. Cryer: On a point of order, Mr. Speaker. You will recall the somewhat partisan outburst by the Chairman of the Services Sub-Committee, and you will no doubt recall that for the previous five years the Chairman of that Sub-Committee was a Conservative Member. You, Mr. Speaker, are not normally responsible for answers that are given, but in this case there is a connection, in that
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    the answers should be solely concerned with the facts and the information that is sought. As I understand it, the Sub-Committee is responsible to the House of Commons Commission, and the Chairman of the House of Commons Commission is yourself. Therefore, if there is an attempt to put a smokescreen of partisan abuse around replies when hon. Members are seeking information, it can reflect on you, Mr. Speaker. The fact that you, as Chairman, are ultimately responsible is an indication that this is fundamentally a House of Commons matter rather than a partisan matter.
    Mr. Speaker: I must remind the hon. Gentleman and the House that the question was not addressed to the right hon. Member who answers for the House of Commons Commission. It was a question addressed to the Chancellor of the Duchy of Lancaster. If it was the responsibility of the Commission in this case, the point should have been addressed to the right hon. Member who answers for the House of Commons Commission.

  PALACE OF WESTMINSTER

    Access for Disabled Persons
    Mr. Dubsasked the Chancellor of the Duchy of Lancaster whether he is satisfied with the means of access to the Palace of Westminster for the disabled.
    The Chancellor of the Duchy of Lancaster and Leader of the House of Commons (Mr. Norman St. John Stevas): Yes, but I will, of course, welcome suggestions for any improvement to the existing arrangements.
    Mr. Dubs: Will the Leader of the House review the means of access by the disabled to the House? Does he agree that the Palace of Westminster should set an example to other public buildings in this country, and that if he were to review the means of access that would be a desirable way of ensuring that disabled people could get here?
    Mr. St. John-Stevas: I agree that we should set an example in this respect. There are ramps in Star Court to enable wheel chairs to proceed to the No. 1 lift, and also ramps at Chancellor's Gate for the King's Lift in another place to enable the disabled to be brought to the Principal Floor level.
    I have looked into the matter carefully as a result of the hon. Member's question and I am satisfied that the arrangements are adequate, but I shall certainly have a further look at it to see whether any improvements can be made.
    Mr. Arthur Lewis: I thank the right hon. Gentleman, you, Mr. Speaker, and the Serjeant at Arms for doing something to try to help the disabled. However, although you, Mr. Speaker, have kindly issued notices, hon. Members who are fit and well still park their cars in places that are reserved for the disabled and still refuse to move when asked to do so. If hon. Members say that they want to help the sick and disabled, surely they should listen to the Leader of the House, to Mr. Speaker and to the Serjeant at Arms and not park in places that are reserved for the disabled.
    Mr. St. John-Stevas: The hon. Member has made an important point. The parking spaces to which he referred are used from time to time by able-bodied people, though they may not all be hon. Members. In order to prevent that happening, the police are putting a notice on the windscreens of cars that are incorrectly parked. I entirely agree with what the hon. Gentleman said. In this matter example is, as always, more effective than precept.

  HOUSE OF COMMONS

    Staff Travel Allowances
    Mr. Gwilym Robertsasked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, what consideration the Commission has given to travel allowances and the improvement of facilities for accommodation for those members of the House of Commons staff who live outside the London area.
    Mr. Arthur Bottomley: The Commission has received no representations on this subject.
    Mr. Roberts: I am obliged to my right hon. Friend, but does he agree that many of the staff are low paid and that if they were given travel allowances from their homes to the Palace of Westminster their conditions would be considerably improved? Hon. Members receive such an allowance, and I am sure that my right hon. Friend would wish to close the gap between the two groups.
    Mr. Bottomley: The Commission takes the view that to give special treatment would be contrary to Civil Service practice.

    Permanent Staff
    Mr. Moateasked the right hon. Member for Middlesbrough, as representing the House of Commons Commission, what was the total number of permanent staff employed in Departments of the House and the number specifically allocated to Select Committees at the latest available date and one year previously.
    Mr. Arthur Bottomley: The total permanent staff in Departments of the House, excluding the Refreshment Department, was 609 on 1 April 1980, compared with 565 on 1 April 1979. The numbers of these staff allocated to Select Committees on the same two dates were 78 and 59, respectively.
    Mr. Moate: Does the right hon. Gentleman agree that when we are urging staff reductions in central and local government, the House should set an example? With the growth of Select Committees and the clamour that apparently exists for the staffing of even Sub-Committees, does it not seem, from the figures that he has supplied, that the most potent law emanating from the House is Parkinson's law?
    Mr. Bottomley: The present staffing position followed the suggestions of the Procedure Committee, and the Commission takes advice as necessary from the Liaison Committee, which is requested to give it when the occasion arises. I assure the hon. Gentleman that the Commission bears in mind the fact that economy is necessary. Wherever possible, it is practised.
    Mr. Palmer: Does my right hon. Friend agree that if the new Select Committees are to work properly, as was intended by the House, they must have adequate staff?
    Mr. Bottomley: Yes. As I have already indicated, the Commission takes advice from the Liaison Committee, and has already had advice from the Procedure Committee.

  GOVERNMENT INFORMATION SERVICES (PRESS RELEASES)
  Mr. Canavanasked the Paymaster General how many press releases he has issued since he assumed responsibility for the co-ordination of the Government's Information Services.
  The Paymaster General (Mr. Angus Maude): Press releases are not issued directly from my office, but through the press offices of individual Government Departments.
  Mr. Canavan: Was the right hon. Gentleman at the secret meeting at No. 10 Downing Street at which the Prime Minister was reported to have told five editors that she would have no objection if their papers rubbished the trade unions? Why do the Government not tell the truth through their information services about the discredited policies of this rubbishy Government, instead of conspiring with the gutter press to discredit the trade union movement?
  Mr. Maude: Since no such meeting took place, and since No. 10 Downing Street and the editors of all five newspapers have denied that it ever took place, the hon. Gentleman's question is pointless.
  Mr. Peter Bottomley: Does my right hon. Friend agree that as the events of Wednesday last week were primarily a dispute between some trade leaders and most trade unions members, the newspaper editors seem to be in better touch with the trade union movement than do Labour Members?
  Mr. Maude: I entirely agree. That has been borne out by everything that has happened.
  Mr. Heffer: In view of the commendable view that the right hon. Gentleman took when we last discussed the House of Lords in this House, will he tell us the view of the Government on that question? Is there to be a press release on it? Are the Government supporting the concept
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  of Lord Hailsham, or taking a different view?
  Mr. Maude: That is not really a question for me. I understand that the matter is still under discussion.

  GOVERNMENT POLICY (MEDIA COVERAGE)
  Mr. Canavanasked the Paymaster General whether he is satisfied with the media coverage given to Government policy especially in relation to developments in the Islamic world.
  Mr. Maude: I am satisfied that the Government take all appropriate action to make known to the media their policies towards individual Islamic countries and the Islamic world as a whole. But decisions on news and media coverage are essentially a matter for the media themselves.
  Mr. Renton: Bearing in mind the resurgence of Islam and the obvious importance of the Islamic world to us, what further steps can my right hon. Friend take to make Government policies clear? For example, is he thinking of taking lessons in Arabic?
  Mr. Maude: I think that that would take longer than the life of this Government to bring to fruition. The Government always negotiate and discuss matters with other Governments, and so long as the matters are within their responsibility they are satisfied that their case is being put across. However, on matters such as the film "Death of a Princess", the content of the film is not the responsibility of the Government, or a matter in which Ministers can possibly intervene, although the Government expressed their regret that offence should have been caused to the Saudi Royal Family.
  Mr. Biggs-Davison: Since elements of the television media appear to rate the screening of sensational entertainment higher than the preservation of British trade and interests in the Islamic world, could not the Government invite the media to consider whether standards of responsible conduct could be drawn up?
  Mr. Maude: That is, of course, a matter for the IBA and not directly for the Government.
  Mr. Teddy Taylor: Is it not a matter of concern that there are so many allegations, including some today, of alleged links between terrorists and embassies—mainly Islamic embassies? Does my right hon. Friend think that it would be appropriate for the Ministers concerned to take all possible steps to expose the facts in this matter and the extent to which there is a serious problem of links between terrorists and Islamic embassies?
  Mr. Maude: This matter is being considered both by my right hon. and noble Friend the Foreign Secretary and by my right hon. Friend the Home Secretary.

IRAN
The Lord Privy Seal (Sir Ian Gilmour): With permission, Mr. Speaker, I shall make a statement on Iran following the decisions taken during the informal meeting of Foreign Ministers of the Nine in Naples on 17–18 May. A copy of the statement issued by the Foreign Ministers of the Nine will be printed in the Official Report.
The Ministers reviewed the latest developments in Iran. There were some grounds for encouragement, but nothing that constituted decisive progress leading to the hostages' release. Accordingly, as agreed in their declaration of 22 April, they decided to proceed without delay with the economic sanctions set out in the Security Council draft resolution of 10 January. The necessary orders will now be drawn up. There is agreement that the conditions and circumstances of application to be followed will be decided in common with our partners. It is accordingly our intention to act simultaneously with our partners on the basis of legal instruments co-ordinated to achieve parallel effect.
The House will have the opportunity to debate the orders after they have been laid. As was made clear at the time when the House was considering the Iran (Temporary Powers) Act 1980, the Government intend to follow a variation of the affirmative resolution procedure for orders made under this Act. This means that such orders will lapse unless approved by the House within 28 sitting days. A parallel procedure will be followed for orders made under the Import, Export and Customs (Defence) Act 1939.
On the question of existing contracts, it was agreed that contracts for the export of goods to Iran entered into after 4 November 1979 would be affected by the sanctions. Export of goods under such contracts would be prohibited under the 1939 Act. However, service contracts will not be affected, except for new service contracts in support of industrial projects, which will be banned as from the date of the entry into force of the appropriate Order in Council. We shall be co-ordinating closely with our Community partners to achieve parallel effect on these questions.
Mr. Shore: This is a very unsatisfactory statement. The Lord Privy Seal will know from last week's debate that it was our view—a view widely shared in the House—that there should be further diplomatic efforts before triggering the sanctions against Iran. Does he not consider that the events of the last 72 hours, including President
Bani-Sadr's open appeal to Britain and other European countries for a political initiative, the United Nations resumed mission to Tehran, and the bringing forward to next week of the date of the opening of the Iranian Parliament, strongly reinforce the case for a measure of delay?
Secondly, is the right hon. Gentleman not aware that the House and the country are now totally confused about the Government's sanctions policy? The Iran (Temporary Powers) Act and ministerial speeches clearly indicated that existing contracts would be exempt, at least in the first stage. Why, then, have the Government changed their mind? Has not the decision to make sanctions retrospective to 4 November made complete nonsense of the Act and of last week's debate?
I note what is said about the laying of orders, and I hope that arrangements will now be made for an early debate.
Finally, may I express my amazement and disquiet that the Minister has seen fit to confine his statement to Iran and to say nothing about the whole range of issues, including Afghanistan, East-West relations, the Middle East and the United Kingdom's contribution to the EEC budget, which have surely been the main subjects for discussion at Vienna, Naples, and now Warsaw during the past three to four days? This is not the way in which to treat the House, and I give notice that we shall expect a further statement on these matters tomorrow.
Sir I. Gilmour: As the right hon. Gentleman implied, there have, of course, been diplomatic contacts with Iran over the last few days, and he will be aware that the Foreign Ministers of the Nine referred to them in the last paragraph of their declaration. As I said in my statement, the Foreign Ministers did not think that they constituted decisive progress leading to the release of the hostages.
On the question of retrospection, the right hon. Gentleman is not quite right.
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He will be aware of what the Minister of State said in the House on the Second Reading of the Iran (Temporary Powers) Bill. In order to make it clear to the House I shall quote what my hon. Friend said at col. 919 of the Official Report. In fact, at col. 921 he said it better—[Interruption.]
Mr. Speaker: Order. Hon. Members must not rise while another Member is addressing the House.
Sir I. Gilmour: I am prepared to read column 919 later, but column 921 is more comprehensive. The Minister of State said:
" The hon. Member for Blackburn (Mr. Straw) asked about existing trade under existing contracts. This Bill gives the Government no power under existing contracts. Powers exist under the 1939 Act not over contracts, but as regards the shipment of goods. No decision has been taken to use those powers. No decision would be taken unless it were clear that our main competitors were doing the same. If any such proposal were made, it would have to be submitted to this House for approval."—[Official Report, 12 May 1980; Vol. 984, c. 921.]
That deals with the second point.
Concerning the right hon. Gentleman's third point, we shall debate the orders as soon as possible. That will have to be decided in conjunction with our partners and with the usual channels.
As to the right hon. Gentleman's fourth point, he displayed, if I may say so, some ignorance about Community procedures. He will be aware that this was an informal meeting of Foreign Ministers, of the sort that takes place every six months, and that it is not customary for decisions to be taken at these informal meetings. It was not customary under the previous Government, and it is not customary under the present Government, for a statement to be made after them. I am making a statement about Iran because the Foreign Ministers agreed exceptionally at Naples that their several Governments would now take certain action. In view of last week's debate, I thought it was only courtesy to the House to make a statement.
Mr. Shore: I should like to press the right hon. Gentleman a little further on the last part of his answer; indeed, I should like to press him on virtually everything that he said. It really will not do to make a statement to the House on

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the basis of having had what he calls an informal meeting of Foreign Ministers, about which he says that the convention is that reports are not made, to found upon that informal meeting a major statement of policy, and then to say that other matters—we know that this has been a weekend of quite exceptional diplomatic activity—under discussion in Vienna as well as in Naples are not to be the subject of report to the House. I warn the right hon. Gentleman that this will not be acceptable to us. If this is to be the new practice of the Government we shall find many ways of making them change their mind.
Sir I. Gilmour: It is no good the right hon. Gentleman working himself into a rage. He knows the procedure. We are acting here in accordance with the historic procedures. The matter concerning Iran was quite exceptional. It was well known that the Foreign Ministers at the informal meeting were, for once, intending to make a decision on the matter. But, as the right hon. Gentleman well knows—or should know—decisions are not usually taken at informal meetings of Foreign Ministers.
Mr. Amery: We are hoping that the prospect of sanctions, allied to quiet diplomacy, will lead to the release of the hostages, but does my right hon. Friend agree that the decisions taken present us with an awkward dilemma? If the sanctions fail—they usually do—the credibility of the West will be still further weakened, and we shall have no option except to strengthen the Western military capability in South-West Asia. If, on the other hand, they succeed in imposing unacceptable damage on the Iranian economy, this will redound to the advantage of both the pro-Soviet and the pro-Western opponents of the present Iranian Government. Should not we make up our minds fairly quickly, to identify who are our friends in Iran?
Sir I. Gilmour: My right hon. Friend has pointed to the disadvantages that are attached to sanctions. I think that many people in the House, if not most people, would agree with him. In principle, most people are against the sanctions, because usually sanctions do not work, but after two days of debate in the House last week, my right hon. Friend and the rest
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of the House will be aware of the reason why this course has been adopted.
Mr. Russell Johnston: What are the grounds for encouragement to which the Lord Privy Seal referred, and why have they had no effect on the timing of the sanctions?
The Lord Privy Seal said that the sanctions would be introduced in parallel by the members of the Community. How does he intend to demonstrate this to the House, following the debate?
Sir I. Gilmour: With regard to the first part of the hon. Gentleman's question, I refer him to the last paragraph in the declaration by the Foreign Ministers. I also refer him to the various aspects of what my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) has just called "quiet diplomacy".
With regard to simultaneity, we shall have to co-ordinate very closely with our partners, and we are in very close touch with them.
Mr. Dalyell: If the 1939 Act is now considered sufficient, what on earth was the House of Commons doing on Monday and Tuesday of last week? Will the Lord Privy Seal look at the statement made by the Minister of State, Foreign and Commonwealth Office? He said:
" We came to the conclusion that the 1939 Act was not sufficient for our purposes because, although it is a blockbuster, its scope is too narrow.—[Official Report, 12 May 1980; Vol. 984, c. 919.]
What has changed in the last 72 hours?
Sir I. Gilmour: Nothing at all. Not for the first time, the hon. Gentleman has totally misunderstood the position. We shall have to produce orders under both Acts. The 1939 Act is not sufficient. For one thing, it does not deal with service contracts; for another, it does not deal with transport.
Sir Derek Walker-Smith: The announcement referred, I think, to the special legal difficulties likely to be encountered in Germany and Italy in regard to retrospection in the context of these contracts. Can my right hon. Friend say in what way the legal position there differs from that in this country, where, presumably, the trader would have to rely on the doctrine of frustration and that of an intervening act, if sued for

35
breach of contract? Could my right hon. Friend make a statement in the House—or get one of his right hon. Friends to do so—elaborating somewhat, for the guidance of those concerned, the position of people involved in contracts and saying how we differ in this respect from the other two countries?
Sir I. Gilmour: I would not want to burden the House with my views about the legal position in Germany and other countries. That would be beyond my competence. I can only say to my right hon. and learned Friend that, as I suggested earlier, we shall aim to act simultaneously and also with the same degree of severity over these matters, to see that we are not getting in front of our partners, nor getting behind them. That must be our objective, and I hope the House will agree that it is a sensible one.
Mr. Winnick: Is the right hon. Gentleman aware that many will feel that the Government have cheated over the date when sanctions are to be applied, and that those who will suffer and feel most strongly are those whose jobs could be at risk in this country? Would it not have been far better, on the merits of the matter, for the Foreign Ministers to recognise that sanctions are a futile and farcical gesture, which—as was pointed by many of us on the Labour Benches during the debate last week—will in no way help to secure the release of one hostage?
Sir I. Gilmour: I do not know whether the hon. Gentleman is always consistent about sanctions and thinks that they should never be pursued anywhere, but to say that we have been cheating is characteristic of him. It is totally wrong. I have already read out to the House what my hon. Friend said during the debate, and my hon. Friend the Minister for Trade said much the same thing. There is no question whatever of cheating.
Mr. Temple-Morris: Does my right hon. Friend agree that if, at the end of the day, in addition to sanctions, and in order to get the hostages released, we are obliged to consent to some sort of bizarre trial or inquiry into the role of the United States of America—and, indeed, the Shah—in Iran, everybody
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should be properly represented at those proceedings? Does he further agree that in addition there should be ample opportunity to compare the present regime with its predecessor?
Sir I. Gilmour: No doubt that is so, but my hon. and learned Friend will appreciate that it goes well beyond the confines of my statement.
Mr. Ennals: Surely the right hon. Gentleman must recognise that the statement that he made goes against the will of the House? It was perfectly clear in the debate that the measure did not apply to contracts made before the debate. Surely the right hon. Gentleman will agree that many hon. Members on each side of the House voted for the Bill in those circumstances. He is now telling the House something that is quite different. Surely, what he is now suggesting is against the absolute will of the House, as expressed in the Lobbies.
Sir I. Gilmour: I do not think that a point becomes any stronger by being repeated three times. I have already given the answer. The 1980 Act does not apply to existing contracts, but, as my hon. Friend made clear several times to the House, the 1939 Act does.
Mr. Aitken: Did the Foreign Ministers of the EEC receive any indication from the French Foreign Minister as to what would be said about Iran by President Giscard to President Brezhnev at their mysteriously private summit meeting? If not, was this not a serious omission?
Sir I. Gilmour: My hon. Friend will appreciate that that has very little to do with my statement.
Mr. Ioan Evans: Have not the Government completely misled the House on this question? Is it not a fact that the 1939 Act does not cover service contracts or transport contracts? Is the right hon. Gentleman not aware that there may well have been service and transport contracts arranged between 4 November and today, yet those who have drawn up those contracts were not aware that this legislation would be retrospective? If the measure is an enabling Act and needs to be amended, will amending legislation be brought before the House?
Sir I. Gilmour: Repeating myself for the fourth time will not make any difference. It has been made perfectly clear that the 1939 Act applies in this case and that there is no question of amending legislation being needed.
Sir Nicholas Bonsor: Is my right hon. Friend aware that on the Government Benches he had overwhelming support in bringing legislation forward to use sanctions against Iran? However, is he also aware that many of us on the Government Benches were not aware, in listening to the debates last week, that the retrospective element of the legislation which will now be involved against Iran was even being considered? Is he further aware that it will do enormous damage to British industry, and that many people since November have made contracts—quite justifiably—which will now be revoked over their heads? I do not believe that my right hon. Friend intended this when he last spoke to the House and I hope that he will confirm that it is only because of the influence of the EEC on British Government policy that this step has now been taken.
Sir I. Gilmour: I am grateful to my hon. Friend for his opening sentence. He will be aware that the contracts going back to 4 November will come under the 1939 Act.
Mr. Douglas: Will the Lord Privy Seal indicate how the Nine propose to monitor the effect of sanctions? What instruments are available to ensure that other nations who do not play cricket, as we do, do not cheat over the imposition of sanctions? Secondly, will the right hon. Gentleman indicate the number of firms and jobs that might be affected by the retrospective element of the legislation that he seeks to impose?
Sir I. Gilmour: It is too early to discuss how we shall monitor something that has not yet been brought into effect. I entirely agree that it is an extremely important matter. We shall see that the cricketers do not suffer more than the non-cricketers. On the second point, I agree that it is important, but I cannot give the House any figures.
Mr. Hal Miller: As one who went along with the sanctions policy with great misgivings, but realising that it was necessary to do something to support our
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American allies, may I ask my right hon. Friend's help in giving us some reason why the 1939 powers are being invoked and why they are being backdated to 4 November? Has any decision yet been taken on what constitutes a new contract? Those of us who are concerned with the motor industry, for example, in which orders are consistently renewed on a schedule basis, find the position very confusing and disturbing.
Sir I. Gilmour: I appreciate my hon. Friends' point. As he realises, at the meeting in Naples no decisions were taken on the details, although this is a particularly important detail. The Government consider that it will be in conformity with the Naples decision that continuing arrangements, essentially concluded before November, should be excluded from the sanctions.
Mr. Cryer: Can the Minister tell us whether any estimates have been made of the number of jobs likely to be lost? Also, do the Government now accept the principle that retrospective legislation is necessary, although they did not give that impresseion in the debates last week? Is it not true that my hon. Friends' views about "cheating" are indeed justified? Will the Lord Privy Seal also accept that this is a particularly complex issue? In view of its complexity, added to the fact that people might be retiring from the scene very shortly, and that it is to do with foreign countries, will he adopt the Attorney-General's principle that in those cases an amnesty will be introduced?
Sir I. Gilmour: I have already answered the hon. Member's first point. I cannot give an estimate. I have also answered the allegation of cheating. I entirely agree that this is a complex matter. The date of 4 November has been chosen because that was the date on which the hostages were taken.
Mr. Marlow: As today's announcement is part of a co-ordinated European foreign policy, and as many of us cannot possibly believe that it would have been made otherwise, can my right hon. Friend confirm that the visit of President Giscard d'Estaing to President Brezhnev is part of that policy? Or is it just an ego trip on the part of the President of France? Secondly, if we are now going

39
in for retrospective legislation, what does my right hon. Friend think that the Ayatollah will do with the Talbot contract?
Sir I. Gilmour: The first part of the question is beyond the reaches of the statement. Secondly, my hon. Friend talks about retrospective legislation. Certainly these are retrospective sanctions, but that is not the same thing as retrospective legislation. Obviously, I have no information about the Ayatollah's intentions.
Mr. Jay: Is the Lord Privy Seal aware that he is just as accountable to the House for what Ministers do at informal meetings as he is for what they do at formal EEC meetings?
Sir. I. Gilmour: The Government are responsible for every action taken by Ministers and by the Government. As the right hon. Gentleman knows perfectly well, in normal circumstances statements are not made after informal meetings.
Mr. Bowen Wells: Is my right hon. Friend aware that he will receive many congratulations for trying to co-ordinate the policies of Western Europe over Iran? Is he also aware, however, that the retrospective element of this legislation was not made plain to the House in the debate last week? There is no doubt about that. Will my right hon. Friend bear in mind that European statesmen must find a way to compensate those who have entered into contracts since November? This is a particularly serious element in the statement that my right hon. Friend made today.
Sir I. Gilmour: I agree that it is serious, but there is no precedent for giving compensation in such cases. My hon. Friend must be aware that the possibility of going back beyond the present date on the sanctions legislation was clearly kept open by the Government Front Bench——
Mrs. Dunwoody: No, no, it was not.
Sir. I. Gilmour: It is no use the hon. Lady chanting "No". The passage that I have already read out to the House indicates that clearly. There was certainly no decision to introduce sanctions as from 4 November, because that decision had not been taken. It was taken only by
40
consensus at the meeting in Naples as at the weekend.
Mr. Straw: Is the Lord Privy Seal not aware that the statement that he read out, made by the Minister of State in response to my intervention, was that no decision on the use of the 1939 Act had been taken? That statement was made to provide reassurance to hon. Members that existing contracts would not be affected. That was the whole point of his statement. If there was a possibility that at the weekend meeting retrospection would be introduced, surely the Lord Privy Seal and his officials knew of it? If they did, why was the House not informed of that possibility? The truth is that hundreds of firms and thousands of workpeople will now feel that they have been totally deceived by the Government—and they have been.
Sir I. Gilmour: With respect to the hon. Gentleman, the debate to which he is referring took place a week ago, so I do not think that the last part of his question is very relevant. [HON. MEMBERS: "Why not?"] I agree that what my hon. Friend the Minister of State said was in answer to an intervention by the hon. Gentleman, but my hon. Friend went on to say—and I repeat—that no decision has been taken to use those powers. No decision would be taken unless it were clear that our main competitors were doing the same. If any such proposal were made, it would have to be submitted to this House for approval. The possibility was clearly kept open.
Mr. Kenneth Lewis: As many of the firms affected by this matter will not have any cover at all under the ECGD, which has, I think, been withdrawn, and no compensation, will my right hon. Friend and other Ministers concerned in other Departments at least try to find out how many firms are affected and seek to arrange for Government Departments to pick up the orders to Iran which will be lost to those firms, so as to keep the firms busy making those orders?
Sir I. Gilmour: Certainly we shall make all the inquiries asked for by my hon. Friend. Every relevant matter in this concern will be considered very carefully by us. I give that assurance.
Several hon. Members rose——
Mr. Speaker: Order.
Mr. Dalyell rose——
Mr. Speaker: Order. If the hon. Member for West Lothian (Mr. Dalyell) wants to stop me, mid-way, from calling anyone else, so be it. However, I propose to call those hon. Members who have been rising to catch my eye since the statement was made.
Mr. Peter Bottomley: Will my right hon. Friend confirm that he has been making himself accountable for part of an informal meeting by making this statement, which gives the House of Commons an opportunity of considering it? Will he accept my assurance that I welcome the fact that he is moving only in concert with our European partners, which was the basis of the debate on the Bill last week, and that retrospective possibilities, although we have not yet heard when they will come in, are covered only by the 1939 Act and not by the Bill that we passed last week?
Sir I. Gilmonr: That is true. I entirely confirm what my hon. Friend has said—that we shall act in close co-ordination with our partners.
Mr. Les Huckfield: Cannot the right hon. Gentleman understand that many of us who took part in the debate last Monday and Tuesday can now see that we were totally misled? Is he aware that in a long and partially acrimonious debate last Tuesday, when I raised the point about the renegotiation of existing contracts, I was given the assurance by the Minister for Trade that Government policy was designed to affect only future contracts? Bearing in mind what the right hon. Gentleman has just said about the retrospective element, cannot he see that we now know that we have been totally misled?
Sir I. Gilmour: I appreciate that that is what the hon. Gentleman may think, but having read both what my hon. Friend the Minister of State, Foreign and Commonwealth office said and what my hon. Friend the Minister for Trade said, I can only advise the hon. Gentleman to read what they said. I hope that he will then withdraw what he has just said.
Mr. S. C. Silkin: If at all times it was the Government's intention to use the 1939
42
Act, retrospectively if necessary, why was it necessary for the Government to lay so much emphasis on the non-retrospective character of the 1980 Act?
Sir I. Gilmour: Because the 1980 Act does not apply retrospectively if applied to service contracts. But from the bits that I have already read out from the remarks of my hon. Friend the Minister of State, it will be seen that he kept the possibility of retrospection clearly before the House.
Mr. Teddy Taylor: Whether or not they are retrospective, what arrangements exist to ensure that other member States, particularly France, will honour the sanctions policy and not use sanctions as a device to secure contracts that would otherwise be secured by the United Kingdom? If my right hon. Friend thinks that this matter is hypothetical, perhaps I may ask whether he ever visited Salisbury, Rhodesia, during the time of mandatory sanctions, when it was difficult to move in Meikle's hotel without meeting Frenchmen and Germans?
Sir I. Gilmour: I think that my hon. Friend will appreciate that I have already answered that question when I said that we shall see that those who play cricket are not disadvantaged by those who do not.
Mr. Spriggs: Is the right hon. Gentleman aware that to bring in retrospection at this stage is letting down right hon. and hon. Members who went into the Division Lobby in support of the sanctions Bill? I am one of those hon. Members who opposed the Bill, because I could not trust the Government's foreign policy. Here we have a bankrupt policy being exposed to the world. If we are all at one in favour of getting the hostages released, for goodness sake let us have a foreign policy to which the whole of the House can agree.
Sir I. Gilmour: Certainly the Conservative Benches are very much in favour of a bipartisan foreign policy, and in some respects we have that. But as the hon. Gentleman voted against the Bill he does not have much cause to complain.
Mr. Maclennan: Will the Lord Privy Seal say what consideration the Foreign Ministers gave in their discussions to the position of companies that had already entered into contracts? Will the Government not allow the lack of precedent for

43
compensation to stand in the way of the obviously sensible need to compensate firms that have lost out as a result of the Government's action?
Sir I. Gilmour: As I have said, we shall take into account every relevant consideration. But in order not to raise false hopes, I must make clear that there is no precedent for giving compensation in these matters.
Mr. Campbell-Savours: The right hon. Gentleman said that there is no precedent. Has he consulted the Secretaries of State for Industry and Employment about special compensation being paid to workers who have lost their jobs in support of a measure that is put before the House as being in the national interest? Does not he think that that is due, particularly in the light of the reinterpretation of the Act that was before the House as a Bill the other day?
Sir I. Gilmour: I can only repeat what I said in answer to the last question.
Mr. Shore: The Lord Privy Seal, having listened to the exchanges in the House, will be aware that he has not satisfied the House, particularly on the question of retrospection, which is very important. I think I am also right in saying that he has not satisfied the House in his refusal to go wider than the narrow subject of Iran, important as it is, and to deal with the major questions that have been discussed by British Ministers in Vienna and Naples. I must ask the right hon. Gentleman again to reconsider what he has said and to make a statement on these subjects tomorrow.
Sir I. Gilmour: My statement had nothing to do with what was going on in Vienna, and I have already explained to the right hon. Gentleman—I am sure that, on reflection, he will realise this—the difference between an informal meeting and a formal meeting of Foreign Ministers.
Following is the statement:

IRAN

  DECLARATION BY THE FOREIGN MINISTERS OF THE NINE CONCERNING IRAN.
  1. At their meeting in Naples on 17 and 18 May 1980, the Foreign Ministers of the Nine Member States of the European Community reconsidered, in accordance with their declaration of 22 April, the situation resulting from the detention of the American hostages
  44
  in Iran, which constitutes a flagrant violation of international law.

  2. The Ministers examined the information emanating from Iran. While noting that there were a number of developments which could be important for the release of the hostages, in particular the completion of the second round of Parliamentary elections and the forthcoming convening of the Majlis, they were obliged to recognise that no decisive progress leading to the release of the hostages had been made since 22 April last.

  3. Consequently, they decided immediately to apply the measures provided for in the Security Council draft resolution of 10 January 1980, according to jointly agreed conditions and procedures. They agreed, in particular, that all contracts concluded after 4 November 1979 will be affected by these measures. They will continue to consult closely pursuant to Art 224 of the Treaty of Rome.

  4. The sole purpose of these measures is to hasten the release of the hostages. At the same time, the Ministers reaffirmed their intention to respect the independence of Iran and the right of the Iranian people to determine their own future.

  5. The Ministers expressed great satisfaction at the decision of the UN Secretary-General to entrust to Mr. Adib Daoudi, member of the UN Commission of Inquiry, the task of entering into contact with the Iranian Government in order to enable the Commission to resume its work and to secure the resolution of the crisis. They fully support the Secretary-General and will remain in constant touch with him in order to establish whether the progress of the UN mission is such as to enable them rapidly to suspend the measures taken in respect of Iran.

IRAN (LORD PRIVY SEAL'S STATEMENT)
Mr. Dalyell: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose or discussing a specific and important matter that should have urgent consideration, namely,
" the breach of the procedure of the House of Commons by the Government in failing to bring forward new legislation on Iran (Temporary Powers) in the light of the Lord Privy Seal's statement and the Government's decision to backdate the imposition of sanctions to 4 November 1979."
The matter is specific, in that the Iran (Temporary Powers) Act 1980 states, as a central part of the Act, that
" (2) An Order in Council under subsection (1)—(a) shall not apply to any contract made before the date on which the Order is made".
In the debate on the Iran (Temporary Powers) Bill the Minister of State, Foreign and Commonwealth Office referred to two important qualifications:

45
" Subsection (2) provides that no order under the Bill can apply to existing contracts or to any contracts made before the date on which an order under the Bill is made."
What can be clearer than that?
The Minister of State also said:
" This Bill gives the Government no power over existing contracts. Powers exist under the 1939 Act not over contracts but as regards the shipment of goods."
What could be clearer than that?
Indeed, in reply to my hon. Friend the Member for Derby, North (Mr. Whitehead), the Minister of State said:
" We would have power under the 1939 Act to deal with that situation, but as regards shipment, not contracts."—[Official Report, 12 May 1980; Vol. 984, c. 919–21.]
Perhaps the Minister is getting petulant about the 1939 Act. I should like to quote from "YY3", page 179, of Hansard, which has not yet been printed. At 4.30 am last Wednesday morning, the Minister of State, Foreign and Commonwealth Office said:
" the hon. Member for West Lothian has done nothing but read out great chunks of the 1939 Act, which does not seem to be relevant to the Bill or to his amendment."
I put it to him that those chunks were highly relevant.
If one looks at "R3", page 55 of the imprinted Hansard——
Mr. Speaker: Order. As the hon. Gentleman knows, he should confine his remarks to his application. He should not make the speech that he would make if his application were granted.
Mr. Dalyell: I draw those quotations to your attention, Mr. Speaker, because I do not believe in gesture politics. I do not believe that hon. Members should move the Adjournment of the House under Standing Order No. 9 for frivolous reasons, or for those of publicity. I am simply trying to persuade you, Mr. Speaker, that this is a serious case. In reply to my hon. Friend the Member for Nuneaton (Mr. Huckfield),—" R3 ", page 55 of the unprinted Hansard for 12 May 1980—the Minister clearly said:
" The Talbot contract is an existing one which would be affected, if at all, by the 1939 Act. The Government are fully aware of the contract."
The Minister made clear that the Bill applied to future contracts. The Minister for Trade spoke petulantly on 13 May
46
1980. If one looks at "VV3" page 280, one sees that it states:
" I remind the House that the Bill deals only with the question of future contracts."
Throughout the night that was in Ministers' minds——
Mr. Speaker: That may well be. However, the hon. Gentleman must make his case as to why a debate that has been promised, should take place tonight or tomorrow. That is the burden of his application. I do not want a rehearsal of the arguments that were used last week.
Mr. Dalyell: Through the learned Clerk Assistant it has been brought to your attention, Mr. Speaker, that some of us think that the Government's proposals introduce the principle of retrospective legislation. This is not a legalistic point, nor will it wait. Many contracts have been signed between 4 November and last week. In answer to your legitimate question, Mr. Speaker, that is why there is urgent need for a debate. Many firms have extremely urgent interests.
As proof, the trade figures—which were published on Friday—show that exports to Iran were worth £54 million in April 1980. The level of exports is slowly returning to the figure of £750 million per annum, the figure that existed before the revolution. It would be difficult to establish exact figures for the amount of business transacted between 4 November and the Royal Assent. Doubtless some exporters may try to backdate their contracts as a means of circumventing sanctions. But a managing director, who must remain nameless as he has not cleared the statement with his board, spoke to me this morning. His remarks demonstrate the urgency of the issue. He said:
" If sanctions are to be imposed from 4 November, then we are knocked for six, not only on account of current losses, but also on account of the ill-will of our customers, in Iran, who will turn to the Romanians and East Germans, and are unlikely to come back to us, after being let down on current work."
An export manager—who will remain nameless for obvious reasons—wearily said that if sanctions were to be backdated to 4 November, he would get straight on to his Turkish contacts to see how they could fulfil the contract, by transporting goods through Turkey. Even today, action is being taken.

47
The issue is of public importance because the Lord Privy Seal's statement is diametrically opposed to the presumably considered and reflected judgment that Her Majesty's Government took only 60 hours ago. The issue is urgent because we have been made to look little more than—I do not like to use such language—creatures of the Americans. It appears that we are subject to every pressure from Washington. Whether or not one likes that type of language, that degree of amenability to another country would seem to warrant urgent debate.
The issue involves retrospective legislation. Britain's reputation may be damaged not only in Iran, but throughout the Arab world.
The proposals before us are quite, quite different from those which we discussed last Monday, Tuesday and Wednesday. If the Government wish to proceed along the lines of the Minister's statement and if they wish to proceed with what purports to be the Naples agreement, they are honour bound to introduce new legislation. The proposals for that legislation should be a matter of extreme urgency.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
" the breach of the procedure of the House of Commons by the Government in failing to bring forward new legislation on Iran (Temporary Powers) in the light of the Lord Privy Seal's statement and the Government's decision to backdate the imposition of sanctions to 4 November 1979 ".
The House has heard the exchanges that took place. The Lord Privy Seal made clear that a debate would take place, and that this order cannot proceed without a debate. I think that I have not misjudged the situation. [HON. MEMBERS: "No."]—Order. As I understood the exchanges, it stated clearly that a debate would be held on the proposals that the Lord Privy Seal had outlined.
Mr. J. Enoch Powell: On a point of order, Mr. Speaker. With great respect, the Government's statement was to the effect that the House would handle an order made under the 1939 Act exactly as it would handle an order made under the 1980 Act. In other words, it can be annulled after it has been in force.
Mr. Speaker: Order. I am much obliged to the right hon. Gentleman for that point.
Mr. Jay: Further to that point of order, Mr. Speaker. I distinctly understood the Minister to say that the order would come into force, and that the House would be able to debate it afterwards. If that is not so, perhaps the Minister will make clear what he said.
The Lord Privy Seal (Sir Ian Gilmour): I think that I said that the timing of this provision would be decided in co-ordination with our partners, and as a result of discussions through the usual channels.
Several Hon. Members rose——
Mr. Speaker: Order. I am in the middle of giving a ruling on a point of order. The hon. Gentleman has sought leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely, the provisions that I earlier read out. I now understand that those provisions could come into operation without any discussion in the House. I am satisfied that the matter raised by the hon. Gentleman is proper to be discussed under Standing Order No. 9.
The leave of the House having been refused, Mr. SPEAKER called on those Members who supported the motion to rise in their places, and not less than forty Members having accordingly risen, the motion stood over, under Standing Order No. 9 (Adjournment on specific and important matter that should have urgent consideration) until the commencement of public business tomorrow

GENERAL COMMUNICATIONS HEADQUARTERS, HONG KONG
4.21 pm
Mr. Christopher Price: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
" the recent allegation that officials of General Communications Headquarters are and have been involved for some time in serious breaches of security and financial misappropriation over a considerable period of years in Hong Kong, the United Kingdom and elsewhere ".
The matter is specific. It is urgent because I submit that it is incumbent on the Government to respond in the House when allegations of this nature are made and supported by full and ample documentation, allegations which I understand will be enlarged in a Granada television "World in Action" programme this evening unless it is censored under the Official Secrets Act 1911 by the Independent Broadcasting Authority, which is considering it now.
I do not want to use this application to repeat the allegations in detail. Many hon. Members will have read them already. In general they concern extremely serious breaches of security and misappropriation of public money on a considerable scale.
I make only two points on the extreme importance of this issue. The first is that General Communications Headquarters come under one of the few headings of the Foreign Office budget which is not subject to the general scrutiny of the House. There is, therefore" an extra responsibility on the Government to allay public concern in an area from which Parliament has, as it were, traditionally withdrawn.
It is worth remembering that half a million pounds was spent by the previous Labour Government in highly expensive criminal litigation purporting to defend this institution from public scrutiny, and that the Committee of Privileges has considered related issues. It is only by a debate that these issues may be resolved.
The second reason for the extreme importance of this issue is that the Leader
50
of the House told us on Thursday—while making allegations that might have been understood as suggesting that I have a financial connection with one of the newspapers involved—which is quite untrue—that these are old issues which have all been investigated. That now turns out not to be true. Many allegations refer to practices that are still continuing and to the recent inquiry having been nothing less than a farce.
The Government brought a good deal of credit on themselves in the Blunt affair by refusing to cover up and by showing their commitment to open government. A debate on this issue could allow the Government once more to display those virtues to the House and ensure that these allegations do not persist for a moment longer than necessary.
Mr. Speaker: The hon. Member for Lewisham, West (Mr. Price) gave me notice before 12 noon that he would seek to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
" the recent allegation that officials of General Communications Headquarters are and have been involved for some time in serious breaches of security and financial misappropriation over a considerable period of years in Hong Kong, the United Kingdom and elsewhere ".
As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order but to give no reasons for my decision.
I listened carefully to what the hon. Gentleman said. In response to his request I read the article to which he referred. However, I have to rule that his submission does not fall within the provisions of the Standing Order. Therefore, I cannot submit his application to the House.
Mr. Ioan Evans: On a point of order, Mr. Speaker. Bearing in mind the timetable for tomorrow's business, are we to have a business statement from the Leader of the House?
Mr. Speaker: That is already provided for in the original timetable motion that was carried by the House. Hon. Members will be rather later tomorrow than they thought.

HOUSING BILL (ALLOCATION OF TIME)
Ordered,
That the Report [15 May] from the Business Committee be now considered.—[Mr. St. John-Stevas.]
Report considered accordingly.

That the following provisions shall have effect in substitution for the provisions of the Resolution of the Committee that was reported to the House on 7 May—

(1) the Order in which proceedings on Consideration are taken shall be New Clauses, Amendments to Clauses 1 to 26, Schedules 1 and 2, Clauses 27 to 49, Schedules 3 and 4. Clauses 50 to 75. Schedules 5 to 8, Clauses 76 to 124, Schedules 9 to 16, Clauses 125 to 127, Schedules 17 and 18, Clauses 128 to 136, Schedules 19 to 22 and New Schedules;

(2) the allotted days which under the Order [16 April] are given to the proceedings on Consideration and Third Reading shall be allotted in the manner shown in the Table set out below and, subject to the provisions of that Order, each part of the proceedings shall, if not previously brought to a conclusion, be brought to a conclusion at the time specified in the third column of that Table.

TABLE

Allotted day

Proceedings

Time for conclusion of proceedings

First day

…

…

New Clauses

…

…

…

…

…

…

11 p.m.

Second day

…

…

Amendments to Clauses 1 to 26 and Schedules 1 and 2.

5.30 p.m.

Amendments to Clauses 27 to 49 and Schedules 3 and 4.

6.30 p.m.

Amendments to Clauses 50 to 75 and Schedules 5 to 8.

9 p.m.

Amendments to Clauses 76 to 124 and Schedules 9 to 16.

10 p.m.

Amendments to Clauses 125 to 127 and Schedules 17 and 18.

Midnight

Third day

…

…

Remaining proceedings

…

…

…

…

6 p.m.

Third Reading

…

…

…

…

…

7 p.m.

Question, That this House doth agree with the Committee in their resolution, put forthwith, pursuant to Standing Order No. 43 (Business Committee) and agreed to.
Following is the report of the Business Committee:

ORDERS OF THE DAY

  HOUSING BILL
  [1st ALLOTTED DAY]
  As amended (in the Standing Committee), considered.
  Mr. W. Benyon: On a point of order, Mr. Speaker. May I raise with you the question of the selection list when we have two consecutive days on Report? I notice, Mr. Speaker, that you have selected amendments up to and including the section that ends at 5.30 pm tomorrow. I appreciate that that selection may be changed. Would it not be possible, in future, as we are likely to have a number of similar occasions, for the selections to go further? There are many outside the House who are involved. It would greatly facilitate hon. Members if they were enabled to plan further ahead.
  Mr. Speaker: I am much obliged to the hon. Gentleman. One of the problems is that starred amendments might not be selected. I shall consider carefully the hon. Gentleman's request.
  Mr. Tony Durant: On a point of order, Mr. Speaker. You have not, Mr. Speaker, selected new clause 10. May I presume that the new clause was defective? That presumption having been made, I do not challenge your ruling. I am merely saying that it is a pity that it has not been selected. Such an important clause, which involves about 20,000 houseboat owners, would have been well worth debating by the House. The non-selection of the clause leaves one small section of the community without security of tenure when a great deal of the Bill covers that very issue.
  Mr. Speaker: With respect, we would be here all day if every hon. Member rose to argue why his new clause should have been selected. The harsh truth is that the hon. Gentleman's new clause was not selected.

  HOUSING BILL
    New Clause 1

      RENT ASSESSMENT PANELS: PENSIONS FOR PRESIDENTS AND VICE-PRESIDENTS
      ' In Schedule 10 to the 1977 Act (rent assessment committees) the following paragraph is inserted after paragraph 7—
      54
      " 7A. The Secretary of State may, with the consent of the Minister for the Civil Service, provide for the payment of pensions, allowances or gratuities to or in respect of any person nominated to act as president or vice-president of a panel.".'.—[Mr. Stanley.]
      Brought up, and read the First time.
      4.28 pm
      The Minister for Housing and Construction (Mr. John Stanley): I beg to move, That the clause be read a Second time.
      The intention of the clause is to rectify a defect in pensions legislation as it applies to presidents and vice-presidents of rent assessment panels. There are 16 panels covering areas of England and Wales, and from their members are appointed rent assessment committees and rent tribunals under the Rent Acts. The presidents and vice-presidents serve mostly in a part-time capacity from one to four days a week.
      It was originally thought that the Rent Acts provided cover for the payment of pensions if justified under the public service pension rules governing those in part-time service. However, subsequent advice was to the contrary. The clause remedies that defect.
      It is in line with general Government policy since 1973 that part-time salaried office holders in public bodies should be eligible for pension, depending on their years of service. The clause provides an enabling power to pay pensions but not an obligation to do so. Under current policy for the pensioning of holders of public offices, pensions would be available only for those who served for a minimum of two days a week. A similar power has already been included in the Tenants Rights, Etc. (Scotland) Bill. I hope that the House will accept the new clause.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 2

      HOUSES IN MULTIPLE OCCUPATION: REVISED PENALTIES FOR CERTAIN OFFENCES
      ' Schedule (Houses in multiple occupation: revised penalties for certain offences) to this Act shall have effect, in relation to offences committed after the commencement of this section, for the purpose of altering penalties

      55
      for certain offences relating to houses in multiple occupation.'.—[Mr. Stanley.]
      Brought up, and read the First time.
      Mr. Stanley: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker: (Mr. Bryant Godman Irvine): With this it will be convenient to consider the following:
      New clause 13—Over-occupation of houses in multiple occupation.
      New clause 14—Registration of houses in multiple occupation.
      New clause 15—Warrant to authorise entry into houses in multiple occupation.
      New clause 16—Provision of means of escape from fire in houses in multiple occupation.
      New clause 17—Duty to ensure that houses in multiple occupation comply with relevant standard.
      New clause 18—Duty to deal with houses in multiple occupation not capable of complying with relevant standard.
      New clause 19—Standards in houses in multiple occupation.
      New clause 20—Houses in multiple occupation—service of notices, etc.
      New clause 21—Penalties for contravention of provisions relating to houses in multiple occupation.
      New clause 22—Amendment of provisions relating to houses in multiple occupation.
      New clause 23—Houses in multiple occupation—Interpretation.
      Government amendments Nos. 87 and 88, and Government amendments Nos. 201 to 204.
      Mr. Stanley: Apart from new clause 21 to which, obviously, new clause 2 relates, I shall confine my remarks at this stage to the Government's new clause, the new schedule and the accompanying amendments and return later to the important other new clauses tabled by the Opposition.
      In the Adjournment debates of 29 November and 31 March, my hon. Friend the Member for Hampstead (Mr. Fins-berg) and I said that we would consider updating the penalties for offences relating to houses in multiple occupation. We think that this should be done, and the Government's proposals are set out in
      56
      new clause 2, which is the paving clause, and in the schedule to which it relates, which is Government amendment No. 87. Our proposed penalties are in line with the policy followed by the last Government and by this one.
      At the bottom end of the scale, the penalties are brought in line with the four-point scale contained in the Criminal Law Act 1977. For more serious offences, the fines are directly comparable with similar existing provisions.
      The proposed £500 fine for failure to execute required works is the same as that in the very similar section 290 of the Public Health Act 1936, as updated by the Criminal Law Act 1977. The fines for contravention of registration requirements are the same as those for the same offence in relation to children's homes and old people's homes.
      Amendments Nos. 201 to 204 add to the full list of repeals in schedule 22 the four repeals which are referred to in amendment No. 87.
      The hon. Member for Leeds, West (Mr. Dean) has tabled his own amendment on penalties in the shape of new clause 21, under which the penalty ceiling is related to the rateable value of the house in respect of which the offence is committed.
      I am afraid that I am not able to agree to prescribe penalties in this way. My right hon. Friend the Home Secretary is also opposed to this system. There are no precedents for it, and I believe that the arguments against it are sound. There mere fact that there are no precedents is not necessarily an argument for rejecting the proposal. However, there are other sound arguments against it.
      If we move to a system of relating penalties to rateable values, it would suggest that the degree of seriousness of the offence bore some relation to the size of the house in respect of which the offence was committed. There might be some rough justice there, but it would probably be a fairly coincidental form of rough justice. It is self-evident that there could be serious offences in respect of relatively small houses in multiple occupation and relatively minor offences in respect of large houses in multiple occupation. I hope, therefore, that the hon. Member for Leeds, West will agree that

      57
      the Government's new clause on penalties is more likely to ensure that the range of criminal penalties bears a direct relationship to the nature of the offence committed.
      We accept that it is time that the penalties in respect of houses in multiple occupation were increased. Some of them have not been increased since the late 1950s and early 1960s. I hope that the House will agree that the formulation which we have brought forward on penalties is the right one to adopt.
      Mr. Joseph Dean: As the Minister said, this is the third debate in this Chamber since November about conditions in hostels and lodging houses. Each debate has to some degree progressed us along the way to a better deal for people who have to live in this kind of accommodation.
      I can see the logic in the Minister's argument against penalties being related to rateable values. However, perhaps I may be allowed to discuss the policy of penalties in a wider context.
      I am not opposed to the principle of raising the current levels of penalties against the owners of houses in multiple occupation who fail to comply with existing legislative requirements. But the Government's first priority should be to simplify and streamline exisiting legislation. It would then be less confused and would give the owners of such houses less excuse for non-compliance.
      I believe that fines and other penalties should be only a last resort. Local authorities should be provided with simpler procedures to ensure above all that where works were needed to be done to improve the facilities, management or fire precautions in premises, the authority could do those works quickly in the event of the owner's noncompliance and make a charge on the property against the owner. New Clause 17 is aimed at doing just that.
      Merely leaving existing legislation in its confused state but increasing the penalties will just prolong the time, delays and money which authorities have to spend on prosecutions and will bring no quick benefits to people living in bad or unsafe conditions.
      On penalties, new clause 21, which would provide across-the-board fines for
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      non-compliance based on a figure not exceeding twice the gross rateable value of the premises, Is well worth looking at, and it may be that other right hon. and hon. Members will wish to air their views on it.
      I shall confine the remainder of my remarks to new clauses 13 and 23 which, together with the new schedule in amendment No. 88, make up a comprehensive package of reforms of the responsibilities of local authorities towards houses in multiple occupation. Above all, the new clauses would provide local authorities with simplified and streamlined procedures and with mandatory duties, which in most cases they do not have at present, to tackle the worst of the multiply-occupied sector of lodging houses, hostels and night shelters.
      The package is based on the Housing (Houses in Multiple Occupation) Bill, a Private Member's Bill presented in this Session by me and parliamentary colleagues from all parties, and with the support of the Campaign for the Homeless and Rootless. The provisions of that Bill and, therefore, these clauses are based on recent judgments in the courts which made it clear that local authorities could treat lodging houses and similar establishments as houses in multiple occupation.
      These reforms in the law are needed urgently because the conditions in all too many lodging houses, hostels, night shelters and small seedy boarding houses are a national scandal. Now that we have largely cleared the slums from our cities, these places represent the last eyesore of Victorian conditions in the nation's housing.
      On Report, there is no need for me to give yet more examples of these unfit and degrading conditions. In my Adjournment debate on 29 November, the Minister said these
      " are certainly some of the worst housing conditions faced by those who undoubtedly are amongst the most deprived and the most vulnerable."—[Official Report, 29 November 1979; Vol. 974, c. 1625.]
      There is no argument between myself, the all-party Committee of CHAR and the Government that these are shocking housing conditions. Indeed, after the tragic fires in too many of these premises which have claimed 32 lives since early 1978, and, in particular, the terrible death toll in

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      the fire at the Kilburn hostel in March this year, there can be no argument between us about the urgent need for these conditions—housing conditions, not just fire precautions—to be tackled as a priority.
      The second reason why comprehensive reform of the present legal framework is urgently required is that the present legislation is confusing to local authorities and owners of premises alike, is, in some cases, archaic—like the common lodging house part of the Public Health Act 1936—and is complex and unwieldly to operate. Too much of it is discretionary and not mandatory.
      Brent council, in its published report on the tragic fire in Kilburn, described the range of legislation as a tangled web. I believe that is putting it mildly. Brent council is to be applauded for carrying out an inquiry and publishing a report. Even the council, I am sure, would say that current legislation is so tangled that it did not grasp all its complexities and implications. For example, its report says that the council could not have taken any action over that hostel as a common lodging house except when an application for registration as such had been made by the owners. In law, it is an offence for anyone to operate a common lodging house unless he registers with the local authority under section 236 of the Public Health Act 1936.
      I am blaming not Brent Council but the complexity of the many laws governing these premises. I hope all hon. Members would agree that the conditions of too many premises are shocking, that the present legal framework is a positive obstacle to action and that reform is needed. New clauses 13 to 23 and the new schedule in amendment No. 88 would secure that reform.
      I am encouraged by the recent support for these changes from many members of the public, from homeless people, from church dignitaries such as Cardinal Hume, from the Bishop of London and representatives of other churches and from a recent editorial in the Daily Star. In presenting my arguments for these clauses and the schedule together, I wish to concentrate on two chief principles behind them and illustrate those from two of the clauses.
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      I should like to deal with the simplifying and streamlining of procedures for authorities. Even if local authorities want to tackle the conditions of houses in multiple occupation in their areas, the present procedures are complex, lengthy and unwieldy to operate. If an authority wishes to, or ought to, deal comprehensively with a house in multiple occupation over its lack of facilities, management or fire precautions, the authority at present has to serve the owner with a notice under sections 12, 14, 15, 16 and 19 of the Housing Act 1961. Clearly, it would be preferable for one notice to be served for whatever defects exist or for all. The fact that present procedures are so complex is a golden excuse for those councils that want to shirk their responsibilities to do so.
      New clause 17 would bring in a simplified procedure to enable authorities to serve only one notice on an owner to remedy a defect of facilities, management, or means of escape from fire, or for all three. This would bring about a major saving in the time and paper work of environmental health officers while ensuring that standards were enforced. It would create a system which authorities, owners and people living in such premises could easily understand. New clause 17 further places the emphasis on getting necessary improvements done in houses that can be improved at reasonable expense by giving authorities greater powers to go in and do works to safeguard the occupiers and then to charge the owners in default.
      I come now to termination orders. Some premises being used for multi-occupation are either unsuitable for that purpose or would require too great an expense to be brought up to habitable use. They should be closed for such use. For decades, we have accepted that some dwellings are such slums that they must be cleared. From this principle, legislators in the past developed closing order procedures. Since 1935, at least, they have been on the statute book. Where that has been enforced in some of the larger authorities, such as Leeds, the scene of a tragic fire in which the occupants had to be dispersed, they were absorbed into the local authority housing stock. This can be done in many cases, although certainly not in all. Some difficulty would obviously be created.

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      4.45 pm
      New clause 18 is based upon and develops the principle of closing orders. It lays down that after six months—this might be thought too long a time in the case of the worst places—premises should cease to be used. This period allows for people displaced to be found alternative accommodation. As under established closing order procedures, new clause 18 lays down that authorities must secure that people displaced, like those under slum clearance schemes, have alternative units of accommodation secured for them. I believe that the only authority that could deal with such a situation is the local authority. We can surely do no less for those people who, according to the Minister, are
      " amongst the most deprived and the most vulnerable."—[Official Report, 29 November 1979; Vol. 974, c. 1625.]
      I wish to thank Ministers for their response so far to this situation. This is the last occasion for a considerable time that the House will have a chance to debate and legislate on this subject. There will be no opportunity in the rest of this Session for us to deal with it. I quoted in Committee a poignant and tragic letter from the mother of an 18-year old girl who died in the fire at Kilburn after only 12 hours at that establishment. She was giving part of her career to help look after more unfortunate people. Nine other people died in that fire, including the mother of three children. I submit that society cannot carry the stigma of allowing such incidents to happen without doing all it can to prevent a recurrence.
      I hope to have the support of Conservative Back Benchers for these clauses. With my colleagues in the all-party CHAR group, I hope that these proposals can push us some way further along the road towards achieving a better deal for these people. That will have been a worthwhile fight. I hope that progressive steps in this difficult matter do not come to be based on further obituaries, epitaphs and gravestones brought about by loss of life in appalling fires that are happening all too frequently.
      Mr. A. W. Stallard: I should say at the outset that I did not serve on the Standing Committee which discussed this Bill. At that time, I was involved in the long and arduous
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      discussions taking place in Standing Committee B on the Social Security (No. 2) Bill. Some of the provisions of that Bill as they affect the single homeless and the all-party CHAR group's views were as important as the provisions of this Bill, so it was impossible for me to serve on both Committees.
      However, as with all Housing Bills, I followed closely all the clauses and provisions as they affect local authority tenants, but perhaps more so as they affect the single homeless for which those on the all-party CHAR group have some responsibility. Therefore, I ally myself with those of my hon. Friends who have tabled new clauses and amendments in an attempt to give the Minister the opportunity, even at this late stage, to think again about how the situation can be improved.
      I know that there is more good will in this respect among Government supporters than there was on the Social Security (No. 2) Bill, as we learnt from two previous Adjournment debates. Therefore, I hope that the Minister, if he has a mind to reconsider the views expressed in these new clauses, will not be so harsh, as would appear to be the case at first sight, as to reject them. I make that plea early.
      I shall speak briefly in support of the new clauses and the amendments tabled by my hon. Friend the Member for Leeds, West (Mr. Dean).
      On new clause 2, the Minister made what my hon. Friend the Member for Leeds, West said was a telling point in relation to rateable value. I am not absolutely convinced. It is a telling point, except when put in its proper context and one gets a mental picture of what is being said. The Minister appeared to be comparing a semidetached with one of those multi-occupation houses in our inner cities. I think that there should be an in-between position. It may be that the suggestion in new clause 21, which would link it to rateable value, is not the right way, but the motive behind it ought to be taken by the Minister and his draftsmen and he should seek to bring back something somewhere between the two.
      New clause 2 would take us back to the age-old procedure of passing a new clause and the local authorities would

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      then be bound up with the delays in the procedure that would emanate from trying to implement the clause. Often, such clauses are impossible to implement. A whole range of penalties would have to be discussed and argued.
      We do not put that forward as our priority. We suggest that we should simplify it. Strange as it may seem, I am not a great supporter of private landlords. One would have thought that anything that attracted private landlords would get my automatic support! Our priority must be not to try to collect fines or to impose penalties, even if they could be enforced, but to get the job done. We want to enable the local authority, wherever and whenever possible, to step in quickly—no new clause covers that aspect, but it is part of the same principle—and do the job in default. It is more important to us to get the job done, to get standards brought up, than to have long drawn out legal arguments about this or that penalty. But I am afraid that will be the effect of new clause 2. However, new clause 21 and the motivation of trying to get round that difficult situation by preventing local authorities from embarking on even more expense as well as time, will enable these matters to be dealt with quickly and will improve standards.
      New clauses 13 to 23 and amendment no. 88 represent a package of provisions dealing with the housing of people who are inadequately housed. It is aimed at providing the kind of standards and conditions that were outlined in the Private Member's Bill that my hon. Friend tried to introduce last year. That Private Member's Bill had the support of the all-party CHAR group, amongst others. This package of reforms, because of the publicity that has surrounded many tragic accidents, has attracted a great deal of support from religious and voluntary organisations and those who are responsible for and have to work among the single homeless. This is a package to take care of that situation.
      The Bill, as I read it, is concerned mainly with the conditions of decently housed people—the owner occupiers, the mortgagees. It also deals with security of tenure for public sector tenants, home improvements and so on. That is all
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      very good and something that we could argue about for months. But the new clauses to which I refer relate to a different category altogether—thousands of people who are not decently housed, single homeless men and women, the mentally ill, the handicapped, the low paid, the deprived, the disabled and so on. Those thousands of people, to whom we have been referring for many years and whose plight has recently been spotlighted, require some kind of protection in any Housing Bill, such protection is long overdue. Therefore, this package of new clauses and amendments is an attempt to put into the Bill what should be in any Housing Bill.
      Unless these new clauses are accepted, the shocking conditions that have been outlined and discussed and focused on in the media recently will continue and will remain a scar on society for as long as they continue. I can find no better quotation than that of church leaders recently, who could have given us a title for this set of new clauses and amendments—" No choice, no chance, no hope." New clauses 13 to 23 are the "No choice, no chance, no hope" clauses because they attempt to put right the conditions of the homeless.
      There has never been more concern for the conditions of the single homeless than there is now, both inside and outside the House. That concern straddles both major parties. It is not the prerogative of any one party. We have excellent colleagues on both sides of the House who are concerned about this matter.
      Only recently my hon. Friend the Member for Leeds, West, the hon. Member for Anglesey (Mr. Best) and I addressed a mass rally in Trafalgar Square. The people directly involved had organised that mass demonstration to focus further attention on their plight Therefore, we are speaking to each other not as Opposition and Government supporters, but as people who have supported this campaign for a long time. Indeed, the vice-chairman of the all-party CHAR group, the hon. Member for Cheltenham (Mr. Irving), who is present, has given sterling support to all the Adjournment debates that we have had on this issue. Therefore, there is great support across the Chamber for these new clauses and amendments. We should not shirk from putting that concern into legislation.

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      When the die is cast, who will stand up and be counted? I think that there will be a fair number of hon. Members on both sides. It may not come to that. However, if it does, I hope that such support will influence the Minister in the decision that he has to make.
      I make that special plea because, like my hon. Friend the Member for Leeds, West, I am concerned that it might be a long time before we are able to do anything about this problem. Unless there is a Housing (No. 2) Bill, as there was a Social Security (No. 2) Bill, or even a Housing (No. 3) Bill—who can tell with legislation coming thick and fast from the Government—I fear that it will be a long time before we can again have this kind of discussion in the constructive atmosphere that prevails now and be able to do anything about this serious problem.
      As has been pointed out, there has been a series of sad, tragic fires. Only last week there was another in Glasgow. There were four deaths in that tragic fire. Since early in 1978, 32 people have died in such tragedies. That is far too many. Two are too many, but 32 become ridiculous and scandalous. It is about time that we did more than mouth slogans and express sympathy. We have to do something about it because it is an unacceptable state of affairs.
      While I welcome the Government's concession, it is a pity that the grant for the provision of fire escape equipment—as I understand the proposal—does not apply to Scotland. I am not certain, but as I read the proposal it seems that the concession does not apply to Scotland. No doubt, Scottish Members will correct me if I am wrong. But if it does not apply to Scotland, that is another terrible omission.
      5 pm
      However, welcome though it is, the concession is not enough by itself. There has been a great deal of misunderstanding about the amount of money. It has been said that the Government have increased the grant to £5,000. As I understand it, they have raised the eligibility for grant to £5,000. It is a different thing. Perhaps I have not studied the Bill closely enough. I do not know exactly what the percentage grant will be. It is said that it will be 75 per cent. Therefore, the amount, it seems to me, will be less than £5,000.
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      However, this is not the only provision with which we are concerned. Even if all premises were to receive a grant of £5,000, it would not be nearly enough for some hostels and similar establishments. Other things require to be done before we get anywhere near a solution to the problem.
      I am concerned, as much as anything, about the number of pensioners who stay in hostels and similar premises. A Government survey of 1976 demonstrated that one in five of the residents in hostels and lodging houses throughout the country was a pensioner. That is a fairly high proportion of those who are, by any standards, more vulnerable than most other people. Pensioners have other problems besides the conditions in hostels and lodging houses. They have problems of deprivation which should be examined and taken far more seriously than we have taken them hitherto. Those problems should not be pushed to one side because we believe that, perhaps, they will not last long and we shall not have to make provision for them.
      Therefore, it is not enough simply to provide fire precautions. We must provide the other resources in order to make available to people in hostels and similar situations the same facilities that are available to their fellow citizens. The facilities in the rest of the community should be theirs by right. The provision of such facilities should be our goal. We say that the legislation should ensure a high standard of housing. That does not simply mean the provision of fire precautions. It means all kinds of other provisions.
      New clause 19 gives power to the Secretary of State to set a national range of standards for houses in multiple occupation. That provision should commend itself to anyone who is genuinely concerned that the premises we are discussing should be brought up to an acceptable standard. When the Minister replies, I hope that he will give the reasons why he does not accept the new clauses rather than say that the Government do not like them. I hope that he will tell us why new clause 19 does not come up to the requirements laid down by his Department. I thought that the new clause would enable him to set appropriate standards for the different types of houses in multiple occupation.
      We are conscious of the range of houses in multiple occupation, and new clause

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      19 attempts to set up standards that could be applied across that range.
      Mr. Ronald W. Brown: I could give my hon. Friend a reason why the Minister might intervene to say that the new clause is defective. That intervention would be on the basis that there is no provision in the new clause that would stop Polyurethane foam being used in furniture. I can assure my hon. Friend that unless there is such a provision—whatever else is covered by the new clause—if there is a fire in a house or hostel in multiple occupation the people there will not get out.
      Mr. Stallard: I know of the concern of my hon. Friend the Member for Hackney, South and Shoreditch (Mr. Brown) about the fire hazards created by polyure-thane foam. It is a topical issue, and I share his concern. He has argued that point for many years, but I do not think that we could have included provisions about furniture in the clause. However, I would be happy if the Minister would take that point on board and let us hear his views.
      New clause 19 taken with new clause 14—where we have categorised the types of houses in multiple occupation—I would have thought stood a reasonable chance of being accepted by any Government concerned about standards in such houses.
      We say that this package of reforms is long overdue for a number of reasons. I give one or two of those reasons. First, under current legislation, there is no clearly defined standard for houses in multiple occupation. Consequently, local authorities are often left to set their own standards. I am aware of the various Acts dealing with standards from the 1920s to the 1960s, and many of us involved in work concerning public health have studied them. The issue of standards is very confused. In many cases, no acceptable or understandable standard is laid down.
      An example of a local authority setting its own standards is Leicester city council, which adopts a range of standards for different premises. The standards cover multi-occupied family dwellings, students' hostels, boarding houses and hostels.
      That seems a sensible approach to those of us in CHAR. But Leicester city council
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      is a rare exception. I do not know of any other local authority which takes that sensible approach and defines houses in multiple occupation by category. Few local authorities look at such houses and their uses and attempt to set standards. New clauses 19 and 14 seek to remedy that.
      Some local authorities have standards for family dwellings only, and they find those standards exceedingly hard to implement in hostels. Therefore, they do not try. It is not always possible to adapt a set of standards which apply to family dwellings to hostels or houses in multiple occupation.
      An inquiry showed that Brent council had difficulty in classifying the standards applicable to the Kilburn hostel. It was aware of the difficulties, as all local authorities are. I am not criticising local authorities—they are only too well aware that there is nothing on the statute book that adequately defines the situation or assists them.
      That is what the new amendments are about. Had definable and understandable standards been laid down over the years, perhaps local authorities such as Brent and others might have had something to refer to. Brent council experienced difficulty in applying a set of standards to the Kilburn hostel because its reference point was houses for family occupation. Many local authorities do not even go as far as that. They do not even try. They let it all hang out. They let it all happen, as it were.
      There is a grave need for the kind of legislation outlined in the new clauses. I am aware of most of the arguments against the new clauses. It will be said that there is adequate current legislation and that it is not being implemented. But it does not work any more. We have tried to bring the jungle of legislation together. To bring together the bits that have not been repealed is a massive task. Voluntary organisations have to try to do it. Unless we can bring together the legislation, we shall not begin to tackle the problems to which we pay lip service as a result of the recent tragedies.
      I ask the Minister to spell out exactly how the Government intend to deal with the problems which I have outlined. If there are objections to the new clauses, I expect the Government to explain the

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      alternatives. The Government have a duty to do that if a solution is to be found to the conditions imposed on the single homeless and the most deprived and vulnerable people in our society.
      Mr. Keith Best: The new clauses and the amendments linked with them deal with a group of people who had no advocate until recently. The rally in Trafalgar Square coupled with the interest in the House this afternoon and two Adjournment debates on the problem in the last six months prove that there is a resurgent interest in the problems of single homeless people.
      We must consider the magnitude of the difficulty. It is easy to talk about a problem but not so easy to judge it within the confines of its true proportions. Insufficient has been done to gauge the size of the difficulty. In the last few years, local authorities have rightly concentrated upon the housing problems of the elderly and families. As a consequence, single homeless people have been forgotten. That is changing. The Government are aware that action must be taken on behalf of single homeless people.
      I hope that the House will forgive me if I use some facts and figures to set the problem in perspective. Between 1961 and 1976, single person households increased by 86 per cent., compared with a 19 per cent. increase in all other households. By 1986, one-person households will account for 25 per cent.—or 5 million—of all households in England and Wales.
      On 25 March 1976, an article in New Society stated that of about 11 million single adults in England and Wales, 8 million were unmarried and that there were almost as many single adults as families composed of married couples or parents with children. The 13 million families in England and Wales almost exactly coincided with the number of household units of accommodation, but only 3 million of the single adults had places that they could call their own.
      A year later, the then Secretary of State for the Environment, the right hon. Member for Stepney and Poplar (Mr. Shore) said:
      " the rising housing standards of the great majority of the population contrast sharply and starkly with those of people still living in poor or unsuitable housing …in slums, houses lacking basic amenities, overcrowded
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      conditions, or sharing against their will and in difficult circumstances."
      The people who suffer most from poor standards of accommodation are the single homeless who are forced into lodging houses, sub-standard hostels and night shelters, over three-quarters of which lack the basic amenities.
      5.15 pm
      I welcomed the debates in November last year and March this year. They were introduced by the hon. Members for St. Pancras, North (Mr. Stallard) and Leeds, West (Mr. Dean). My hon. Friend the Member for Cheltenham (Mr. Irving) participated in one of the debates. He stressed that single homeless people not only have the deprivation of not having a roof that they can call their own but suffer from a variety of other infirmities such as alcoholism, psychiatric difficulties and related disorders.
      That is why I welcomed the eight-point plan introduced in the Adjournment debate on 29 November by my hon. Friend the Minister for Housing and Construction. It is encouraging that the Government made a few moves in the right direction after only six months in office. Mandatory grants are to be made available for securing the means of escape from fire. I congratulate the Minister on that. One can argue about the limit which is perhaps too low, but it is a step in the right direction.
      Secondly, the Minister referred to a special grant for the provision of basic amenities. That has come to fruition in the Bill. Thirdly, he referred to the updating of penalties. That has also come to fruition in the Bill.
      I shall examine the Minister's fourth point critically. He said that he had been in touch with the Law Commission and that it had confirmed that the consolidation of Housing Acts was a priority. I urge that course on my hon. Friend. Even hon. Members who suffer the burden of being lawyers and all that entails, including the opprobium that so often attaches to them, appreciate the complexity of existing legislation.
      I welcome the researches into the problems of single homeless people. I particularly welcome the announcement of a major research effort by the Department of the Environment into the accommodation problems of disadvantaged single

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      people. That research effort was announced on 29 November.
      The Minister wrote to me on 12 May to confirm that that major research effort was going ahead and that the report could be expected fairly soon. I disagree with the hon. Member for St. Pancras, North when he says that this will be the last opportunity for some time for us to discuss the problems of the single homeless. I hope that, when the result of the research is known, we shall be able to debate the matter on the Floor of the House.
      I have no doubt that the Minister will say that the new clauses and the amendments cannot be accepted because they place an additional burden on local government.
      Mr. Charles Irving: I have listened with great attention to what has been said. The subject is close to my heart. My hon. Friend the Member for Anglesey (Mr. Best) referred to more talks, further discussions, further legislation, more cackle—and on and on it goes. I have been a member of my local authority for 30 years. We were saying then exactly what we are saying today. We were saying that we must get rid of the prolific flea-pits in which people are expected to live. There is only one difference—the conditions in those flea pits faced by the single homeless are worse 30 years later than they were then.
      Would my hon. Friend be prepared to help by suggesting to the Minister—who has a deep concern about these matters—some way to remove those eyesores? Instead of cutting Housing Corporation money, the Government should allocate more money to remove a continuing national scandal, of which we are all ashamed.
      Mr. Best: My hon. Friend speaks with great emotion on the subject. I know that he feels sincerely—as we all do—about these matters. He has pre-empted my final thrust at my hon. Friend the Minister, who will say that the new clauses cannot be accepted because they change the powers into duties and that that is something which the Government do not wish to do, as it would impose further burdens upon local authorities.
      When we receive the result of the research project, that will be the time for
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      action. We have discussed the matter for far too long. If the Minister had been with me and some Opposition Members at the rally in Trafalgar Square, he would have seen the tempers of people becoming a little frayed. So often they have been given hope about what might happen in the future, but so often they have had those hopes dashed.
      The Government are moving in the right direction, but they are not moving fast enough. Something more concrete must be done. The Government may try to encourage more involvement by voluntary organisations. Heaven only knows we realise that, because local and national government in the past have totally abrogated their responsibilities for the single homeless, it has been the voluntary organisations on which the burden of the problem has fallen. I do not want to see that continue. The voluntary organisations will always have a part to play. I know intimately of one that provides a soup run on Brighton beach. I do not pretend that that function could be undertaken by the Government, but they have a part to play in ensuring that the squalid conditions that have been described in the debate are ameliorated. They can do that along the lines suggested by the hon. Members for Leeds, West and St. Paneras, North.
      I understand the present difficulties, but many hon. Members look to the Government with great hope to remedy the problems that have confronted the single homeless for far too long. A research project is being carried out, and we have discussed the matter on many occasions, even since the Government came into office. That is encouraging, but my hon. Friend the Minister must realise—and I am sure that he does—that the time for action is at hand. The House will not continue to talk about the problems of the homeless. We need to see action being taken, which may have to be along the lines proposed by Opposition Members, namely, by placing an additional burden upon local authorities. That may be the only way in which the problems can be solved.
      Mr. David Alton: I support the hon. Member for Leeds, West (Mr. Dean) and the series of amendments that he has tabled. I also echo the sentiments that Conservative

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      Members have expressed in their concern about the condition of many common lodging houses and houses in multiple occupation.
      Many hon. Members who represent the great cities know that within the cities exist the appalling flea-pits that were so adequately described by the hon. Member for Cheltenham (Mr. Irving). It is all very well for Ministers to say—I suspect with a certain amount of crocodile tears—that the conditions are dreadful, but they now have the opportunity to do something about those conditions. I hope that they will not throw away that chance. I agree with the hon. Member for Leeds, West that it could be a long time before the House has the opportunity to consider further legislation of this magnitude, and to do something about the conditions in our common lodging houses.
      I do not speak in ignorance on the matter. When I was the chairman of the housing committee in Liverpool we tackled the problem of a common lodging house that was owned by an entrepreneur who practised and traded in the misery of those who lived there—numbering more than 140. I visited the hostel. In some of the rooms there were eight or nine people—in one room up to 14—sleeping together in the most abject conditions that I have ever seen. It is a shame, a scandal and a reflection on all here, and on those in local government, that we have allowed such conditions to continue for so long.
      My local authority tried to tackle the problem by serving a control order on the proprietor of the "Unique" hostel, and by invoking the Public Health Act 1936. Eventually, on Christmas Day a couple of years ago, the local authority moved in and took over the hostel, threw out the owner, and took it into its own ownership. That authority was not hellbent on State control, or anything like that. I hope that the Minister will accept that there are times when intervention by a Government is necessary.
      Although we believed that many people wanted to own their homes, and tried to encourage a policy of home ownership and many of the other things that the Minister will talk about when he refers to other parts of the Bill, we accepted that there were matters that should be the legitimate concern of local and central Government.
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      There were 14 people sleeping in a room with bare floor boards. There was a range of outside toilets—there was no inside sanitation in that house. There had been no heating until the winter before. Year after year, the proprietor of the hostel had made £40,000 to £50,000 profit on that house. Those were matters of concern to members of all political parties in that city.
      The fact that Back Bench Members from both sides of the House, who are members of the parliamentary CHAR group, are expressing deep concern should cause the Minister to think about the problems in a wider perspective than the terms of the Government amendments that are before the House. I have considered carefully the amendments that they have suggested. Compared with the profits that can be made in many common lodging houses, the fines that can be imposed will be inadequate to stop the dealing in misery that is happening at present. The Government must accept that we are discussing rather more than the odd restriction here and the odd gesture there. It is a fundamental problem that causes great misery and hardship to many.
      It is not only single young people who end up in hostels, but many in the twilight of their lives, as the hon. Member for St. Pancras, North (Mr. Stallard) mentioned earlier. Many elderly people end up with nowhere else to go. Many local authorities do not have adequate accommodation for them. The cuts in public expenditure that we are experiencing will make it even more difficult for local authorities to provide sheltered accommodation, hostel accommodation and flatlets for the single homeless.
      I suspect that the paltry fines that are being suggested, and the gestures that are contained in the Government's amendments, will not go far. I do not wish to sound churlish and bitter, but it is a matter about which many people feel incredibly strongly. I commend to the Minister the new clauses in the name of the hon. Member for Leeds, West.
      There had to be legislation to deal with such items as fire escapes, following the tragedy at Kilburn. I remind the Minister that hon. Members from all parties raised that question on Second Reading, before the fire took place. We need to talk about the standards. The

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      hon. Member for Leeds, West talked about the duty of authorities to deal with houses in multiple occupation, which were not capable of complying with relevant existing standards. New Clause 13 states:
      " A direction under the foregoing subsection shall have the effect so as to make it the duty of person having control of the house not to permit the number of individuals or households accommodated in the house to increase above the limit specified ".
      The need to do all those things is a sad reflection on the present state of affairs in many of our common lodging houses and hostels.
      I conclude by referring to a letter that I have received from the Petrus Community, which deals with many single homeless people in Liverpool:
      " on a wider front we are concerned about the lack of adequate fire precautions and often appalling conditions which are still found in many hostels and common lodging houses in various parts of the country and which represent considerable hazards to the health, safety and welfare of their occupants."
      The 1936 Act, the measure with which most local authorities have to comply, is inadequate and insufficient. It is more suited to Charles Dickens than today. To have to talk about such problems in 1980 is sad enough. We have the opportunity not to wait for months or years for the outcome of studies but to act today by supporting the new clauses in the name of the hon. Member for Leeds, West.
      5.30 pm
      Mr. Gerald Kaufman: The House will want to pay tribute to my hon. Friend the Member for Leeds, West (Mr. Dean) for the way in which he has conducted his campaign on behalf of people who, almost by their nature, are unable to speak for themselves.
      I hope that the Minister will not confine himself to endorsing the sentiments that have been expressed from both sides of the House, but will give us a commitment to legislative action in the Bill. As the hon. Member for Cheltenham (Mr. Irving pointed out, reports and studies are useful, but action is required.
      My hon. Friend the Member for St. Paneras, North (Mr. Stallard) reminded us that we cannot rely on further major housing legislation for a long time, if at
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      all, in this Parliament. Therefore, the available vehicle of the Bill ought to be used to deal with the matter.
      Although we welcome the changes in penalties and grants that the Government have announced, they are an inadequate response to the problem. All that they are doing is to provide penalties after things have gone wrong. My hon. Friend the Member for Leeds, West and the hon. Members associated with him are seeking to stop now the things that go wrong, so that the penalties will not be necessary. The hon. Member for Anglesey (Mr. Best) referred to the studies that are taking place. However, studies are a convenient excuse for all Governments to postpone action that they know needs to be taken and that they know how to take. I hope that the Minister will not say that he requires more time in order to bring forward the necessary legislative provisions.
      In the four months since the Bill received its Second Reading, the Government have tabled 16 new clauses and five new schedules, many of considerable length, in order to deal with matters that have arisen during the passage of the Bill. The matter dealt with by my hon. Friend's new clauses was drawn to the attention of the House before the Bill was introduced. If the Government had had the will, they could have dealt with it in the Bill. I hope that the Government will either accept my hon. Friend's new clauses or amend the Bill in another place in the way that the House has shown that it wants the legislation amended.
      These inadequate lodging houses and hostels are a burden not only to those who have to put up with the conditions that have been described but to those who live near them. When such lodging houses and hostels are planted in a community, that community suffers from the overflow of problems from that hostel into the surrounding area. I have had such difficulties drawn to my attention by working people in my constituency whose own housing conditions are not as good as they should be and who have to put up with the sort of problems that inevitably flow from the existence of inadequate institutions—I use that word deliberately—in their neighbourhood.

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      The hon. Member for Cheltenham put his finger on the answer to the problem. He said that it is necessary for the Government to provide extra resources in order to enable the provision of what I take him to mean modern, properly constructed and properly planned buildings with proper facilities for those who live in them. I agree with the hon. Gentleman, but I would go further. If the Government were willing to make finance available for the general housing programme in order to provide accommodation for single people through local authorities and housing associations on the scale that is necessary, the demand for the use of the institutions with which we are concerned would inevitably be a great deal less.
      I am sure that the hon. Member for Cheltenham was not implying that the problems of those living in such institutions were other than the problems of the general housing situation. It is just that since they are at the bottom of the pile, they have to take what is left when everybody else has been accommodated. Since the provision for everybody else will in future be more inadequate than for a generation or more, these people will suffer more than ever.
      The eventual answer to the problem is not simply to provide better, more modern, purpose-built institutions, but to provide more resources for the housing problem, so that such institutions are a last resort places to which society should not have to resort.
      I hope that the Minister will not only utter the sentiments that I know spring sincerely to his lips when he is dealing with the problem. We know that he is profoundly concerned about it. I hope that he will give the House a commitment that the Government will try to use the opportunity provided by the Bill, if not here, at least in another place, to deal with the problem, so that we do not have to return to it throughout this Parliament and do not have to keep being reminded of it by the sort of tragedies that my hon. Friends have described.
      Mr. Stanley: I start by echoing what the right hon. Member for Manchester, Ardwick (Mr. Kaufman) said about the way that the hon. Member for Leeds, West (Mr. Dean) has contributed to our debate and, with my hon. Friend the
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      Member for Cheltenham (Mr. Irving) and the hon. Member for St. Paneras, North (Mr. Stallard), to the all-party CHAR group.
      One of the happier aspects of the problem, which I do not underestimate, has been the degree of bipartisanship on the issue. I assure the hon. Member for St. Pancras, North that there is good will, and much more, on this issue on the part of the Government.
      The right hon. Member for Ardwick said that the Government's response had been inadequate to date. I do not wish to be in any way partisan, but there was no legislation whatever on hostels in the last Parliament, and none of the clauses that have been introduced by the hon. Member for Leeds, West featured in the previous Goverment's Housing Bill which was introduced a year ago. So, in legislative terms, we are all starting from the same position.
      I should like to make two general comments and then respond in a little detail to the important points raised by the amendments tabled by the hon. Member for Leeds, West. First, I assure the House that the Government fully accept that there are legitimate grounds for concern in certain aspects of the provision of hostels. That concern does not apply to every hostel or to all aspects of hostel legislation, but there are certainly some dark corners.
      It may be helpful to the House if I indicate what we have done to date, and then say what we are thinking about for the future. As the House is aware, we have produced a tenfold increase in the eligible expense limit for the Exchequer contribution to the means of escape in the event of fire. That is wholly warranted, and, although my hon. Friend the Member for Anglesey (Mr. Best) reasonably said that no sum was sufficient, it represents a substantial advance on the figure that was included in the Bill when it was first introduced.
      We have also made special provision for grants for repairs in hostels. Following an amendment that was introduced in Committee, we have extended the eligibility for rent rebates and rent allowances to those people living both in local authority and privately-owned hostels. That is an important extension of financial help to people on low incomes.

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      We have put forward the new clause on penalties, and despite what was said by the hon. Member for Liverpool, Edge Hill (Mr. Alton), there is, as he will be aware, a broad structure of penalties which has to go right across legislation. Although he may feel that these penalties are too low, there is a broad Government stance on penalties. There has to be some reasonable comparability of penalties against comparable offences.
      During the last few months, we have also asked the housing services advisory unit within the Department of the Environment to carry out a study of conditions in hostels. I assure the right hon. Member for Ardwick that there was no thought in my mind when taking this initiative to use it as a means for delay. We took this step because we found that we did not have sufficiently comprehensive and up-to-date first-hand information about conditions in hostels. We thought that was an essential pre-condition before we could take a further view on legislation. That is why that work has been set in hand. We hope to receive the report shortly, and if it is at all possible we shall make it available before the Bill completes its remaining stages before both Houses of Parliament.
      As my hon. Friend the Member for Anglesey mentioned, the Government are seeking to consolidate housing legislation. That will add materially to the point highlighted by the hon. Member for St. Pancras, North. This is a complex and difficult area of legislation, and consolidation will materially help local authorities and other statutory bodies to understand the exact scope of the legislation.
      Reference has been made to resources. That is a wholly legitimate subject to raise. In the current financial year, the Housing Corporation will allocate 5 per cent. of its total London allocation to hostel provision. I shall have further discussions with the Housing Corporation about that figure, but I cannot hold out any prospect of an increase in the overall allocation to be made to the Housing Corporation this year. An increase in the provision for hostels would be at the expense of reductions in other parts of the Housing Corporation's work. I shall certainly examine the level of hostel provision with the Housing Corporation in the context of the current year.
      5.45 pm
      Mr. Best: I should like the Minister to consider that, though the hostel deficit grant, public resources can be used in an efficient way in improving hostel accommodation which is largely provided through the medium of voluntary organisations. Massive public resources do not have to be employed through that medium. I hope the Minister will bear that in mind.
      Mr. Stanley: I agree with my hon. Friend, and may I say, in response to a remark made by the right hon. Member for Ardwick, that I do not necessarily see the housing association contribution as residual in this context. The housing associations have an important mainstream role to play in hostel provision.
      Mr. Ernie Roberts: Is the Minister aware that the local authority in my constituency emptied a large dwelling that was not fit for human habitation in order to carry out repairs? As soon as it became vacant, 130 young people who required accommodation squatted there, showing the extent of the problem, even in that area. How will that sort of problem be solved?
      Mr. Stanley: The hon. Gentleman will be aware that there are certain provisions in the Housing Bill governing squatters. Squatting is a matter of litigation between the squatters and the local authority.
      My second general point bears particularly on these amendments. There is an important matter of principle in approaching fresh legislation on hostels. Although some of the amendments raise considerable implications for local authority administration, I do not suggest that they are overriding factors. We have considered the new clauses on their merits. An essential dilemma which we face—and which the whole House faces—is that those in hostels are certainly amongst the most deprived and most vulnerable. Yet a critical balance has to be struck in legislative terms. We must provide sufficient statutory protection and regulation to provide the degree of protection that we should like to see for the most vulnerable and the most deprived. But we must not tip the legislative balance so far that a series of onerous

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      statutory obligations is imposed on local authorities, and more particularly on those who own, run and manage hostels, which will force a great number of hostels to close. The House will be aware that about half of the hostels are run by voluntary bodies, such as the Salvation Army and the Church Army. A balance has to be struck between the degree of protection and the level of standard that we wish to see and ensuring that the existing hostel provision—which provides a crucial source of shelter for some very deprived people—remains, and that we do not contract it unduly.
      I shall deal briefly with the four main themes running behind the new clauses—overcrowding, registration, standards and fire.
      As the House will be aware, there are already substantial powers available for local authorities to deal with overcrowding. This is under relatively recent legislation—section 19 of the 1961 Act and section 90 of the 1957 Act. It is possible for local authorities to fix ceilings concerning the number of people in houses of multiple occupancy in relation to all the items listed in the new clauses. It can be done in relation to lighting, ventilation, water supply, washing facilities, drainage, toilets, food storage and preparation, and space heating.
      The one criterion not included in the 1961 Act is that of living space. This was the subject of an amendment tabled in Committee by the right hon. Member for Rhondda (Mr. Jones). We said that we would consider a legislative amendment to enable the criterion of living space to be included. I assure the right hon. Member that we have it very much under consideration. I cannot make a firm commitment as of today because we have not gone through the drafting of it, but it is an amendment that I hope will be brought forward in another place. That would then give the local authorities the full range of criteria against which to use their existing powers on overcrowding.
      New clause 13, as drafted, would have the effect of reducing the existing powers of local authorities concerning overcrowding. Local authorities would be able to fix a ceiling only when a house was overcrowded, whereas under present legislation they are able to fix a ceiling before overcrowding occurs. That, clearly,
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      is an important additional preventive power that local authorities now have, and obviously should have. For that reason alone, therefore, we feel that it would not be right to accept new clause 13. But I assure the hon. Member for Leeds, West that we are considering whether we should be widening the statutory criteria against which local authorities can deal with overcrowding.
      As the House knows, the issue is not whether there should be registration, because there are already substantial powers available to local authorities to deal with registration—under section 22 of the 1961 Act and under section 64 of the 1969 Act. The central issue that we have to decide is whether we should continue with the existing discretionary registration system or whether we should go over to a national mandatory registration system, as set out in new clause 14.
      Having considered this question very carefully, it is our view that we should retain the existing discretionary system. The hostel problem is, in its most acute form, a problem for a relatively small minority of local authorities. Obviously, it exists to a greater or lesser extent throughout the country, but the acute problem is one for a minority of local authorities. That is reflected in part, at any rate, by the fact that only 38 out of 367 local authorities have used the existing registration powers.
      Mr. Joseph Dean: But is it not a fact that, although the pressure points are few in number, the authorities concerned cater for the biggest part of the population of England? When we have talked about London, Liverpool, Manchester and Birmingham, there is not much left.
      Mr. Stanley: I agree with the hon. Member that in geographical terms the essential problem is confined to the major city areas, where there is a heavy concentration of population. But the statutory effect of new clause 14 would be to impose a mandatory registration system on every one of the 367 local authorities in England. It would involve the registration of probably in excess of 200,000 dwellings. That is likely to be a very conservative estimate because, as the clause is drafted, it would require the registration of all dwellings in which there were two households. In other words, it would apply to the dwelling which had

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      the basic family plus one lodger living as a separate household and sharing part of the amenities. That would fall within the definition for registration purposes. It would be a massive undertaking to carry out nationally, and in addition it would have to be kept up to date.
      There is a slightly worrying feature about the extension of criminal penalties in respect of the obligation that someone would have, if he came within the B and C categories, to notify the local authority. If he railed to notify the local authority, he could incur a criminal penalty in the shape of a fine. I shall take the most extreme view as an example. If someone took in a lodger on the basis that the lodger was a separate household but shared part of the facilities, and then failed for a year to notify the local authority that he had done so, he could, theoretically, be liable for a penalty of £3,500.
      A major burden would be placed on all those in quite small households—houses with just two households—to notify the local authority. If they failed to do so, they could suffer a criminal penalty. The proposal is very far reaching in administrative terms. We feel that the right way to proceed would be through the existing discretionary system of registration by local authorities.
      With regard to standards, the question is similar to that of registration. Here, too, there are substantial powers available to local authorities to secure the improvement of standards in houses of multiple occupation. They can require work to be carried out. They can carry out the work themselves if the owner does not do it. They can also, in some circumstances, close hostels.
      The new clauses would replace the existing ability of local authorities to apply standards on a discretionary basis—on an authority by authority basis—by a system of national mandatory standards. Here again, we could run into some major problems not merely with regard to local authorities but also with regard to the people who live in the hostels.
      There is the most enormous variety and variation in the dwellings that would be covered by the new clauses. They would range from dwellings hundreds of
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      years old to newly-built dwellings. They would range from dwellings with two households to enormous places with up to 1,000 bed spaces. A great variety of individuals are responsible for these dwellings. In trying to prescribe a system, we should have to choose between establishing the lowest common denominator—to be realistic, for this great variety of houses in multiple occupation, that could be below some of the existing standards now applied by some authorities—and having a mandatory system of national standards. The result would be almost certainly the loss of some of the hostel accommodation.
      The House might say that some of the accommodation should be closed, but before that is said we have to consider the effects on those who are using the accommodation at present. In our approach to legislation, we should not take steps which could result in people who have very basic accommodation running the risk of losing it in certain circumstances.
      I now turn to what has been said about the life and death issue of fire, the most important single issue before us. I assure the House that we shall study very carefully the report that has been made by the Brent council into the Kilburn fire, and also the report that we are expecting to receive shortly from the London Fire Brigade into that fire.
      6 pm
      There are three central issues that we must examine here—first, the level of public financial support in contributing towards means of escape from fire; secondly, whether local authorities need further guidance in interpreting their statutory obligations; and thirdly, whether the legislation itself should be altered. One can always say that the level of grant is too low. Certainly the original figure of £500 was too low. Some may say that £5,000—the figure now in the Bill—is also too low. However, the £5,000 is a material improvement, and there are powers already in the Bill whereby it is possible, on an individual case, to go above the eligible expense limit laid down. The £5,000 ceiling is not necessarily absolute in each and every case.
      We have considered whether further guidance should be issued to local authorities, and we have concluded that it should be given about local authorities'

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      responsibilities under existing fire legislation. Therefore, when we have considered the report on the Kilburn fire, and following the enactment of this Bill, we shall issue further guidance to local authorities. That may be a useful advance.
      Finally, I turn to whether there should be fresh legislation. I cannot accept new clause 16 as drafted. I do not just quarrel with the drafting; there is a substantive point of principle at issue. The clause sets in motion a statutory chain of events involving both the local authority and the fire authority, and leads to the compulsory installation of the means of escape from fire. Clearly, it is right that in certain circumstances there should be such a statutory chain of events, but the difficulty with the clause is that that statutory chain of events can be set in motion by someone who is described as "an aggrieved person". It may be done solely by an aggrieved person. It is our firm view that the intitia-tive for taking statutory, mandatory action on the question of fire must lie firmly with the local authorities, in consultation with the fire authorities.
      Having said that, I shall consider further, with my right hon. Friends and without commitment at this stage, whether the statutory duties of local authorities need to be strengthened. We intend to complete our consideration of that in time for any amendments—should we decide that any are necessary—to be included in the Bill in another place. I assure hon. Members that we are considering further the statutory position of fire legislation in the context of the Bill.
      I hope that the House will appreciate that we have considered very carefully and in great detail the points raised by the new clauses. We have already taken, both in this Bill and administratively, more action over the past 12 months than has been taken for several years. We still reckon that we have further possibilities before the Bill is on the statute book. Therefore, I do not regard this debate as the last chance. I hope that the House will agree that we are trying to approach this matter constructively, in the light of the need to improve conditions in hostels without taking legislative steps that might disadvantage those who use them.
      Question put and agreed to
      Clause read a Second time, and added to the Bill.
      Mr. Stallard: On a point of order, Mr. Speaker. I seek your guidance. A number of my hon. Friends and I wish to vote on new clause 13. When will that be appropriate?
      Mr. Speaker: When we reach it, and we shall not reach it for some time.

    New Clause 3

      POWER TO COMMUTE TRANSITIONAL TOWN DEVELOPMENT SUBSIDY AND PAYMENTS TO RECEIVING AUTHORITY
      '.—(1) Where, under section 5 of the 1975 Act, transitional town development subsidy is payable to a sending authority for years later than the year 1979–80 the Secretary of State may, with the agreement of the sending authority and of the receiving authority, determine—

      (a) to commute further payments of transitional development subsidy into a single payment of an amount detemined by him or calculated in a manner determined by him; and

      (b) to commute the corresponding payments by the sending authority to the receiving authority under subsection (6) of that section into a single payment of an amount four times that payable under paragraph (a) above.

      (2) In making a determination under this section the Secretary of State shall make such allowance (if any) as appears to him appropriate for circumstances in which, if there were no commutation, his power under section 5 of the 1975 Act to reduce or discontinue the sending authority's transitional town development subsidy might be exercised.'.—[Mr. Geoffrey Finsberg.]
      Brought up, and read the First time.
      The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): I beg to move, That the new clause be read a Second time.
      The purpose of the new clause is to enable the Secretary of State, with the agreement of the authorities concerned, to commute further payment of transitional town development subsidy, payable to sending authorities, and the associated rate fund contribution, payable by sending authorities, into lump sums.
      The 1972 Housing Finance Act required sending authorities under town development agreements to contribute from their rates to the rate fund of the receiving authority to compensate for the

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      extra burden. The Exchequer paid a rate fund subsidy of 25 per cent. to the sending authority. The contributions for the subsidy were to continue for the periods specified in the town development agreements, which were mainly for 10 years, but one or two stretched to 12 years.
      The 1975 Housing Rents and Subsidies Act provided that in the case of newly provided dwellings an exporting town subsidy would be paid direct to the receiving authority. Most of these agreements will expire before 1985 and a few will expire in 1987. The principal contributors and recipients are within the Greater London Council. The GLC has suggested the power to commute into a lump sum payment, and it believes that the receiving authorities agree in principle. Certainly, that is the information that has been given to us. This seems a sensible proposition. I stress that it can operate only by mutual consent. We propose that enabling powers will be taken to streamline the system for ease of administration and ease of accounting procedures. I believe that it is in the best interests of sound, sensible local government co-operation.
      Question put and agreed to.
      Clause read a Second time and added to the Bill.

    New Clause 4

      DISPOSAL OF LAND BY REGISTERED HOUSING ASSOCIATIONS
      (1) Without prejudice to the provisions of Chapter 1 of Part I of this Act, every registered housing association shall, subject to section 2 of the 1974 Act (control by Housing Corporation of dispositions by housing associations), have power by virtue of this section, but not otherwise, to dispose in such manner as it thinks fit of any land held by it.
      (2) If, in a case where a registered housing association disposes of any land, section 39 of the Settled Land Act 1925 (disposal of land by trustees) would apply but for this subsection, that section shall not apply in relation to the disposal: and accordingly the disposal need not be for the best consideration in money that can reasonably be obtained.
      (3) Nothing in subsection (2) above shall be taken to authorise any action on the part of a charity that would conflict with the trusts of the charity.
      (4) Subsections (2) to (8) of section 104B of the 1957 Act (repayment of discount on
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      early disposal of freehold or lease), which are inserted in that Act by section 87 of this Act, apply in relation to a disposal by a registered housing association made under this section with the consent of the Housing Corporation, as they apply to a disposal by the local authority made under section 104 of that Act with the consent of the Secretary of State; and accordingly do not apply in any such case if the consent so provides.
      (5) Section 104C of the 1957 Act (power to impose covenant limiting freedom to dispose of houses in National Parks and areas of outstanding beauty, etc.), which is also inserted in that Act by section 82 of this Act, shall apply in relation to conveyance, grant or assignment executed under this section by a registered housing association as it applies to a conveyance, grant or assignment executed under section 104 of that Act by a local authority.'.—[Mr. Stanley.]
      Brought up, and read the First time.
      Mr. Stanley: I beg to move, That the clause be read a Second time.
      Mr. Speaker: With this we may take new clause 6—Consent of Housing Corporation to disposals of land by housing associations and trusts
      Mr. Stanley: This new clause gives all housing associations registered with the Housing Corporation the power to sell. It applies to co-ownerships as well as to associations providing rented accommodation, and it applies whether or not the association is a charity.
      It will be useful to non-charitable associations whose tenants will also have the right to buy because it will enable those associations to sell by agreement as an alternative to the statutory right-to-buy procedure if it suits both parties. It will also enable them to sell to any of their tenants who are excluded from the right to buy, if they so choose.
      The main purpose of the new clause is to fulfil an undertaking that I gave on 30 January when I said that, in addition to giving the right to buy to the tenants of non-charitable housing associations, we should also give charitable housing associations, co-ownerships and co-operatives the power to sell if they wished.
      I shall say something about each of these categories in turn. First, I deal with charities. We have decided, and clause 2 of the Bill reflects this, that it would not be possible to extend the right to buy to the tenants of charitable housing associations. These associations have a special legal position and have often

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      provided their housing with the benefit of private donations instead of with public funds. However, we think that it is right that charities should be able to sell to their tenants if they wish, and to do so at a discount. I emphasise that it will be for charities themselves to decide whether to sell any particular house or flat. If they decide to sell, it will also be for them to decide what discount, if any, they wish to offer, provided that it does not exceed the discount that would have been available had the sale been under the right-to-buy procedure. I hope, however, that charitable associations will give careful consideration to their use of their new ability to sell when tenants want to buy.
      Secondly, I turn to co-ownerships, which are independent self-governing bodies. Although many were set up under the auspices of the Housing Corporation, and have received corporation loans, they have received no Government subsidy, apart from option mortgage subsidy. The corporation's loans to co-ownerships have always been at commercial rates. The self-governing nature of co-ownerships is incompatible with giving individual members the right to buy regardless of the wishes of the co-ownership as a whole. I have, however, received many letters from co-ownership societies and from individual members, the great majority arguing that co-ownerships as a whole should be able to sell and their members to become owner-occupiers. This clause makes this possible.
      I am, however, very conscious that in some societies the great majority of members may be willing and able to buy their homes, while a few, perhaps elderly residents, who cannot easily raise a mortgage, will not be in the same position. Because of this, it is necessary to make the sale of properties in co-ownership societies subject to certain safeguards.
      The first safeguard is that a decision by any society to sell property must be taken with proper participation by its members. This means that 100 per cent. of the members should have the opportunity to decide and that as far as posible they should all participate in the decision. Secondly, the majority, as defined in the society's rules, which will normally mean three-quarters of those
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      voting, will have to be in support of any decision to sell. Thirdly, consent for a co-ownership to sell will normally be conditional on the whole of a society's outstanding mortgage debt being repaid. This would normally lead to 100 per cent. individual ownership. The exception might be where co-owners who were unable or unwilling to buy could continue as a viable society.
      Co-ownerships are self-governing bodies, and it will be for each co-ownership society to decide for itself how to distribute the liability for redeeming the outstanding mortgage debt amongst its members. As these dwellings have not been subsidised with public money, we do not propose to lay down any other conditions about sale price, apart from the obligation on the society to extinguish all outstanding liabilities.
      Under new clause 6, the consent of the Housing Corporation is required for sales by a co-ownership society. The corporation will thus be responsible for seeing that the conditions to which I have referred are complied with and will also be in a position to see and approve of the arrangements made by each co-ownership—for instance, if there are members who are unwilling or unable to buy.
      Finally, this new clause will enable cooperative societies to sell properties to their tenants. Under the Bill, the right to buy extends already to tenant management co-operatives and to co-operatives which do not have fully mutual rules. The reason it does not apply to fully mutual co-operative societies, all of whose members are tenants and all of whose tenants are members, is that, like co-ownerships, they are also self-governing bodies. However, there is no reason why they should not be enabled to sell to their members if they wish. If they do, the financial arrangements will be the same as those for charitable housing associations. Co-operatives will be able to sell at such discounts off market value as they choose, subject again to the restriction that discounts should be no greater than those on right-to-buy sales.
      This is an important new clause, covering more than 200,000 tenants in all. It will help to extend home ownership and it will do so in a way that recognises the special status and organisation of the

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      different types of housing association, co-ownership society and co-operative. I hope that the House will be willing to agree to it.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 5

      POWER OF LOCAL AUTHORITY TO REQUIRE REPAIR OF HOUSES
      ' In section 9 of the 1957 Act (power of local authority to require repair of unfit house) after subsection (1A) there are inserted the following subsections—
      " (1B) Where a local authority, on a representation made by an occupying tenant, are satisfied that a house is in such a state of disrepair that, although it is not unfit for human habitation, the condition of the house is such as to interfere materially with the personal comfort of the occupying tenant, they may serve upon the person having control of the house such a notice as is mentioned in subsection (1A) above.
      (1C) In subsection (1B) above, ' occupying tenant ' has the same meaning, in relation to a dwelling which consists, or forms part, of the house concerned as it has in section 104 of the Housing Act 1974 ".'.—[Mr. Geoffrey Finsberg.]
      Brought up, and read the First time.
      Mr. Geoffrey Finsberg: I beg to move, That the clause be read a Second time.
      The purpose of this new clause is basically to restore the position of local authorities to what they thought it was prior to the case of the National Coal Board versus Thorne in 1976. A 1942 High Court decision enabled local authorities to use statutory nuisance provisions in the Public Health Acts to secure the remedying of defects, which might not be substantial in themselves but which interfered with the personal comfort of occupiers. Examples such as leaking roofs and defective gutters spring to mind as typical of what was intended.
      6.15 pm
      Local authorities, as those of us who have served on them know, made substantial and effective use of those powers. In 1976, the Divisional Court ruled against the 1942 court decision, in effect, and said that conditions which affected only the occupiers could not be dealt with unless they were prejudicial to health. This caused well justified concern, and
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      we decided to legislate. It is fair to say that whilst this provision was not in Labour's Bill, the Labour Government's consultation paper said that they would look into this matter to see what the extent of the problem was. We have had the benefit of being able to do that, and we decided that it would be right to legislate.
      Local authorities have existing powers to deal with substandard houses. They can require an unfit house to be made fit where this can be done at reasonable cost. They can require works of repair to a house which is not unfit but in a state of substantial disrepair. But I think that the House would agree that these are major powers of a somewhat sledgehammer nature.
      In the circumstances of a particular case, a local authority might well not be able nor wish to require very extensive and expensive repairs to an old house. It might not be economic. This new clause gives local authorities power to deal with a defect which, whilst it may not be substantial in itself, may be causing distress or problems to the tenant. It differs in two ways from what was believed to be the position prior to the 1976 court decision. First, it can be used only when the local authority has received representations from the tenant. It cannot be used against owner-occupiers. Second, the appeal and enforcement provisions that will apply will be those common to those existing in Housing Acts. The right of appeal to courts against the notice will be there, but subject to this, if the notice is not complied with, the local authority can do work in default and recover its costs.
      To make the situation crystal clear, I stress finally that the statutory nuisance provision will continue. If defects create conditions prejudicial to health, the local authority is perfectly able to continue to proceed under the Public Health Acts.
      Mr. R. C. Mitchell: As the Minister said, if a house has a leaking roof, a statutory notice can be served on the landlord to repair it. However, one area in which there has been a lack of such provision is with defects in electrical wiring in a house. This matter has arisen on many occasions in the past. I have known of

      93
      houses in Southampton with defects in electrical wiring. As I understand it, the local authority has no power to compel the landlord to correct such defects. In a number of cases in my area, the electricity board has said that electrical wiring was dangerous, and the only thing that could be done was to turn off the supply of electricity. This has happened to a number of old people in the past. Their power supply has had to be cut off because of defects in wiring.
      In cases where electrical wiring is ruled to be dangerous, will the new clause enable the serving of a notice on the landlord to make him carry out the necessary works? That is a simple question on an area in which, apparently, there has been a gap in legislation.
      Mr. John Sever: Will the Minister define the words
      " the person having control of the house "?
      I assume that if a local authority served a notice it would be served on the owner, his appointed agent, or someone generally referred to as the landlord. Will the hon. Gentleman confirm that if someone wishes to draw the local authority's attention to a defect in his house, he will not have to wait for the local authority to track down an absentee landlord? In the past, that has often been a problem.
      Mr. James Hill: I seek some clarification from the Minister. Some of the worst landlords are local authorities. As chairman of a housing committee in Southampton, I sometimes find myself under pressure to deal with essential repairs. Tenants have become more selective in their requirements, particularly in respect of fencing and the provision of inside toilets. Will the Minister make some provision in the new clause for local authority tenants?
      Mr. Geoffrey Finsberg: The hon. Member for Southampton, Itchen (Mr. Mitchell) asked about electrical wiring. I am advised that that is an issue for the courts to decide. We believe that it will be covered by the new clause. Such faults could be described as a health risk because they might lead to a fire. The local authority might wish to proceed under existing public health legislation. It is a difficult issue. I have argued with
      94
      lawyers about it before. However, I am advised that the new clause covers that point. Ultimately it will be an issue-as so many provisions in the legislation are—for the courts to decide.
      The hon. Member for Birmingham, Ladywood (Mr. Sever) raised the question of the way in which notice might be served. It will normally be served on the owner. However, it could be served on the person in receipt of rent. That might well be the agent, whose name must be written in the rent book. Normally, he would not be thousands of miles away.
      My hon. Friend the Member for Southampton, Test (Mr. Hill) asked about local authority tenants. My experience of local authorities is that they usually adopt a constructive approach towards their properties. The minority of local authorities that neglect their tenants' welfare—for a variety of reasons—can be dealt with by an efficient local councillor or Member of Parliament. He may apply the right spur and remind the local authority that it collects rent from its tenants and has a duty towards them. However, the tenant has an ultimate sanction. He does not have to give his vote to a bad local authority.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 6

      CONSENT OF HOUSING CORPORATION TO DISPOSALS OF LAND BY HOUSING ASSOCIATIONS AND TRUSTS
      '(1) Section 2 of the 1974 Act (control by Housing Corporation of dispositions of land by housing associations) is amended as follows.
      (2) After subsection (1) there are inserted the following subsections—
      " (1A) Any consent of the Corporation may be given either generally to all housing associations or to any particular association or description of association and either in relation to all kinds of property or to any particular property or description of property.
      (1B) Any such consent may be given subject to such conditions as the Corporation sees fit to impose.".
      (3) For subsection (2) there is substituted the following subsection—
      " (2) Subsection (1) above shall not apply to a disposition by an unregistered housing association which is a charity if the disposition is one which, by virtue of subsection (1) or (2) of section 29 of the Charities Act

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      1960 (certain disposals not to take place without an order of the court or of the Charity Commissioners), cannot be made without such an order as is mentioned in that section.".
      (4) After subsection (3) there is inserted the following subsection—
      " (3A) Subsection (1) above shall not apply to the letting, by a registered housing association or by an unregistered housing association which is a housing trust, of any property under a secure tenancy or under what would be a secure tenancy but for any of paragraphs 2 to 12 of Schedule 3 to the Housing Act 1980 or, as the case may be, but for Schedule 1 to the Tenants' Rights Etc. (Scotland) Act 1980.".
      (5) In subsection (4), after the word "grant" there are inserted the words "by an unregistered housing association which does not satisfy the landlord condition in section 27 of the Housing Act 1980 (bodies which are capable of granting secure tenancies) ".
      (6) After subsection (5) there is inserted the following subsection—
      " (5A) Where a housing association has, at any time, made a disposition requiring the censent of the Corporation under this section, then—

      (a) in favour of any person claiming under the association, the disposition shall not be invalid by reason that any consent of the Corporation which is required has not been given; and

      (b) a person dealing with the association or a person claiming under the association shall not be concerned to see or inquire whether any such consent has been given.".

      (7) After subsection (6) there is inserted the following subsection—

      " (6A) In this section—

      ' housing trust ' has the same meaning as in section 15 of the Rent Act 1977; and

      'secure tenancy' has the same meaning as in section 27 of the Housing Act 1980 or section 10 of the Tenants' Rights, Etc. (Scotland) Act 1980.".'.—[Mr. Stanley.]

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

    New Clause 7

      EXCLUSION OF SHARED OWNERSHIP TENANCIES FROM LEASEHOLD REFORM ACT 1967
      ' (1) Where, after the commencement of this section, a tenancy of a house is created by the grant of a lease at a premium and either—

      (a) the lease is granted by a body mentioned in subsection (2) below and complies with the conditions set out in subsection (3) below; or

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      (b) the lease is granted by a registered housing association and complies with the conditions set out in subsection (4) below;
      the tenancy shall not be treated for the purposes of Part I of the Leasehold Reform Act 1967 (enfranchisement and extension of long leaseholds) as being a long tenancy at a low rent at any time when the interest of the landlord belongs to such a body or, as the case may be, to a registered housing association.

      (2) The bodies referred to in subsection (1) (a) above are—

      (a) the council of a district, the Greater London Council, the council of a London borough, the Common Council of the City of London or the Council of the Isles of Scilly;

      (b) a development corporation established by an order made, or having effect as if made, under the New Towns Act 1965;

      (c) the Commission for the New Towns;

      (d) the Development Board for rural Wales.

      (3) The conditions mentioned in subsection (1)(a) above are—

      (a) that the lease provides for the tenant to acquire the freehold, whether under an option to purchase or otherwise, for a consideration which is to be calculated in accordance with the terms of the lease and which is reasonable, having regard to the premium or premiums paid by the tenant under the lease; and

      (b) that it states the landlord's opinion that by virtue of this section the tenancy will not be a long tenancy at a low rent for the purposes of the Leasehold Reform Act 1967 at any time when the interests of the landlord belongs to a body mentioned in subsection (2) above.

      (4) The conditions mentioned in subsection (1)(b) above are—

      (a) that the lease is granted at a premium which is calculated by reference to a percentage of the value of the house or of the cost of providing it;

      (b) that at the time when it is granted it complies with the requirements of regulations made by the Secretary of State for the purpose of this section; and

      (c) that it states the landlord's opinion that by virtue of this section the tenancy will not be a long tenancy at a low rent for the purposes of the Leasehold Reform Act 1967 at any time when the interest of the landlord belongs to a registered housing association.

      (5) If, in any proceedings in which it falls to be determined whether a lease complies with the condition in subsection (3)(a) above, the question arises whether the consideration payable by the tenant on acquiring the freehold is reasonable, it is for the landlord to show that it is.
      (6) In this section "registered housing association" means an association registered under section 13 of the 1974 Act.'.—[Mr. Wyn Roberts.]
      Brought up, and read the First time.
      The Under-Secretary of State for Wales (Mr. Wyn Roberts): I beg to move, That the clause be read a Second time.
      The new clause is part and parcel of the Government's proposals for making shared ownership more practical and attractive. When the advantages of home ownership are so considerable, and when many people find the difficulty of bridging the financial gap between owning and renting so great, more must be done to create a half-way house between the two. A person could initially part own and part rent, and would later be able to take up the right to buy into full home ownership.
      We want to encourage landlord authorities to go beyond the traditional 50–50 shared ownership scheme, under which the purchaser has to buy the equity of his property in two equal instalments. Additional flexibility is possible, if a landlord's shared ownership scheme contains an element of "staircasing", or of progressive purchase. Under such an arrangement, a shared owner could buy successive slices of his equity in, for example, 25 per cent. tranches. He would then move gradually towards exercising the option to acquire the freehold.
      A shared ownership lease can come into conflict with the Leasehold Reform Act 1967. Under that Act, a lessee with a long lease of a house can enfranchise—purchase a freehold reversion to his property—under favourable terms once his rent falls below two-thirds of its rateable value, and after five years' residence—or three years if the House approves amendment No. 106. This can happen in a shared ownership scheme when successive slices of equity are bought and the part on which rent is payable correspondingly diminishes.
      If the rent falls below two-thirds of the rateable value, the owner can buy the freehold reversion under the Leasehold Reform Act on terms that may be more favourable than allowed under the shared ownership scheme into which he had entered. It would not be in the spirit of shared ownership if a shared owner were to enter into a lease that provided for terms on which he could purchase the freehold reversion and if he were then to switch to enfranchisement under the Leasehold Reform Act 1967. The clause will exclude from the operation of part I of the Leasehold Reform Act 1967 shared
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      ownership leases that have been granted by local authorities and new towns.
      We felt it necessary to deal with housing associations differently. Their shared ownership leases do not always contain an option to purchase the freehold. We do not wish to cause problems for interesting experimental schemes, such as community leasehold and leasehold for the elderly. The amendment provides a power to set out in regulations the main principles of those leases to be excluded.
      The exemption is closely defined and tightly controlled. It is not a loophole through which public sector landlords—who are not granting shared ownership leases—will be able to evade the operation of the 1967 Act. In contrast, it will encourage the development of a wider range of shared ownership schemes. I commend the new clause to the House.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 27

      RENT OFFICERS AND APPLICATIONS FOR REGISTRATION OF RENT
      '(1) In section 63(2) of the 1977 Act (provision to be made by rent officer schemes) there is inserted, at the end of paragraph (d) "; and
      (e) may require the proper officer—

      (i) to designate one of the rent officers as chief rent officer; and

      (ii) to designate to him such of the duties imposed on the proper officer by virtue of paragraph (d) above as may be specified in the scheme."

      (2) Schedule (Applications for registration of rent) to this Act has effect, in relation to applications made after the commencement of this subsection, for the purpose of amending the procedure provided for by the 1977 Act in relation to applications for the regisration of rent.'.—[Mr. Stanley.]
      Brought up, and read the First time.
      Mr. Stanley: I beg to move, That the clause be read a Second time.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): With this, it will be convenient to take Government amendment No. 148.
      Mr. Stanley: The new clause and schedule stem from the recommendation of the working party on output and the

      99
      rent officer service which has just concluded its work. I shall place a copy of its report in the Library.
      6.30 pm
      The working party, which consisted primarily of serving rent officers, was set up last year to consider rent officer procedure with the object of examining the scope for streamlining and reducing delays. It was the first time that that had been done during the 15 years that the service had been in operation. I stress that neither its terms of reference nor its recommendations have an effect on the criteria according to which fair rents are fixed, or the independence of rent officers in fixing them. The working party is concerned solely with procedures.
      The working party found a great variety of practice and procedure from area to area. It made a number of proposals for improving output without diminishing the quality of the rent officer service. Some of its proposals involve statutory changes, while others involve administrative changes.
      We have consulted the Institute of Rent Officers on all the working party's recommendations. In the light of that consultation we have dropped one of its proposals, namely, that the initial indication of fair rent should be made by the rent officer, rather than that a person should apply for the fair rent to be registered. The proposals before the House are fully in accord with the working party's recommendations, but are slightly amended in accordance with the wishes of the Institute of Rent Officers.
      There are four changes. First, the new clause gives a statutory recognition to the existing role of the county and senior rent officers heading rent registration areas, whose task is to allocate work between rent officers and supervise the administration of the rent officer service in their areas. Although this has been the practice for many years, and a senior rent officer has been responsible for each area, it has not been reflected in statute. We agree with the rent officer service that it should be, and that is the purpose of the new clause. The giving of statutory recognition to the position of senior rent officers is internal to the rent officer service and does not affect their relationship with central Government in any way.
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      Secondly, under the new schedule, which is amendment No. 148, rent officers will have a greater measure of discretion in the arranging of consultations with tenant and landlord. Both tenant and landlord will have an absolute right to consultation if they so wish.
      Thirdly, rent officers will be able to organise a joint consultation on several tenancies—for example, where they are subject to an application by the same landlord. This will be convenient and efficient in blocks of flats or in housing association properties.
      Finally, except where joint application is made, tenants and landlords will be able to appeal to rent assessment committees regardless of whether they made representations on the original application to the rent officer. This will provide a readier means of appeal to the rent assessment committee.
      These changes are fully supported by the rent officer service, which has adopted a most commendable approach to considering how it can provide a quicker and more efficient service without reducing its quality. I commend these changes to the House.
      Mr. W. Benyon: I have not read the report to which the Minister referred, but if the new clause results in a speeding up of the procedures it can do nothing but good.
      One of the great difficulties at present arises on the question when the rent officer comes into the calculations. This is especially relevant in relation to new properties or to the revision of rents of existing properties. Did I understand from the last part of the Minister's speech that there is provision for consultation, when that is agreed, between landlord and tenant, and that that can mean an advance of the date when the rent has to be fixed?
      Mr. Stanley: I assure my hon. Friend that it is possible for rent officers to arrange for consultations to take place in advance of the final determination of rent.
      Mr. Hill: I did not have the privilege of being selected to consider the Bill in Committee, but I have been trying for some years to ascertain the formula that the rent officer uses to determine rents in a certain area. There seems to be some

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      black magic about the determination. To my knowledge, no qualified surveyor has ever plumbed the depth of knowledge of rent officers, many of them being not qualified. It seems that the black magic and the mystery——
      Mr. Frank Field rose——
      Mr. Hill: —that surrounds the problem should be explained. I shall be obliged if my hon. Friend offers an explanation.
      Mr. Stanley: The formula, the black magic, or however my hon. Friend wishes to describe the determination, is set out clearly in the 1965 Act. It is the statutory duty of rent officers to determine a rent in accordance with that formula; it is not for Ministers to suggest how they should interpret what is set out in the 1965 Act.
      Mr. Hill: Is my hon. Friend saying that the formula is sufficiently flexible for the rent officer to determine his own yardstick when assessing a rent?
      Mr. Stanley: It would not be proper for me to seek to produce an interpretation of the provisions that are set out in the 1965 Act. That must be a matter ultimately for the courts to decide. I shall be glad to refer my hon. Friend to the specific provision in the Act. He will learn from that that it is possible for rent officers to take into account all relevant circumstances.
      Question put and agreed to.
      Clause read a Second time, and added to the Bill.

    New Clause 30

      DWELLINGS FORMING PART OF CROWN ESTATE OR BELONGING TO DUCHIES
      ' (1) The following section is substituted for section 13 of the 1977 Act:
      " 13.—(1) Except as provided by subsection (2) below—

      (a) a tenancy shall not be a protected tenancy at any time when the interest of the landlord under the tenancy belongs to Her Majesty in right of the Crown or to a government department or is held in trust for Her Majesty for the purposes of a government department; and

      (b) a person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate landlord would at
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      that time belong or be held as mentioned in paragraph (a) above.

      (2) An interest belonging to Her Majesty in right of the Crown shall not prevent a tenancy from being a protected tenancy or a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.".
      (2) In subsection (5) of section 19 of the 1977 Act the words (in paragraph (b)) "or of the Duchy of Lancaster or to the Duchy of Cornwall" are omitted and at the end of the subsection there are inserted the words "except that an interest belonging to Her Majesty in right of the Crown does not prevent a contract from being a restricted contract if the interest is under the management of the Crown Estate Commissioners".
      (3) In section 5 of the Rent (Agriculture) Act 1976 the following is substituted for subsection (1):
      " (1) A person shall not at any time be a statutory tenant of a dwelling-house if the interest of his immediate landlord would, at that time—

      (a) belong to Her Majesty in right of the Crown or to a government department, or

      (b) be held in trust for Her Majesty for the purposes of a government department; except that an interest belonging to Her Majesty in right of the Crown shall not prevent a person from being a statutory tenant if the interest is under the management of the Crown Estate Commissioners.".

      (4) In the Landlord and Tenant Act 1954—

      (a) the following is inserted at the end of section 56:

      " (7) Part I of this Act shall apply where—

      (a) there is an interest belonging to Her Majesty in right of the Crown and that in terest is under the management of the Crown Estate Commissioners; or

      (b) there is an interest belonging to Her Majesty in right of the Duchy of Lancaster or belonging to the Duchy of Cornwall; as if it were an interest not so belonging.";

      (b) in section 21(6) the following is sub stituted for the definition of "interest not bound by this Part of this Act ":

      " In this subsection ' interest not bound by this Part of this Act ' means an interest which belongs to Her Majesty in right of the Crown and is not under the management of the Crown Estate Commissioners or an interest belonging to a Government department or held on behalf of Her Majesty for the purposes of a Government department.".
      (5) Schedule (Crown Estate and Duchies— consequential provisions) has effect for making certain provisions consequential on this section.'—[Mr. Heseltine.]
      Brought up, and read the First time.
      The Secretary of State for the Environment (Mr. Michael Heseltine): I beg to move, That the new clause be read a Second time.
      Mr. Speaker: With this it will be convenient to discuss Government amendments Nos. 143, 144, 149 and 200.
      Mr. Heseltine: The clause and the associated amendments follow a review of the application of housing legislation to the Crown Estate. The House will be familiar with the fact that there was an answer on 14 May that anticipated the clause and the amendments.
      The purpose of the proposals is to give Rent Act protection to short-lease tenants of the Crown Estate Commission, the Duchy of Cornwall and the Duchy of Lancaster. We estimate that respectively there are 2,000, 1,000 and 200 such tenants, who are mostly in London. In future they will benefit from full security of tenure, and they and their landlords will be able to apply to the rent officer for the registration of a fair rent. By virtue of their being protected tenants they will be eligible for improvement grants and will be given the right to improve under the new provisions in the Bill. The provisions of the Rent (Agriculture) Act 1976 and part I of the Landlord and Tenant Act 1954 will also be applied.
      The House will be familiar with the fact that the practice of the Crown Estate Commissioners to apply the Rent Act administratively to their tenancies has been long established. However, in the light of recent representation and a review of their arrangements, during which tenant associations were consulted, the Commissioners have concluded that their tenancies should be brought formally within the Rent Acts. That is what we are now proposing.
      There is a transitional arrangement which is based on a precedent that was established when earlier arrangements of this sort involving the Rent Acts were considered. There has been some comment and some concern has been expressed about the position of Crown Estate tenants who have paid premiums for their leases to outgoing tenants. I shall try to put this issue in prospective.
      First, the Crown Estate does not charge premiums when granting short-term tenancies at fair rent levels. The majority of such tenants are the original occupiers under the lease. They have not paid a premium and they have no right to complain that when formal Rent Act protection
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      is applied they will not be able to charge a premium if they leave before the expiry of the lease. About 5 per cent. of tenants are not originals, and they will have paid premiums to outgoing tenants when taking over the remaining period of the lease on assignment. I can understand that these tenants feel that if they want to leave before the remainder of the lease has expired, they should be able to recoup something by way of a premium from an assignee.
      The House faced exactly this problem when the Rent Act was applied in 1973 to tenants of more expensive properties in London and outside, when a much greater number of tenants was affected.
      Provision was then made for transitional arrangements so that, where a premium was paid lawfully before the Rent Acts applied, a tenant could recover a proportion of his premium on assignment to a new tenant. We have simply applied the identical provisions in part II of schedule 18 to the 1977 Act to Crown Estate and Duchy tenants. Broadly, it works on an apportionment basis. If there were five years left on the lease when it was assigned and there are, say, two years left when it is reassigned, two-fifths of the original premium can be recovered. I hope that that explains the position that arises there.
      There is one other matter that I wish to put to the House. It concerns the controversy about whether the Crown Estate Commissioners are a public body, and ought therefore in some way to have their properties made subject to the right to buy provisions enshrined in this legislation.
      The right to buy does not apply to all publicly owned properties. It applies to properties which have been provided by new towns and housing authorities. It does not apply, for example, to Government Departments or to county councils. Obviously, in coming to a broad conclusion about where to draw the line, we decided that it would be appropriate to treat the Crown Estate Commissioners on the same basis as we treated those non-housing authority bodies such as Government Departments or county councils.
      Mr. Roger Moate: Will my right hon. Friend elaborate on that? The 3,500 tenants of a public department, as my right hon. Friend has described

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      the Crown Estate, are not comparable to tenants of county councils where houses are held for a specific purpose. Will my right hon. Friend explain why he felt the tenants of the Crown Estate were somehow unworthy of the right to buy?
      Mr. Heseltine: There is no question of their being unworthy. That did not enter into the calculations. I realise that there are tenants living in such properties who would find the right to buy financially attractive. But when originally we came to our conclusions about the right-to-buy provisions, we took the view that to make judgments about the disposal of assets it was right to do so where those public assets had been created with the help of taxpayers' support and subsidy for housing purposes. That was the general view that we used to guide ourselves in deciding that the right to buy should apply to local authority and new town tenants.
      Those general tests would not apply in the circumstances about which my hon. Friend asked me. Therefore, we felt that they came on the other side of the divide and were more equitable to the local authority houses. If they had been acquired in connection with a road scheme in the hands of county councils, they would not be subject to the right to buy. Where Government Departments might have houses for service tenancies of one sort or another, these would not be subject to the right to buy. We could not see an argument for breaching the broad distinction that I made and extending the right to buy further than we had said it should be given.
      6.45 pm
      Mr. William Shelton: I welcome my right hon. Friend's remarks. I declare my interest as chairman of a residents' association, and as one who lives in a Crown Estate property I can confirm that the position has been rather anomalous regarding tenants of the Crown Esate.
      I regret that my hon. Friend the. Minister for Housing and Construction has not been able to find time to consult further about this. The only letter that I have received from his Department was from my hon. Friend the Member for Hamp-stead (Mr. Finsberg), who told me that legislation might be introduced in the Lords, Consequently, it was surprising to
      106
      me, since I had missed the answer to the question on Wednesday, that people telephoned me on Friday in a state of some anxiety and dismay because of what they had heard. Mention was made of this in Sunday's newspapers.
      There are two matters which concern me. First, as my right hon. Friend says, it is clear that the Crown Estate is in the public sector. Without going into long detail, I quote two authorities. One was Mr. W. A. Wood, now Sir William Wood, who was a Crown Estate commissioner. He appeared before the Select Committee on the Civil List on 21 July 1971, when he was asked about the Crown Estate:
      " So in effect it is a public estate? ",
      and he replied:
      " I would think so, yes."
      The second authority is that very distinguished Queen's counsel, Sir Frank Lay field, who gave an opinion on 28 April 1980 which I know found its way into the hands of the Department. To summarise his views, on page 2 he says that the Crown Estate is a Government Department within the expression "public sector" as it is employed in the Housing Bill.
      As my hon. Friend the Member for Faversham (Mr. Moate) said, the nub of the matter is the right to buy within the public sector. I accept the criticism from my right hon. Friend that it would be financially attractive to some people should this right be extended to tenants of the Crown Estate, but not more financially attractive than it would be to a council tenant. The main point made by my hon. Friend the Member for Faversham was that the attraction was not necessarily so much financial as that of home ownership.
      People in my association have been in their houses for 10, 15 or 20 years and have been denied the right to buy their homes. Under this legislation, they will continue to be denied that right. I must take issue with my right hon. Friend. The people living in these estates cannot be equated with those living in Department of the Environment houses, specially those with some kind of service agreement. It is a housing estate of 3,000 or 4,000 people spread across London. It is possible, I accept, that taxpayers' money may not have gone into their

      107
      creation, and that might be an argument. However, I do not think that it should gainsay the right to buy which is so much part of the philosophy espoused by my right hon. Friend that we should extend home ownership to the maximum.
      However, leaving that aside, there are some fundamental difficulties with this legislation. In the first place, under the tenants' charter the council tenant will have a series of advantages which will continue to be denied to the tenant of the Crown Estate. I mention, for example, the right to sublet. That has nothing to do with the Rent Act 1977 and would have been given to the Crown Estate tenant had the tenants' charter been applied to it. There are a number of other advantages which these people lack and which the council tenant will have, quite apart from the fundamental one of the right to buy.
      Secondly, insecurity will continue by applying the Rent Act. The difference between the Housing Bill and the Rent Act is that the former is based on the identity of the landlord whereas the Rent Act is based on the rateable value of the property. Some of the Crown Estate properties—in Regents Park, for example, with which I have nothing to do—will still be excluded from the Rent Act because some of their rateable values may be above £1,500 a year which, after all, is a figure which is now a good many years out of date. So this 1977 Rent Act provision will not cover all Crown Estate properties, to the best of my understanding.
      Then there is this extraordinary application in part II of schedule 18 to the 1977 Rent Act referring to premiums. I say "extraordinary" because my understanding is that schedule 18 came with section 121 of the counter-inflation legislation of 1973 which was then consolidated in 1977 and was introduced by the Government of the day to control prices and incomes within a counter-inflation package. It is hardly applicable to present circumstances. It introduces a considerable problem.
      As my right hon. Friend said, the premium that the outgoing tenant may charge must diminish pro rata to the percentage of the lease that he has enjoyed. I take a simple case. If such a
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      tenant paid £1,000 five years ago for a 10-year lease and now wishes to sell it, I understand that the maximum he can charge is £500. That takes into account no aspect of inflation. A former colleague in this House, Sir George Sinclair, has his lease on the market. By this provision, if the legislation goes through, he will stand to lose some £20,000. He bought his lease between 10 and 15 years ago I believe, and paid I would guess £2,000. It is now on the market for about £20,000. He will be allowed to charge £1,000—if, indeed, according to my reading of the schedule he is allowed to charge anything at all.
      I understand that a premium can be charged only if the person who is the outgoing tenant has recently bought the lease. Under a series of seven-year leases, someone like Sir George, who acquired his lease 20 years ago, has his third seven-year lease. My understanding of the schedule is that he is therefore not entitled to charge any premium at all. Only those outgoing tenants who have bought the most recent seven-year lease and did not carry on from previous leases—I hope I make myself clear—have any right to charge a premium. In that case, Sir George would not only be unable to charge £1,000 but could not charge anything at all.
      This provision in the schedule is directly contrary to the assurance given in writing by Sir William Wood, the then commissioner, when he informed tenants that they would have the right to assign at market prices until the expiry of their leases, some of which run until 1990. The legislation will obviously override that assurance. I am sure, however, that my right hon. Friend, reflecting upon the points I have raised, will wish to see what I consider an injustice and a betrayal of the assurance of the Crown Estate put right at a later date.
      Mr. Ronald W. Brown: I do not agree with the hon. Member for Streatham (Mr. Shelton) with regard to the assigning of leases. This is not a problem that causes much concern in my constituency. I wish to pursue the argument put by the Secretary of State that he is happy to ensure that the Crown Estate Office should be placed in the private sector. I simply ask "Why?" For a long time, it could have come into the private sector but expressed no wish to do so,

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      because the private sector was controlled. It is true that it attempted to stay within the general framework of housing in the private sector but it made clear that it was not a part of it. When one wished to pursue it in any particular it claimed its right not to be pursued because of its status as administrator of Crown property.
      I do not understand how the Secretary of State can now discover a profound legal opinion put before him advising him that the Crown Estate Office is part of the public sector. When, for the first time, his own advisers cannot challenge the legal advice, he decides that the Crown Estate Office is not in the public sector—although it is clear it is—and he puts it in the private sector. The Secretary of State owes it to the House to explain why he has rejected the legal advice that was clear and appears to be supported by almost everyone, and has opted instead for the private sector.
      Mr. Tim Rathbone: I suggest that the answer may be found in my right hon. Friend's answer to my hon. Friend the Member for Fareham (Mr. Lloyd) last week, in which he said:
      " the Commissioners have concluded that their tenancies should be formally included within the rent Acts and associated legislation."—[Official Report, 14 May 1980; Vol. 984, c. 509.]
      It seems that the Department has taken the commissioners' view at face value without any question.
      Mr. Brown: The Secretary of State should help the House to understand why this has happened. Until now, there was no evidence on which side of the fence the Crown Estate Commissioners would fall. Now the evidence is that it is the public sector. But the Secretary of State has said that it is the private sector. The right hon. Gentleman has had advice from the Crown Estate Commissioners, who, as he pointed out, have consulted their tenants. I am bound to point to the extent of their consultation. One of the commissioners wrote to the tenants' associations, saying "I am sorry to hurry you, but within the next two weeks, I must have observations on the proposals in the Housing Bill." When the tenants' association in my constituency said that that presented some difficulties, the reply was "Just get something in." The
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      comments from the tenants' association in my constituency is one man's attempt to understand the Housing Bill in order to provide advice to the commissioners.
      Mr. William Shelton: The same situation applies to ourselves. The result of our consultation was that the Crown Estate Office should be in the public sector. I cannot accept that any attention was paid to the consultation that was undertaken.
      Mr. Brown: We are getting a picture. The Secretary of State should understand that we are not satisfied with his approach. There was no consultation in any meaningful sense. The right hon. Gentleman said that he had decided, even if the Crown Estate Office had been in the public sector, with the opportunity to buy, it should not have that opportunity, because it was different and did not possess the inalienable right of people to purchase their own houses. That apparently does not apply, for some unknown reason. The right hon. Gentleman argues that even if the Crown Estate Office were in the public sector there should not be this right, because taxpayers' money is not involved. That is not true, either.
      Some years ago, when I sought to comment on the amount of increase in rent that the Crown Estate Commissioners were charging, I tabled a question asking why the Treasury was insisting that the commissioners had to make a profit on the housing. I asked why such an edict had been given by the Treasury. I was told that it had not been given. On the other hand, I was told, money goes to the Treasury and the Treasury, therefore, has an overall view. The Crown Estate Office is responsible for industrial enterprise, commercial enterprise and private residential enterprise, in order to balance its books, but the beneficiary is the taxpayer.
      I do not understand why the Secretary of State should make a positive statement to the effect that the taxpayer is not involved when he is, in fact, primarily involved. If the Secretary of State accepts my argument, as I feel he must, on taking advice—I shall be pleased, if he does not propose to accept it, to hear his rebuttal—does that not take him back a stage? If his only argument for not permitting Crown Estate tenants to purchase their property is that taxpayers' money is not involved, he must pull

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      back, because taxpayers' money is involved. I hope that he will change his mind.
      If he pursues the wrong argument, a question arises about the Crown Estate Office's letting policies. One of the principal problems in my constituency relates to the letting of property. What are the terms? How is it let? Why is it let? What sort of lists are drawn up? Those who seek a letting are told that there are lists. I should like to know the criteria for those lists. Do I understand that, according to the tenants' charter provisions of the Bill, Crown tenants, under new clause 30, will be entitled to have that information and that they will be covered by all aspects of the tenants' charter?
      7 pm
      I do not think that the House can accept that, because the Crown Estate has been left alone for so long, it can continue in that way. Too many points need to be argued. Too many problems are being left behind. The Secretary of State cannot leave it by saying "I was advised by the Crown Estate Commissioners that they would prefer now to be under a qualified part of the private sector." The Crown Estate is either in the private sector, in which case it comes under the whole gamut, or it is in the public sector, where, I submit, it should be. I insist on the Secretary of State's telling me whether it is fully in the private sector under the new clause. If so, it is covered by everything in the Housing Bill relating to the tenants' charter. Will the right hon. Gentleman review the situation and understand that it should be in the public sector, and that tenants should have the inalienable right to buy?
      Mr. Moate: Like my hon. Friend the Member for Streatham (Mr. Shelton), I declare an interest, being a Crown Estate tenant. Because of that, I speak with some reluctance in this debate. But, despite that reluctance, I feel that I should be letting down a large number of honourable colleagues and tenants of the Crown Estate if I did not express my view on this proposal.
      I believe that my right hon. Friend has made a mistake. I also believe that the way in which the new clause has been
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      put forward leaves something to be desired.
      What we are debating today from the standpoint put forward by my hon. Friend the Member for Streatham and the hon. Member for Hackney, South and Shoreditch (Mr. Brown) represents the interests of thousands of tenants. I suspect that many of those tenants have no idea that this debate is taking place today. They have no idea that their future, rights, property interests and, in some cases, financial interests are being debated and changed. That is because the new clause came to our notice only on Friday. Within 48 hours of its being tabled, a major decision on the future of many people is likely to be taken. That cannot be right.
      This proposition has not been discussed. There has been no consultation. It has not been put to these tenants. They have no way of putting forward their response or of making representations about this proposition. Does my right hon. Friend believe that to be right? Does he believe that the Government want to proceed in that way as regards consultation with minority groups? I know that it is not the way that he believes this should be done. Yet in this instance it is being done.
      Because of the important nature of this proposition affecting so many tenants and considerable property interests—a matter of historic importance—I ask my right hon. Friend not to proceed with the new clause. Would it not be better to allow a short period of consultation to take place to discuss and understand the full implications of this move?
      I understand that the Under-Secretary of State, my hon. Friend the Member for Hampstead (Mr. Finsberg), in a letter, suggested that, if there were to be legislation affecting the Crown Estate, this would be taken in another place. That is a very good suggestion. I think that he is right. I fail to understand why my right hon. Friend has not pursued that sensible course, but has decided to move the new clause today. I ask him, in the interests of public consultation in which I know he is a strong believer, to consider not proceeding with the new clause, but to have it moved in another place to allow the intervening period—probably short—for sensible consultation to take place.

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      I put to my right hon. Friend the reasons why I think that there should be some scope for second thoughts and time for consultation. At stake is the principle of home ownership. I do not suggest that my right hon. Friend does not believe passionately in home ownership. We know that over the years it has been unclear in many people's minds whether the Crown Estate is a public or a private sector estate. The Crown Estate has recently been asserting that it is in the private sector and therefore tenants should not have the right to buy. Recently we had the opinion by Frank Layfield asserting powerfully and leaving no vestige for doubt that the Crown Estate is a public sector body. I shall not bore the House with all the evidence to support that view, but the evidence is overwhelming and the conclusion is absolutely conclusive.
      How do the Government respond? Instead of saying "We accept that opinion. We believe in home ownership and we shall give all these tenants the right to buy", they introduce a new clause at very short notice that states "We shall ensure that they are in the private sector for this purpose only and we shall deny them the right to purchase their own homes."
      Who are these people? My hon. Friend the Member for Streatham mentioned people who had a considerable interest in the leasehold values of their properties. The hon. Member for Hackney, South and Shoreditch has spoken of many of his constituents who are small tenants in the classical sense of that word. I cannot understand the logic that they should be denied the right to purchase their properties.
      If this is a large public sector estate, if these are Government tenants, in a sense, council tenants—my right hon. Friend should have tried hard to examine the arguments a little further and to have given them the right to buy. He has not examined the argument further because the answer that he gave, which was quoted by my hon. Friend the Member for Lewes (Mr. Rathbone) gave the game away. My right hon. Friend said that
      " the Commissioners have concluded that their tenancies should be formally included within the Rent Acts ".—[Official Report, 14 May 1980: Vol. 984, c. 509.]
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      It seems that on this occasion the Secretary of State has listened to the Crown Estate Commissioners, but not to his hon. Friends or to the representations that have been made by Crown Estate tenants. If ever there were evidence that the Crown Estate is in the public sector, it is that the civil servants have been working together and that little heed has been paid to Parliament. That is evidence, if evidence were needed, that this is a public sector body. The Commissioners are civil servants, ex-civil servants or people who might go back to the Departments. It is very much a public sector body.
      I turn now to those tenants in this area who have an interest in leases. I suggest that my right hon. Friend has done an unpleasant thing to some of these people. I can think of people who have recently moved in, having paid substantial sums for leasehold properties, in the not unreasonable belief that they would be able to remain there indefinitely and would not lose all their cash. But, from today forward, such people will feel that they have been deprived totally of their investment. Basically, these people want to stay, but, like everybody else, they want to feel that at some stage they will have the freedom to move and to realise the value of that property.
      I should like to quote from some minutes of a meeting which took place between certain tenants and the Crown Estate Commissioners. I was not present at the meeting, but it makes the point. It states:
      " Tenants had taken on full repairing covenants, and for the most part, had taken assignments upon payment of a premium (with the knowledge of the Commissioners) in the not unreasonable expectation that the policy of the Commissioners would not be changed in such a way as would put them at a disadvantage. Much distress had been caused by virtue of the fact that many tenants who had put money into their homes (whether by way of premiums or improvements) were condemned either to have to move home so as to recoup themselves—when most of them did not wish to move—or stand to lose the money which they had invested."
      People moved into those homes believing that they would be able to secure renewal of those leases, which was the general policy at that time, only to find that they are now being deprived of the right to assign. In effect, they are having

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      the capital value of their homes taken away from them.
      If the Crown Estate were a superb example of estate management, I might have some sympathy with this approach. But hon. Members have only to walk to Millbank and to look at that estate to judge for themselves whether it is private or public sector. Had that been a private estate, I do not believe that, 35 years after the war, there would still be yawning gaps where the bombs fell leaving valuable sites empty. We would not now have the wide ranging demolition of properties that, within the private sector, would have been protected as buildings of historic interest. I do not believe that the properties would have been allowed to deteriorate as they have done in many areas.
      For many people, they have been marvellous homes and the Crown has been a reasonable manager. But, if we look at the overall picture, I do not believe that we see a picture of something that we should preserve. I suspect that many of the causes of the poor management result from factors beyond the control of the Crown Estate. I sympathise with the situation in which the 16 commissioners find themselves.
      However, their response should surely be not to acquire more protection for their tenants. Their response should be to sell the properties. Perhaps my right hon. Friend will tell me why he has not encouraged them to sell the houses even if they are in the private sector. Could he not on this occasion have come to the House and said that, despite these restrictions, the Crown Estate would pursue an enlightened policy of selling to all its tenants at fair prices? Why has my right hon. Friend not done that and secured such a concession? It seems to me that that would be in the interests of the Crown Estate. It would be commercial, sensible and enlightened, and it would be in the interests of the tenants.
      This debate has come upon us unexpectedly and certainly much more quickly than many of us expected. It really is not fair to tenants and the House to discuss a matter of this major importance under such pressure of time. The matter needs more attention, and I ask my right hon. Friend to consider not pressing the clause today but pursuing
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      it in another place when there has been proper time for discussion.
      Mr. W. Benyon: I do not wish to delay the House nor do I wish to oppose this new clause, though I think that the suggestion of my hon. Friend the Member for Faversham (Mr. Moate) deserves consideration. There are a number of features of the new clause that are doubtful.
      I rise to point out that this is one of the difficulties we can get into when we establish a statutory right to buy. At an earlier stage in our proceedings I asked what, in equity, was the difference between the tenants of a private landlord and the tenant of a public landlord. I was told, as we have been told today, that the difference was that the latter was financed by public money.
      When King George IV made a deal with the then Government and exchanged his private properties for the Civil List—it was a good bargain for the taxpayers of the country, a fact often forgotten by the hon. Member for Fife, Central (Mr. Hamilton)—he transferred lock, stock and barrel those assets to the Government of the day. They have been held ever since. Therefore, the profits or losses are profits or losses to the national Exchequer. They are as much a part of the public purse as, let us say, local authority housing or housing association property.
      In certain sections of the public sector, there are large numbers of houses that are not subject to any debt at all. The debt has been paid off and therefore they are in exactly the same position as these houses. In logic, if not in political fact, there is no difference whatever between these properties and those of local authorities.
      To deny the right to buy to one and not to the other is illogical. It may be practical and it may be important, and I am the last person to suggest that the Crown Estate should be broken up. But it is illogical to defferentiate between one part of the public sector and another.
      Mr. Peter Bottomley: I apologise for coming late because I did not realise that this discussion would be reached so soon. I openly admit that I did not realise that a significant number of my constituents would be affected by a new clause moved almost without notice, as far as I can see. It has been

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      moved without notice to me as a Member of Parliament in whose constituency there are a number of houses which contain both Crown Estate tenants and, more importantly, Crown Estate leaseholders.
      I have not had time to go into the merits of this issue. I believe that it is important that the House should have the opportunity to do that for two reasons. The first is to protect the name of the Crown; the second is to protect those of our constituents who are affected.
      I hope that some of the arguments that I have heard from both sides of the House will receive a suitable answer from Ministers. If it is not possible to provide a full justification for this new clause now, I hope that my right hon. Friend will not push this new clause at the moment. If it is introduced in another place, that would give me, and other hon. Members, time to go into the merits of the effects of the new clause. It will afford the opportunity for a full discussion in the other place and, when it comes forward as an amendment to the Bill, it will give the House an opportunity to consider it, having had consultations—which I certainly wish to have with my constituents—on the effect of the new clause at such a late stage.
      7.15 pm
      Mr. Heseltine: I believe that there are two issues before the House in this set of proposals. The first one is whether or not the tenants of the Crown Estate should be brought within the protection of the Rent Acts. The second is whether they should enjoy the right-to-buy provisions associated with a commitment made by the Conservative Party in the general election campaign.
      The practice of the Crown Estate has been to apply private sector policy in respect of the Rent Acts to its tenants. It has now decided that it would be right to see that practical application of the Rent Acts extending into statutory form. That is what the amendments do. They merely confer legally on tenants the rights which they have enjoyed in practice. It cannot be in the interests of those tenants not to have those rights on the statute book. They are losing nothing and they are gaining a statutory backing for their present position. That must clarify the position in which they live if nothing else.
      Mr. Ronald W. Brown: The Secretary of State says that, but the statement must be qualified. Tenants did not have rights under the Rent Acts. When their rents were going up, the Crown Estate Commissioners—the landlords—claimed that they consulted the rent officer but the rent officer did not consult the tenants. He could not do that. It is, therefore, not true to say that tenants have the same rights.
      Mr. Heseltine: In that case I think that the hon. Member for Hackney, South and Shoreditch (Mr. Brown) is going further than I was going in showing why the tenants positively gain from the legal provisions that are now before the House. What he has said strengthens what I was saying, because it clarifies and puts the rights which tenants would enjoy if the House approved these amendments against a statutory backing. Therefore, I think that the House should take a decision on a matter which can only enhance the position of the tenants.
      Questions have been put to me about the letting policies of the Crown Estate Commissioners. I do not have a statutory role in relation to the letting policies of the Crown Estate Commissioners. They act independently and reach their own judgments. It is not for me to try to lay down the various codes of practice to which they should adhere. I make the point that the Rent Acts do not prevent subletting. The whole business of letting is a matter for the Crown Estate Commissioners, and they would pursue the policies which they thought appropriate in the circumstances. It is not for my Department to try to do that.
      The second point of discussion——
      Mr. William Shelton: The thrust of my argument was that, while my right hon. Friend is right, if the tenants' charter applied, the Crown Estate, of course, would have to give to its tenants the privileges council tenants will have. While the Rent Act applies, that is not so. That is why I was arguing that the tenants' charter should apply rather than the Rent Act.
      Mr. Heseltine: I am grateful to my hon. Friend the Member for Streatham (Mr. Shelton), because his intervention brings me to my second point, which is

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      whether or not tenants should have the right to buy because that provision is not in an amendment before the House at this time. The question would be whether, by passing these provisions, we would preclude a subsequent amendment to give the right to buy. I should have thought that, on consideration in another place—even if the Bill had been amended as proposed today—it would be possible to devise amendments for consideration there to give the right to buy if that seemed desirable.
      The right-to-buy—or discount—provisions promised to new town and council tenants are generous. They were never promised to anybody in the public sector outside those categories. Indeed, there are exclusions within those categories, and they were spelt out at the time that the provisions were announced. Not only were some local authority tenants excluded but, by implication, it was clear that we were not talking about Government Department tenants or local authorities which are not housing authorities but which have tenants incidental to their main purposes as local authorities.
      Whether the Crown Estate Commissioners are in the public or private sector, they would not be within the right-to-buy provisions. We should have to make a policy judgment about whether we wish to extend the right-to-buy provisions from the council and new town tenants to other tenants who might be able to claim to be in the public sector but who are not the tenants of housing authorities. We were right not to extend the provisions to such tenants. The debate is about whether we should extend the provisions to a new category of tenant.
      The broad view is that the Crown Estate Commissioners operate private sector tenancies. We have given the right to buy to the tenants of housing authorities which provide houses as a main purpose and where substantial sums of public money have been used in the creation of assets. We felt that we were entitled to make a judgment about the use of public funds and about assets accumulated by the taxpayer. We believed that we had a status, whatever the merits of the argument. We have no such status in relation to Crown Estate property. Such property was not built as a public asset with subsidies from the
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      public purse. It is not right to violate the principle on which the original judgment was made, and we do not wish to change our minds.
      Mr. Rathbone: I follow the two parallel lines of thought which the Minister has developed, but I do not see where they meet.
      Mr. Frank Dobson: Parallel lines do not meet.
      Mr. Rathbone: I am grateful to the hon. Member for Holborn and St. Pancras South (Mr. Dobson). Parallel lines do not meet, and that is the crux. If the Secretary of State accepted that the Crown Estate is part of the public domain, he would still feel that he should not change his mind about the right to buy. I do not see how any of his arguments support that line. Perhaps he will elaborate.
      Mr. Heseltine: The hon. Member for Holborn and St. Pancras, South (Mr. Dobson) helped me in his intervention about parallel lines, because there is no meeting of the two lines of argument that I was developing. We would not have brought the Crown Estate into the right-to-buy provisions because such houses were not provided with public funds or subsidy and therefore we have no locus to make decisions about their disposal. Historically, one can argue about whether Crown property involves a public asset or activity. However, such property was not provided with subsidies from the public purse, and we have no right to dispose of it. That is why the arguments fail to converge, let alone meet.
      My hon. Friend the Member for Streatham asked about the premiums and the transitional arrangements. There is a transitional arrangement for bringing Crown Estates into the Rent Acts. It has the effect that if somebody has paid a premium he can dispose of that lease and charge that premium, which represents a proportion of the original premium, only in relation to the amount of time that has expired. My hon. Friend asks what will happen when a premium has been paid for the original lease which has expired and the new extension does not come within the provision. I shall examine that matter. Somebody who buys a short lease which then

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      expires has the benefit which he anticipated when he purchased the original lease. The lease would be time-limited, and no assurance would have been given that it would be extended into a new lease. It is difficult to argue that the capital value of the original lease should run over to the supplementary lease. I am trying to be helpful. Without optimism, I undertake that the issue will be examined in another place.
      Mr. William Shelton: For the person who bought a current lease, the provision takes no account of inflation. It is contrary to the express undertaking of the commissioners that such leases should be sold at market value.
      Mr. Heseltine: I accept that the provisions do not take account of inflation any more than the original provisions did when they were introduced in the early 1970s. We can examine the detail, but I do not wish to raise false hopes about the principles. We are not likely to want to change our direction.
      Mr. Peter Bottomley: The Crown Estate Commissioners were kind in reviewing some of their policies towards leaseholders. Many of my constituents have been prohibited from buying freeholds because of planning and development problems. Are such leaseholders affected in any way by the provisions? When the review by the commissioners is concluded, will their conclusions be included in the legislation? If a significant number of leaseholders and tenants are affected, hon. Members should be given time to consult about the provision. My right hon. Friend has given some assurances, many of which are satisfactory. However, many significant areas are left uncovered. Will my right hon. Friend think again and introduce the new clause in the House of Lords and come back to the House in a week or two so that we can give it proper consideration after consulting constituents who have not the slightest idea about what is going on this evening?
      Mr. Heseltine: Consultation has taken place. The amendment was tabled in time for the debate. There have certainly been meetings at which discussions on the broad issues took place. I have read the minutes of such meetings. I do
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      not believe that they were private. They involved my hon. Friend the Member for City of London and Westminster, South (Mr. Brooke) and representatives of tenants. The meetings were on the broad issue of principle, not the detail. It is for the House to consider the detail.
      We are applying the existing legislation which has been time-tested to give certain protections to tenants who have had the benefits of protections. The other issues in the right-to-buy provisions are not affected by the amendments. The Government do not feel able to move from the view that Crown Estate does not come within the category of activity covered by the right to buy. I cannot see how I can help such tenants by holding up benefits. The issue can be considered in another place, but I cannot see how I can serve any purpose by delay.
      7.30 pm
      Mr. Ronald W. Brown: Will the provisions of the tenants' charter be applied to the Crown tenants?
      Mr. Heseltine: The provisions do not apply outside the categories of public housing authorities and, therefore, the tenants' charter will not apply to the Crown Estate, any more than it applies to other private sector landlords, to properties owned by a Government Department and let to tenants—but incidental to the main activities of that Government Department—or to local authorities in similar circumstances. The tenants' charter applies to tenants of a housing authority. We are not now talking about tenants in such categories.
      Mr. Moate: I know that my right hon. Friend sets great store by consultation. However, this proposition—which is not a detail but an important principle—came like a bolt out of the blue to the large majority of those involved. They do not feel that they have been consulted. I ask him to consider that, and to find some way to defer a decision so that there can be proper consultation.
      Mr. Peter Bottomley: I thank my right hon. Friend for giving way to me also. Leaseholders in my constituency are affected in their opportunities to sell their leases, which may make a financial difference to them. We have had only the weekend to consider the new clauses—

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      that is, if we were clever enough or alert enough to pick them up on Friday. We should recognise that this sort of matter normally would have been dealt with in Committee, and there would have been time for consultation between hon. Members and constituents before Report stage.
      I apologise once more to my right hon. Friend for intervening so late in the debate. The danger is that if the new clause passess through the House today, and is not amended in the other place, we have lost our opportunity to put forward our constituents' interests. Possibly none of my constituents would be adversely affected, and if my right hon. Friend could give me that assurance I should be relatively satisfied. If he is not able to give me that assurance, and as there is clearly no assurance that sub-sequential amendments may be made in the other place, I must ask him not to push these points, and allow the House the opportunity to consider them in depth.
      Mr. Heseltine: We have had a range of discussions on the matter. There are benefits for the tenants. There is no reason why the re-introduction of these amendments in the other place would not be compatible with the main objective of Government policy. If it would help my hon. Friends to consult their electors on a wider basis, I have no objection to acceding to the requests made widely in the House that more time should be given for the ideas to be ventilated on a wider scale. I beg to ask leave to withdraw the motion.
      Motion and clause, by leave, withdrawn.

    New Clause 8

      RENT ARREARS
      " In considering an application for admission to a housing list and in the allocation of local authority housing, a landlord shall take no account of any outstanding liability (for payment of rent or otherwise) attributable to the tenancy of any dwelling-house of which the applicant is not, and was not when the liability accrued, a tenant.".—[Mr. Tilley.]
      Brought up, and read the First time.
      Mr. John Tilley: I beg to move, That the Clause be read a Second time.
      Mr. Deputy Speaker: With this, we may take new clause 28—Allocation.
      Mr. Tilley: I hope that the Government Front Bench, in its new mood of flexibility, will accept the new clauses. They do not represent anything that is separate from the Government's thinking. As hon. Members will realise, the two clauses add up to the gist of clause 25 of the Tenants' Rights, Etc. (Scotland) Bill, which was passed in Committee. Its present form is a result of Government amendments.
      In Committee on the Bill before us, Ministers were reluctant to explain the discrepancies between the two Bills, an attitude which was understandable at that stage. But now there is a strong case for hon. Members—especially those representing England and Wales—to know why their constituents who require council housing should have fewer rights than the constituents of Scottish Members.
      The new clauses are taken as two separate parts of clause 25 in the Tenants' Rights, Etc. (Scotland) Bill, because there are two separate themes. If the Government are unable to accept both new clauses, we hope that they will accept at least one of them.
      New clause 28 removes the possibility of local authorities applying residential qualifications to those hoping to be placed on the housing list. It prevents residents on the housing list being given any degree of priority. Both in the past and at present many local authorities apply such rules. The London boroughs had a rule that there had to be five years' residence in London and one year's residence in the borough concerned before people could be added to the waiting list. That policy clearly discriminated against newcomers, especially immigrants. That was one of the reasons why many Commonwealth immigrants who arrived in England in the late 1950s and early 1960s had to wait many years before qualifying for local authority housing, even though they were living in poor housing conditions.
      The other objection to residents' qualifications is that they are strongly hostile to the mobility of labour. Those who wish to work in another town feel that they will not be able to join the housing list, let alone be given accommodation. That is clearly a deterrent against their moving. Above all, removing the residence qualifications is desirable because

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      the current restrictions clearly cut across the idea of a top priority of need being the basis on which housing is allocated.
      There may be a family with small children living in squalid and cramped housing conditions that will scar the children for life. Should that family wait longer for rehousing than a family living in better housing conditions, simply because the second family have lived longer in that town or district? That should not be so.
      The second set of restrictions removed by new clause 28 concern employment. New clause 28 provides that people can be placed on a waiting list before they live in an area if they are employed there, if they have been offered a job there, or if they intend to find a job there. That is a valuable step forward in terms of mobility of labour. There have been strong calls for a greater mobility in the public sector from organisations such as the Confederation of British Industry. Contrary to our expectations on this side of the House, the Government have done nothing to meet that need for greater mobility of labour, other than to claim credit for an arrangement that local authority associations made between themselves several months ago.
      The final reason why new clause 28 should be accepted is that, as it stands now, and with the difference between the two Bills, there is a clear anomaly between England and Scotland. An English resident who wishes to work, or who is working, in Scotland can join the housing list where he or she works, or wishes to work. But a Scot working, or wishing to work, in an English town cannot join the waiting list of that town. The Government should take the opportunity that they are being given tonight to remove that important anomaly.
      New clause 28 is concerned with housing lists, allocation, and the cuts that exist in housing provision at present. Being added to a waiting list does not guarantee the provision of housing.
      I turn to new clause 8, which should be taken separately because of its greater urgency and greater importance.
      Unless new clause 8 is carried, bringing the Bill in line with the Scottish Bill, there will be great injustices immediately and for the future, particularly for divided families—almost exclusively women
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      with small children trying to keep the family going after having been deserted by a spouse or having left home because of violence.
      Clause 25 of the Scottish Bill is a step forward because it prevents the widespread practice of local authorities which employ every possible means of reclaiming rent arrears by insisting that the spouse over whom they still have some control—in most cases the wife—should pay all the rent arrears, even when they had been incurred by the husband or the co-habitee and she had no control over whether the rent was paid.
      At a time when a woman is trying to cope with the emotional problems of separation and the financial problems of bringing up children on her own, it is wrong for a local authority to say that she cannot have a tenancy until she has paid the rent arrears left by her husband.
      The second circumstance that the new clause would meet is the point that has been raised with many hon. Members by the National Women's Aid Federation, Rights of Women and the Women and Housing Group, who say:
      " Women's Aid Refuges frequently take in women compelled to leave home by a violent spouse. By the time they have obtained an injunction to exclude the spouse from the accommodation, they may well find arrears of rent have accrued. At this point a woman seeking an immediate transfer in order to protect herself and her children from the possibility of further violence may find that she has to pay off the debt before she can be considered for a transfer. If the tenancy is held solely by the husband … or if jointly held, many local authorities will insist that the woman clears alt the arrears of rent before allowing a transfer. In the first instance this is unreasonable as the woman has no legal liability for the arrears anyway. Even in the case of a joint tenancy where technically the woman may be legally liable for the arrears, it is unreasonable to attribute them to her if she has not been in a position to pay them."
      The new clause seeks to deal with the case where a woman has not been a joint tenant and has no legal liability for the arrears. A council should not have the power to hound her for the money as a condition of giving her decent housing.
      Many Labour Members fear, as do the Government in relation to Scotland, that, if the new clause is not included, the growing refusal of many women to face and tolerate domestic violence and to try to find a better life for themselves and their children will be overshadowed by the

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      fear that there will be no alternative housing available from the local authorities. Therefore they will stay in a violent home, to their detriment and that of their children.
      In two extremely reactionary housing Bills, clause 25 of the Scottish Bill is the only progressive measure. The least that the Government can do is to ensure that it applies to England and Wales as well as to Scotland.
      7.45 pm
      Mr. Dobson: I support new clause 8, which is intended to outlaw the practice of certain local authorities in England and Wales of using a deserting spouse's rent arrears to harass and oppress a deserted spouse into paying the arrears, which she had not accrued, before allocating housing or giving a transfer.
      The new clause is identical to clause 25 in the Tenants Rights, Etc. (Scotland) Bill. Much of the progress that led to the inclusion of that clause in the Scottish Bill was the result of the work done by my hon. Friend the Member for Aberdeen, North (Mr. Hughes), who has been pursuing the matter for many years in Scotland, and in England and Wales, in an effort to stamp out such practices.
      It is not coincidental that in 1978 the Scottish Law Commission recommended that explicit statutory provision should be made to clarify the matter and to ensure that such practices were not continued, because one spouse does not have legal responsibility for the other's rent arrears if there is not a joint tenancy.
      Progress has been made in Scotland, and it has been suggested that there may be proportionally more reactionary housing authorities in Scotland than there are in England and Wales, but there is clear evidence that such policies apply in England and Wales as well.
      I should like to quote the report of the local government Ombudsman on a complaint against the Forest of Dean district council two or three years ago. The report stated:
      " The complainant's husband was the tenant of a council house occupied by the couple and their four young children. During 1975 arrears of rent accumulated until £172·93 was owing in August 1975 when the complainant's husband left her. The complainant applied for supplementary benefit which together with family allowances gave her an income of £28·50
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      a week out of which she has since August never paid less than the full rent of £1588 a fortnight.
      Her complaint is that in November 1975 she was asked to appear before a Sub-Committee of the Housing Committee of the Forest of Dean District Council (the Council) at which meeting she was told that she must clear her husband's arrears or be evicted; as a result of this pressure she agreed to pay off £1 a week. The complainant alleges that she was subjected by the Sub-Committee to unfair treatment amounting to harassment."
      The Ombudsman found in that woman's favour and the council, unlike one or two others, took action and repaid the money that it had improperly taken from her. The new clause has been put forward in an effort to eliminate that sort of activity by councils in England and Wales. If my advocacy is not sufficient, I can do no better than to quote the Under-Secretary of State for Scotland, who said during the discussion of the identical clause in the Scottish Bill:
      "There is at the moment the tendency on the part of a minority of local authorities … when a tenancy has been vacated with rent arrears outstanding to refuse to consider the spouse of the tenant who may subsequently apply for rehousing until the rent arrears which may have been accumulated by her husband or the person who was the tenant have been paid off. Most people would consider this an unreasonable action on the part of the small number of authorities which act in this way, and it is right and proper that this should not be allowed."—[Official Report, First Scottish Standing Committee, 13th March 1580; c. 1225.]
      I hope that hon. Members will agree with those sentiments.
      I should have preferred the new clause to be drafted more widely, to have made it illegal for a local authority to exploit in any way the fact that a spouse had left home, leaving rent arrears. If we considered all the ways in which a housing authority can exercise discretion, either in favour or against the tenant, we could bet our boots that somewhere in England and Wales we would find a mean-minded housing director or housing committee that would exploit the position to the disadvantage of the deserted spouse.
      In an effort to ensure that the Government would accept the new clause, there was considerable discussion between my hon. Friend the Member for Lambeth, Central (Mr. Tilley), myself and a number of interested groups. We agreed to stick to the wording of the Scottish Bill, so that no one could claim that we were

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      trying to extend the scope of the provision.
      If the clause is good enough for Scotland, why is it not good enough for us? I understand that the previous Parliament spent a great deal of time discussing the "West Lothian" question. That concerns Scotland and its relations with England. I should like to pose a new question, which could be called the
      " Holborn and St. Pancras, South" question. If it is necessary to eliminate this nasty practice in Scotland, why is it not necessary to eliminate it in England and Wales?
      Further, if the Government do not accept the clause, what they are doing is tantamount to saying that this practice is all right. The limited number of mean-minded authorities are likely to take their rejection—if they reject it—as the nod to go ahead with this sort of harassment. I hope that the Government will bear that in mind. Labour Members regard this clause as a limited step forward in helping people, some of whom are in the absolute depths of distress at the time at which this sort of action is taken. We look forward at least once during this debate, to some sort of humane response from the Government, and we hope that they will accept the clause and outlaw this Dickensian and degrading practice.
      Mr. R. C. Mitchell: I am pleased that these clauses are being dealt with separately, because they raise different problems and principles. I agree with the comments of my hon. Friend the Member for Lambeth, Central (Mr. Tilley) on new clause 28. This clause seeks to impose on local authorities ways in which they should allocate their council houses. I am against an imposition of that kind, as I am against the Government telling local authorities that they must sell their council houses.
      This clause raises the important question of mobility. One of the biggest factors working against the mobility of labour is housing. A few years ago, a shipyard in my constituency was short of skilled workers. There was no unemployment—simply a shortage of skilled workers. It advertised in the North-East, North-West and other parts of the country for skilled workers. A number of skilled
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      workers came to Southampton and were employed with Vosper Thornycroft. They then had to face the problem of housing. Because of the rigidity of the system, many of those workers, after having lived in Southampton for six months or so, with their families still living in Newcastle or Clydeside, had had enough, and they went back to their part of the world because they could not find a house in which to live and to which to bring their families.
      The price of housing in the South is high. Those workers could not have afforded to buy even if they had had a house to sell in the area from which they came. An equivalent house in my area would cost almost twice as much as a house in the North-East. Those workers could not get on the housing list. There is a waiting list of more than 4,000 because our dearly beloved Tory council, which has had control for the last five years is not building any houses. It is not only selling existing council houses; it is not building any to replace them. The waiting list is getting longer, and only the occasional house is being built for the elderly.
      That is one of the problems of rigidity and of areas with a housing shortage. The real answer is to build more houses and not to impose from the centre a pattern of the way in which local authorities should allocate their housing.
      New clause 8 falls into a different category. It raises fundamental legal principles. My local authority will not rehouse anyone who has a debt, even if that debt was incurred in the private sector. If a tenant has a debt and is evicted because of rent arrears, he cannot necessarily expect to be rehoused. I understand that. Many of such cases result from the break-up of marriages. When there has been trouble in the home and the marriage breaks up, it is possible that debts will accrue. In my constituency there are many cases where debts have accrued and the husband has left home. The council has told the wife that she cannot have the tenancy until the debt has been paid off. A woman who is left with three children is suddenly faced with having to find £200 or £300 before she can have a proper house for herself and her three children.

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      That is a fundamental legal question, and not simply a matter of administration by a local authority. To what extent should a wife be liable for her husband's debts? I do not consider that housing authorities should act differently from the way they would if the debt were in another area.
      I therefore support new clause 8 and hope that the Government will accept it. It will go a long way towards easing many bitter problems.
      Mr. Geoffrey Finsberg: The hon. Members for Lambeth, Central (Mr. Tilley) and for Holborn and St. Pancras, South (Mr. Dobson) have pointed out that this clause would merely introduce a provision which already appears in the Tenants' Rights, Etc. (Scotland) Bill. That is a fair point, but there are good reasons why it would not be appropriate to include the clause in this Bill. I am not unsympathetic to the intention behind the clause. It is clearly distressing for a wife whose marriage has broken down and is trying to make a new start to be penalised for liabilities under a tenancy held by her husband or for her husband.
      The hon. Member for Holborn and St. Pancras, South quoted the reports by the local government commissioner which criticised two English local authorities for the way in which they treated the wife in those circumstances. But we have no evidence that the practice which the proposed provision seeks to stop is at all widespread. We have mythology, but no evidence. I believe that local authorities generally have taken note of the Ombudsman's views. Two documents were issued by the Departments under the previous Government subsequent to those incidents. There was a circular on the housing of one-parent families in 1977, and a report from the housing services advisory group in 1978. They both stressed that arrears should not be treated as a reason for disqualification or allocation. We believe that these have further influenced local authorities. We do not wish to legislate without fresh and compelling evidence of abuse. I also think that it is best left to local housing management to decide how particular rent arrears cases should be handled, knowing all the circumstances, rather than imposing a blanket view through legislation.
      8 pm
      Mr. R. C. Mitchell: The hon. Gentleman said that he would not want to legislate without having new and compelling evidence. How would he propose to get it? He said earlier that the abuse was not widespread. I suspect that it is much more widespread than he thinks it is. Does his Department collect any statistics? If not, how will he get information, apart from the cases sent to him by Members of Parliament?
      Mr. Finsberg: That is one of the best ways that we have, and Members of Parliament have not drawn to our attention any evidence of widespread abuse.
      Mr. Dobson: Has the Department considered the evidence assembled by my hon. Friend the Member for Aberdeen, North (Mr. Hughes), which, as far as I understand, covered both Scottish housing authorities and housing authorities in England, if not in Wales?
      Mr. Finsberg: I am afraid that, without taking advice. I do not know whether the report of the hon. Member for Aberdeen, North (Mr. Hughes) went wider than Scotland. My preliminary advice was that it was confined to Scotland and resulted, as was pointed out, in the Scottish Law Commission making certain proposals. But again I have to say that we have no evidence that this is a widespread practice in England and Wales.
      I remind the House that the Bill deliberately does not interfere with local authorities' allocation procedures—a point made by the hon. Member for Southampton, Itchen (Mr. Mitchell) in his vehement opposition to new clause 28, with which I shall deal in a moment. To include the proposal of the hon. Member for Lambeth, Central would be the Bill's first incursion into that area. The Scots, on the other hand, are importing statutory rules about eligibility for allocation of housing, and start with a reasonable context for their amendment. We have no such context. We believe that it is right that the local basic responsibility for this sort of allocation should be that of the local authority.
      It is right also not to underestimate the fairly large volume of law that already exists to deal with the matrimonial home. There are the Matrimonial

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      Homes Act 1967, the Matrimonial Clauses Act 1973 and the Domestic Violence and Matrimonial Proceedings Act 1976. Under the provisions of these Acts as extended to secure tenancies by the Bill, where necessary it is possible for one spouse to occupy the matrimonial home on behalf of the other, when that other is the tenant, to take part in possession proceedings commenced against the other, and to apply to the court to have the tenancy transferred on divorce. Thus the position of the spouse is protected under this legislation.
      Mr. Tilley: Does not the hon. Gentleman realise that the legal processes he has described can take a very long time, certainly months and often years, and that what is needed is for the local authority to be flexible enough and compassionate enough to take a decision which meets the immediate needs of that woman and her children? That is what the amendment would enforce, so that she would not have to wait the very long time that is necessary for the legal processes.
      Mr. Finsberg: That is precisely why we believe that it should be left to the authorities, because we have no evidence, since the two Ombudsman's reports, that this is a practice being carried out by other local authorities. For the reasons that I have already given, I cannot advise the House to accept new clause 8.
      With regard to new clause 28, I can hardly speak in stronger language than that of the hon. Member for Itchen. It would make a mockery of local authority freedom. It would give preference to people coming from outside. It would put them on the same basis as that of those seeking internal transfer. That would not be a good thing. We believe that it would be better that local authorities should continue to follow a sensible line on this question. It would make local authorities tailor their allocation policies not to their own local needs but to some centrally devised plan. We believe that local authorities should be in a position to give preference to local people where they feel that it is deserved. It shows, in our view, a basic distrust of the ability of local authorities to make their own allocation decisions in a way which best suits their own local needs.
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      I have noticed that Lambeth has a residential qualification which must be met before anyone can go on its list, so that the hon. Gentleman has not yet persuaded his own authority to get rid of the residential qualification, although he may have tried very hard. I should be interested to know when he achieves success.
      Mr. Tilley: I am sure that the hon. Gentleman and his right hon. Friend are not suggesting that they are not aware that I am not the leader of Lambeth council.
      Mr. Finsberg: I shall not even say that it would be an improvement. All I can say is that when the hon. Gentleman led the neighbouring local authority it got itself into such a mess that, when the voters had their opportunity, they changed the political control there.
      In Committee, the hon. Gentleman quite fairly chided us and told us what he was trying to persuade Lambeth to do. All I am saying is that he has not yet persuaded the authority that his view is right. I agree with Lambeth that to abolish the residential qualification would not be at all helpful to local people. It would almost certainly not achieve the result that the hon. Gentleman wants. A local authority could very simply get round it by changing the criteria under which it operates its own internal transfer for its own tenants, so that those were made more onerous; and those conditions would, according to the new clause, apply to people from outside. It would simply be making life much more difficult for a council's own tenants, who would find it more difficult to obtain their own transfer.
      The clause is misconceived and virtually impossible to enforce. We believe that it is much better to follow the voluntary co-operation method which my hon. Friend the Minister for Housing and Construction announced in the Committee. We think that that would be better than a bureaucratic mess of regulations which can take no account of local housing needs. For that reason, when we come to clause 28, I hope very much that the hon. Gentleman will decide not to move it. If he does, I hope that the House will reject it.
      Mr. Dobson: I am grateful to the Minister for giving way. I am now rather confused by his response to new clause 8.

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      As I understand the position, he has argued that it is unnecessary because this sort of abuse does not happen. But unless my ears have deceived me, he went on to say that it is a matter which should be left to local authorities to decide in the light of local circumstances. It is the clear view of the House as expressed in the Tenants' Rights, Etc. (Scotland) Bill, that this is a wholly improper process and that it should not be followed. Will the hon. Gentleman confirm that that is the Government's view—that any use of a spouse's rent arrears to stop someone from being allocated or transferred is wrong?
      Mr. Finsberg: I can only repeat what I said to the hon. Gentleman and the House earlier—that the particular issues, as they affect the Scottish Bill, are for Scottish Members, because the circumstances are different. I said that, in regard to the English legislation, apart from the two local Ombudsman's reports, we have no evidence. The previous Government felt that it was right to issue two circulars, and we believe that local authorities have heeded the advice given. But there is no evidence that this practice is now being indulged in by English and Welsh local authorities. Therefore, I cannot advise the House to accept new clause 8.
      Mr. Tilley: Is the Minister glad that the local authorities have heeded that advice? He seems to want to stand back from saying whether the purpose of the clause is desirable. He merely suggests that it is something for the Ombudsman and the local authorities to discuss among themselves. Will he say that the Government support the advice given by the Ombudsman and that they do not think that it is desirable for local authorities to use rent arrears that a woman has not incurred herself as a reason why she should not be rehoused?
      Mr. Finsberg: I repeat that I am not unsympathetic to the intention behind the clause. However, in the light of two Ombudsman cases, followed by two circulars from the previous Government, we do not believe that statutory control is needed. I really do not believe that there is any justification for legislating without evidence.
      Question put and negatived.

    New Clause 12

      STATISTICS ON HOUSING STARTS
      ' Local authorities in receipt of housing subsidies payable under this Act shall, not later than 31st March of each year submit to the Secretary of State an estimate of the numbers of new dwellings whose construction they expect to start in the 12 months commencing from the date of 1st April immediately following.'.—[Mr. Hattersley.]
      Brought up, and read the First time.
      Mr. Roy Hattersley: I beg to move, That the clause be read a Second time.
      The intention of the clause is to do no more and no less than enable Parliament, and eventually the people, to know the number of new houses likely to be built each year by each local authority. Therefore, by aggregating those numbers, as reported to the Secretary of State from each local authority, Parliament and the people will know the total number of new houses to be built in the subsequent year throughout England and Wales.
      An estimate of such information might be thought to be already available. However, when the Opposition pressed the Secretary of State to make an estimate of the number of houses likely to be built in the financial year 1980–81, he declined absolutely to offer any opinion and said that under the new system of capital allocation this was a matter for the local authorities alone.
      There are two things to be said about that. First, if this is a matter for local authorities, it is important that they should make clear how many houses they intend to build. In other legislation this Govern ment have been great devotees of performance indicators—of the local authorities telling the people whom they represent, and upon whose votes they depend, what they have done and what they propose to do. It is no less reasonable that those authorities should tell their electors how many houses they propose to build, as well as what rates they propose to levy and how many employees they have on their books.
      8.15 pm
      That is only one of the arguments. The other, which makes the new clause particularly important, is that it is disingenuous for the Secretary of State to say that

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      this is not a matter about which any national judgment can be made but is a matter for the local authorities, when at the same time he is putting those authorities in a position that limits them absolutely on the numbers of houses they can build next year and in subsequent years. If the choice is that of a local authority, it should make clear where its choice lies.
      The Secretary of State's point is that, with a block allocation of funds, a council can decide whether to build houses, whether to use money on rehabilitation or for other purposes. The nonsense of that argument is best demonstrated by one Conservative local authority which, when asked by the Association of Metropolitan Authorities whether it proposed, in the light of this year's capital allocation, to make an alteration to its system of priorities in housing, said:
      " The allocation will not result in any change in the council's priorities because the uncommitted allocation of funds is likely to prove insufficient to enable the council to commence any new schemes of any description."
      If that is the position in which individual local authorities find themselves, it seems only reasonable that Parliament should know about it, because Parliament votes those funds. It also seems right that the electors of the authority and the national electors of this Parliament should know about it as well.
      It is the pratice of the Government to provide, in an aggregated form, at least, some of the information for which the new clause asks. Each year, normally towards the end of the calendar year and before the financial year in which the expenditure falls, the Government make an announcement about housing allocation. Even under the new regime of a single grant, the Government will make an allocation of money and make the information known to the House about the turn of the year.
      This year, the Government made a statement on 21 February, unsually in the House of Commons, about the number of houses to be built, or at least about the size of the housing investment programme. Even if they continue that practice, it is very clear from the episode of 21 February that it will not meet the needs as we see them and describe them in the new clause. On 21 February, the Secretary of State made a statement that I must remind him, for the third time,
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      was described by two professional journals as "wilful obfuscation" and "calculated to mislead". Those phrases seem to be wholly accurate descriptions of the Secretary of State's behaviour. The journals put it in language that might be inappropriate for me to use in the House.
      Whatever the strength of that language—I am glad that the Secretary of State is here on the third occasion on which I have quoted those allegations, as he will have a third opportunity to answer them—the nature of that obfuscation and misleading statement means that the House has been left with virtually no information except that which it could glean from other sources about the number of houses likely to be built in Britain during the next year.
      The statement itself, even with the statistical limitations on which I will not dwell this evening but which are well documented, suggest that house building will be reduced in Britain next year by 21 per cent. compared with last year. A more accurate answer, given the following week, put the reduction in house building at about 33 per cent. I have no doubt that, if the Secretary of State addresses himself to this problem, he will try, with awe-inspiring disregard for logic, to argue that this is not a matter that should concern the House particularly. He will probably say that since overall house building expenditure fell by 24 per cent. in the five years from 1974–75 to 1979–80, it is wholly reasonable that it should fall by 48 per cent. in the four years from 1979–80 to 1983–84.
      We take a rather contrary view. Housing expenditure was reduced in those early years, and far from that being a reason to reduce it any further, it is a reason for ensuring that the programme is protected to every reasonable extent. I have no doubt that the Secretary of State will want to reply to the debate in the partisan terms of "You did this a little, we shall do it a lot. Anyway, why do you want to know about the actual figures for the building programmes of individual authorities?"
      I shall try to explain as clearly and briefly as I can why we want to know. The evidence presented to us suggests that a cut in the house building programme of the extent to which the Secretary of State eventually admitted—about

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      33 per cent., year on year—must amount in many areas to a virtual ending of the house building programme.
      It must also amount to a literal ending of the house building programme in some local authorities where the need for housing is particularly acute and where the Opposition would say "This is not an area that should have no opportunity to build; it is an area where house building is absolutely essential and where the programme, far from being abandoned, ought to be extended."
      Let me try to explain why a reduction of over 30 per cent. in the investment allocation, one year to another, is not a cut of 30 per cent. in the programme but, in a real sense, an abandonment of new building. It stems from the simple fact that the nature of local authority contracts means that, year on year, much money is being paid for contracts that were begun, for work done and for work almost completed in the previous financial year, and that with a reduction of 30 per cent. in the overall investment programme, authority after authority is finding that the only money that it possesses is the money that it needs to enable it to pay off the existing work, and after that has been completed there are no new funds to allow new housing starts and new building.
      I give a single example of the sort of information that we seek. It is the sort of information that hon. Members ought not to have to obtain by going individually to local authority associations and individual councils and reading the professional press, but it is an example that makes my point exactly. It is from the borough of Southwark. It is written up in some detail in the professional journal of the housing association by the Director of Housing—not struggling to make a party point, but just describing how he, as an officer of the corporation, faced the housing investment programme which had been offered to him by the current Secretary of State.
      For Southwark, the housing investment programme was £417 million—almost exactly the corresponding percentage as that which has been allocated for the nation as a whole. Southwark received 64 per cent. of what it had asked for, and that £41·7 million amounted to rather
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      less than it needed to pay this year to fulfil existing contracts. Indeed, outstanding work requires a payment of £42·8 million, leaving that borough literally short of money, to the tune of £1·1 million, to pay off existing contractors, and, as the director of housing says, without any hope of new building or a continuation of the modernisation planned.
      I suspect that my right hon. and hon. Friends will be able to give examples of other areas that, whatever the Secretary of State attempted to pretend to the House and the country on 21 February, are areas in which there is little or no new building, where there are, in consequence, appalling results—both for those families in desperate need of housing and for the building industry, many of whose members are facing bankruptcy during the current financial year—and where not only are there reductions in housing which amount to no housing starts but where housing investment programme funds have been so denied them that as well as there being no possibility of new houses being started, there is equally little possibility of improvement programmes continuing or local authority mortgages being available to prospective purchasers of private houses.
      If the Secretary of State has any doubts whether that is so, let me say that I have managed, through the courtesy of the Association of Metropolitan Authorities, to find him two or three other examples of what, in reality, this year's housing investment programme amounts to. They are examples that I fear would be multiplied 10, 20 or 50 times over were the Secretary of State to accept the new clause and require housing authorities to describe in detail what housing prospects had been offered them by the Secretary of State.
      I give only four examples, the first of which is the borough of Bolton. It was hoping to start 257 houses. They have all been lost. In its report to the AMA, the borough says:
      " We can envisage the position in a few years' time where the size of the backlog presents a daunting task and there will be no possibility of the resources being available to tackle our problems adequately."
      The second example is South Tyne-side, where again the authority has discovered that it has no funds available

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      and is being allocated no funds to meet any of its needs.
      The third example is Barnsley, where the authority has had to decide that in 1980–81 no new construction contracts will be available and that it can go ahead with no new housing whatsoever. It has had to postpone its slum clearance programme for 1980–81 and subsequent years. Its improvement programme has been brought to a halt for a year, and it will consider in 12 months' time whether that can go ahead.
      My fourth example is Coventry, where that authority, too, has decided that there can be no new house building in 1980–81, where the mortgage scheme for tenants wishing to buy private houses has been abandoned, and where central heating for elderly residents, which was to be the centre point of the authority's rehabilitation and improvement programme, has been abandoned because there is just not enough money to allow that programme to continue.
      I could continue to give the House example after example of local authorities that have reported over the last two months that what the Secretary of State has done, in effect, is to prevent them from starting any new houses next year, to prevent them from going on with their programmes of rehabilitation and improvement next year, and to prevent them from providing mortgages for private purchasers next year.
      If we have a Secretary of State who is prepared to do that to housing programmes, he should at least have the courage to admit that he has done it and to explain it and describe where the blow is to fall. By the nature of these cuts, they will fall on the areas which need housing the most. They will fall on the areas that would have built the most and now find that they are unable to build at all.
      What we are asking, therefore, is that councils should be required—most of them, I know, will do it most willingly—to describe at the beginning of their financial year their housing programme for the subsequent two months. It seems to us that that is a proper, necessary and highly desirable check on individual local authorities—altogether consistent with other things that the Secretary of State says about the public having the right to
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      know how their local councils are behaving and about the decisions that their local councillors are taking.
      I do not attempt to deceive the House by pretending that we do not regard this as anything other than an essential check on the behaviour and performance of the present Secretary of State for the Environment, because two things are clear about his house building record. The first is that he has brought new house building to a virtual halt. The second is that he has not had the courage to admit it in the House, and, when pressed about it, he has done all that he could to obscure the truth of the position.
      If the new clause is agreed to, at least we shall know the extent, the severity and the areas of the Secretary of State's damage. If the new clause is resisted and defeated, it will be because the Government in general and the Secretary of State in particular do not have the courage to face and admit the consequences of their own performance.
      8.30 pm
      Mr. Frank Allaun: The Government are dealing with this Bill as if it were an ordinary run-of-the-mill measure. It is not. It is a monstrous Bill. It will give private landlords the opportunity to raise their rents every two years, instead of every three years. It will allow the best council houses to be sold. Shortholders will lose their security of tenure. The Bill also forms part of the Government's strategy to end council housing. The new clause is therefore important.
      I believe that the Minister will oppose the new clause. As the Bill stands, a provision that appeared in the Housing Bill 1957 will be deleted. That provision states:
      " and as often as occasion arises, or within three months after notice has been given to them by the Minister, to prepare and submit to the Minister proposals for the provision of new houses."
      The provisions in this Bill are very different. The Bill merely states that local authorities should review the situation. Anyone can review the situation. That is a child's game. The 1957 Act states:
      " it shall be the duty of every local authority to prepare and submit to the Minister proposals for the provision of new houses."
      I do not think that the Secretary of State is listening. If he is not listening, he should be.

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      The provisions of the 1957 Bill have been omitted. That is an outrage. The new clause is good, but it is not good enough. All those interested in housing will know that one cannot start building a new house within 12 months of approval. Local authorities should be required to provide their estimates of housing to the Minister, not only for the subsequent April, but also for the subsequent April but one. We do not blame councils. The Government have not told us the size of the subsidy cuts to be implemented next April. As yet, people do not know what has hit them. Subsidy cuts will not commence until next April. The Secretary of State must admit that councils do not know what they can build.
      Last year, Salford spent £10 million on improvements. The local authority does not know how much it will spend in the coming year. It thinks that it might spend £500,000. That represents a terrible cut. However, it does not know how much it will spend, because it does not know the Government's intentions.
      The current issue of the Local Government Chronicle states:
      " A question mark still hangs over the new housing subsidy system. While more clues to the Government's policies are available as a result of publication of the long-term expenditure plans it is impossible for local government to tell what will happen with reckonable expenditure levels until it sees the Government's suggestions for housing project control. The consultation paper is not now expected for several weeks.
      ' Until such time as we know what they are going to do about project control we can't make sense of the subsidy sysem ', commented the Association of Metropolitan Authorities' Housing Under Secretary Peter McGurk."
      My right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) has given us cause for serious thought. There have been savage cutbacks. Some London boroughs have already announced that they cannot build one new house this year, or grant one council mortgage. Nevertheless, there is a colossal need for houses. There are 1 million families on waiting lists. Another 1 million families probably do not bother to apply for housing, because they know that the situation is hopeless.
      The number in need of homes is even greater. It includes those who live in a house without a bath, hot water or inside
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      lavatory—in the year 1980! There are people living in houses condemned as unfit for human habitation and in grossly overcrowded houses, especially when two families have to live together, the parents, the children and the grandchildren.
      There are more families coming into existence, because families are smaller and there are so many divorces. More houses are needed. Many older houses are collapsing every year or having to be demolished.
      Most of those to whom I have referred are dependent on getting a council house. They cannot afford to buy even with a mortgage. These people are being entirely neglected and ignored. As my right hon. Friend the Member for Sparkbrook said, the solution is to build more houses.
      About nine out of 10 of those who come to my advice bureau wish to see me about housing. They used to see me about getting out of their rotten slum house into a council flat. I must admit that that has changed. Most of the slums have been pulled down. People now come to see me about getting a transfer from the multi-storey block into a council house. That applies especially to mothers with young children. There they are, 18 or 20 storeys up, trying to keep an eye on their children who are playing in the playground at the foot of the block, assuming that there is a playground. They are seeking a transfer from the flat to one of the better council houses in the suburbs where there is a bit of garden.
      That is what millions of mothers want. However, they will not be able to have it because the Government will sell off those houses. They will not sell the multistorey blocks. No one will buy flats in those blocks and the Government know it. However, they will find buyers for the nice semis with a bit of garden. That will prevent many mothers from giving their children the future that they were intended to have.
      Last year was the worst council house building year since 1947. There were 88,000 starts in 1978 and 66,000 in 1979. My estimate for 1980 is 35,000. Shelter, which is not exactly behind the door in these matters, estimates that there will be 13,000 starts. That means virtually the end of council house building. Only a few disabled and elderly persons will be able to get a house.

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      The Government's estimate of current expenditure on housing is £5·3 billion. By 1983 there will be a cut of about £2½ billion. That is a cut of 50 per cent. I said that there will be a £2½ billion cut, but it will be £3½ billion when contrasted with the Labour Party's plans for that year. There will be a 50 per cent real cut in housing.
      The Government say "You have freedom." It seems that it is the freedom to cut. In effect, the Government are saying "There are three choices—namely, to cut new build, to cut on improvements or to cut the amount lent to residents for mortgages."
      It has been said that some of the worst cuts are taking place in stress areas. That is true, but other areas are in need of council housing, too. No council builds unless there is a demand for housing. Throughout the country the need for housing is great in stress areas and also in better areas, although the situation there is not as acute.
      We are told by the Government that we cannot afford to continue, that it is necessary to cut because the country cannot afford the expenditure on housing. That is nonsense. Instead of cutting expenditure on housing, we shoud be cutting our fantastic arms expenditure. This is highly relevant, for this reason. Obviously the Secretary of State does not like what I am saying, but I shall continue. Five Trident submarines each costing £1 billion are proposed. For £1 billion we could build homes for 74,000 additional families; and that is what people want.
      The Secretary of State will not agree with this, but a month ago The Sunday Times carried out a public opinion poll. The questions put to those interviewed did not get much headline treatment. Nevertheless, they were printed. The majority of people, when asked whether we should spend more or less on housing, said that we should spend more. The same people, when asked whether we should spend more or less on defence, said that we should spend less. In other words, the majority of people take the view that it would be far better to build houses than to build Trident submarines, and that was despite the daily propaganda in the opposite direction.
      If we cut house building, as is clearly the Government's intention, what will
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      happen to those who build houses? At the moment, including subsidiary trades such as glass, brick and furniture making, there are 235,000 unemployed construction workers. So, by cutting the housing programme, we shall not only fail to provide what people want. We shall also put an additional number of workers on the dole.
      The average rent of a council house is £6.60 a week, plus rates. I do not know what it will be by the time this Government finish. Shelter estimates that it will be £21 a week plus rates. Of course, part of the Government's intention is so to raise rents as to force people to buy council houses even if they have no wish or intention to do so. If rents are raised to that degree, the rate of council house building will go down even more sharply than it has already.
      The Government say that the average rent of a council house should rise this year by £2.10 a week. However, a friend of mine on the Wolverhampton council tells me that in his area rents are going up by £5 a week. That again is bound to cut council house building.
      I challenge the Minister. What will happen to those who cannot afford £21 a week and who cannot afford to buy? Where will they live? How can a young couple set up home unless they have plenty of money, in which case there is no housing problem? This has been portrayed graphically in three films which many of us have seen. They are "A Kind of Loving", "The Family Way" and "Cathy, Come Home". In all those films the story is the same, and we can tell it from our own experience. It is that of a young couple who cannot find a house. The girl lives with her mother, and the boy lives with his mother and father. I suggest that that kind of family life does not continue for very long. It ends in the divorce court. That is what will happen as a result of this cut in housing.
      The Government are trampling on human lives. This clause would give people something to hope for and look forward to.
      8.45 pm
      Mr. Durant: I have heard housing debates as an hon. Member sitting on both the Opposition and the Government side of the House. Listening to the debate so far, one would imagine that the Labour

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      Party had the most marvellous record on housing while our record was bad. I sat on the Opposition side of the House when the Labour Government of the time cut housing viciously. They claimed that such steps were necessary and that the country was in a bad financial state. That was accepted by the Conservative Opposition——
      Mr. Jack Straw rose——
      Mr. Durant: I should like to proceed with my speech. The Labour Party introduced the Rent Act 1974 that had a diminishing effect on the amount of rented accommodation available. If hon. Members wish to indulge in tear-jerking, I recall that university students were sleeping on the floor of halls at Reading university because inadequate accommodation was available in the rented sector.
      The previous Government also introduced a Community Land Act. What a farce that was. Hon. Members discussed the Bill until all hours of the night. It was described by the Government as a vital Act that would save the whole situation. It turned out to be a damp squib. The abolition of that Act has gone through the House hardly noticed. It was an inadequate and stupid piece of legislation. There were vicious cuts in improvement grants. The grants were put back into circulation shortly before the election but, during the preceding period, the grants were cut enormously.
      The Government are right in the sense that it is time to move to greater use of existing stock. This is the key to housing. The housing situation, except in stress areas, has changed. There are parts of the country, for instance, Swindon, where one can obtain a council house in six weeks. In stress areas such as that I represent, it takes longer. Looking at the housing situation as a whole one sees that massive building of more council houses is not required. There needs to be less of the bulldozer and more of the development of existing stock.
      Mr. Straw: The hon. Gentleman accepts that the situation varies from local authority to local authority and indicates that Swindon is different from Reading. If that is the case, is it not necessary for the Secretary of State to have the information about the building plans of each local authority that reflect
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      those differences? What is the hon. Gentleman's objection to accepting this amendment?
      Mr. Durant: Under the Government's proposals, local authorities will be able to make local decisions. That is the point that the hon. Gentleman makes. The authorities can choose how to spend the allocation—on improvements, new housing or people. That is a right and sensible choice.
      There has been mention of high-rise flats. It was interesting to hear the hon. Member for Salford, East (Mr. Allaun) say that the main problem is moving people out of high-rise flats into other accommodation. The housing situation in his area does not sound so bad. Some of my constituents would be pleased to get into high-rise flats. That is a local matter. The local authority can decide which people go into high-rise flats. If this has been done badly by his local authority, that is not the fault of the House of Commons.
      Mr. Hattersley: The hon. Gentleman describes the problems in his area. Will he tell the House, or does he prefer me to tell the House, how many new houses this year's housing investment programme allows his council to start in areas with the problems he has described?
      Mr. Durant: I happen to know that the right hon. Gentleman's adviser is a councillor from my constituency. That is probably why the right hon. Gentleman has the figures. The situation is that the authority is able to complete its existing programme. What happens afterwards is a different story. It is not felt that there is need for a great expansion in building for council housing in our area once that programme is completed. It is a policy matter for the council.
      We need to move much more into the development of housing associations. One of our basic troubles is that we have concentrated too much on public sector housing and not sufficiently on housing association type development.
      Mr. Donald Anderson rose——
      Mr. Durant: I shall not give way. Many hon. Members wish to speak.

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      I have been on a trip to Denmark recently. It is interesting that there is no public housing there. The money is provided by central Government and by local authorities, but all housing is provided under the aegis of housing associations. That is a good way of providing housing.
      Mr. Anderson rose——
      Mr. Durant: I want to finish my remarks as other hon. Members wish to speak.
      The next point concerns land. Land is the key to housing, be it local government or private. The Community Land Act had a bad effect on the availability of land. We have had delays in planning. The Government are doing their best to speed up the planning process. The hon. Member for Salford, East said that it takes a year to start a house. Frankly, it should be a jolly sight quicker than that. It is nonsense that it should take a year to start a house. That is something else that the Government are endeavouring to sort out. They want to get more land released.
      We have heard about the Government holding large tracts of land. There is land in my constituency not being used. The more land that we can release, the better it will be for house prices. It will enable developers to build more houses, for which we hear a constant demand from both sides of the House.
      I do not support the bleats by Labour Members. The Labour Government had a bad record on housing. They cut improvement grants, they dried up the supply of land——
      Mr. Deputy Speaker (Mr. Bryant God-man Irvine): Order. The argument that the hon. Gentleman should be advancing is whether we should or should not have statistics.
      Mr. Durant: The answer is that they are not relevant to the situation. One can play about with figures and prove all sorts of things. But people want more houses. Therefore, the relevance of collecting statistics, so that we can have a wailing and gnashing of teeth, will not help homeless people. We should be more interested in getting things moving in all sections and doing something about the problem. That is what we are trying to do. This is an excuse by the Opposition to bleat about the bad record of
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      this Government. I do not support that view.
      Mr. Peter Hardy: I support the new clause. The hon. Member for Reading, North (Mr. Durant), who was my opponent in Rother Valley in 1970, will not be surprised if I disagree with him. Without trespassing too far from the subject, I believe that we need the facts of the situation in order that the hon. Gentleman may learn that Labour-controlled authorities-authorities which remained Labour-controlled through difficult years—carried on building houses whereas Conservative-controlled authorities did not and thereby contributed to the decline both in the building of new houses and in the improving of old houses. I share the hon. Gentleman's view that we should improve houses. Indeed, in many ways I should have liked my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) to have included the number of houses that authorities expected to improve in the ensuing year. However, I believe that we shall get the picture that we need if the new clause is accepted.
      The need for the new clause is illustrated by a recent exchange in the House. The Secretary of State may recall that, whilst he was speaking in the guillotine debate, I intervened and spoke about the dreadful situation that would apply in my constituency. The right hon. Gentleman may recall that he rejected emphatically the critical note that I struck. Since that debate I have looked carefully at the position in the Rotherham metropolitan borough and found that my criticism was entirely justified and could have been expressed more strongly than I put it.
      It is clear that my area and other Labour-controlled areas, which traditionally have been concerned to promote dignity in living conditions, will be badly affected. The hon. Member for Watford (Mr. Garel-Jones) may sneer. He may not like that point. But Rotherham council, which has a strong traditional Labour record—as was emphasised at the local general election on 1 May—commands the support of people in the area, and it has never before had such a superb result as at that time.
      When the House considered the guillotine motion, the Secretary of State

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      clearly did not understand the position. The new clause rightly seeks to provide him with the information that he lacked at that time. We have seen nothing in the ensuing weeks to lead us to believe that he has learnt any better.
      I also believe that the amendment could be useful in improving the flow of information from the Department. For example, Rotherham borough council received the response to its housing investment programme request five months later than it had hoped. Five months later than it had hoped it was told that it would receive only 59 per cent. of the amount that it had anticipated. The council had asked for £21·4 million for housing in 1980–81. It was told that it could spend only £12·68 million in devalued money for the current year.
      That clearly means that the scope for doing anything further when existing contracts have been completed has disappeared. It means that we cannot build more houses and improve more houses than existing contracts allow. I believe that if the Secretary of State could devise a way of compelling Rotherham borough council to escape from its existing contracts, that possibility would be foisted upon us as well.
      My local authority will be in serious difficulties and serious disappointment will be created. Eight new building schemes will have to be deferred and hope will be damaged or destroyed for thousands of people who occupy houses such as the hon. Member for Reading, North wishes to see improved. My local authority wished to improve a large number of houses, but 268 houses which should have been improved in the latter part of 1979–80 will not now be completed because of the Government's appallingly vicious policy.
      My housing chairman—I believe that the hon. Member for Reading, North will recall him with affection—who has been the agent of my party for many years, said recently about Government policy——
      Mr. Deputy Speaker: Order. Does the housing chairman have anything to say about statistics?
      Mr. Hardy: Yes, Mr. Deputy Speaker, this is absolutely relevant. My housing chairman, who is one of the most experienced
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      housing chairmen in the country, said that the Secretary of State had no conception of the housing needs of the industrial North. As a long-serving member of the Labour Party, my housing chairman has dedicated many years to seeking to improve the conditions in which my constituents live. I can think of no better ambition for anyone involved in party politics than to seek to ensure that people—particularly the elderly—are decently accommodated. From his experience it is quite clear that he believes firmly that we need an improvement in the flow of communications since the sheer ignorance of Ministers in the Department needs to be remedied.
      We were able to tell the Minister that on 31 March this year not only that 268 houses could not be improved, which should have been improved as a continuation of the 1979–80 contract, but that 566 houses which we had expected to build, or to start, this year would not now progress beyond the design stage. That represents as much a waste of resources as the fallow land mentioned by the hon. Member for Reading, North.
      Some expenditure, care and planning had been devoted to those 566 houses which will not now proceed beyond the design stage, and the improvement of a large number of houses in the metropolitan borough will now be in abeyance. The council will not be able to do what it had hoped to do in the area of general improvements, energy conservation schemes and in other directions.
      Mr. Durant: Since the hon. Gentleman has touched on the question of land, does he agree that vast tracts of the land lying fallow in his area are owned by the National Coal Board?
      Mr. Hardy: The land owned by the National Coal Board in my area tends to be land which has been used for spoil or changed by reclamation. I am glad that the hon. Member for Reading, North has raised this matter because he may not realise that the assisted area status policy being pursued by his Government has created serious doubts about the maintenance of the reclamation policy, which could have provided land for housing and economic activity in the future. The hon. Gentleman should not embark upon arguments which properly concern hon. Members in mining areas. He should pay

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      another visit to Rother Valley before his memory becomes even more flimsy.
      9 pm
      I am proud of my local authority's achievements in the last three or four years. It is one of the best authorities in Europe in terms of providing houses for the elderly, whether these be bungalows or ground floor flats. However, hopes for the future have been dashed by the latest housing improvement figure. It was clear from the exchange in the guillotine debate that the Secretary of State had not the faintest idea about the implications of his policy. It is right that the House should improve the arrangements so that local authorities can make clear to the Secretary of State the exact implications of his policy.
      Perhaps the right hon. Gentleman knows what he is after. In that case we must attribute his motives to malevolence. Whether the right hon. Gentleman is incompetent or malevolent, we must know the position. The new clause will provide that opportunity.
      Mr. Anderson: The new clause is useful and necessary, because we must have an overall view. Each hon. Member has his own idea about the total demand. One can take a view from the state of the housing lists, although there are difficulties in that. Hon. Members gain impressions from their surgeries. In the past few months, my impression has been that there is an increase in the despair of young people who are forced to live apart because of the lack of council houses. There is despair among older people who are unable to transfer back to their community links. There is a degree of distress which does not equate with the Government's picture of over-supply. That is my genuine impression, although it might not be reflected by the views of Government Members.
      As a result of the present policies and the cut in housing grants, the despair and distress will increase in the period covered by the public expenditure survey and beyond. We gain some idea about demand from statistics and from impressions in our constituencies. We have not such a clear view about supply. That is what the new clause is about. It will inform us about the scale of the problem and about the way in which the Government can meet the demand.
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      Perhaps the Government do not wish to know the answers because they would be too embarrassing. That probably lies behind their likely opposition to the new clause. The new clause will provide for the monitoring of Government performance so that we know the aggregate position that will allow a more informed debate at national and local levels. Local activists and ratepayers will then be able to assess what their local authorities propose to do, in the knowledge of the scale of the problem.
      The Government cannot say "Do not blame us, blame someone else", as they say of steel and other issues. They cannot try to shuffle responsibility off on to the local authorities that they are starving of funds. The Government cannot escape blame if, as is likely, as a result of their own economic and housing policies, public sector housing collapses in the next few years. If it does, it will be directly attributable to the policies pursued by the Government.
      We know that in the private building industry the omens are bleak. We recall, not a year ago, the vast sums that the private building industry poured into the Government election campaign. There were advertisements from a body that called itself CABIN. Where is CABIN now? What is it doing now that all those things that it pressed the Government to do are being ignored? I suspect that CABIN will be asking for its money to be returned. It is false pretences; those things that it asked the Government to do, and that it was led to expect, have not been done.
      Mr. Durant rose——
      Mr. Anderson: I shall give way to the hon. Gentleman, although he did not give way to me. I shall show him a greater politeness than he showed me.
      Mr. Durant: I apologise to the hon. Gentleman for not giving way on a previous occasion. I had given way to other hon. Members. I remind the hon. Gentleman that CABIN was organised to prevent the nationalisation of the construction industry. It had nothing to do with money for the Conservative Party. It succeeded. We are in power.
      Mr. Anderson: The campaign was organised by a body that anticipated

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      greater funds for its activities being provided by the Government, into whose coffers it poured money. It must be sorely disappointed. I refer to another matter mentioned by the hon. Gentleman during his speech. He said that public sector housing might collapse, that there might be an over-supply of owner-occupied housing, and that the real point for the future, following his visit to Denmark, was in the area of housing associations.
      Has the hon. Gentleman taken the trouble to talk to officials in the Housing Corporation? Has he heard its assumptions about its new build programme over the years to come? Has he heard, as I have heard, that its projections are that the programme will fall by about 50 per cent. as a result of the Government's cutbacks?
      If the hon. Gentleman is so keen on housing associations—the third arm—as the way of the future in housing, how does he square that with the fact that the Housing Corporation anticipates that its programme over the next year will be halved as a result of Government policy? Would he like to reply to that?
      Mr. Durant: The country cannot afford these things at the present time. We have to face reality, and that is the position. As matters improve, that is the area to which I should like the money to go. That is the point that I was making.
      Mr. Anderson: The hon. Gentleman said "As matters improve". He should read his Government's public expenditure White Paper, which shows that over the next four years the amount allocated to public sector housing will be halved both in England and in Wales. My priorities are different from those pursued by the Government. We shall not find salvation in the housing associations, the cause of which the hon. Gentleman espouses.
      There is clear evidence in all parts of the country of a collapse in public sector housing. The chairman of a council in the Principality confirmed that. I refer to the area that I know best. The Secretary of State for Wales said, in mitigation of the Government's cutbacks and the 100 per cent. fall in real terms over the period 1979–80 to 1983–84 from £217 million to £110 million, that over the next year the Government would meet 80 per cent. of the guarantee made by my right hon.
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      Friend the Member for Rhondda (Mr. Jones) when he had responsibility for housing in Wales. He made it quite clear that that 80 per cent. was for planning purposes only, and that the previous Labour Administration were prepared to finance the whole programme of housing authorities in Wales. My local authority was allocated less than two-thirds of the sum that it sought. It had already committed itself to more than the sum that it obtained from the Government and was denied at a late stage, when its HIP was announced in February, the 10 per cent. carry-over that it had assumed would continue as previously. The authority has a high proportion of pre-1919 houses. The number of properties lacking basic amenities is substantially higher than in Reading and other parts of the South-East.
      The areas that are bearing the brunt of Government policies in other spheres will also feel the full effect of their housing policies. The Government try to say that council housing will increasingly be a specialist provision for the vulnerable—the old, the handicapped, and so on. But it is clear that the Government are making whole regions of the country vulnerable. There is, therefore, a greater need for public sector housing for those in, for example, steel areas such as my constituency who are feeling the effects of the unemployment brought about by the Government. Perhaps Reading is less vulnerable.
      Mr. Deputy Speaker: Order. Perhaps at some stage the hon. Gentleman will come back to the amendment.
      Mr. Anderson: Part of my general argument is that we need to know the overall picture in order to have a proper debate about the relationship between the demand that we know exists and the supply, which the Government are rapidly drying up.
      Mr. John Major: How many new homes does the hon. Gentleman expect to be provided simply from the provision of statistics?
      Mr. Anderson: We shall get no new houses simply from the provision of statistics, but if, as I suspect, they reveal a virtual drying-up of public sector housing, we shall hope that the hon.

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      Member and his hon. Friends will be sufficiently reasonable to see the effects of the policies that their Government are pursuing, and may be drawn back from the brink.
      The Government cannot get away with saying that it is a matter of local authority priorities. The finger points at them. Do they want to know the aggregates, the statistics and the figures? Perhaps they will be too embarrassing for the Government. I suspect that that is the reason why they do not want to know the figures.
      Mr. Bruce George: Someone once said that everyone is entitled to his own views, but no one is entitled to his own facts. If there is information to be bestowed upon the world, local authorities or the Government should go out of their way to acquire that information not simply to provide ammunition for social scientists or statisticians but because politicians can make use of statistics not in a pernicious way or for propaganda but because statistics are an aid to decisionmaking. If information is made available, it will assist the Government and the Opposition in their attempt to appraise the housing situation throughout the country.
      A few weeks ago, a conference was held in Newcastle where the publicists attached to the political parties gloated or commiserated over the result of the election. One piece of gloating was over the Conservative Party's advertising on film and television which showed a series of queues with a young man and his girl friend asking "Is this the queue for the cinema?" Those in the queue replied that they were in the queue for council houses, health treatment and other services, implying that the length of the queue was related to the Labour Government's policies, successes and failures. They suggested that if the Conservatives came to power those queues would diminish. Those who fell for those statistics a year ago now realise the error of their ways. Far from being halved, the queue for council housing is getting longer and longer. These are not people who are seeking ostentatiously to add their names to the list for the purpose of being on a waiting list. They are people who are desperately in need of accommodation and who are being denied it by this
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      Government. I cannot believe that we are so deeply into a recession that we can deny people a basic human right of housing.
      9.15 pm
      When the housing investment programme decision was made by the Department of the Environment, it was obviously communicated to the Walsall metropolitan borough council. We have heard a great deal about local authorities being freer to make decisions and being freer to decide their own spending priorities. But if their budgets are halved, what freedom is that? It is the freedom to give a man 50p and tell him to go to the Ritz and buy whatever meal he chooses. The choice is deliberately and maliciously restricted.
      We have not heard very much about statistics. If the statistics about my local authority were revealed, some interesting figures would emerge. The allocation to Walsall in 1979–80 was £19·3 million. In 1980–81, the allocation was £12·9 million. I remember complaining bitterly to Ministers of Housing that £20 million was not enough to deal with the problem of housing in my area—a problem of 40,000 municipal houses and about 10,000 houses requiring modernisation. In areas such as Walsall, South and North and Aldridge-Brownhills, there is much private property lacking any basic amenities. This is an area of deep housing stress, yet the Government have responded by dropping the allocation by 33 per cent.
      Surely it is necessary to look clearly at areas and to ascertain their housing needs, and not to act as some sort of butcher almost without recourse to individual needs and problems in specific areas. I do not wish to play one neighbouring authority off against another. I hope I have not caused offence to hon. Members representing neighbouring Sand-well or Wolverhampton, but the problems of housing are as serious in my area as they are in Sandwell or Wolverhampton.
      Mr. John Heddle: I invite the hon. Gentleman to give offence to one of his other neighbouring colleagues—the hon. Member for Lichfield and Tamworth. I invite the hon. Gentleman to agree with him that the housing shortage can be met by half-and-half schemes and by shorthold provisions

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      within the private sector. It is not necessary for him to divide his borough or to divide the constituency of the hon. Member for Lichfield and Tamworth into owner-occupiers, council tenants and people on waiting lists. The private sector can also pick up the demand for providing this accommodation.
      Mr. George: I am not sure how to respond to that, except to say that I do not know where our half will come from in a half-and-half scheme. Our commitments are now equal to our allocation, [interruption.] The price of a council house will be equivalent to the price of a bottle of whisky if the hon. Member for Watford (Mr. Garel-Jones) has his way. In some cases there is not total disagreement on that—at least on the whisky side.
      The point that I wish to make, without being guilty of playing one area off against another, is to ask when the problems of neighbouring areas are so similar, why should the reduction for Sand-well in 1979–80 be only 4·8 per cent., Wolverhampton 7·3 per cent. and the average for the whole of the West Midlands 23 per cent., with Walsall cut by over 33 per cent? The average cut in Wales is 24·8 per cent. [Interruption.] Conservative Members wanted statistics; now they are getting them. If I were representing an area such as Lichfield, perhaps I would be prepared to accept a 33 per cent. cut, but for an area possessing enormous housing problems to be cut way above the average is the un-kindest cut of all.
      The freedom of my local authority to make decisions is, therefore, an illusory one. As for the freedom to build council houses, it is now no longer building council houses, although there are more than 6,000 people on the waiting list. Those of us who hold regular surgeries are inundated week after week by people wanting repairs done to houses which were built 30 or more years ago. We are also hearing constantly from people who want to leave an overcrowded house and to move into a flat. We have to tell them—in a way, we are the agents for the Government—" Sorry, there is nothing doing."
      This freedom is a bogus freedom—a freedom to do nothing. When an authority's
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      housing allocation is halved, there is very little that can be done. The hon. Member for Reading, North (Mr. Durant) said that in his area the authority could fulfil its existing commitments. He should thank God that it can, otherwise there will be legal recourse open to people who are being denied their rights. I know what is happening in my area.
      Mr. Durant rose——
      Mr. George: With so many people on the waiting list and requiring every type of accommodation, the prospects of these problems being resolved are nil.
      In conclusion, I very much hope—[Interruption.] Hon. Members may say "Hear, hear", but I represent many people who have been denied housing by this Government. I cannot believe that the problems are so acute that many of my constituents have no prospect of accommodation. It might be suggested that they can enter the private market, but what chance have ordinary people of accumulating the £20,000 necessary to purchase the kind of accommodation that is on the market in my area today?
      I hope that in the near future, when the Government—I hope—make one of their numerous U-turns, one of them will be somehow to restore a building programme; otherwise, when the next Government come into office, whenever that might be, the problems that they will face will be enormous.
      If, as we have been told, a sign of virility in the Cabinet is that a Minister has made cuts, the present incumbent is indeed an exceedingly potent Minister. I hope that other people will see the light and provide for those in my area the kind of accommodation they deserve and need and, I hope, will one day get.
      Mr. Graham Bright: Some Labour Members were telling the hon. Member for Walsall, South (Mr. George) to sit down because they were waiting to get into the debate. I assure the House that I shall be very brief.
      Several hon. Members have talked about the overall view of housing, yet the new clause tends to seek the provision of statistics purely on local authority starts in building houses.
      As I see the position in terms of needs, there are needs existing over a very wide

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      area. There are many people on council house waiting lists whose names are there "in case ". Many of them go on to buy their own homes. This applies particularly to young engaged people who have put their names on the list. There are many old people living in council houses, and many more living in the private sector, who have put their names on the council list for housing in elderly persons' accommodation. Very often, when one analyses the list of a local authority, it is possible to cut it in half. I know of some authorities that have looked carefully at lists and cut them even by two-thirds.
      We should look at the question of need, therefore, on a much broader basis. Other parts of the Bill tackle this. Short-hold tenancies will add considerably to the amount of housing stock coming onto the market. We must consider that aspect.
      One must also look at the private sector. I appreciate that it is going through a difficult phase, but here as well needs should be recognised. Many of my colleagues have talked about the needs of the elderly. Smaller flats and patio bungalows should be built for old people, thus releasing larger houses for families. In the private market, there is a need to build such small flats, bungalows and complexes for old people who are living in large houses of their own. If such complexes were available, old people could move into smaller units. We all know of cases in which Labour councillors have opposed and decried such schemes and refused to help private developers in the provision of wardens.
      The new clause tries to put the future of housing in the hands of local authorities. That is far too narrow a view. We must look at a broader basis and consider the private market, and people's needs—particularly of those of first-time buyers and others who wish to move into short-hold tenancies and save up for mortgages.
      There are many points which this clause tries to brush aside and overshadow. If the Opposition are playing a game of statistics, they must know that statistics can prove anything that anyone wants them to prove. In most instances, housing lists are far larger than they should be, but we could cut them down if we examined needs. We must look at needs,
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      not only in the public sector, but in the private sector as well. That is something that the new clause fails to do.
      Mr. D. E. Thomas: This new clause attempts to introduce a data base of rationality between local housing authorities and the two Government Departments in England and Wales that are responsible for allocating funds. For that reason I support it. It means that in future there may be a rational data base produced by each housing authority as a projection of its likely targets for the number of housing starts in each financial year. The reason why this is essential is that housing starts have been such a haphazard factor in housing policy over the years under successive Governments.
      Therefore, I welcome the conversion of the Labour Opposition to more rational policies on housing. It would be churlish of me at this moment to go at great length into criticisms of the housing record of the Labour Opposition. I could and will do so at another time. But I should put on record that a 25 per cent. cut betwen 1974 and 1979 balances neatly a 30 per cent. cut in 1980.
      When the housing investment programmes were first introduced, the Green Paper of the previous Government said:
      " We can only establish how much needs to be done, when and where, by local assessment."
      The crucial contribution of the new clause is that it lays down clearly the likely performance of a local authority on the basis of its local assessment of the need.
      In the 1977–78 financial year when the Welsh Office was allocating funds on the basis of centraly determined indicators of needs, the introduction of the concept of local authority bids for funds was regarded as an advance on centrally imposed needs formulae. But of course, as is so often the case in the relationship between local government and central Government, what is initially sold as greater flexibility locally ends up by being yet another more sophisticated device for central Government to control local authority spending and local authorities' own estimates of their needs.
      9.30 pm
      This Bill compels local authorities to dispose in an irrational way of their

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      public sector housing stock. At the same time, in another part of the same Bill, and in parallel with that, the Secretary of State for the Environment, through his clampdown on the housing investment programmes, is reducing substantially the ability of local authorities to complete their current programmes, let alone to meet their local needs.
      The alleged aims of local flexibility when HIPs were first introduced have to be balanced against the use of the HIP system to control public expenditure on housing. Indeed, the previous Labour Government made clear in their Green Paper that HIPs would be a means of controlling public expenditure. The difficulty that so many of us on the Left in Britain generally have in what we regard as an alternative approach towards public expenditure and the State's role in the economy, is that our arguments are undermined by the failures of Labour Governments to adopt a strategy which would extend rather than retract public expenditure. Therefore, upon the introduction of the HIP policy there was the clear implication in the Labour Government's policies that these forms of expenditure control were available as instruments of reducing public expenditure. Therefore, it should come as no surprise to the spokesman for the official Opposition that these strategies are being adopted for those very purposes and are being taken to their logical conclusion by the present Right-wing Conservative regime.
      The basic problem with the HIP data is that too often the definition of needs set down by central Government is inadequate to give us a profile of what the true situation is locally. That is where the provision of local statistics by each housing authority of its projected starts is an essential component of local housing planning, which is brought forward in the new clause. Far too often the definition of needs and the request for information on the local housing profile made by central Government Departments is inadequate. This is particularly so with the Welsh Office, which is a worse offender in this respect than even the Department of the Environment. The requests made of housing authorities in Wales in Welsh Office circulars are for less full statements of statistics on local needs than those
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      made of the English authorities by the Department of the Environment.
      For example, in the Labour Government's circular 158/78, which began to request key statistics for the compilation of HIPs, the request for the statistics in Wales differed substantially from the requests relating to England. I fail to see how this can be justified. It is essential for any housing district, whether in Wales or England, to have a comprehensive assessment of housing conditions in its area at a disaggregate level.
      Housing authorities are relying on the 1976 Welsh house conditions survey, which sampled only 8,000 dwellings—1,000 per county—out of 1 million-plus dwellings in Wales. This means that when authorities compile their housing statistics and make their bids under HIPs, and when those bids are being assessed by the Welsh Office—and when the projected housing starts—if the new clause is accepted they will be relying for their estimates of their own problems, let alone the projected solution under the new clause, on inadequate data. The data used in the house conditions survey are totally inadequate as a measure of the housing conditions in the various districts. If Cardiff had accepted the Welsh survey on housing conditions as the basis for its HIP claim, the number of houses considered fit but lacking amenities would have been underestimated by 12,000. That is a clear indication that the data are totally inadequate.
      The same problem exists in Swansea. However, Swansea is to be complimented on its local initiative. It sought funds to undertake its own survey into its housing needs. If local authorities widen their definitions of need when putting forward their HIP allocations and providing data, the Welsh Office will be able to make better estimates. Local authorities must have clear profiles of their individual housing needs before they can embark on an effective programme.
      Welsh HIP data should take account of improved data for waiting lists, involuntary sharing, overcrowding and homelessness. Such information is already available in England on form No. 16314. Perhaps the Minister will explain why there is a discrepancy

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      between the statistics requested by the Welsh Office and those requested by form No. 16314.
      Welsh HIPs do not assess rates of housing deterioration. Our housing stock is older than that found in any region in England, with the exception of the North. The measure of deterioration must be set against the rates of improvement, repair and maintenance. That is essential if we are to clarify the projected deterioration and if additional resources for improvement and building are to be allocated.
      The measurement of need is inadequate. The data produced by local authorities are also inadequate. In addition, the Welsh Office allegedly introduced the HIP system as a more flexible tool for local authorities. However, it puts a substantial constraint on the work of local authorities. In Wales, the HIP will lead to allocations being made on the basis of a local authority's ability to spend, rather than on that of need.
      When the right hon. Member for Rhondda (Mr. Jones) was at the Welsh Office, he conducted a vigorous campaign against local authority underspending. One such problem of underspending involved the form of the allocation system. Cuts were made. Additional funds were then found in the Welsh Office's budget. Housing authorities were therefore urged to spend late in the day. That is contrary to the rational system of housing starts that we favour.
      When the right hon. Member for Rhondda was at the Welsh Office, his great adversary was the hon. Member for Conway (Mr. Roberts). The latter made speeches that were critical of local authorities, and critical of the Welsh Office for its underspending. That hon. Member is now a Minister and has taken over responsibility for housing in Wales. It is not surprising that he has undermined his own rhetoric. However, he is also undermining the basis of the allocation system that he used to support.
      Mr. Wyn Roberts: We are not undermining the allocation system. The hon. Gentleman has spoken about reallocation. Does he not think that that is the proper action to take when quarterly checks reveal underspending by certain authorities and overspending by others? Surely it is sensible to reallocate, taking patterns
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      of spending into account. As for the difference between English HIPs and Welsh HIPs, I assure the hon. Gentleman that Welsh housing authorities have the freedom to state in their HIPs any fact additional to those contained in answers that they consider to be relevant.
      Mr. Thomas: The Minister's intervention has confirmed all that I have said. The hon. Gentleman has indicated that the statistical basis provided for the Welsh HIP formula is inadequate. He has invited local authorities to add other fact" of interest. The hon. Gentleman talks about the reallocation of resources according to spending patterns. I was arguing that HIP allocation is being made in Wales on the basis of historic spending patterns since the system was introduced and not on need. Authorities which historically have been prepared to spend more are being allocated more.
      It is significant that authorities that underspend are those that appear to have the most severe housing problems. We have a system of allocation based on spending which is diverting resources not to authorities which most need them, which is the most objective criterion, but to authorities which for various reasons—mainly accidental reasons of recent history rather than reasons connected with housing need—are most able to spend the resources. A Government who are allegedly in favour of the efficient use of resources in the public sector are demonstrating yet again an example of contradiction in their housing policy.
      In Wales there are more than 200,000 houses lacking in amenities or in a state of disrepair. There are 60,000 householders on the housing waiting list and 6,000 becoming homeless. These severe housing problems can be made only substantially more critical by the Government's policies. I welcome the fact that the Opposition are trying to obtain a more rational relationship between local housing authorities and the Secretaries of State for the Environment and for Wales for the projection of housing starts. I remind the Labour Opposition of their disastrous performance when in office on housing starts in Wales and England.
      Mr. Major: It is a narrow clause, but it has been a wide-ranging debate. I did not expect to take part in it when I walked into the Chamber. I shall make

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      only a briet intervention. I shall endeavour to remain entirely pertinent to the clause. Before doing so, I must say that I am astonished that so much time has been spent on such a relatively trivial clause in substance when we consider the substantive matters of genuine dispute between the parties that are yet to be debated.
      The substance of the clause is to seek to compel local authorities to estimate the number of new dwellings the construction of which they expect to start in any particular 12 months.
      I return to what may have been considered a flippant point that I introduced during the speech of the hon. Member for Swansea, East (Mr. Anderson). It was not clear to me as the hon. Gentleman spoke—it has not become clear to me subsequently—why or how the submission of new constructions will provide any more houses or be of any material benefit in adding to the information that the Secretary of State has, or could obtain, without statutory backing and without any great difficulty.
      I understand that the clause might provide more jobs in housing departments of local authorities. I can understand that it would provide more information at the Department of the Environment. I understand that it would provide more information for pressure groups. However, I cannot understand how it will make a material contribution to the construction and availability of more houses. I can see circumstances in which the statutory requirement to provide this information is positively counter-productive to the provision of stable accommodation in certain parts of the country.
      9.45 pm
      Let me indicate why I believe that to be the case. If, as a sort of housing virility symbol, local authorities are to be judged solely, as it is reasonable to presume from the clause, on the amount of new starts that they have in any year, I can see, first, that local authorities may be tempted to direct their funds solely into new starts when perhaps they would be better used elsewhere, or solely into low-cost starts so that over a period of years they produce more dwellings but not necessarily dwellings to meet the needs of their areas. On this ground alone,
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      therefore, the clause as it stands offers nothing to the housing programme and may possibly be counter-productive.
      To put it bluntly, it does not seem sensible to offer an incentive to local authorities to spend all their money on new construction when, in order to meet a higher number of new starts, they may at the same time allow other properties to fall into disrepair.
      The hon. Member for Swansea, East, who has probably retired for a well-earned dinner, spoke briefly of the despair of young people. All of us in this House understand the despair of people living in bad housing conditions. To varying degrees, most of us have had some direct or indirect experience of people who suffer from those conditions. But I doubt whether that despair is despair at the absence of statistics. I know that the right hon. Member for Manchester, Ard-wick (Mr. Kaufman) is an assiduous constituency Member who runs an extensive advice bureau on a weekly basis. I am prepared to accept that his constituents come to talk to him about the absence of homesteading, about the level of mortgage rates, and so on, but I doubt whether young people come to his advice bureau saying "I have noticed the absence of statistics on new housing starts in Ard-wick "—in Manchester, or anywhere else. That seems to defy logic.
      If this amendment was a wider one, if it sought not only the statistics of starts on new construction, if it sought figures on improvements, if it sought perhaps also for the local authority to endeavour to determine how many shortholds had been brought into operation in the preceding year, and so on, it might begin to aggregate to information that was worth while having. But the very narrowness of the clause and the possible danger that it could be counter-productive renders it a clause eminently worthy of not being passed by the House.
      As the clause stands, it is a monument purely and solely to the intention of the Opposition of providing a party political point on an annual basis. The Opposition have no special concern about whether the money has been spent in the best way by the local authority concerned. The clause is simply a virility symbol on numbers alone which the Labour Party hopes to hang up in the wind to make a political point or two

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      year after year. To my mind, that is not a justifiable basis for the imposition of this statutory requirement, and on that ground as well as the others to which I have referred, if the Opposition press the clause to a Division I trust that it will be soundly defeated.
      Mr. David Winnick: The hon. Member for Huntingdonshire (Mr. Major) gave the game away, did he not? If the Conservatives were not fearful of what the figures would show, they would not be so reluctant to accept the proposed new clause.
      Mr. Major: Either the hon. Gentleman misunderstood or he deliberately misinterpreted what I said. I said quite categorically that if this clause had asked not only for figures of new construction but for improvements and other information, it might have been worth while. I hope that the hon. Gentleman will bear that in mind.
      Mr. Winnick: The importance of the clause is to illustrate what is happening in local areas and to give a guide both to the Secretary of State and to this House. I believe that the clause is a very important part of the suggested improvement to the Bill, and I hope that it will be supported by right hon. and hon. Members in all parts of the House.
      Undoubtedly the major brunt of the cuts announced in the White Paper on public expenditure will fall on housing.
      Housing expenditure will fall from £5,372 million in 1979–80 to £2,790 million in 1983–84. In the next four or five years, there will be a reduction of some 48 per cent. in public expenditure on housing. It is extremely important to know what is happening in local areas, to know what is being built, what is being modernised and what other housing work is being undertaken by local authorities. Of the total public expenditure cuts over the years from 1980 to 1984 of some £3,700 million, £2,582 million will come from housing alone. This will be a shattering, devastating blow at the construction and modernisation of council dwellings.
      If the Secretary of State, in giving the figures for the housing investment programme for 1980, for 1981 or for any other occasion, had been frank and said that there was to be a vast reduction in
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      council dwellings, we would have known where we stood. But the Secretary of State was careful to camouflage what was being done. Council house construction is now at its lowest level since the war. The Secretary of State will perhaps comment on the figures. It has been estimated that, by 1981–82, about 18,000 new council houses will be in the process of being built.
      Much has been made of the fact that the situation is virtually the same as under the Labour Government. The Secretary of State, the Minister for Housing and Construction and Back Bench Conservative Members say that the decline is a continuation of what occurred under Labour. I cannot deny that there was a decline under the Labour Government. There were reasons for that decline.
      One factor was the refusal of Tory controlled councils to build new council dwellings. There were other factors that I would not wish to deny, such as the economic situation and also the cuts of which I did not always approve. However, even in the last full year that Labour was in office, in 1978, there were still 107,000 starts in the public sector, and 132,000 in 1977. Never, while Labour was in office, did the figure in a full year go below 100,000. Those figures should be compared with the present situation and the likely possibility that within two years the number of new council dwellings will amount to 18,000. There is no comparison between what happened under Labour and what is planned under the Tory Government.
      At the time of the Labour Government, Labour MPs and councillors were constantly urging the Government to reverse the decline in housing. Now the situation is very different. Listening to the speeches of Conservative Members, I did not detect concern or anger over what was happening. If anything, I heard excuses. There did not seem to be any wish to urge the Secretary of State against entering upon a situation that will amount to a virtual stoppage in the construction of new council dwellings. The Conservative Party clearly does not feel strongly on the issue.
      Mr. Heddle: Perhaps the reason why Conservative Members are not as agitated as the hon. Gentleman on this point is

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      the realisation on the Government side that increased council house building year after year has not solved the nation's housing crisis.
      Mr. Winnick: It may not have solved the housing crisis nationally. But, if we reduce the number of council dwellings, we increase, not reduce, the difficulties. Even more so—this is the point to which I was coming before the hon. Gentleman intervened—at a time when it is becoming more difficult for people to buy, because of property price inflation and a 15 per cent. mortgage rate, there is a need for more, not fewer, council dwellings. In certain areas—the West Midlands, London and so on—people find it impossible to buy. Perhaps a few years ago they would have been able to do so. Because of their difficulties now, they will look to the local authority to assist them in finding accommodation. We have a housing crisis now, and it will get much worse on the basis of the Government's White Paper on public expenditure.
      My hon. Friend the Member for Walsall, South (Mr. George) mentioned the position in our area. The allocation in the housing investment programme for 1980–81 has been reduced by 33 per cent. It is not an easy matter for the local authority. This is a housing stress area. We desperately need more council accommodation. Moreover, many older council dwellings need to be modernised.
      Recently I received a petition from some of my constituents. They said "The local authority has promised that our houses, built before the war and in very bad condition, will definitely be modernised during 1980–81. Now it is likely that they will not be modernised." The tenants are very upset. Conservative Members would be upset if they lived in
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      properties which needed to be modernised and a promise had been made that they would be modernised, but, because of the reduction in the housing investment programme, the local authority was unable to carry out that promise.
      In Walsall, of the £13 million allocated in the housing investment programme, all that will be left for new work is some £234,000. After Walsall's commitment, that is the sum that will be left. How many new council dwellings can be built, how many modernisations can take place and how many major repairs and conversions can be undertaken with that sum of money? People in the area are bitterly angry at the reduction that the area has suffered. Local councillors have been to the regional office of the Department of the Environment in Birmingham to try to explain the position. Indeed, I have written to the Secretary of State, but the reply that I have received is not very satisfactory.
      The housing crisis would normally be of great concern to the Government of the day. Unfortunately, this Government seem to be totally indifferent to housing. If anything, they have declared war on council housing. The Tories always seem to wage a vendetta against council housing. This has been going on for some time in Tory-controlled local authorities.
      I hope that, even at this late stage, the Secretary of State will recognise the need to increase the funds in the housing investment programme for 1980–81. If the situation continues as it is, if the expenditure cuts in housing take place, many people—far more than in the past—will find it impossible to obtain decent accommodation. They will suffer the agony of the cuts being inflicted on the community by the Tory Government.
      Mr. Alton: I begin by echoing some of the sentiments expressed by the hon. Member for Huntingdonshire (Mr. Major). He said that the new clause did not go as far as it might go. Of course, I support what the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) is asking for. I think that this information is essential if we are to plan our housing economy properly. However, we also need additional information on house improvement, house renovation and all the other activities relating to housing in which local authorities engage. I wish that the amendment went further, but on balance I think that it would add to the Bill rather than detract from it. I think that was the conclusion reached by the hon. Member for Huntingdonshire.
      The National Federation of Building Trades Employers—I think that the Secretary of State would, perhaps, do well to take note of a letter that I received, of which I am sure he has had a copy—in the Merseyside region says:
      " massive public expenditure cuts in the past have undermined the industry's long-term planning, investment and recruitment and training programmes."
      I refer to that letter because if the National Federation of Building Trades Employers does not know how many houses will be built in the next financial year that inevitably means that its members cannot plan in terms of their building material requirements, their employee requirements, and how they should organise their activities for the year ahead. To treat an industry that, after all, is probably the largest in the country in this stop-go way is ensuring that that industry goes into decline.
      10 pm
      The construction industry is the single largest productive industry and employer and accounts at the present time for one-eighth of the nation's output. It has a work force of about 2½ million people. It provides the social and economic infrastructure essential for future prosperity. Since the last war 10 million new homes, 20,000 miles of new roads, schools, hospitals, power stations and water and sewerage works have been built by the industry. We accord far too little respect to the contribution that the industry makes to the economy of this
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      country in treating it in this haphazard way.
      I do not play the numbers game in housing and say that one Government have built more houses than another Government. I am more concerned about the quality of the homes provided than about the quantity. When we look at the mistakes that were made, particularly during the 1960s, by politicians and planners of all persuasions, we see that it is obvious that this country was gripped at the time by a "more-and-more" mentality, which produced some of the worst housing ever provided in the United Kingdom.
      In my constituency, and in the city area of Liverpool, we are still living with properties aptly known locally as "the Piggeries ". They were built only 12 years ago. The Secretary of State has been approached by my own local authority to sanction the pulling-down of properties built only 10 years ago. Those properties were constructed on the say-so of a Conservative Administration. They consist of spine blocks, cluster blocks, high-rise blocks and all manner of blocks. They were built purely because people had a fixation about the number of homes rather than the quality of homes.
      Perhaps we are, nevertheless, ignoring the way in which we can plan for future home construction. I have had cause to write to the Secretary of State within the last week about people living in Liverpool who have been offered houses and had those offers withdrawn as a result of Government directives that the local authority has received. I moved an early-day motion on this subject.
      There is nothing worse than offers of housing being made to people who are told that they will get a new home, who build up their hopes and expectations, and then receive a letter from the local authority telling them that they cannot now have a new home. These are not statistics. They are human beings who thought that they were going to move to a new home. They had measured up their carpets and bought new curtains. They got their furniture ready for the move, only to be told that the offer of a home was being withdrawn.
      That speaks far more eloquently than anything that I can say, and far more eloquently than any number of statistics.

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      It is only when we know what will happen in the years to come that we can ensure that people such as those constituents of mine will be properly catered for.
      At present the total output of the construction industry is about £19 billion—one-eighth of our national gross domestic product. Two and a half million people are involved in activities associated with construction. In the North-West about 30 per cent. of those people are either on the dole queue or facing the prospect of the dole queue at the present time. We should compare that figure with the national employment level of about 6 per cent.
      Firms ranging from the largest household name to the one-man band, with specialities equal to every construction need, are facing the same problems and having to make skilled men unemployed. There is work to be done and new homes to be built. Over 1 million people still live in houses without inside sanitation and yet people with skills to build houses are left in the dole queues.
      Builders can survive only if they can rely on a supply of skilled manpower. That depends upon construction companies being able to plan confidently and to invest in the long process of recruitment and training. That can happen only when the industry's work load remains reasonably stable from year to year. Recently that has not been possible. Builders have lacked the confidence to plan and invest. Employment in the building trade has declined steadily and men have ceased to see any future in working in that industry.
      I want local authorities to build more council houses, but that is not the whole answer. I believe that there is a need in areas of great stress to provide homes. There is a need to provide a mixture of homes for sale and for rent. We must know how local authorities plan for that provision.
      In some areas thousands of empty council properties stand idle and yet in other areas there is a deficit of council accommodation. We must have the information. Neither local government nor central Government can plan properly without the information. The Secretary of State wrote to me saying that he was worried because Liberal-controlled authorities
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      had not provided him with the necessary figures. He urged me to make representations to my local authority. I arranged for the information to be sent to him.
      In the same spirit the Secretary of State should accept the need for politicians of all persuasions, planners, architects and people in the construction industry to know the scale of the problem with which they must contend. They should be given the information. If such a provision is good enough in terms of the number of employees in local government, it should apply to the number of housing starts by local authorities.
      Mr. Allen McKay: The new clause represents a start in the provision of necessary statistical information. Information about the whole spectrum of housing should be provided, so that we know exactly what is going on. Some hon. Members believe that council housing is unnecessary. They should bear in mind that many young couples who have bought houses recently now find that they cannot afford them, because of Government policies. They have to turn to local government for rehousing in council properties. Their houses are being repossessed.
      The Government do not seem to appreciate the size of the cut in council house building. I encouraged my local officials to conduct a census to discover the extent of the housing problem and what it will be in the year 2000. A report on the census was produced. We are able to make a realistic bid based on strategy rather than having to apply for an unrealistic allocation.
      A number of changes are being made in the housing investment programme. The allocation is in the single-block system rather than the three-block system used in previous years. That has given some flexibility within the allocation, but because the money has not been provided the drawing up of the new starts programme for 1980–81 will cause a number of problems to my local authority.
      The Secretary of State proposes to replace the present yardstick with a new system. There is a lack of hard information about the new system. That will cause a problem to authorities when they try to plan schemes for future years,

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      especially those where they wish to maximise the subsidy entitlement as well as provide value for money.
      The tolerance arrangements have been varied from previous years, so that authorities may anticipate the allocation for 1981–82 only by a sum equivalent to 5 per cent. of the 1980–81 allocation. In addition, the 5 per cent. tolerance may be used only with the express consent of the Department. The reduction in tolerance is not conducive to a balanced and efficient programme, without a further restriction of the specified approvals to tolerances later in the year. There is no doubt that the revised programmes and procedures are designed to reduce total spending rather than to produce a balanced programme. To that extent, it frustrates the two principles of the tolerance system.
      My authority has been allocated 87·48 per cent. of the 1979–80 figure, but because of inflation that falls to a figure of about 64 per cent. at the present time, and inflation is increasing.
      Government procedures and policies cause many other problems. I would like further statistics. There is a problem of condensation which should be realistically considered. Its solution is a costly procedure, and there is no allocation from the Government to overcome that. Because of lack of money the condensation problems will gradually become slum clearance problems, and will add to the statistics of new build.
      We established a local strategy covering the period to the year 2000, and tried to plan ahead. The areas for which we have planned should be improved and upgraded, but because of the Government's policies we shall not be able to carry out that plan. They will gradually degenerate into slum properties. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, in that authority no new build contracts will be made before 1980–81. Our objective to provide central heating in the dwellings of elderly persons has been postponed until 1982, and will be subject to reallocation.
      We established a programme to acquire old properties to modernise and to improve housing stock—properties that private landlords had allowed to run down. We have now discovered that there
      178
      will be no finance available for that programme. It is a sad reflection on an authority such as Barnsley, which will be able to build only 100 houses. The other half of the authority that I represent in Sheffield also will be able to build only 100 houses. That is a sad reflection on an authority of that size.
      There is a speed-up effect. I spoke recently to the leaders of the construction industry and to the leader of Sheffield council. They said that there would be no construction programmes for the next year. Therefore, it is vital that the statistics should be provided. The areas concerned are having to lay off joiners, bricklayers and plumbers because there will be no work for them next year. If we are to plan efficiently for employment not only in the construction industry but within local authorities, it will be necessary to have the statistics. I support the amendment, and I hope that the House will do likewise.
      Mr. Heseltine: We have had a wide-ranging debate about virtually every aspect of housing policy. I was not convinced that my hon. Friend the Member for Huntingdonshire (Mr. Major) received an answer to his question, namely, how the improved statistics that the new clause is intended to produce would contribute to better housing or better investment in housing. My hon. Friend was on the right track in asking that question.
      The generality of the Opposition's case is that there is less money to spend on housing in the foreseeable future than there was last year. However, in terms of new construction that has been the position for the past few years. There has been a declining rate of investment in new local authority housing. We have debated the issue at length on many occasions and I doubt whether the attitudes of either side are likely to be influenced by a repetition of the arguments.
      10.15 pm
      The previous Labour Government came to power believing that they could achieve certain results in the public housing sector. They failed dismally, and the position deteriorated year by year. That is the background against which we must judge all the claims and assertions of the Opposition. My hon. Friend the Member for Reading, North (Mr. Durant) said it all. The Opposition's case was a vast

      179
      deployment of substantially hypocritical, repetitive accusations.
      If the statistics would produce better results, why were they not produced when the programmes were falling substantially under the previous Government, when, presumably, statistics would have been able to bring about a transformation?
      Mr. Straw: Labour Ministers published statistics on future projections in the housing consultative document and elsewhere. Why is the right hon. Gentleman refusing to publish statistics that previous Labour and Conservative Ministers have published?
      Mr. Heseltine: The hon. Member advised Labour Ministers on the figures that they published and he must realise, that no sooner had they published them—indeed, sometimes even before the figures were published—than they were proved to be irrelevant to the way in which money was spent.
      Mr. Straw: That is untrue
      Mr. Heseltine: The new clause concerns the publication of figures for individual authorities. If that is such a good idea, in order to reverse the decline, why did Labour Ministers, who had the chance to do it and who were responsible for the decline, not use that device? We have heard no explanation of that. It is a good question to ask.
      Mr. Kaufman: May I answer it? In clause 85 the Secretary of State has removed from local authorities the duty that they were required to fulfil under the Labour Government of making regular proposals to the Government on how they would fulfil their duty for rehousing. The statistics that were available anyway were not necessarily to be supplied by statute. The Government are removing that duty and we at least want the figures to see what the removal of that duty does to housing programmes.
      Mr. Heseltine: If the powers already existed and could have helped in the production of more homes, why did the Labour Government never use the powers on the statute book? The right hon. Member must understand that there was never a return of the sort listed in the new clause. The Labour Government never attempted to use the powers
      180
      on the statute book. Their removal would presumably be as acceptable to a Labour Government as it is to this Government. We do not believe that it is necessary to have those powers.
      Before the right hon. Member for Manchester, Ardwick (Mr. Kaufman) goes to a tome of references, I may be able to help him and to take the House a little way down the road that we should have been taken down in the speech of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). The statistics about every housing authority in the country are available and readily accessible to all hon. Members. My hon. Friend the Member for Chichester (Mr. Nelson) kindly got for me the basic background information. I have here the return from the housing authority of the right hon. Member for Sparkbrook. That is the return—it comes from the House of Commons Library—that gives the most detailed profile for the city of Birmingham for the years 1976 to 1983–84. There is virtually no question that is not answered. All the figures are available.
      Mr. Straw: Is it not the case that the Secretary of State has the housing improvement programme bid by Birmingham, and not the details of what Birmingham will build following its allocation?
      Mr. Heseltine: The document is in two parts. First, there is the historical fact of what Birmingham has done; secondly, there is the current year's anticipated figure; and then there are the figures for later years, which obviously have to be speculative. These figures are updated every year. Indeed, I am about to write to the housing authorities—as was the convention under my predecessor—asking for this set of figures to be updated. Then they will be able to move the process further forward. The only difference between what I am doing and the new clause is that I am doing it now, in midsummer, whereas the new clause would have performed the same exercise in March in relation to the same year.
      Mr. Frank Allaun: The Minister for Housing and Construction will confirm the truth of my remarks. When this clause in the 1957 Act was removed in Committee, Labour Members moved an amendment seeking to reinstate it. That

      181
      request was turned down on the vote of Conservative Members. Why?
      Mr. Heseltine: Because we already have the information that Labour Members are requesting. There is no point in having a new clause in a Bill to achieve what the previous Government and this Government are already achieving. In respect of all the authorities represented by all Labour Members who have spoken, the most detailed information is available about their past expenditure, future expenditure and housing stock problems in each area. Yet there is not one Labour Member who knew that the information was available in the Library. If that is not a real indication of the humbug and hypocrisy that has been paraded by Labour Members, I do not know what is.
      Mr. Kaufman: If the Minister has this information, will he now give it to the House? How many new houses does he expect local authorities to start building this year?
      Mr. Heseltine: The right hon. Gentleman has only to go to the Library. If the House wishes me to look down the figures in front of me for the city of Birmingham, I shall have to add up the total of all these forms. That is something that the Government could be asked to do by parliamentary question. These figures are published, and all hon Members know that there is detailed accounting throughout the procedure.
      Mr. Kaufman: Since the Secretary of State does not have time to add up the figures when he is on his feet, will he give me a commitment that if I table a question asking for an estimate of the number of local authority housing starts in England for the coming financial year he will give me a figure in his reply?
      Mr. Heseltine: I shall tell the right hon. Gentleman what the local authorities have told me. That is the only basis of information that I have. Of course I shall answer that question, but it will achieve absolutely nothing in adding to the certainty of what will happen on the ground. That is precisely the trap that Labour Members fell into in their housing assessment. They made assertions about what would happen, but the results were different. The only purpose of the debate is to ascertain whether we should try to get different information from that
      182
      available to this House and to every right hon. and hon. Member in his local housing area. I have not heard a single argument to suggest that better information than this, or different information, would advance the cause of housing.
      The only conclusion that I can draw is that because Labour Members did not know of the existence of these documente they tabled the new clause, believing that they would somehow add to the sum of human knowledge, when the Library of the House already had all the information.
      Mr. Winnick: Would the right hon. Gentleman care to comment on the estimate, which I mentioned when I was speaking earlier and which has been mentioned in a number of other places, that by 1981–82 it is quite likely that the number of new council dwellings will be as low as 18,000? Would he agree that on the basis of the cuts in the White Paper that is quite likely?
      Mr. Heseltine: The right hon. Member for Sparkbrook is always making these forecasts.
      Mr. Winnick: Would the right hon. Gentleman care to comment on the estimate?
      Mr. Heseltine: Yes, I shall do that. I am simply setting the scene for the hon. Member. His right hon. Friend the spokesman for the official Opposition says that there will be no house building at all, so we have advanced by 18,000 in the course of the last couple of hours.
      We have now given a great deal of flexibility to housing authorities. I shall wait to see what judgment they exercise, because I reckon that that will be the most prudent way of telling the House what local authorities have decided to do in their own areas, where they know their own problems. That is the lesson of the last few years, where central Government have tried to tell the House what local government was intending to do but local government was doing different things.
      I am concerned that local authorities should get the best value for money out of what money is available for housing. I happen to believe that the flexibility that we have given them provides a much better chance of that happening than under the previous policies that we have

      183
      seen. The judgment about how it should be done will be better exercised by each authority, with a total flexibility as to how authorities deploy their resources. The way in which they decide to do it, under the new freedom, is not predictable. I do not know the answer to the question what they will do now that they have this freedom. We cannot know what they will do. We shall have to wait and find out. My own belief is that we are as likely to get a satisfactory result in that way as in any alternative way, which must be based on the civil servants of the central Government trying to second-guess and instruct local authorities on deploying their resources.
      The choice that the House is being asked to make tonight is not about housing policies but about whether we need better information, or different information from that which is available to every hon. Member about his own housing authority. As far as I can see, we have the information that we require. The Local Government, Planning and Land (No. 2) Bill provides total power to get any information that we require, in any form that is acceptable to the House, concerning any local authority activities. The right hon. Member for Sparkbrook, who is leading for the Opposition in the Committee on that Bill, well knows that the powers about to be put on the statute book are vastly more comprehensive than the powers embraced in the new clause that we are debating today, which talked only about new buildings—a very shortsighted way of looking at housing policy.
      I should have thought that people wanted to know about improvements, about mortgages, about slum clearance, and about new building in that context. Why Labour Members should try to single out new construction I do not understand, but that is is the one test that they seem to apply to housing policy. It is not the one that would be applied by anyone who had an understanding of the problems.
      I advise my right hon. and hon. Friends that on the evidence before us and on the evidence of the debate today there is not a shred of argument in favour of the new clause. If the Opposition wish to press it,
      184
      I shall have to recommend my colleagues to reject it.
      Mr. Kaufman: We have received from the Secretary of State during the last few minutes a very important commitment—that when, as soon as the Division is over, I table a question to him asking him for details of the estimated number of council house starts for the coming financial year, he will provide that information to the House—because he tells the House that he already has it. That is a very important gain and we are grateful for that, but we are angered by the cavalier attitude of the Secretary of State to the whole question of public sector housing. For that reason, we shall vote for the new clause.
      Mr. Heseltine: The right hon. Gentleman—unintentionally, I am sure—has repeated what he thought I was saying. As I was not saying anything of the sort, I think that it is very important that I make absolutely clear what I have said.
      I receive the HIP statements from local authorities. They are available in my Department, as they are in the Library of the House. If any hon. Member wishes to ask me about the content of those HIP statements, I shall do my best to add the figures together, which will be an aggregate of the judgments of local authorities, and I shall provide that information.
      That is not the same thing as saying that that is what I believe will happen. I have to tell the House that if one had done that exercise previously and had simply added together the views of the individual authorities to give one total, the outturn would not have coincided with the projection. Certainly, in the terms in which I gave the assurance I shall stick to it, but I want the right hon. Gentleman to understand fully the terms in which I gave it.
      Mr. Kaufman: The House has now seen the shiftiness with which the Secretary of State has dealt with this issue. That being so, and since he wishes to deny to the House information that a few moments ago he pretended he was willing to give us, we shall certainly vote against the Government on this issue.
      Question put, That the clause be read a Second time:—
      The House divided: Ayes 236, Noes 304.

      Division No. 3111

      AYES

      [10.30 pm

      Abse, Leo

      Garrett, W. E. (Wallsend)

      Newens, Stanley

      Adams, Allen

      George, Bruce

      Oakes, Rt Hon Gordon

      Allaun, Frank

      Gilbert, Rt Hon Dr John

      Ogden, Eric

      Alton, David

      Ginsburg, David

      O'Halloran, Michael

      Anderson, Donald

      Gourlay, Harry

      O'Neill, Martin

      Archer, Rt Hon Peter

      Grant, George (Morpeth)

      Orme, Rt Hon Stanley

      Ashley, Rt Hon Jack

      Grant, John (Islington C)

      Owen, Rt Hon Dr David

      Ashton, Joe

      Hamilton, W. W. (Central Fife)

      Palmer, Arthur

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

      Hardy, Peter

      Park, George

      Bagier, Gordon A. T.

      Harrison, Rt Hon Walter

      Parry, Robert

      Barnett, Guy (Greenwich)

      Hart, Rt Hon Dame Judith

      Pendry, Tom

      Barnett, Rt Hon Joel (Heywood)

      Hattersley, Rt Hon Roy

      Penhaligon, David

      Beith, A. J.

      Haynes, Frank

      Powell, Raymond (Ogmore)

      Benn, Rt Hon Anthony Wedgwood

      Healey, Rt Hon Denis

      Prescott, John

      Bennett, Andrew (Stockport N)

      Heifer, Eric S.

      Price, Christopher (Lewisham West)

      Bidwell, Sydney

      Hogg, Norman (E Dunbartonshire)

      Race, Reg

      Booth, Rt Hon Albert

      Holland, Stuart (L'beth, Vauxhall)

      Richardson, Jo

      Bottomley, Rt Hon Arthur (M'brough)

      Home Robertson, John

      Roberts, Albert (Normanton)

      Bradley, Tom

      Homewood, William

      Roberts, Allan (Bootle)

      Bray, Dr Jeremy

      Hooley, Frank

      Roberts, Ernest (Hackney North)

      Brown, Hugh D. (Provan)

      Horam, John

      Roberts, Gwilym (Cannock)

      Brown, Robert C. (Newcastle W)

      Howells, Geralnt

      Robinson, Geoffrey (Coventry NW)

      Brown, Ron (Edinburgh, Lefth)

      Huckfleld, Les

      Rooker, J. W.

      Buchan, Norman

      Hudson, Davies, Gwilym Ednyfed

      Ross, Ernest (Dundee West)

      Callaghan, Jim (Middleton & P)

      Hughes, Mark (Durham)

      Ross, Stephen (Isle of Wight)

      Campbell, Ian

      Hughes, Robert (Aberdeen North)

      Rowlands, Ted

      Campbell-Savours, Dale

      Hughes, Roy (Newport)

      Ryman, John

      Canavan, Dennis

      Janner, Hon Grevllle

      Sever, John

      Cant, R. B.

      Jay, Rt Hon Douglas

      Sheerman, Barry

      Carter-Jones, Lewis

      John, Brynmor

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

      Cartwrlght, John

      Johnson, Walter (Derby South)

      Shore, Rt Hon Peter (Step and Pop)

      Clark, Dr David (South Shields)

      Johnston, Russell (Inverness)

      Short, Mrs Renée

      Cocks, Rt Hon Michael (Bristol S)

      Jones, Rt Hon Alec (Rhondda)

      Silkin, Rt Hon John (Deptford)

      Cohen, Stanley

      Jones, Barry (East Flint)

      Silkin, Rt Hon S. C. (Dulwlch)

      Coleman, Donald

      Jones, Dan (Burnley)

      Silverman, Julius

      Concannon, Rt Hon J. D.

      Kaufman, Rt Hon Gerald

      Skinner, Dennis

      Conian, Bernard

      Kerr, Russell

      Smith, Rt Hon J. (North Lanarkshire)

      Cook, Robin F.

      Kilroy-Sllk, Robert

      Snape, Peter

      Cowans, Harry

      Lambie, David

      Soley, Clive

      Craigen, J. M. (Glasgow, Maryhill)

      Lamborn, Harry

      Sprlggs, Leslie

      Crowther, J. S.

      Lamond, James

      Stallard, A. W.

      Cryer, Bob

      Leadbitter, Ted

      Stoddart, David

      Cunliffe, Lawrence

      Leighton, Ronald

      Strang, Gavin

      Cunningham, George (Islington S)

      Lestor, Miss Joan (Eton & Slough)

      Straw, Jack

      Cunningham, Dr John (Whitehaven)

      Lewis, Arthur (Newham North West)

      Lltherland, Robert

      Dalyell, Tam

      Lofthouse, Geoffrey

      Summerskill, Hon Dr Shirley

      Davidson, Arthur

      Lyon, Alexander (York)

      Taylor, Mrs Ann (Bolton West)

      Davies, Rt Hon Denzll (Llanelli)

      Lyons, Edward (Bradford West)

      Thomas, Dafydd (Merioneth)

      Davis, Clinton, (Hackney Central)

      Mabon, Rt Hon Dr J. Dickson

      Thomas, Jeffrey (Abertillery)

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

      McCartney, Hugh

      Thomas, Dr Roger (Carmarthen)

      Deakins, Eric

      Thome, Stan (Preaton South) Tllley, John

      Dean, Joseph (Leeds West)

      McDonald, Dr Oonagh

      Tinn, James

      Dempsey, James

      McElhone, Frank

      Torney, Tom

      Dewar, Donald

      McGuire, Michael (Ince)

      Urwin, Rt Hon Tom

      Dobson, Frank

      McKay, Allen (Penlstone)

      Varley, Rt Hon Eric G.

      Dormand, Jack

      McKelvey, William

      Wainwright, Edwin (Dearne Valley)

      Douglas, Dick

      MacKenzie, Rt Hon Gregor

      Wainwright, Richard (Colne Valley)

      Douglas-Mann, Bruce

      Maclennan, Robert

      Watkins, David

      Dubs, Alfred

      McNally, Thomas

      Weetch, Ken

      Duffy, A. E. P.

      McWilliam, John

      Wellbeloved, James

      Dunn, James A. (Liverpool, Kirkdale)

      Magee, Bryan

      Welsh, Michael

      Dunwoody, Mrs. Gwyneth

      Marks, Kenneth

      White, Frank R. (Bury & Radcliffe)

      Ellis, Raymond (NE Derbyshire)

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

      White, James (Glasgow, Pollok)

      English, Michael

      Marshall, Dr Edmund (Goole)

      Whitehead, Phillip

      Ennals, Rt Hon David

      Marshall, Jim (Leicester South)

      Whitlock, William

      Evans, loan (Aberdare)

      Mason, Rt Hon Roy

      Wigley, Dafydd

      Evans, John (Newton)

      Maxton, John

      Williams, Sir Thomas (Warrington)

      Ewing, Harry

      Maynard, Miss Joan

      Wilson, Rt Hon Sir Harold (Huyton)

      Faulds, Andrew

      Mellish, Rt Hon Robert Mikardo, Ian

      Wilson, William (Coventry SE)

      Field, Frank

      Millan, Rt Hon Bruce

      Winnick, David

      Fitch, Alan

      Miller, Dr M. S. (East Kilbride)

      Woodall, Alec

      Flannery, Martin

      Mitchell, Austin (Grimsby)

      Woolmer, Kenneth

      Fletcher, Ted (Darlington)

      Mitchell, R. C. (Soton, Itchen)

      Foot, Rt Hon Michael

      Morris, Rt Hon Alfred (Wythenshawe)

      Wrigglesworth, Ian

      Ford, Ben

      Morris, Rt Hon Charles (Openshaw)

      Wright, Sheila

      Forrester, John

      Young, David (Bolton East)

      Foster Derek

      Morris, Rt Hon John (Aberavon)

      TELLERS FOR THE AYES:

      Fraser, John (Lambeth, Norwood)

      Morton, George

      Mr. Ted Graham and

      Freeson, Rt Hon Reginald

      Moyle, Rt Hon Roland

      Mr, James Hamilton.

      Garrett, John (Norwich S)

      NOES

      Adley, Robert

      Fletcher-Cooke, Charles

      Marland, Paul

      Aitken, Jonathan

      Forman, Nigel

      Marlow, Tony

      Alexander, Richard

      Fox, Marcus

      Marshall, Michael (Arundel)

      Amery, Rt Hon Julian

      Fiaser, Rt Hon H. (Stafford & St)

      Marten, Nell (Banbury)

      Ancram, Michael

      Fraser, Peter (South Angus)

      Mates, Michael

      Arnold, Tom

      Fry, Peter

      Mather, Carol

      Aspinwall, Jack

      Galbraith, Hon T. G. D.

      Maude, Rt Hon Angus

      Atkins, Rt Hon H. (Spelthorne)

      Gardiner, George (Reigate)

      Mawby, Ray

      Atkins, Robert (Preston North)

      Gardner, Edward (South Fylde)

      Mawhinney, Dr Brian

      Atkinson, David (B'mouth, East)

      Garel-Jones, Tristan

      Maxwell-Hys up, Robin

      Baker, Nicholas (North Dorset)

      Gilmour, Rt Hon Sir Ian

      Mayhew, Patrick

      Banks, Robert

      Glyn, Dr Alan

      Mellor, David

      Beaumont-Dark, Anthony

      Goodhew, Victor

      Meyer, Sir Anthony

      Bendall, Vivien

      Goodlad, Alastair

      Miller, Hal (Bromsgrove & Redditch)

      Benyon, Thomas (Abingdon)

      Gorst, John

      Mills, lain (Meriden)

      Benyon, W. (Buckingham)

      Gow, Ian

      Miscampbell, Norman

      Best, Keith

      Gower, Sir Raymond

      Mitchell, David (Basingstoke)

      Bevan, David Gilroy

      Gray, Hamish

      Moate, Roger

      Biffen, Rt Hon John

      Greenway, Harry

      Monro, Hector

      Biggs-Davison, John

      Grieve, Percy

      Montgomery, Fergus

      Blackburn, John

      Griffiths, Eldon (Bury St Edmunds)

      Moore, John

      Blaker, Peter

      Griffiths, Peter (Portsmouth N)

      Morgan, Geraint

      Body, Richard

      Grist, Ian

      Morris, Michael (Northampton, Sth)

      Bonsor, Sir Nicholas

      Grylls, Michael

      Morrison, Hon Charles (Devizes)

      Boscawen, Hon Robert

      Gummer, John Selwyn

      Morrison, Hon Peter (City of Chester)

      Bottomley, Peter (Woolwich West)

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

      Mudd, David

      Boyson, Dr Rhodes

      Hamilton, Michael (Salisbury)

      Murphy, Christopher

      Braine, Sir Bernard

      Hampson, Dr Keith

      Myles, David

      Bright, Graham

      Hannam, John

      Needham, Richard

      Brinton, Tim

      Haselhurst, Alan

      Nelson, Anthony

      Brocklebank-Fowler, Christopher

      Brooke, Hon Peter

      Brotherton, Michael

      Hastings, Stephen

      Neubert, Michael

      Brown, Michael (Brigg & Sc'thorpe)

      Havers, Rt Hon Sir Michael

      Newton, Tony

      Brooke, Hon Peter

      Hawkins, Paul

      Nott, Rt Hon John

      Browne, John (Winchester)

      Hawksley, Warren

      Onslow, Cranley

      Hayhoe, Barney

      Oppenheim, Rt Hon Mrs Sally

      Heddle, John

      Osborn, John

      Bruce-Gardyne, John

      Henderson, Barry

      Page, John (Harrow, West)

      Bryan, Sir Paul

      Heseltine, Rt Hon Michael

      Page, Rt Hon Sir R. Graham

      Buchanan-Smith, Hon Alick

      Hicks, Robert

      Page, Richard (SW Hertfordshire)

      Buck, Antony

      Higgins, Rt Hon Terence L.

      Parkinson, Cecil

      Budgen, Nick

      Hill, James

      Parris, Matthew

      Bulmer, Esmond

      Hogg, Hon Douglas (Grantham)

      Patten, Christopher (Bath)

      Burden, F. A.

      Holland, Philip (Carlton)

      Patten, John (Oxford)

      Butcher, John

      Hooson, Tom

      Pattie, Geoffrey

      Butler, Hon Adam

      Hordern, Peter

      Pawsey, James

      Cadbury, Jocelyn

      Howe, Rt Hon Sir Geoffrey

      Percival, Sir Ian

      Carlisle, John (Luton West)

      Howell, Rt Hon David (Guildford)

      Peyton, Rt Hon John

      Carlisle, Kenneth (Lincoln)

      Howell, Ralph (North Norfolk)

      Pink, R. Bonner

      Carlisle, Rt Hon Mark (Runcorn)

      Hunt, David (Wirral)

      Pollock, Alexander

      Chalker, Mrs. Lynda

      Hunt, John (Ravensbourne)

      Perler, George

      Channon, Paul

      Hurd, Hon Douglas

      Prentice, Rt Hon Reg

      Chapman, Sydney

      Irving, Charles (Cheltenham)

      Price, David (Eastleigh)

      Churchill, W. S.

      Jenkin, Rt Hon Patrick

      Prior, Rt Hon James

      Clark, Hon Alan (Plymouth, Sutton)

      Johnson Smith, Geoffrey

      Proctor, K. Harvey

      Clark, Sir William (Croydon South)

      Jopling, Rt Hon Michael

      Raison, Timothy

      Clarke, Kenneth (Rushclifte)

      Joseph, Rt Hon Sir Keith

      Rathbone, Tim

      Cockeram, Eric

      Kaberry, Sir Donald

      Rees, Peter (Dover and Deal)

      Colvin, Michael

      King, Rt Hon Tom

      Rees-Davies, W. R.

      Cope, John

      Knight, Mrs Jill

      Renton, Tim

      Corrie, John

      Knox, David

      Rhodes James, Robert

      Costain, A. P.

      Lamont, Norman

      Rhys Williams, Sir Brandon

      Critchley, Julian

      Lang, Ian

      Ridsdale, Julian

      Crouch, David

      Langford-Holt, Sir John

      Rifkind, Malcolm

      Dickens, Geoffrey

      Latham, Michael

      Roberts, Michael (Cardiff NW)

      Dorrell, Stephen

      Lawrence, Ivan

      Roberts, Wyn (Conway)

      Douglas-Hamilton, Lord James

      Lawson, Nigel

      Rost, Peter

      Dover, Denshore

      Lee, John

      Royle, Sir Anthony

      du Cann, Rt Hon Edward

      Lester, Jim (Beeston)

      Sainsbury, Hon Timothy

      Dunn, Robert (Dartford)

      Lewis, Kenneth (Rutland)

      St. John-Stevas, Rt Hon Norman

      Durant, Tony

      Lloyd, Ian (Havant & Waterloo)

      Scott, Nicholas

      Dykes, Hugh

      Lloyd, Peter (Fareham)

      Shaw, Giles (Pudsey)

      Eden, Rt Hon Sir John

      Loveridge, John

      Shaw, Michael (Scarborough)

      Edwards, Rt Hon N. (Pembroke)

      Luce, Richard

      Shelton, William (Streatham)

      Eggar, Timothy

      Lyell, Nicholas

      Shepherd, Colin (Hereford)

      Elliott, Sir William

      McCrindle, Robert

      Shepherd, Richard (Aldridge-Br'hills)

      Emery, Peter

      Macfarlane, Neil

      Shersby, Michael

      Fairgrieve, Russell

      MacGregor, John

      Silvester, Fred

      Faith, Mrs Sheila

      MacKay, John (Argyll)

      Sims, Roger

      Farr, John

      Macmlllan, Rt Hon M. (Farnham)

      Skeet, T. H. H.

      Fell, Anthony

      McNalr-Wllaon, Michael (Newbury)

      Smith, Dudley (War. and Leam'ton)

      Fermer, Mrs Peggy

      McNair-Wilson, Patrick (New Forest)

      Speed, Keith

      Finsberg, Geoffrey

      McQuarrie, Albert

      Speller, Tony

      Fisher, Sir Nigel

      Madel, David

      Spence, John

      Fletcher, Alexander (Edinburgh N)

      Major, John

      Spicer, Michael (S Worcestershire)

      188

      189

      Sproat, lain

      Thorne, Nell (Ilford South)

      Warren, Kenneth

      Squire, Robin

      Thornton, Malcolm

      Watson, John

      Stainton, Keith

      Townend, John (Bridlington)

      Wells, John (Maidstone)

      Stanbrook, Ivor

      Townsend, Cyril D. (Bexleyheath)

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

      Stanley, John

      Trippier, David

      Wheeler, John

      Steen, Anthony

      Trotter, Neville

      Whitelaw, Rt Hon William

      Stevens, Martin

      van Straubenzee, W. R.

      Whitney, Raymond

      Stewart, Ian (Hitchin)

      Vaughan, Dr Gerard

      Wickenden, Keith

      Stewart, John (East Renfrewshire)

      Viggers, Peter

      Wiggin, Jerry

      Stokes, John

      Waddington, David

      Wilkinson, John

      Stradling Thomas, J.

      Wakeham, John

      Williams, Delwyn (Montgomery)

      Tapsell, Peter

      Waldegrave, Hon William

      Winterton, Nicholas

      Taylor, Robert (Croydon NW)

      Walker, Rt Hon Harold (Doncaster)

      Wolfson, Mark

      Taylor, Teddy (Southend East)

      Walker, Rt Hon Peter (Worcester)

      Young, Sir George (Acton)

      Tebbit, Norman

      Walker-Smith, Rt Hon Sir Derek

      Younger, Rt Hon George

      Temple-Morris, Peter

      Wall, Patrick

      Thatcher, Rt Hon Mrs Margaret

      Waller, Gary

      TELLERS FOR THE NOES:

      Thomas, Rt Hon Peter (Hendon S)

      Walters, Dennis

      Mr. Spencer Le Marchant

      Thompson, Donald

      Ward, John

      Mr. Anthony Berry.

      Question accordingly negatived.

    New Clause

      OVER-OCCUPATION OF HOUSES IN MULTIPLE OCCUPATION
      "(1) Where a local authority are satisfied that any house in multiple occupation is not capable of providing satisfactory accommodation for the number of individuals or households or both who are for the time being accommodated there, then they shall fix as a limit for the house what is in their opinion the highest number of individuals or households or both who should be accommodated, and give a direction applying that limit to the house.
      (2) A direction under the foregoing subsection shall have effect so as to make it the duty of the person having control of the house not to permit the number of individuals or households accommodated in the house to increase above the limit specified in the direction and, if it is for the time being above the number, not to permit it to increase further.
      (3) It shall be the duty of the local authority to ensure as soon as may be after the giving of a direction with respect to any house, that suitable alternative accommodation is made available for the number of individuals or households liable to be displaced by the direction.
      (4) A local authority may at any time, having regard to any works which have been executed in the house or any other change of circumstances, revoke or vary any direction given under subsection (1) of this section.
      (5) If any person knowingly fails to comply with the requirements imposed on him by subsection (2) of this section, he shall be guilty of an offence under this subsection.
      (6) The powers conferred by this section shall be exercisable whether or not a notice has been given under this Act.
      (7) A direction under subsection (1) of this section may, if made in conjunction with a notice under this Act, specify as a limit the number of individuals or households or both which, in the opinion of the local authority, could reasonably be accommodated in the house if the works specified in the notice were carried out.".—[Mr. A. W. Stallard.]
      Brought up, and read the First time.
      Motion made, and Question, That the clause be read a Second time, put and negatived.

    New Clause 24

      DWELLINGMOUSES FOR THE ELDERLY
      '(1) Where a conveyance or grant executed in pursuance of this Chapter is of a dwelling-house which is designed or specially adapted to make it suitable for occupation by persons of pensionable age or which the landlord certifies in writing to the tenant is reserved for letting to such persons, the conveyance or grant shall contain a perpetual right of pre-emption precluding a disposal of the dwellinghouse falling within subsection (2) below unless the owner for the time being has first offered to sell the dwellinghouse to the landlord with vacant possession and the landlord has refused the offer or has failed to accept it within one month after it is made, the price (subject to subsection (4) below) to be the price which, at that time, the dwellinghouse would realise if sold on the open market by a willing Vendor and which shall be determined by agreement between the parties but in default of such agreement which shall be determined by the District Valuer whose determination of such price shall be conclusive and not be capable of being questioned in any proceedings.
      (2) A disposal falls within this sub-section if it is—

      (a) a further conveyance of the freehold or an assignment of the lease; or

      (b) the grant of lease or sub-lease for a term of more than 21 years otherwise than at a rack rent;

      whether the disposal is of the whole or part of the dwellinghouse; but neither a disposal in pursuance of an order under section 24 of the Matrimonial Causes Act 1973 nor a vesting in a person taking under a will or an intestacy is a disposal falling within this subsection.'.
      (3) The reference in subsection (2) above to a lease or sub-lease does not include a mortgage term.
      (4) Where a dwellinghouse falling within this section is sold by the landlord at a discount, the pre-emption right contained in the conveyance or grant shall provide that on the first occasion of a disposal falling within subsection

      191
      (2) above which takes place within a period of five years from the date of the conveyance or grant, the purchase price payable on the exercise of the right shall be reduced by the amount specified in subsection (5) below.
      (5) The amount by which the purchase price payable on the exercise of its pre-emption right is to be reduced in the circumstances mentioned in subsection (4) above shall be an amount equal to the discount to which the secure tenant was entitled on the sale by the landlord but reduced by 20 per cent. of that discount for each complete year which has elapsed between the date of the conveyance or grant and the date of purchase under the preemption right.
      (6) Nothing in this section shall affect the operation of section 8 of this Act in relation to dwelling-houses to which this section applies.
      (7) The pre-emption right referred to in this section shall be a local land charge and the Chief Land Registrar shall enter the appropriate restriction on the register of title as if application therefor had been made under section 58 of the Land Registration Act 1925.'.—[Mr. Kaufman.]
      Brought up, and read the First time.
      10.45 pm
      Mr. Kaufman: I beg to move, that the clause be read a second time.
      Mr. Deputy Speaker (Mr. Bernard Weatherill): With this, it will be convenient to take amendment No. 90, in Schedule 1, page 88, line 23, at end insert—
      ' 5. The dwelling house has been provided primarily for the accommodation of elderly tenants and is situated in a National Park, or an area designated under section 87 of the National Parks and Access to the Countryside Act 1949 as an area of outstanding natural beauty, or an area designated by Order of the Secretary of State as a rural area.'.
      Mr. Kaufman: The aim of the new clause is to fulfil a commitment in the Conservative Party election manifesto that recognised the special circumstances of sheltered housing for the elderly. By allowing council houses specially built for the elderly to be sold off, the Government are dissipating the most important of the housing stock for the elderly. The case has been well put in a document circulated to many hon. Members by the Association of District Councils. The association, arguing the case for special treatment for old people's houses, says
      " (a) In many cases, it is in desperately short supply; housing authorities with little ' sheltered ' accommodation are heavily dependent upon it to meet the needs of the elderly, waiting times are often much longer than for other kinds of accommodation.
      192
      (b) unlike ordinary family dwellings, occupancy is likely to change within a relatively short time-scale;
      (c) pre-emption in respect of such dwellings has been accepted in the parallel Scottish Bill (Clause 4 (4)); "
      I hope that the Minister will explain why he is not willing to put into this Bill what is already in the Scottish Bill. The document states:
      " (d) without some safeguards, purpose-built accommodation for the elderly may, within a short time-scale, be sold to people from other areas as retirement or second homes; a number of inland and coastal resort areas with an existing high proportion of elderly residents will have much of their accommodation for the elderly unprotected by the existing exemption in Schedule 1;
      (e) in practice, there is often little distinction between the occupants of sheltered schemes and those in specially designed accommodation without wardens."
      As the Bill stands, local authorities will be required to sell homes specially built for old people, and local authorities will not have pre-emption rights to get those back again. We believe, as stated in the new clause, that there should be a perpetual pre-emption right, subject to the landlord's first refusal. If the old person who has bought the house wishes to sell it again the council must first have the chance to take it back into its stock. In this way, old people will have the right to buy, upon which the Government appear to set such great store, but, at the same time, it will be impossible for old persons' bungalows to be sold permanently out of the public stock unless the local authority is given the right to take that old people's property back again.
      The ADC talks about people buying retirement homes and second homes, but there is a much greater danger of fringe bankers and other seedy merchants hanging around old people's estates, waiting like vultures for the pickings that will be available under the provisions of the Bill. Old people will be bamboozled into buying their houses with a commitment to sell them to the fringe bankers and to seedy property speculators who hang around our great cities and other areas. We want to put that situation right. It is particularly important that these houses should be kept in the stock, because of the cost of building new property.
      The Minister told us that the cost of building a new council house is now

      193
      £19,250. Building an old person's house will cost more than that. Since the old person will almost certainly qualify for the maximum discount of 50 per cent., which is available with 17 years' residence, the local authority will get only 50 per cent. of its revenue to build new houses. A house will be built and in return the local authority will get, at most, a quarter of the value of the house, bearing in mind that the district valuer's valuation will probably be lower than the price of building a new house. That means that the authority will lose about 75 per cent. of its houses and they will not be replaced.
      The amendment seeks to prevent the sale of old people's houses in rural areas where there is a particular shortage of such houses. It is little short of scandalous that the Government should consider removing such houses from the housing stock.
      That is our proposal—first, a permanent pre-emption right on all old people's houses which can be sold to maintain those important specialised houses in local authority stocks and, secondly, a ban on the sale of those houses in rural areas.
      I hope that not only my right hon. and hon. Friends but Conservative Members wishing to fulfil their election manifesto will vote with us on this proposal.
      Mr. D. N. Campbell-Savours: I shall be brief. Some weeks ago the Allerdale district council sent a delegation to make representations to the Select Committee in the hope that the evidence of that Select Committee would come before the House prior to the Bill on Report to influence judgments and votes in the Division Lobbies.
      There is considerable concern in the Allerdale district about those parts of the Bill which will lead to the sale of elderly persons' property to people outside the county of Cumbria. Inside the national park area the problem is essentially scarcity and restrictions by the Lake District planning board on new construction and new build of property for the elderly. The development of the second and holiday home syndrome means that between 12 per cent. and 17 per cent., dependent on what part of the national
      194
      park one visits, are in the hands of people who own second homes or who use them for holiday lets in the summer season.
      Another problem is that we have an immobile population. Therefore, few relets are available. In Keswick last year only six relets were made available, for a waiting list of 152 people. That is a reflection of the great problem throughout the national parks, not just in the part of the national park that falls within my constituency.
      There are considerable fears in the local authority that the relatives of elderly people may find it opportune to fund the purchase of an elderly relative's house, thereby getting access to a second home in years to come. Reservations are being expressed by local authorities on this potential abuse of the Bill. It may be the Government's intention that that should happen.
      The Government's response has been to introduce this 10-year pre-emption "buy back "clause. The Allerdale district council does not feel that that will resolve the problem. The local authority has been given the right to purchase back during a 10-year period, but at current market value. On a quick calculation, if a house in Keswick worth £30,000 today, which is a menial house, were to be sold at a 50 per cent. discount for £15,000 to a silting tenant or to a relative of that tenant, by the end of the Government's period in office the resale value of that house, based on the past five years of inflation in house prices in the Lake District national park, would be £91,552. It is sheer lunacy to expect a local authority to purchase back a property at over £91,000 when only five years previously it was compelled by legislation to sell that property with a 50 per cent. discount at £15,000.
      I must say that there is a strong feeling not only in the national park that forms part of my constituency but in every national park in the country that the right hon. Gentleman would do well to read the proceedings of the Select Committee and try to take a sensible view, when we discuss Lords amendments, by making a recommendation that will appease the feelings that exist in the national parks.
      Mr. Stanley: In the course of our proceedings, I do not believe that the right hon. Member for Manchester.

      195
      Ardwick (Mr. Kaufman) has managed to pray in aid the Conservative manifesto in introducing an Opposition amendment. I am glad he is now converted to the merits of the Conservative manifesto. Perhaps he would like to look at further passages.
      Mr. Kaufman: I have got a very good passage, namely, the promise to reduce mortgages. How about that one?
      Mr. Stanley: I think that we can square that one with the promises made by the Labour Party in the 1974 election to increase council house building year after year. Council house building went down year after year, as the right hon. Gentleman well knows.
      The Government have already included in the Bill an important exclusion which is wider than the exclusion in the Scottish legislation, which is the point that is relevant to the pre-emption amendment also, as far as dwellings for the elderly are concerned. That is provided for in paragraph 4 of schedule 1 to the Bill.
      We have also said that at no time do we think it would be right to produce a general exclusion of dwellings for the elderly. Also, we do not believe that it would be right to produce a general pre-emption clause going on to infinity for the elderly. We have, it is true, introduced a 10-year pre-emption clause for areas of outstanding natural beauty, national parks and designated rural areas, but, as I explained in Committee, we did that with some reluctance.
      Pre-emption certainly circumscribes an important aspect of the ownership of someone who has bought a house if the local authority exercises the right to pre-emption. That means that an owner loses control of the determination of the price at which he sells his home. We, therefore, think it right that we should use pre-emption as sparingly as we can.
      We believe that it is right that in the special circumstances of the rural areas we should provide the option of a 10-year pre-emption to the existing locality covenant, though we do not believe that it would be right to couple that the pre-emption going on its perpetuity for all elderly persons dwellings.
      In relation to the national parks, we think that it would be wrong to produce an exclusion of all elderly persons' dwellings in certain geographical areas. The exclusion we believe should apply nationally because those dwellings are special types of elderly persons' dwellings with a social services facility. It would be quite wrong to say that in certain parts of the country such as the national parks and areas of outstanding natural beauty that the exclusion which would apply to such dwellings should be different from the one which applied elsewhere.
      We think that we have got the balance as right as we can get it. Clearly there must, to some extent, be a conflict between the interests of elderly people who wish to buy and a community interest in certain specialist types of property. We have achieved this by the combination of the exclusion in schedule 1 coupled with the pre-emption right, which we think should extend to the national parks and areas of outstanding natural beauty.
      To go further in the direction desired by the Opposition would be an undesirable extension of pre-emption generally and, as far as the national parks and areas of outstanding natural beauty are concerned, it would be quite wrong to treat elderly persons' dwellings differently from the rest of the country.
      I hope that the House will reject the Opposition's new clause.
      Question put, That the clause be read a Second time.
      The House divided: Ayes 239, Noes 303.

      Division No. 312]

      AYES

      [11pm

      Abse, Leo

      Beith, A. J.

      Callaghan, Jim (Middleton & P)

      Adams, Allen

      Benn, Rt Hon Anthony Wedgwood

      Campbell, Ian

      Allaun, Frank

      Bennett, Andrew (Stockport N)

      Campbell-Savours, Dale

      Alton, David

      Bidwell, Sydney

      Canavan, Dennis

      Anderson, Donald

      Booth, Rt Hon Albert

      Cant, R. B.

      Archer, Rt Hon Pater

      Bottomley, Rt Hon Arthur (M'brough)

      Carter-Jones, Lewis

      Ashley, Rt Hon Jack

      Bradley, Tom

      Cartwrlght, John

      Ashton, Joe

      Bray, Dr Jeremy

      Clark, Dr David (South Shields)

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

      Brown, Hugh D. (Provan)

      Cocks, Rt Hon Michael (Bristol S)

      Bagler, Gordon A. T.

      Brown, Robert C. (Newcastle W)

      Cohen, Stanley

      Barnett, Guy (Greenwich)

      Brown, Ron (Edinburgh, Leilh)

      Coleman, Donald

      Barnett, Rt Hon Joel (Heywood)

      Buchan, Norman

      Concannon, Rt Hon J. D.

      Conlan, Bernard

      Hudson, Davies, Gwilym Ednyfed

      Powell, Rt Hon J. Enoch (S Down)

      Cook, Robin F.

      Hughes, Mark (Durham)

      Powell, Raymond (Ogmore)

      Cowans, Harry

      Hughes, Robert (Aberdeen North)

      Prescott, John

      Craigen, J. M. (Glasgow, Maryhill)

      Hughes, Roy (Newport)

      Price, Christopher (Lewlsham West)

      Crowther, J. S

      Janner, Hon Greville

      Race, Reg

      Cryer, Bob

      Jay, Rt Hon Douglas

      Richardson, Jo

      Cunliffe, Lawrence

      John, Brynmor

      Roberts, Albert (Normanton)

      Cunningham, George (Islington S)

      Johnson, Walter (Derby South)

      Roberts, Alian (Bootle)

      Cunningham, Dr John (Whitehaven)

      Johnston, Russell (Inverness)

      Roberts, Ernest (Hackney North)

      Dalyell, Tarn

      Jones, Rt Hon Alec (Rhondda)

      Roberts, Gwilym (Cannock)

      Davidson, Arthur

      Jones, Barry (East Flint)

      Robinson, Geoffrey (Coventry NW)

      Davies, Rt Hon Denzll (Llanelli)

      Jones, Dan (Burnley)

      Rooker, J. W.

      Davis, Clinton (Hackney Central)

      Kaufman, Rt Hon Gerald

      Ross, Ernest (Dundee West)

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

      Kerr, Russell

      Ross, Stephen (Isle of Wight)

      Deakins, Eric

      Kilroy-Silk, Robert

      Ross, Wm. (Londonderry)

      Dean, Joseph (Leeds West)

      Lambie, David

      Rowlands, Ted

      Dempsey, James

      Lamborn, Harry

      Ryman, John

      Dewar, Donald

      Lamond, James

      Sandelson, Neville

      Dobson, Frank

      Leadbitter, Ted

      Sever, John

      Dormand, Jack

      Leighton, Ronald

      Sheerman, Barry

      Douglas, Dick

      Lestor, Miss Joan (Eton & Slough)

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

      Douglas-Mann, Bruce

      Lewis, Arthur (Newham North West)

      Shore, Rt Hon Peter (Step and Pop)

      Dubs, Alfred

      Litherland, Robert

      Short, Mrs Renėe

      Duffy, A. E. P.

      Lofthouse, Geoffrey

      Silkin, Rt Hon John (Deptford)

      Dunn, James A. (Liverpool, Kirkdale)

      Lyon, Alexander (York)

      Sllkin, Rt Hon S. C. (Dulwich)

      Dunwoody, Mrs Gwyneth

      Lyons, Edward (Bradford West)

      Silverman, Julius

      Ellis, Raymond (NE Derbyshire)

      Mabon, Rt Hon Dr J. Dickson

      Skinner, Dennis

      English, Michael

      McDonald, Dr Oonagh

      Smith, Rt Hon J. (North Lanarkshire)

      Ennals, Rt Hon David

      McElhone, Frank

      Snape, Peter

      Evans, loan (Aberdare)

      McGulre, Michael (Ince)

      Soley, Clive

      Evans, John (Newton)

      McKay, Allen (Penistone)

      Spriggs, Leslie

      Ewing, Harry

      McKelvey, William

      Stallard, A. W.

      Faulds, Andrew

      MacKenzie, Rt Hon Gregor

      Stoddart, David

      Field, Frank

      Maclennan, Robert

      Strang, Gavin

      Fitch, Alan

      McNaily, Thomas

      Straw, Jack

      Flannery, Martin

      McWilliam, John

      Summerskill, Hon Dr Shirley

      Fletcher, Ted (Darlington)

      Magee, Bryan

      Taylor, Mrs Ann (Bolton West)

      Foot, Rt Hon Michael

      Marks, Kenneth

      Thomas, Dafydd (Merioneth)

      Ford, Ben

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

      Thomas, Jeffrey (Abertillery)

      Forrester, John

      Marshall, Dr Edmund (Goole)

      Thomas, Dr Roger (Carmarthen)

      Foster, Derek

      Marshall, Jim (Leicester South)

      Thorne, Stan (Preston South)

      Fraser, John (Lambeth, Norwood)

      Mason, Rt Hon Roy

      Tilley, John

      Freeson, Rt Hon Reginald

      Maxton, John

      Torney, Tom

      Freud, Clement

      Maynard, Miss Joan

      Urwln, Rt Hon Tom

      Garrett, John (Norwich S)

      Meacher, Michael

      Varley, Rt Hon Eric G.

      George, Bruce

      Mellish, Rt Hon Robert

      Walnwright, Edwin (Dearno Valley)

      Gilbert, Rt Hon Dr John

      Mikardo, Ian

      Watklns, David

      Ginsburg, David

      Mlllan, Rt Hon Bruce

      Weetch, Ken

      Gourlay, Harry

      Miller, Dr M. S. (East Kilbride)

      Wellbeloved, James

      Graham, Ted

      Mitchell, Austin (Grimsby)

      Welsh, Michael

      Grant, George (Morpeth)

      Mitchell, R. C. (Soton, Itchen)

      White, Frank R. (Bury & Radcllfte)

      Grant, John (Islington C)

      Molyneaux, James

      White, James (Glasgow, Pollok)

      Hamilton, James (Bothwell)

      Morris, Rt Hon Alfred (Wythenshawe)

      Whitehead, Phillip

      Hamilton, W. W. (Central Fife)

      Morris, Rt Hon Charles (Openshaw)

      Whitlock, William

      Hardy, Peter

      Morris, Rt Hon John (Aberavon)

      Wigley, Dafydd

      Harrison, Rt Hon Walter

      Morton, George

      Williams, Rt Hon Alan (Swansea W)

      Hart, Rt Hon Dame Judith

      Moyle, Rt Hon Roland

      Wlliams, Sir Thomas (Warrington)

      Hattersley, Rt Hon Roy

      Newens, Stanley

      Wilson, Rt Hon Sir Harold (Huyton)

      Haynes, Frank

      Oakes, Rt Hon Gordon

      Wilson, William (Coventry SE)

      Healey, Rt Hon Denls

      Ogden, Eric

      Winnick, David

      Helfer, Eric S.

      O'Halloran, Michael

      Woodall, Alec

      Hogg, Norman (E Dunbartonshire)

      O'Neill, Martin

      Woolmer, Kenneth

      Holland, Stuart (L'beth, Vauxhall)

      Orme, Rt Hon Stanley

      Wrigglesworth, Ian

      Home Robertson, John

      Owen, Rt Hon Dr David

      Young, David (Bolton East)

      Homewood, William

      Palmer, Arthur

      Hooley, Frank

      Park, George

      TELLERS FOR THE AYES:

      Horam, John Howells, Geralnt

      Parry, Robert Pendry, Tom

      Mr. Hugh McCartney and

      Huckfield, Les

      Penhallgon, David

      Mr. James Tinn.

      NOES

      Adley, Robert

      Bendall, Vivian

      Boyson, Dr Rhodes

      Aitken, Jonathan

      Benyon, Thomas (Abingdon)

      Braine, Sir Bernard

      Alexander, Richard

      Benyon, W. (Buckingham)

      Bright, Graham

      Amery, Rt Hon Julian

      Best, Keith

      Brinton, Tim

      Ancram, Michael

      Bevan, David Gilroy

      Brocklebank-Fowler, Christopher

      Arnold, Tom

      Riffen, Rt Hon John

      Brooke, Hon Peter

      Aspinwall, Jack

      Biggs-Davison, John

      Brotherton, Michael

      Atkins, Rt Hon H. (Spelthorne)

      Blackburn, John

      Brown, Michael (Brigg & Sc'thorpe)

      Atkins, Robert (Preston North)

      Blaker, Peter

      Browne, John (Winchester)

      Atkinson, David (B'mouth, East)

      Body, Richard

      Bruce-Gardyne, John

      Baker, Nicholas (North Dorset)

      Bonsor, Sir Nicholas

      Bryan, Sir Paul

      Banks, Robert

      Boscawen, Hon Robert

      Buchanan-Smith, Hon Alick

      Beaumont-Dark, Anthony

      Bottomley, Peter (Woolwich West)

      Buck, Antony

      198

      199

      Budgen, Nick

      Hill, James

      Page, Richard (SW Hertfordshire)

      Bulmer, Esmond

      Hogg, Hon Douglas (Grantham)

      Parkinson, Cecil

      Burden, F. A.

      Holland, Philip (Carlton)

      Parris, Matthew

      Butcher, John

      Hooson, Tom

      Patten, Christopher (Bath)

      Bulter, Hon Adam

      Hordern, Peter

      Patten, John (Oxford)

      Cadbury, Jocelyn

      Howe, Rt Hon Sir Geoffrey

      Pattle, Geoffrey

      Carlisle, John (Luton West)

      Howell, Rt Hon David (Guildford)

      Pawsey, James

      Carlisle, Kenneth (Lincoin)

      Howell, Ralph (North Norfolk)

      Percival, Sir Ian

      Carlisle, Bt Hon Mark (Runcorn)

      Hunt, David (Wlrral)

      Peyton, Rt Hon John

      Chalker, Mrs. Lynda

      Hunt, John (Ravensbourne)

      Pink, R. Bonner

      Channon, Paul

      Hurd, Hon Douglas

      Pollock, Alexander

      Chapman, Sydney

      Irving, Charles (Cheltenham)

      Porter, George

      Churchill, W. S.

      Jenkln, Rt Hon Patrick

      Price, David (Eastleigh)

      Clark, Hon Alan (Flymouih, Sutton)

      Johnson Smith, Geoffrey

      Prior, Rt Hon James

      Clark, Sir William (Croydon South)

      Jopling, Rt Hon Michael

      Proctor, K. Harvey

      Clarke, Kenneth (Rushcliffe)

      Joseph, Rt Hon Sir Keith

      Raison, Timothy

      Cockeram, Eric

      Kaberry, Sir Donald

      Rathbone, Tim

      Colvin, Michael

      Kimball, Marcus

      Rees, Rt Hon Meriyn (Leeds South)

      Cope, John

      King, Rt Hon Tom

      Rees-Davles, W. R.

      Corrie, John

      Kltson, Sir Timothy

      Renton, Tim

      Costain, A. P.

      Knight, Mrs. Jill

      Rhodes James, Robert

      Critchley, Julian

      Knox, David

      Rhys Williams, Sir Brandon

      Crouch, David

      Lamont, Norman

      Ridsdaie, julian

      Dickens, Geoffrey

      Lang, Ian

      Rifkind Malcolm

      Dorrell, Stephen

      Langford-Holt, Sir John

      Roberts, Michael (Cardiff NW)

      Douglas-Hamilton, Lord James

      Latham, Michael

      Roberts, Wyn (Conway)

      Dover, Denshore

      Lawrence, Ivan

      Rost, Peter

      du Cann, Rt Hon Edward

      Lawson, Nigel

      Royie, on Antony

      Dunn, Robert (Dartford)

      Lee, John

      Sainsbury, Hon Timothy

      Durant, Tony

      Lester, Jim (Beeston)

      Scott, Nicholas

      Dykes, Hugh

      Lewis, Kenneth (Rutland)

      Shaw, Giles (Pudsey)

      Eden, Rt Hon Sir John

      Lloyd, Ian (Havant & Waterloo)

      Shaw, Michael (Scarborough)

      Edwards, Rt Hon N. (Pembroke)

      Lloyd, Peter (Fareham)

      Shelton, William (Streatham)

      Eggar, Timothy

      Loveridge, John

      Shepherd, Colin (Hereford)

      Elliott Sir William

      Luce, Richard

      Shepherd, Richard (Aldridge-Br'hills)

      Emery, Peter

      Lyell, Nicholas

      Shersby, Michael

      Fairgrieve, Russell

      McCrindle, Robert

      Silvester, Fred

      Faith, Mrs Sheila

      Macfarlane, Nell

      Sims Roger

      Farr, John

      MacGregor, John

      Skeet T.H.H.

      Fell, Anthony

      MacKay, John (Argyll)

      Smith Dudley (War and Leam'ton)

      Fermer, Mrs Peggy

      Macmillan, Rt Hon M. (Farnham)

      Speed, Keith

      Finsberg, Geoffrey

      McNair-Wilson, Michael (Newbury)

      Speller, Tony

      Fisher, Sir Nigel

      McNair-Wilson, Patrick (New Forest)

      Spence, John

      Fletcher, Alexander (Edinburgh N)

      McQuarrie, Albert

      Spicer, Michael (S Worcestershire)

      Fletcher-Cooke, Charles

      Madel, David

      Sproat, Iain

      Forman, Nigel

      Major, John

      Squire, Robin

      Fox, Marcus

      Marland, Paul

      Stianton, Keith

      Fraser, Rt Hon H. (Stafford & St)

      Marlow, Tony

      Stanbrook, Ivor

      Fraser Peter (South Angus)

      Marshall, Michael (Arundel)

      Stanley, John

      Fry, Peter

      Marten, Neil (Banbury)

      Steen, Anthony

      Galbraith, Hon T. G. D.

      Mates, Michael

      Stevens, Martin

      Gardiner, George (Relgate)

      Mather, Carol

      Stewart lan (Hitchin)

      Gardner, Edward (South Fylde)

      Maude, Rt Hon Angus

      Stewart, John (East Renfrewshire)

      Garel-Jones, Tristan

      Mawby, Ray

      Stokes, John

      Gilmour, Rt Hon Sir Ian

      Mawhlnney, Dr Brian

      Stradling Thomas, J.

      Glyn, Dr. Alan

      Maxwell-Hyslop, Robin

      Tapsell, Peter

      Goodhew, Victor

      Mayhew, Patrick

      Taylor, Robert (Croydon NW)

      Goodlad, Alastair

      Meiler, David

      Taylor Teddy (Southend East)

      Gorst, John

      Meyer, Sir Anthony

      Tebbit, Norman

      Gow Ian

      Miller, Hal (Bromsgrove & Redditch)

      Temple-Morris Peter

      Gower, Sir Raymond

      Mills, lain (Meriden)

      Thatcher, Rt Hon Mrs Margaret

      Gray, Hamish

      Mlscampbell, Norman

      Thomas, Rt Hon Peter (Hendon S)

      Greenway, Harry

      Mitchell, David (Basingstoke)

      Thompson, Donald

      Grieve, Percy

      Moate, Roger

      Thorne, Neil (Ilford South)

      Griffiths, Eldon (Bury St Edmunds)

      Monro, Hector

      Thornton, Malcolm

      Griffithe Peter (Portsmouth N)

      Montgomery, Fergus

      Townend, John (Bridlington)

      Grist, Ian

      Moore, John

      Townsend, Cyril D. (Bexleyheath)

      Grylls, Michael

      Morgan, Geraint

      Trippier, David

      Gummer, John Selwyn

      Morris, Michael (Northampton, Sth)

      Trotter, Neville

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

      Morrison, Hon Charles (Devizes)

      van Straubenzee, W. R.

      Hamilton, Michael (Salisbury)

      Morrison, Hon Peter (City of Chester)

      Vaughan, Dr Gerard

      Viggers Peter

      Hampson, Dr Keith Hannam, John

      Mudd, David Murphy, Christopher

      Waddlngton, David

      Haselhurst, Alan

      Myles, David

      Wakeham, John

      Waldegrave, Hon William

      Hastings, Stephen

      Needham, Richard

      Walker, Bill (Perth & E Perthshire)

      Havers, Rt Hon Sir Michael

      Nelson, Anthony

      Walker-Smith, Rt Hon Sir Derek

      Hawkins, Paul

      Neubert, Michael

      Wall, Patrick

      Hawksley, Warren

      Newton, Tony

      Waller Gary

      Hayhoe, Barney

      Nott, Rt Hon John

      waner, Gary

      Heddle, John

      Onslow, Cranley

      Walters, Dennis

      Henderson, Barry

      Oppenheim, Rt Hon Mrs Sally

      Ward, John

      Heseltine. Rt Hon Michael

      Osborn, John

      Warren, Kenneth

      Hicks, Robert

      Page, John (Harrow, West)

      Watson, John

      Kfggins, Rt Hon Terence L.

      Page, Rt Hon Sir R. Graham

      Wells, John (Maidstone)

      200

      201

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

      Wilkinson, John

      Younger, Rt Hon George

      Wheeler, John

      Williams, Delwyn (Montgomery)

      Whitelaw, Rt Hon William

      Winterton, Nicholas

      TELLERS FOR THE NOES:

      Whitney, Raymond

      Wolf son, Mark

      Mr. Spencer Le Merchant and

      Wickenden, Keith

      Young, Sir George (Acton)

      Mr. Anthony Berry.

      Wiggin, Jerry

      Question accordingly negatived.
      Mr. Deputy Speaker (Mr. Richard Crawshaw): As there are no other Government new clauses, we move to amendment No. 213.

    Clause 1

      RIGHT TO ACQUIRE FREEHOLD OR LONG LEASE
      Mr. Alton: I beg to move amendment No. 213 in page 1, line 12, leave out paragraph 1(b).
      Mr. Deputy Speaker: With this we may take the following amendments:
      No. 152, in page 2, line 1, leave out ' in either case '.
      No. 153, in page 2, line 13, after ' tenant ' insert ' of that dwelling house '.
      Mr. Alton: The amendment proposes the deletion of subsection (1)(b), which uses the words
      " if the dwelling-house is a flat, to be granted a long lease of the dwelling-house ".
      It will be difficult from a maintenance and management point of view to have piecemeal forms of tenure in blocks of flats. The danger for local authorities is that large blocks of flats could be sold haphazardly, which would raise many difficulties for the authorities owning the remainder of those blocks. Some flats could be sold to individuals on long leases and others could still be occupied by short-term periodic tenants.
      Schedule 2 provides some rules for the appointment of repairs and their costs, but there is only minimal provision for the upkeep of communal parts. It will be difficult for a local authority to maintain and repair a block of flats that is in the ownership of the authority and individuals as well.
      I have examined the problem with officers of my own local authority and their conclusion is that it would be wholly impractical to maintain and operate blocks of flats on that basis, particularly the lighting and common areas, the maintenance and upkeep of lifts and all the other parts that will still be in common
      202
      ownership under the local authority, with some individuals in the block holding their ownership through long leases. The practical problems will be very difficult to overcome. The Government have perhaps ignored the greatest opportunity that the sale of council dwellings has provided, namely the creation of more co-ownerships and co-operatives, which would be the ideal way of running large blocks of flats.
      11.15 pm
      Alternatively, it will be possible to sell off blocks of flats to private enterprise, particularly those such as Oak and Eldon Gardens, which the Department of the Environment agreed to demolish only a year ago. Before that demolition took place, other forms of tenure, through the opportunities that private enterprise can afford, should have been experimented with. Substantial help and financial incentive should be given by the Government, particularly in blocks of hard-to-let flats, for private enterprise to be involved in the ownership of the block if the local authority has failed to let that block to would-be tenants. Where blocks of flats are occupied by large numbers of council tenants, rather than selling them off individually, it would be far better to form tenants' committees where the tenants would have control and ownership of those blocks through co-ownerships or co-operatives.
      Clause 1 is a retrograde step. I am convinced that it will pose enormous problems. It also suffers from the blanket solution mentality in dealing with a local authority's problems. I do not take the view that one local authority's problems will be the same as another's. It should be left to local authorities to decide what is best in their areas. I am convinced that the Government, by imposing their ideas on every local authority regardless of local circumstances, are undermining local democracy and are ensuring that housing authorities have even less control of their council properties and less interest in what goes on in their districts than they have at present.
      Big Brother—this time in the shape of the Department of the Environment and

      203
      the Minister for Housing and Construction—has decided to take away even more power from the local authorities. The Government will no doubt claim their mandate to sell council houses and flats and will say that they were elected on this platform. I remind them that local councillors were also elected on the same platform of whether they chose to sell council houses and flats in their areas. Some Conservative-controlled authorities decided not to sell their properties because in many areas it was recognised that was not the easy or glib answer to the housing problems of their district.
      That is why this kind of legislation suffers from the inherent weakness of manifesto mouthings—this false premise of a mandate. This sort of stricture has to be fulfilled by imposing solutions on every local council, regardless of the local circumstances. It would be far better to allow local authorities to decide for themselves and to work out solutions to their problems. If they believe there is room to experiment with the sale of some council flats, let them try that. If it goes wrong at least we shall know before we have embarked on the same policy throughout the country.
      The Minister should look at the implications and the possible pitfalls of the legislation before rushing headlong, willy-nilly into what could be a catastrophe for many local authorities. He should listen to the representations which have been made by the Association of Metropolitan Authorities. He should listen to what Conservative councillors are saying to him. They say that in this Bill, and particularly these compulsory clauses, there lies a plethora of problems which local authorities will have difficulty in overcoming.
      I appeal to the Minister not to rush into this legislation dogmatically or in a doctrinaire way—in the way he might say that Opposition Members did so frequently in the past. I appeal to him not to impose one set of standard rules and say that this is the textbook by which we shall now operate, replacing the little red book by the little blue book, not solving any fundamental problems, but forcing on local authorities the sort of strictures which are not solutions in reality.
      204
      I urge the Minister to think again before imposing these measures on local councils.
      Mr. Allan Roberts: It is difficult to speak against an amendment when the mover has for 90 per cent. of his time made remarks with which one agrees. I share the view of the hon. Member for Liverpool, Edge Hill (Mr. Alton) that the Government are wrong in forcing local authorities to sell council accommodation when they do not want to sell it. The Government are wrong in forcing some Conservative local authorities to sell certain types of accommodation which previously they felt it was wrong to sell. I agree with the hon. Member that discretion should be left with local authorities. However, it is difficult to support an amendment which, if carried, would exclude from the provisions for right to buy the compulsory sale of flats and would keep in the legislation the compulsory sale of houses.
      One of the main objections that I and other Labour Members have to the legislation is that by forcing councils to sell council accommodation we are merely forcing them to sell the best accommodation; that in reality very few flats will be sold and that mostly the best houses will be sold.
      On 15 January, in the Second Reading debate, the hon. Member for Edge Hill quoted the statistics for Liverpool. He said that there were, 80,000 council houses or units of council accommodation, including houses and flats, in the ownership of the city of Liverpool, and that 3,899 of them were empty. He used the fact that that number of units were empty to justify the need for Liverpool to sell council houses. He justified the Liberal-Conservative policy in Liverpool of selling council houses, and he pointed out that 1,200 houses have been sold. What he failed to mention was that the 1,200 were the best houses—low-rise council houses in the best areas of Liverpool, where people want to live—and that the 3,899 that were empty were empty flats.
      Mr. Alton: Not all those properties are empty flats. I can take the hon. Gentleman to properties in the road adjacent to where I live where there are two houses owned by that local authority which have been empty since 1964. I

      205
      am sure, Mr. Deputy Speaker, that you will know of other examples.
      Mr. Roberts: Considering that the hon. Member for Edge Hill was the chairman of the housing committee for some time, it is interesting to have his admission that the houses were kept empty from 1964.
      Mr. Alton: The hon. Member—I am sure unintentionally—has misled the House. While I was chairman of the housing committee in Liverpool we passed plans—he will be pleased to know this—to pull down those houses because of their bad state. Since there has been a Labour-controlled administration, the number of empty properties in Liverpool has risen by 1,000.
      Mr. Roberts: In the Second Reading debate, the hon. Member for Edge Hill also pointed out that the two houses which had been empty since 1964 had been municipalised and were miscellaneous properties outside the existing housing stock. He was criticising that fact. We are really talking about purpose-built council housing. This Government stopped municipalisation, and I regret it. I also regret that local authorities municipalised houses and then kept them empty, but if they were in such a state that they needed to be demolished, perhaps that was why they were empty. But that does not alter my point that of the 1,200 council houses sold in Liverpool out of the 80,000 houses, the vast bulk were low-rise houses in nice areas where people wanted to live. The flats were not sold.
      What we are saying from the Labour Benches is that the enforced sale of council houses will cause social divisions. The best houses will be sold. The local authorities will be left with only the worst in their ownership. This will cause the stigmatisation of the public sector. It will also mean that families living in the kind of flats the hon. Member for Edge Hill describes will be made prisoners for longer than ever in those flats because they will not be able to transfer to the house and garden they desire because those properties have been sold. [Interruption.] The facts speak for themselves. The national statistics show that the number of flats sold is negligible. The Tory GLC has sold the best houses, not flats. The GLC started to sell vacant
      206
      houses by slowing down on transfers of families from flats to houses in order to be able to sell the houses. The best houses will be sold, but the flats will remain, not least because of the many legal difficulties and other problems.
      We want to see the abolition of the enforced right to buy on all council accommodation. An amendment which exempts flats and allows local authorities to sell the best houses—or forces them to do so—but does not force them to put flats on to the market will worsen the position. It will merely give legal form to what is likely to happen anyway. The amendment should not be passed. If we are to have the right to buy, let us have it for flats as well as houses, then the proof of the pudding will be in the eating. We shall see whether this Government's legislation and the £1 million publicity campaign the Minister is mounting will persuade people to live in the Oak and Eldon Gardens, the Hulme Fives and the Fort Ardwicks. We shall see whether it persuades them to be enthusiastic about buying their flats. I do not believe for one minute that it will. I believe that the Minister will be proved wrong. There are not thousands of flat dwellers throughout the country eagerly wishing to buy their flats. There are hundreds of thousands of flat dwellers wishing to be transferred into the very housing that this legislation will cause to be sold off. The amendment will exacerbate the position, particularly in Liverpool, as it will give statutory backing to what is already happening with a Conservative-Liberal majority.
      Mr. Stanley: The House will want to be aware of the scope of this amendment moved by the hon. Member for Liverpool Edge Hill (Mr. Alton). It would have the effect of taking out of the right-to-buy provisions approximately one-third of all council tenants in local authorities and new town tenancies. About 30 per cent. of all local authority new town tenancies are flats. That effectively means that 1½ to 1¼ million tenants would be taken out of the right-to-buy provisions. Hon Members will want to note that it was the official spokesman for the Liberal Party who proposed this. If public sector tenants are to be given the right to buy it would, in our view, be wrong to discriminate against those who live in flats rather than houses.

      207
      The hon. Member for Edge Hill said, no doubt anticipating what I would wish to say, that one could ignore the manifesto. That is a happy—or unhappy—position for the Liberal Party, which has not been concerned with the point since the 1930s. We certainly regard ourselves as being under a firm commitment to the electorate which returned this Government to office last May. We said clearly that we would wish to extend the right to buy to flats as well as to houses. I do not know how many people in flats wish to buy them, but we have had a number
      of letters from people who wish to buy and I know that many of my hon. Friends have sent such letters to me from people who live in flats and are anxious to be given the opportunity to buy. We made it quite clear at the general election last year that the right to buy would extend to flats as well as to houses, and we have no intention of going back on that commitment now. I ask the House to reject the amendment.
      Question put, That the amendment be made:—
      The House divided: Ayes 6, Noes 268.

      Division No. 313]

      AYES

      [11.30 pm

      Howells, Gerafnt

      Johnston, Russell (Inverness)

      Mabon, Rt Hon Dr J. Dickson

      Penhallgon, David

      Ross, Stephen (Isle of Wight)

      TELLERS FOR THE AYES:

      Mr. Alan Beith and

      Mr. Clement Freud.

      NOES

      Adley, Robert

      Clark, Hon Alan (Plymouth, Sutton)

      Grylls, Michael

      Altken, Jonathan

      Clark, Sir William (Croydon South)

      Gummer, John Selwyn

      Alexander, Richard

      Clarke, Kenneth (Rushclltfe)

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

      Ancram, Michael

      Cockeram, Eric

      Hampson, Dr Keith

      Arnold, Tom

      Colvin, Michael

      Hannam, John

      Aspinwall, Jack

      Cope, John

      Haselhuret, Alan

      Atkins, Rt Hon H. (Spelttiome)

      Corrie, John

      Hastings, Stephen

      Atkins, Robert (Preston North)

      Costain, A. P.

      Havers, Rt Hon Sir Michael

      Atkinson, David (B'mouth, East)

      Critchley, Julian

      Hawkins, Paul

      Baker, Nicholas (North Dorset)

      Crouch, David

      Hawksley, Warren

      Banks, Robert

      Dickens, Geoffrey

      Heddle, John

      Beaumont-Dark, Anthony

      Dorrell, Stephen

      Henderson, Barry

      Bendali, Vivian

      Douglas-Hamilton, Lord James

      Heseltine, Rt Hon Michael

      Benyon, Thomas (Abingdon)

      Dover, Denshore

      Hicks, Robert

      Best, Keith

      du Cann, Rt Hon Edward

      Hogg, Hon Douglas (Grantham)

      Bevan, David Gilroy

      Dunn, Robert (Dartford)

      Holland, Philip (Carlton)

      Bitten, Rt Hon John

      Durant, Tony

      Hooson, Tom

      Biggs-Davison, John

      Dykes, Hugh

      Hordern, Peter

      Blackburn, John

      Eden, Rt Hon Sir John

      Howe, Rt Hon Sir Geoffrey

      Blaker, Peter

      Edwards, Rt Hon N. (Pembroke)

      Howell, Ralph (North Norfolk)

      Body, Richard

      Eggar, Timothy

      Hunt, David (Wirral)

      Bonsor, Sir Nicholas

      Elliott, Sir William

      Hunt, John (Ravensbourne)

      Boscawen, Hon Robert

      Fairgrieve, Russell

      Hurd, Hon Douglas

      Bottomley, Peter (Woolwich West)

      Faith, Mrs Sheila

      Jenkln, Rt Hon Patrick

      Boyson, Dr Rhodes

      Farr, John

      Jopllng, Rt Hon Michael

      Bright, Graham

      Fenner, Mrs Peggy

      Joseph, Rt Hon Sir Keith

      Brinton, Tim

      Finsberg, Geoffrey

      Kaberry, Sir Donald

      Brocklebank-Fowler, Christopher

      Fisher, Sir Nigel

      Kimball, Marcus

      Brooke, Hon Peter

      Fletcher, Alexander (Edinburgh N)

      King, Rt Hon Tom

      Brotherton, Michael

      Fletcher-Cocke, Charles

      Knox, David

      Brown, Michael (Brlgg & Sc'thorpe)

      Forman, Nigel

      Lamont, Norman

      Browne, John (Winchester)

      Fox, Marcus

      Lang, Ian

      Bruce-Gardyne, John

      Fraser, Rt Hon H. (Stafford & St)

      Latham, Michael

      Bryan, Sir Paul

      Fraser, Peter (South Angus)

      Lawrence, Ivan

      Buchanan-Smith, Hon Alick

      Gardiner, George (Reigate)

      Lawson, Nigel

      Buck, Antony

      Gardner, Edward (South Fylde)

      Lee, John

      Budgen, Nick

      Garel-Jones, Tristan

      Lester, Jim (Beeston)

      Bulmer, Esmond

      Gilmour, Rt Hon Sir Ian

      Lloyd, Peler (Fareham)

      Butcher, John

      Goodhew, Victor

      Luce, Richard

      Butler, Hon Adam

      Goodlad, Alastalr

      Lyell, Nicholas

      Cadbury, Jocelyn

      Gorst, John

      Macfarlane, Neil

      Carlisle, John (Luton West)

      Gow, Ian

      MacGregor, John

      Carlisle, Kenneth (Lincoln)

      Gower, Sir Raymond

      MacKay, John (Argyll)

      Carlisle, Rt Hon Mark (Runcorn)

      Gray, Hamish

      McNair-Wllson, Michael (Newbury)

      Chalker, Mrs. Lynda

      Greenway. Harry

      McNair-Wilson, Patrick (New Forest)

      Channon, Paul

      Grieve, Percy

      McQuarrie, Albert

      Chapman, Sydney

      Griffiths, Peter (Portsmouth N)

      Madel, David

      Churchill, W. S.

      Grist, Ian

      Major, John

      Marks, Kenneth

      Pawsey, James

      Stewart, John (East Renfrewshire)

      Marland, Paul

      Percival, Sir Ian

      Stradllng Thomas, J.

      Marlow, Tony

      Pink, R. Bonner

      Taylor, Robert (Croydon NW)

      Marshall, Michael (Arundel)

      Pollock, Alexander

      Taylor, Teddy (Southend East)

      Marten, Neil (Banbury)

      Porter, George

      Tebblt, Norman

      Mates, Michael

      Price, David (Eastleigh)

      Temple-Morris, Peter

      Mather, Carol

      Proctor, K. Harvey

      Thatcher, Rt Hon Mrs Margaret

      Maude, Rt Hon Angus

      Raison, Timothy

      Thompson, Donald

      Mawby, Ray

      Rathbone, Tim

      Thorne, Neil (llford South)

      Mawhinney, Dr Brian

      Rees, Peter (Dover and Deal)

      Thornton, Malcolm

      Maxwell-Hyslop, Robin

      Rees-Davies, W. R.

      Townend, John (Bridlington)

      Mayhew, Patrick

      Renton, Tim

      Townsend, Cyril D. (Bexleyheath)

      Mellor, David

      Rhodes James, Robert

      Trippier, David

      Meyer, Sir Anthony

      Rhys Williams, Sir Brandon

      Trotter, Neville

      Miller, Hal (Bromsgrove & Redditch)

      Ridsdale, Julian

      van Straubenzee, W. R.

      Mills, lain (Meriden)

      Rifkind, Malcolm

      Vaughan, Dr Gerard

      Miscampbell, Norman

      Roberts, Michael (Cardiff NW)

      Viggers, Peter

      Mitchell, David (Basingstoke)

      Roberts, Wyn (Conway)

      Waddlngton, David

      Moate, Roger

      Ross, Wm. (Londonderry)

      Wakeham, John

      Monro, Hector

      Sainsbury, Hon Timothy

      Waldegrave, Hon William

      Montgomery, Fergus

      Scott, Nicholas

      Walker, Bill (Perth & E Perthshire)

      Moore, John

      Shaw, Giles (Pudsey)

      Walker-Smith, Rt Hon Sir Derek

      Morgan, Geralnt

      Shaw, Michael (Scarborough)

      Wall, Patrick

      Morris, Michael (Northampton, Sth)

      Shelton, William (Strealham)

      Waller, Gary

      Morrison, Hon Charles (Devizes)

      Shepherd, Colin (Hereford)

      Ward, John

      Morrison, Hon Peter (City of Chester)

      Shepherd, Richard (Aldrldge-Br'hills)

      Watson, John

      Murphy, Christopher

      Shersby, Michael

      Wells, John (Maidstone)

      Myles, David

      Silvester, Fred

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

      Needham, Richard

      Sims, Roger

      Wheeler, John

      Nelson, Anthony

      Skeet, T. H. H.

      Whitelaw, Rt Hon William

      Neubert, Michael

      Smith, Dudley (War. and Leam'ton)

      Whitney, Raymond

      Newton, Tony

      Speed, Keith

      Wickenden, Keith

      Nott, Rt Hon John

      Speller, Tony

      Wlggin, Jerry

      Onslow, Cranley

      Spence, John

      Wilkinson, John

      Oppenheim, Rt Hon Mrs Sally

      Spicer, Michael (S Worcestershire)

      Williams, Delwyn (Montgomery)

      Page, John (Harrow, West)

      Sproat, lain

      Winterton, Nicholas

      Page, Rt Hon Sir R. Graham

      Squire, Robin

      Wolfson, Mark

      Page, Richard (SW Hertfordshire)

      Stalnton, Keith

      Young, Sir George (Acton)

      Parkinson, Cecil

      Stanbrook, Ivor

      Younger, Rt Hon George

      Parris, Matthew

      Stanley, John

      Patten, Christopher (Bath)

      Steen, Anthony

      TELLERS FOR THE NOES:

      Patten, John (Oxford)

      Stevens, Martin

      Mr. Spencer Le Marchant and

      Pattie, Geoffrey

      Stewart, Ian (Hitchin)

      Mr. Anthony Berry.

      Question accordingly negatived.
      Amendments made: No. 1, in page 2, line 3, after ' security ' insert ' of a first mortgage '.
      No. 2, in page 2, line 20, at end insert
      ' and (c) this subsection is subject to subsections (4) to (5B) below '.
      No. 3, in page 2, line 33, at end insert—
      ' (5A) In determining whether the condition in subsection (3) above is satisfied in the case of a person who is, or of persons one of whom is, a previous purchaser, a period counts as a period during which the previous purchaser or his spouse was a secure tenant only if it fell after the completion of the previous purchase or, if more than one, the last of them.
      (5B) In subsection (5A) above "previous purchaser" means a person who has exercised the right to buy or the right to purchase conferred by Part I of the Tenants' Rights Etc. (Scotland) Act 1980 on a previous occasion (whether he has exercised it alone or jointly with another person) and "previous purchase" has a corresponding meaning.'.—[Mr. Stanley.]

    Clause 5

      EXERCISE OF RIGHT TO BUY
      Amendments made: No. 4, in page 4, line 21, after ' weeks', insert
      'or in a case falling within subsection (1A) below, eight weeks '.
      No. 5, in page 4, line 25, at end insert—
      ' (1A) A case falls within this subsection if the periods counting towards the three years required by section (3) above include a period during which the landlord was not the landlord on which the tenant's notice under subsection (1) above is served '.—[Mr. Stanley.]

    Clause 7

      DISCOUNT
      Mr. Alton: I beg to move amendment No. 156, in page 5, line 25, leave out subsections (2) and (3) and insert:—
      ' 7.—(1) A person exercising the right to buy shall be entitled to a discount of 50 per cent. if he has been in occupation for 20 years or more and a person exercising the right to buy who has been in occupation for less than 20 years shall be entitled to a discount of 2½ per cent. for each complete year he has occupied the premises.'.
      Mr. Deputy Speaker: With this it will be convenient to take the following amendments:
      No. 157, in clause 8, page 7, line 5, leave out ' five ' and insert ' ten '.
      No. 158, in clause 8, page 7, line 11, leave out ' 20 ' and insert ' ten '.
      Mr. Alton: I do not wish to delay the House unduly, but I should like to refer to clause 7. Hon. Members must consider the difficulties that will beset council tenants and local authorities when they determine the levels of discounts to be made available to those tenants who decide to buy their homes.
      I am not arguing against the principle of providing discounts. However, a person should receive a discount towards the cost of buying the house that is based on how long that person has lived there. Clause 7(1) provides:
      " A person exercising the right to buy is entitled to a discount equal, subject to the following provisions of this section, to the following percentage of the price before discount, that is to say—
      (a) if the period to be taken into account under subsection (4) below is less than four years, 33 per cent.; and
      (b) if that period is four years or more, 33 per cent. plus one per cent. for each com.-plete year by which that period exceeds three years, but not together exceeding 50 per cent."
      The average council tenant in my constituency would be perplexed, to put it mildly, if he were confronted with such terminology. One might argue that it would need a Philadelphia lawyer to interpret it.
      11.45 pm
      The amendment seeks to clarify the way in which I believe that the discount scheme should work. It is an attempt to simplify the procedures. It states, in effect, that a person exercising the right to buy should be entitled to a discount of 50 per cent. if he has been in occupation for 20 years or more, and that a person exercising the right to buy who has been in occupation for less than 20 years shall be entitled to a discount of 2½ per cent. for every year that he has occupied the premises." It is an attempt to make the system easier for tenants to understand.
      I ask the Minister to consider carefully the terminology in the Bill. If he were an average council tenant, how would he go about trying to penetrate the language that no doubt will be contained in a form
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      that is difficult to understand that will be circulated by the Department to council tenants who want to think about buying their own home and who will be put off by the language in the Bill?
      I contend that my proposal is more equitable. It would ensure that every council tenant starts on the same basis. It would be easily understood by tenants and it could be fairly applied to them.
      Mr. Wyn Roberts: I listened carefully to the hon. Member for Liverpool, Edge Hill (Mr. Alton). Although his proposition allows the secure tenant of 20 years' standing to receive the same 50 per cent. maximum discount as the Bill, it does not take account of all the circumstances that will be relevant to a sale under the right to buy, and it would treat unfavourably any secure tenant of less than 20 years' standing by comparison with the arrangements in clause 7(1)(a) which provide that a secure tenant of three years' standing is entitled to a basic discount of 33 per cent. on the valuation of his dwelling in accordance with clause 6. Clause 7(1) (b) entitles him to one extra percentage point of discount for each year of secure tenancy in addition to the basic 33 per cent., bringing him up to a maximum of 50 per cent. after a total of 20 years as a secure tenant.
      The hon. Gentleman pleaded that this proviso is difficult to understand, but I do not think that it is. It is 33 per cent. after three years and 1 per cent. per annum thereafter up to a maximum of 50 per cent. As well as reflecting the length of time during which a purchaser has been a secure tenant, the basic 33 per cent. discount entitlement was intended to reflect that he was buying as a sitting tenant with, once the Bill is enacted, security of tenure. It seemed that to ignore the purchaser's status as a sitting tenant in fixing the terms on which the Bill allowed him to buy would have misrepresented the relationship in which he stood to his landlord. That would have had an unfair effect on his interests. The hon. Gentleman's proposal that the discount should simply accrue pro rata over 20 years' tenancy does not take these considerations sufficiently into account.
      Mr. Alton: Surely the hon. Gentleman should take into account how long

      213
      someone has been a tenant and not only the property in which he has been living. Many tenants move from one tenancy to another, not necessarily at their own request, but through modernisation or improvement.
      Mr. Roberts: The hon. Gentleman could not have been listening very well. I said that, as well as reflecting the length of time during which the purchaser had been a secure tenant, we took into account his status and his security of tenure. We take the length of tenure into account and also the possibility that he may have been a tenant in different local authority areas. The extra percentage point of discount to which a secure tenant would be entitled under clause 7(1)(b) for each of 17 years spent as a secure tenant, in addition to the basic three, represents something different. We intended it to give a reasonable advantage to secure tenants of longer standing in recognition of the extra contribution they made by paying rent over a number of years.
      I do not think that the hon. Gentleman would argue with this reasoning, which is implied in the amendment that he has put down. The discount arrangements in the Bill are the product of careful consideration. Our judgment is that they are fair and reasonable both to landlord and tenant. I hope that the hon. Gentleman will withdraw his amendment in the light of my explanation.
      Amendment negatived.
      Mr. Stanley: I beg to move amendment No. 6, in page 5, line 35, leave out from beginning to end of line 3 on page 6 and insert—
      ' (2) The discount shall not reduce the price below the amount which, in accordance with any determination made by the Secretary of State, is to be taken as representing so much of the costs incurred in respect of the dwelling-house as, in accordance with the determination, is to be treated as incurred after 31st March 1974 and as relevant for the purposes of this subsection; and if the price before discount is below that amount, there shall be no discount.
      (2A) A determination under subsection (2) above may make different provision for different cases or descriptions of case, including different provision for different areas, and may provide for exceptions from the requirements of that subsection.'.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 24.
      Mr. Stanley: These amendments concern the cost floor below which the price of a dwelling house sold under the right to buy may not be reduced by discount. As originally drafted, clause 7 (2) would have provided that no dwelling house first let under a secure tenancy after 31 March 1974 could generally be sold at a discounted price below the cost of its provision estimated in a manner determined by the Secretary of State.
      This cost floor was intended to ensure that no landlord would be required to incur an immediate capital loss on the sale of a dwelling under the right to buy. It is based on the arrangement that has operated for a number of years in relation to sales by local authorities under successive general consents. The cut-off date of 31 March 1974 is the date of the reorganisation of local government in England and Wales under the Local Government Act 1972.
      Changes in the boundaries and administrative structures of local authorities that took effect then mean that data for calculating the cost of dwellings provided earlier might now often be insufficient or difficult to obtain. Also, because of subsequent movements in building costs and market values, few dwellings provided since March 1974 would be priced below cost even if sold at maximum discount.
      As originally drafted, however, the cost floor in clause 7(2) would have applied only to the cost of providing dwellings built or acquired from the private sector since local authority reorganisation. The financial safeguard it provided would not have extended to expenditure by public landlords on the improvement or conversion of dwellings, which is part of the cost of provision of a dwelling no less than expenditure on land, site works or construction. I therefore said in Standing Committee on 12 February that I should bring forward amendments to allow significant expenditure on those items since 31 March 1974 to be taken into account in the cost floor. These amendments make this possible.
      Mr. Moate: As one who did not serve on the Standing Committee, I am concerned about the occasions on which the Secretary of State would be able to exercise this judgment and make a determination. I am concerned especially about council houses that might have

      215
      been built five years ago at rather too high a price. I am talking not of cases where exorbitant costs were involved but of substantial costs in excess of what the ordinary private builder would consider reasonable. A current market price in Sittingbourne, in my constituency, might be £17,000. A council house tenant for 20 years who may have been expecting a 50 per cent. discount and anticipates that he will be able to buy for £8,500 wants to buy. He is then told that, because of excess building costs five years ago, the house to which he moved five years ago cost £16,000 for the simple reason that the local authority did not exercise the sensible controls that a private builder would have exercised and paid too much for the construction of that house.
      Would the Secretary of State in those circumstances be prepared to intervene, to exercise his discretion and to say that that property could be sold at below the construction price? This situation arises more often than we like to think. If my right hon. Friend is not prepared to do that, a large number of prospective buyers will be prevented from buying their houses and will be frustrated and disappointed. The fact that a tenant moved from one council house to that particular house a few years ago would mean that he lost out substantially. I am sure that we would not want that to happen. Will my hon. Friend say what would happen in those circumstances?
      Mr. Stanley: My hon. Friend has made an important point. There is certainly some evidence, although it is not too widespread, of local authorities and new town development corporations—some of my hon. Friends have written to me about this problem—whose construction costs were in excess of the subsequent market value of those properties.
      The cost floor applies only to the operation of the discount. That means that a person cannot buy with the benefit of a discount at a price below the cost floor. It is open to a person to buy below cost if he buys at market value—in other words, without a discount. That has always been possible under general consent. That will continue to be possible under the right to buy.
      We have included a power in the Bill for my right hon. Friend in certain circumstances
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      to waive the cost floor. That obviously will be a matter for him to decide when we see how the pattern of values and costs emerges after the Bill is enacted.
      Amendment agreed to.
      Amendments made: No. 7, in page 6, line 6, leave out from ' prescribe ' to end of line 7.
      No. 8, in page 6, line 9 leave out ' subsection (5) ' and insert
      ' subsections (5), (6A) and (6B) '.—[Mr. Stanley.]
      Mr. Stanley: I beg to move amendment No. 9, in page 6, line 15, after first ' the ' insert ' regular '.
      Mr. Deputy Speaker: With this it will be convenient to take Government amendments Nos. 10 and 11.
      Mr. Stanley: These minor amendments concern the special discount arrangements made by subsections (4)(b) and (5)(c) for secure tenants who were serving in the Armed Forces on or after 21 December 1979, the day after the Bill was published. These arrangements allow for a secure tenant or his spouse to count towards their discount entitlement under clause 7 any time during which he occupied accommodation provided for him as a member of the Armed Forces of the Crown. If his spouse spent time in accomodation provided because of his membership of the Armed Forces, that, too, may be counted for discount.
      These special arrangements for the Armed Services were included in the Bill in recognition of the uniquely valuable job which Service men and women do and the price that they often pay in sacrificing the ability to make satisfactory housing arrangements for themselves by serving in the Armed Forces.
      However, we have had to give further consideration to the definition of
      " armed forces of the Crown "
      in clause 7(4)(b), which has led us to the view that it went rather wider than we should wish. When drawing up the provision we had in mind men and women serving in the Regular—I stress "Regular"—Army, Navy and Air Force. But the expression in the Bill as originally drafted,
      "armed forces of the Crown"'

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      according to the legal advice that we had, was sufficiently wide to include all the members of the Territorial forces and the other voluntary reserves. Indeed, it might even have extended to the armed forces of the Commonwealth. Though, of course, our admiration for those groups knows no bounds, we did not think that it was altogether appropriate that all members of the Commonwealth forces should be able to exercise the right to buy with a discount under this legislation if they came to this country.
      Clearly we have had to make a small amendment to reflect our intention of giving this——
      Mr. Deputy Speaker: Order. Under the terms of the allocation of time order, I have to interrupt the proceedings.
      Further consideration of the Bill adjourned.—[Mr. Cope.]
      Bill, as amended (in the Standing Committee), to be further considered this day.

  EUROPEAN COMMUNITY (DENTAL PROFESSION)
  Motion made, and Question proposed,
  That the draft Dental Qualifications (EEC Recognition) Order 1980, which was laid before this House on 22 April, be approved.—[Sir George Young.]
  12.1 am
  Mr. Bob Cryer: I do not think that this order should go through on the nod, particularly when the Joint Committee on Statutory Instruments has drawn the attention of the House to it. I should have thought that the Minister would have said something about it in view of the fact that the House took the trouble to set up a Joint Committee to examine the position of this instrument and others.
  Under article 4 a person who is disqualified in another member State is disqualified on registration in the United Kingdom. We do not want a string of disqualified dentists visiting the United Kingdom, but under article 7, which relates to practitioners who render services while visiting the United Kingdom, a person can be similarly disqualified if convicted of a criminal offence, whether in a member State or elsewhere. However, article 7(2) refers to the fact that
  " No prohibition shall be imposed under this Article on the grounds of conviction of a criminal offence which does not, either from the trivial nature of the offence or from the circumstances under which it is committed, disqualify a person for practising dentistry."
  On the one hand, the disqualification is looked behind and there is an examination to see whether, for example, a motoring offence or perhaps an offence of drinking, which may not be considered as affecting the dental practice, can be put to one side. On the other hand, under article 4 there is no such qualification.
  In evidence to the Joint Committee on Statutory Instruments the Department made clear that it does not look behind the disqualification. That, I think, is unfortunate because the qualifying phrase in Article 7 could reasonably have been included in article 4 so that a person who is disqualified unsatisfactorily in a member State and where there is no examination of the disqualification in a member State is regarded as being disqualified—that and nothing else.

  219
  A person can be disqualified for reasons that we in this country would find entirely unsatisfactory. He has no right of appeal and no right to make representations that the disqualification was based on a criminal penalty which was of a trivial nature or that from the circumstances in which it was committed it did not disqualify a person from practising dentistry, or that the offence was such that it did not disqualify a person. That was thought by the Joint Committee to be less than satisfactory and it was on that point that it decided to report the matter to the House.
  Officials, in evidence to the Committee, agreed that they looked behind qualifications but did not look behind disqualifications. The order, in schedule 1A, lists the qualifications which they will accept as being suitable for qualifying dentists coming to this country. That is reasonable. However, it is anomalous to give a qualified disqualification to visiting dentists but to accept completely the disqualification of other member States without any qualification or examination whatsoever. That is the effect of the instrument.
  Mr. Nicholas Baker: The hon. Gentleman and I have discussed this matter. What we are really saying is that we would have to accept a disqualification which might be trivial but accept the qualifications of foreign dentists which we regard as unimportant. I am not sure that the two issues are as out of line as the hon. Gentleman suggests.
  Mr. Cryer: The Ministry has gone to the trouble to list in detail the European dental qualifications in schedule 1A, thereby suggesting that the qualifications have been examined, to ensure that a standard is enforced by law. That is the impression gained from the instrument. However, it has used two standards for two classes of persons practising dentistry in this country—the person who seeks to practise permanently but who is disqualified and who has no examination of that disqualification, and the person who is visiting to practise but who has a qualification because a disqualification which is based on a trivial criminal offence need not be applied. The general drift of the Joint Committee's comments
  220
  is that that is anomalous. That was reinforced by evidence to the Committee which is not available in the Vote Office because it is not yet printed, but it is available in the Library.
  The Joint Committee does not report an enormous number of instruments to the House, although it examines an enormous number. Since the House set up the Committee to do a job, it would be wrong for the order to be passed on the nod without reference to the point raised by the Committee.
  12.8 am
  Mr. Stanley Orme: My hon. Friend the Member for Keighley (Mr. Cryer), who is the Chairman of the Joint Committee, is well versed in these matters. He has drawn to the attention of the House the discrepancy between article 4 and article 7 of the order. Perhaps the Minister can explain why the General Dental Council supports the qualifications for member States in the order, while the Committee is not satisfied in the respects which have been outlined. I do not believe that a serious discrepancy is involved. Disqualification is meant to apply to any dentist in the member States who is disqualified for the reasons set out in the order. However there is a discrepancy between how other member States and Britain operate in regard to disqualification. Perhaps the Minister will reply to that.
  12.10 am
  The Under-Secretary of State for Health and Social Security (Sir George Young): I am grateful to the Joint Committee on Statutory Instruments for the thoroughness with which it examined the order. I read the draft minutes of its meeting last week. The hon. Member for Keighley (Mr. Cryer) and the right hon. Member for Salford, West (Mr. Orme) both contrasted the provisions in article 4 with those in article 7, both of which deal with disqualification.
  Article 4 of the draft order provides that a dentist who has been disqualified in a member State from practising dentistry because of some criminal offence or professional misconduct shall not, while so disqualified, be entitled to registration under the provisions of the proposed new section 2A.

  221
  Article 4(2)(A) of the order emphasises that a disqualifying decision in that respect is limited to one expressed to be made on the grounds that the dentist has committed a criminal offence, or has misconducted himself in a professional respect, and not on any other grounds. Article 4(2)(B) emphasises that the effect of a disqualifying decision is that the dentist is prohibited from practising in his own State.
  The Joint Committee on Statutory Instruments has expressed concern that that provision might be the cause of injustice, in that it would allow a person disqualified in his own State for a criminal offence of a trivial nature to be debarred from his entitlement to registration in this country. The Joint Committee asked why, in article 4(2)(A) of the order, the reference was to a criminal offence simpliciter, and that the article contained no qualification that it should not be of a trivial nature. The reason is that it is for each member State to decide what its disciplinary legislation shall be. There is no need to assume that, in framing and operating disciplinary legislation, controlling bodies of the dental profession in respective member States will not be responsible or fair minded.
  Article 4(4) of the order provides that a person refused registration in the United Kingdom on the grounds of a disqualifying decision in his own State may appeal to the General Dental Council. Any such appeal is to be decided by the disciplinary committee of the General Dental Council and it is to be noted that the issue before that committee in such an appeal is the issue whether the disqualifying decision was a disqualifying decision within the meaning of article 4(2). It is not for the disciplinary committee to go into the merits of whether it would have disqualified the dentist concerned had it been seized of the matter. I understand that that is a general application in the way in which we enforce or recognise foreign decisions.
  I turn to article 7. As persons rendering dental services temporarily, which is covered in article 6 and 7, while visiting the United Kingdom will not be registered in the dentists register, the disciplinary procedures provided in the Dentists Acts for use against registered dentists could not be applied. Article 7 provides a parallel procedure which might be
  222
  operated by the disciplinary committee of the General Dental Council to impose a prohibition on the person concerned in respect of the rendering of dental services in the United Kingdom in the future.
  The recognition directive requires that in the temporary provision of services the visiting dentist shall be subject to the same rules of conduct which apply in the host State, as in this case the United Kingdom. The wording of article 7 therefore follows closely that used in section 25 of the Dentists Act 1957, which relates to the erasure of a name from the dentists register kept by the General Dental Council in the United Kingdom. In particular, the disciplinary committee of the General Dental Council, under section 25 of the Act, may not cause erasure of a person's name on account of a conviction for an offence which does not, either from the trivial nature of the offence or from the circumstances under which it was committed, disqualify a person for practising dentistry. Consequently, article 7(2) of the draft order excludes consideration of criminal offences of a trivial nature when the disciplinary committee is considering imposing a prohibition on a visiting dentist providing services temporarily.
  I hope that that gives the hon. Member for Keighley and the right hon. Member for Salford, West the explanation that they were seeking.
  Sir Graham Page: Although my hon. Friend has gone at a speed that would be admired by Steve Ovett or Sebastian Coe, I think that I gathered that he confirmed the statement made by the hon. Member for Keighley (Mr. Cryer) that there is a difference between a dentist from another European State coming to Britain to practise permanently and one who is visiting. Suppose that there is a dentist who is qualified in Germany, and who becomes disqualified there for some trival offence. He comes to Britain, but because he is disqualified in Germany he cannot practise here. However, if he has come here on a visit, we can, under article 7, disregard that trivial offence and allow him to practise here. Is it the case that if he wishes to set up permanent practice here we must study carefully the disqualification, but if he comes here visiting, we can disregard it? That is how the order is worded, but it is so ridiculous that I cannot believe that it is intended.
  Sir G. Young: I understand that if a dentist were disqualified in Germany he would not be allowed to practise even temporarily in the United Kingdom.
  Sir G. Page: But that it not what the order says. Article 7 makes clear that one can disregard trival offences by a visiting dentist and allow him to practise here. That is why the Statutory Instruments Committee drew attention to the order. Although an explanation was given by witnesses who came before us, I still think that there is ambiguity in the order.
  One point that my hon. Friend did not deal with is whether we get reciprocal treatment in other European States. Are we being rather over-conscientious? Are other States passing such orders? The House ought to be told.
  Sir G. Young: By leave of the House, I can confirm what I said in my earlier intervention. The provisions of article 6 refer only to dentists who are established in another member State. If a dentist has been struck off in his own member State, he is no longer established as a dentist there and cannot provide services even temporarily in this country.
  Mr. Nicholas Baker: I do not have article 7 before me, but I believe that I am right in saying that the reference to a trivial offence by a visiting dentist refers to a trivial offence committed here, not in the country of origin.
  Sir G. Page: The order does not say so.
  Mr. Cryer: Article 7 refers to a visiting dentist having committed an offence "whether in a member State or elsewhere ". Does not the framework of the order give rise to the possibility that a dentists could have committed a trivial offence in West Germany, and, while it was being considered by the German dental council, come to this country as a visitor and be allowed to practise, because the General Dental Council regarded it as a trivial offence? He could go back to Germany and find that the dental council there had disqualified him and he would automatically come under article 4 and be disbarred from practising here. The DHSS has not gone behind the disqualification
  224
  process of the other member States.
  Sir G. Young: If the dentist had been disqualified in Germany, he would not be allowed access to the register in this country and, therefore, would not be allowed to practise here temporarily or permanently. That is the crucial safeguard.
  Mr. Cryer: But the Statutory Instruments Committee was concerned about the framework of the order and that it should not be ambiguous or unclear. The Minister has not answered my point that there are two standards and if a criminal charge were hanging over a dentist we could find that when he came here as a visitor he was allowed to practise because we regarded the offence as trivial, whereas he might be disqualified by his member State because the offence was not regarded as trivial.
  Sir G. Young: If the hon. Gentleman is looking for confirmation that the criteria for disqualification in this country and other EEC States may be different, I can confirm that that is so. In this country, certain trivial offences are automatically disregarded, which is not the case in certain other European countries. As for access to the register, there may be slightly different criteria in the various European countries.
  Question put:—
  The House proceeded to a Division—
  Mr. Newton and Lord James Douglas-Hamilton were appointed tellers for the Ayes, but no Member being willing to act as Teller for the Noes, MR. DEPUTY SPEAKER declared that the Ayes had it.
  Question agreed to.
  Resolved,
  That the draft Dental Qualifications (EEC Recognition) Order 1980, which was laid before this House on 22 April, be approved.

  ADJOURNMENT
  Resolved, That this House do now adjourn.—[Mr. Wakeham.]
  Adjourned accordingly at twenty-two minutes past Twelve o'clock.

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  COMMONS COMMISSIONERS
  COMMONS COMMISSIONERS
  Post Office
  Post Office
  Mineral Supply
  Mineral Supply
  Nationalised Industries (Employees' Pensions)
  Nationalised Industries (Employees' Pensions)
  Courtaulds Ltd. (Financial Assistance)
  Courtaulds Ltd. (Financial Assistance)
ENVIRONMENT
  House of Commons (Accommodation)
  House of Commons (Accommodation)
  Home Insulation Grants (Pensioners)
  Home Insulation Grants (Pensioners)
  Rates (Statistics)
  Rates (Statistics)
  Sports Council
  Sports Council
  National Building Agency
  National Building Agency
  Domestic Rates
  Domestic Rates
  Housing Investment Programme
  Housing Investment Programme
  Housing Associations
  Housing Associations
  Option Mortgage System
  Option Mortgage System
TRANSPORT
  Nationalised Industries (Employees' Pensions)
  Nationalised Industries (Employees' Pensions)
  Lead Pollution
  Lead Pollution
  Cycle Lanes
  Cycle Lanes
  Trunk Roads and Motorways
  Trunk Roads and Motorways
AGRICULTURE, FISHERIES AND FOOD
  Non-temperate Products
  Non-temperate Products
  Fisheries Research and Development Board
  Fisheries Research and Development Board
  European Community (Fisheries Policy)
  European Community (Fisheries Policy)
  Whisky
  Whisky
  Departmental Staff (Alnwick)
  Departmental Staff (Alnwick)
  Farm Incomes
  Farm Incomes
  Canned Fish
  Canned Fish
  Marginal Farmers
  Marginal Farmers
EDUCATION AND SCIENCE
  Secondary Schoolchildren
  Secondary Schoolchildren
  Examination Passes
  Examination Passes
  Parents' Rights
  Parents' Rights
  GCE and CSE Examinations
  GCE and CSE Examinations
  Teachers' Pensions
  Teachers' Pensions
FOREIGN AND COMMONWEALTH AFFAIRS
  Hong Kong
  Hong Kong
  Albania
  Albania
  Iran
  Iran
NORTHERN IRELAND
  European Community Budget
  European Community Budget
  Housing (Handicapped Persons)
  Housing (Handicapped Persons)
  St. Matthew's Redevelopment, Belfast
  St. Matthew's Redevelopment, Belfast
  Electricity Service (Debts)
  Electricity Service (Debts)
  Fuel Conversion Schemes
  Fuel Conversion Schemes
  Northbrook Gardens (Heating)
  Northbrook Gardens (Heating)
  St. James Area (Heating)
  St. James Area (Heating)
  Ulsterville Avenue/Gardens (Heating)
  Ulsterville Avenue/Gardens (Heating)
  Nationalised Industries (Employees' Pensions)
  Nationalised Industries (Employees' Pensions)
  Gas and Electricity (Debts)
  Gas and Electricity (Debts)
  COMMITTEE ON ALTERNATIVES TO PROSECUTION
  COMMITTEE ON ALTERNATIVES TO PROSECUTION
CIVIL SERVICE
  Civil Servants (Ethnic Origin)
  Civil Servants (Ethnic Origin)
  Pensions
  Pensions

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

HELSINKI AGREEMENTS: MADRID REVIEW
Lord AVEBURY Lord AVEBURY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will give notice that they will not take part in the forthcoming Madrid review of the Helsinki Agreements unless the members of the Soviet Helsinki Monitoring Groups who have been arrested or sentenced are released.
Lord TREFGARNE: No, my Lords; we believe that the best way of supporting those whose only crime is that of working for the full implementation of the Final Act is to continue to take part in the Helsinki process.
Lord AVEBURY: My Lords, does not the Minister agree that we have made some efforts in the past, including at previous review meetings of the Helsinki Agreement, to persuade the Soviet Union to honour the undertakings which they entered into freely, particularly those concerned with the freedom of expression and the emigration of people who wish to join their relatives abroad? Is the noble Lord aware that in particular a conference was held just last weekend in Amsterdam, attended by the former Prime Minister of Portugal, former Ambassador Andrew Young and many other distinguished persons, which unanimously issued a demand for the release of the prisoner of conscience, Anatoli Shcharansky, so that he can join his wife in Israel; but that there are many thousands of other people in the same position as Anatoli Shcharansky, on whose behalf the efforts of Great Britain are urgently needed? Therefore, if the noble Lord will not
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accept the suggestion in my Question, will he undertake at least to ask his colleagues personally to raise at the Madrid review meeting as many of the individual cases as are brought to their attention?
Lord TREFGARNE: My Lords, as for raising the matter of individual cases with the Soviet Union, we do this on a selective basis. First, of course, we make representations on those where we have a formal locus; that is, those who have an English or British connection of some kind. But in other cases we do so on a selective basis only because otherwise we think we might degrade the effectiveness of our representations. As for attending the Madrid review conference, what the noble Lord says is entirely right about the Russians' failure to live up to their undertakings in these matters. But we think that to go to Madrid and to draw their attention to their shortcomings in a public forum is the best way in which to proceed.
Lord GORONWY-ROBERTS: My Lords, on the question of monitoring groups in various countries which are signatories of the Helsinki Agreement— a very important development in between the conferences— can the noble Lord tell us whether, leading up to the Madrid meeting this year, there has been a similar group in this country, independent of the Foreign and Commonwealth Office although acting with its full approval, to the one that was set up before the Belgrade meeting in 1977-78? Can the Minister also tell us whether the United States Congress, which produced a very useful report before the Belgrade Conference in 1978, has similarly been engaged in preparation for the Madrid Conference?
Lord TREFGARNE: My Lords, I am afraid that I am not informed as to what is going on in the American Congress at the present time. But as for a British group on this matter, there are a number of people who are, of course, taking an interest, not least the noble Lord, Lord Caccia, who I see in his place now.
Lord CACCIA: My Lords, is the Minister aware of the gratitude with which his remarks will be received by many of the monitoring groups outside the Iron Curtain and in Western Europe? Without any breach of confidence, may I

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also say, as the chairman of the group of the David Davies Institute which did this monitoring before Belgrade and which is engaged in this work at the present time— which has been referred to by the noble Lord, Lord Goronwy-Roberts— that the representations that we have received from all these groups are in the strongest terms that the West should go to Madrid in order to act exactly as the Minister has said, and that it would give grave disappointment if they did not do so?
Lord TREFGARNE: My Lords, I am sure that what the noble Lord says is exactly right. Indeed, as the noble Lord will know, the Foreign Office gives his current group every support.
Lord BROCKWAY: My Lords, although we are deeply concerned about the persecution of dissidents in the Soviet Union, will the Minister not agree that persecution is also taking place in many countries? Will he not agreee that the main elements of the Helsinki Agreement were the development of economic and disarmament co-operation, and will not progress in those directions be the best way in which to establish a climate in which the rights of the dissidents in the Soviet Union could be respected?
Lord TREFGARNE: My Lords, the noble Lord has put that assertion to me before and I am afraid that I must again refute it. The factors which the noble Lord mentions are, indeed, part of the Helsinki Final Act, but not, I think, necessarily the most important part. The matter of human rights is certainly the one which has attracted the most international attention, and rightly so.
Lord JANNER: My Lords, I should like to thank the Minister and the Government for the active part, which includes monitoring, that they have taken with regard to these particular people. Is it possible for us to discuss with other nations what can be done in order to ensure that there will be no interference with monitoring in the USSR?— particularly because it is a very important subject and because the Russians themselves know what is going on in the USSR and whether or not, in fact, that is interfering with a proper appreciation of what
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has been happening. While appreciating the fact that perhaps it is best for us to attend the conference, may I ask whether he will try to get such nations as he is in contact with to help in the matter?
Lord TREFGARNE: My Lords, I think the only way of persuading the Russians, for example, to comply with, and live up to, their undertakings given so freely in regard to the Helsinki Final Act is to persuade them in open forum, and to bring to bear the full weight of international public opinion. That is why we think it is so important that we should go, for example, to the Madrid Conference.
Lord AVEBURY: My Lords, while accepting what the Minister says about the problem of modus, is he aware that in the recently published Amnesty International document, Prisoners of Conscience in the USSR, there are literally dozens of cases of individuals who are being persecuted and imprisoned who have very strong British connections? In particular, Anatoly Shcharansky has many friends in the British computer world, including Professor Donald Michie, the Professor of Machine Intelligence in the University of Edinburgh, who has issued appeals on his behalf. Will he therefore undertake to raise in particular the case of Mr. Shcharansky at the Madrid review meeting?
Lord TREFGARNE: My Lords, the case of Mr. Shcharansky, which I referred to in your Lordships' House when I answered a Question from my noble friend Lord Renton on 1st April, is indeed one of particular concern, and we made a representation on that particular case some months ago. But in general, as I have said before, we have to be selective in these matters, because if we were to make representations in each and every case that is brought to our attention— and, as the noble Lord says, there are indeed a great many altogether— I think we would degrade the effect of our representations.

MRS. S. DE-SILVA: DETENTION
2.45 p.m.
Lord AVEBURY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will explain why Mrs. Sujatha De-Silva, a citizen of Sri Lanka who was convicted of shoplifting and working in the United Kingdom in breach of conditions on 8th April, though she was still within her permitted leave to remain, and who was not given a custodial sentence, has nevertheless remained in Holloway prison ever since that date, and how they reconcile this with the policy of the Secretary of State for reducing the prison population.
The PARLIAMENTARY UNDERSECRETARY of STATE, HOME OFFICE (Lord Belstead): My Lords, the Immigration Act provides that a person recommended for deportation by a court is to be detained pending the making of a deportation order unless the court or the Home Secretary directs that he be released. The court gave no such direction in Mrs. De-Silva's case, nor did my right honourable friend the Home Secretary feel able to release her. She had pleaded guilty to four charges of theft and to working in breach of her conditions, in spite of having earlier given an explicit undertaking to the Home Office that she would continue to comply with the conditions attached to her stay here. A deportation order was made against her on 8th May and she left the country three days later.
Lord AVEBURY: My Lords, would not the Minister accept— of course he will because he gave me the answer himself on 16th May— that at the end of March this year 200 persons were detained in our prisons under the administrative powers in the Immigration Act 1971? Is not this wholly inconsistent with the declared policy of the Home Secretary to reduce the prison population? In the particular case of Mrs. De-Silva, would the Minister confirm that she was held in custody from 9th April to 11th May at a cost to public funds of £ 63642? Is this not also inconsistent with the Government's policy of reducing public spending? Therefore, will the Home Secretary exercise the powers which, as the noble Lord has said, he possesses to release people from prison when they have not been given a custodial sentence by the courts, and the Secretary of State is considering whether or not to
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exercise his power to deport them following a recommendation of the court?
Lord BELSTEAD: My Lords, a case of this nature is wholly inconsistent with my right honourable friend's policy of trying to see that fewer people are kept in custody. People like Mrs. De-Silva cause very great problems to the prison service, and I should like to make that crystal clear to the noble Lord. I confirm, to the best of my knowledge, that the dates that the noble Lord put to me are correct for the period of time that Mrs. De-Silva was kept in custody; and the reason was that she had committed a series of criminal offences, and, in spite of her explicit undertakings, had engaged in unauthorised employment, and this record inspired no confidence as to her likely conduct if she was released.
Lord ELWYN-JONES: My Lords, are the Government examining alternatives to prison custody for those who are held for some breach or other of immigration procedures, bearing in mind, as the noble Lord has just said, the plea of the Home Secretary for a reduction in the prison population? The overcrowding in prisons, as the noble Lord knows, has now reached scandalous proportions.
Lord BELSTEAD: My Lords, we would like to find a solution to this particular problem, but if one takes a case of this kind where someone who comes as a visitor to the country commits criminal offences, quite apart from the undertaking which that person gave with regard to immigration control, it really is then extremely difficult to see how such a person can be released pending deportation. The fact of the matter is that in this case neither the court nor my right honourable friend felt able to direct such release.
Lord ELWYN-JONES: My Lords, I did not apply my question to the immediate case in hand but to the general practice. Are there not alternatives means, hostel or other more or less secure accommodation, to lessen the load and burden on the prisons?
Lord BELSTEAD: My Lords, I absolutely take the point which the noble and learned Lord makes. The reason why I attached it to this particular case was that it is the sort of case, as the noble

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and learned Lord will know, which occurs and recurs. The fact of the matter is that experience shows that a number of those recommended for deportation and not detained subsequently disappear and cannot be traced. Of course we shall look, and are looking, at the problem which the noble Lord premises, but it is very difficult in this particular situation to see what the solution is to be.
The Earl of HALSBURY: My Lords, has the noble Lord ever considered reviving that ancient custom of the stocks?
Lord BELSTEAD: No, my Lords.
Lord NUGENT of GUILDFORD: My Lords, is my noble friend aware that while we all wish to see the prison population reduced, we also expect his right honourable friend the Home Secretary to be aware of his responsibilities to protect the public against predatory characters?
Lord BELSTEAD: My Lords, I am glad my noble friend made that point, a point which remains always in my right honourable friend's mind.
Baroness HORNSBY-SMITH: My Lords, will my noble friend bear in mind that one of the biggest problems at the moment is shoplifting? We are repeatedly seeing cases where foreign visitors with vast sums of money in their pockets are still shoplifting, to the detriment of shopkeepers. Will he agree that it is against the wishes of the general public that because they happen to be visitors they should be treated more leniently than our own citizens? Am I right in thinking that my noble friend informed us that this lady had not only abused her conditions of landing by taking employment but had shoplifted as well? Although it is reprehensible that we had to keep her in prison, would my noble friend agree that she would probably have gone off and done it again if we had not?
Lord BELSTEAD: My Lords, without prejudicing or appearing in any way to interfere with the judicial discretion of the courts, my answer to the supplementary questions asked by my noble friend is, yes, in each case.
Lord AVEBURY: My Lords, is the Minister aware that it is not yet a provision of our law that preventive detention, especially for first offenders, should be imposed on anyone who is inclined to shoplift, and that to keep someone in prison for five weeks, as Mrs. De-Silva was, when the offence for which she was convicted was thought worthy of a fine, which was immediately paid, is not consistent with the principles of British justice? Is the noble Lord further aware that in Holloway there are 245 places for the 411 women who are now in custody there? Does he agree that every possible step should be taken to reduce the overcrowding particularly in this prison, which is far worse than the average of prisons in England and Wales?
Lord BELSTEAD: My Lords, I am most concerned that by the first part of that supplementary question the noble Lord should suggest to your Lordships' House that in some way the way in which this lady was dealt with was not consistent with the maxims of British justice. The period of time that Mrs Dc-Silva was kept in detention was a period during which a right of appeal might be exercised and which under the Act must be allowed to expire. The noble Lord then intervened, as he had every right to do, and that had to be considered. It was a week later that the deportation order was signed, and Mrs. De-Silva left three days later. Regarding the point the noble Lord raised about Holloway prison, as he will be aware, that prison is being rebuilt at the present time and that project is being pushed ahead with at the greatest possible speed.
Lord MORRIS: My Lords, would my noble friend agree—
Lord DENHAM: My Lords, we have already spent 16 minutes on only two of the four Starred Questions. Perhaps the House might now wish to proceed to the next Question.

RADIOLOGICAL WEAPONS
2.53 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the Disarmament Committee at Geneva has reached a decision on the prohibition of radiological weapons.
Lord TREFGARNE: My Lords, the Committee on Disarmament has established a working group to agree a convention prohibiting radiological weapons. The group has before it the elements of such a convention, presented jointly by the United States and the Soviet Union. We hope that agreement can be reached by the end of the committee's summer session.
Lord BROCKWAY: My Lords, while I welcome the joint action by the United States and Soviet Union and their initiative in this matter, may I ask the noble Lord whether he is aware that some of us are rather puzzled by the distinction between this convention and the convention adopted in 1975, endorsed by 87 nations and ratified by 30, which prohibited the development and stockpiling of biological and toxin weapons? Will something be done to co-ordinate these two conventions?
Lord TREFGARNE: My Lords, these two conventions deal with quite different classes of weapon. The radiological weapon, which is the subject of this Question, is a weapon which relies for its effect on the deliberate, widespread and indiscriminate dispersal of highly radioactive materials stored in the weapon. No nuclear explosion or any other explosion is involved, and this is therefore quite different from the kinds of weapon considered in the convention to which the noble Lord refers. We think it is right that a separate convention should apply to these weapons, and that is why we are proceeding as I described.
Lord GORONWY-ROBERTS: My Lords, does the noble Lord agree that what he has said is encouraging from quite another point of view?— namely, that, since the reorganisation of the Disarmament Committee, as it is now called, on a more representative basis, and the taking away of the giant monopoly of the chairmanship from the two super powers, we have all been expecting progress in the Disarmament Committee on specific
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issues. Radiological weaponry is one. The chemical warfare agreement which this country really produced is another. May I give the noble Lord notice that I shall put down a Starred Question which in due course I hope either he or the Foreign Secretary will answer as to the progress of the specific agreements under the new structural organisation of the Disarmament Committee in Geneva?
Lord TREFGARNE: I am indeed glad to receive that notice, my Lords. As for chemical weapons, about which the noble Lord has asked me several times, on the last occasion when the noble Lord asked about them I undertook to write to him on the matter in more detail. I agreed the draft of that letter this morning, so he should receive it very shortly.
Lord BROCKWAY: My Lords, while thanking the Minister for his explanation— and quiet honestly I wanted the information— may I ask him whether the 1975 convention did not deal with biological weapons, and are they not complementary to the radiological weapons which come under this convention?
Lord TREFGARNE: I do not think they are, my Lords. I think they are really a quite separate class of weapon, and that is why we are proceeding as I described.

EPSOM DOWNS: FUTURE
2.57 p.m.
Lord KILMANY Lord KILMANY: 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 when it is expected that the Epsom and Ewell Borough Council will promote legislation to protect the Epsom Downs in such a way as to ensure the future of the Epsom Derby by replacing the Epsom and Walton Downs Regulation Act 1936 before it expires in 1984.
Lord MOWBRAY and STOURTON: My Lords, I understand that the council hope to promote a Bill at the end of 1981.
Lord KILMANY: My Lords, while I thank my noble friend for that reply, which would seem to be very satisfactory, may I ask him to bear in mind that private legislation can take a long time? Would it not be just as well to get on with putting this on the statute book without further delay to remove any possible anxieties there might be about the future holding of the Derby?
Lord MOWBRAY and STOURTON: My Lords, these local Bills take a good deal of work and much drafting and the council may have it in mind to do a few other things in the local Bill which they will bring forward. If the legislation in Parliament were so clogged up that it looked as though there would be a danger of these local Bills not meeting the 1984 deadline, it would if necessary always be open to the Government to introduce an order delaying the 1984 deadline.

DINNERS
Lord DENHAM: My Lords, it may be for the convenience of your Lordships to know that dinner will be available this evening at the usual time. The Committee stage of the Transport Bill will be adjourned at about seven o'clock for approximately an hour. The Dental Qualifications (EEC Recognition) Order 1980 will be taken during this adjournment.

IRAN: SANCTIONS
2.59 p.m.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, with your Lordships' permission, I shall make a Statement on Iran following the decisions taken during the informal meeting of Foreign Ministers of the Nine in Naples on 17th and 18th May. A copy of the Statement issued by the Foreign Ministers of the Nine will be printed in the Official Report.
We reviewed the latest developments in Iran. There were some grounds for encouragement, but nothing which constituted decisive progress leading to the hostages' release.
Accordingly, as agreed in our declaration of 22nd April, we decided to proceed
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without delay with the economic sanctions set out in the Security Council draft resolution of 10th January. The necessary orders will now be drawn up. There is agreement that the conditions and circumstances of application to be followed will be decided in common with our partners. It is accordingly our intention to act simultaneously with our partners on the basis of legal instruments coordinated to achieve parallel effect.
The House will have the opportunity to debate the orders after they have been laid. As was made clear at the time when the House was considering the Iran (Temporary Powers) Act 1980, the Government intend to follow a variation of the Affirmative Resolution procedure for orders made under this Act. This means that such orders will lapse unless approved by the House within 28 sitting days. A parallel procedure will be followed for orders made under the Import, Export and Customs (Defence) Act 1939. On the question of existing contracts, it was agreed that the contracts for the export of goods to Iran entered into after 4th November 1979 would be affected by the sanctions. Export of goods under such contract would be prohibited under the 1939 Act. However, service contracts will not be affected, except for new service contracts in support of industrial projects which will be banned as from the date of the entry into force of the appropriate Order-in-Council. We shall be co-ordinating closely with our Community partners to achieve parallel effects on these questions.

DECLARATION BY THE FOREIGN MINISTERS OF THE NINE CONCERNING IRAN
At their meeting in Naples on 17th and 18th May 1980, the Foreign Ministers of the Nine member states of the European Community reconsidered, in accordance with their declaration of 22nd April, the situation resulting from the detention of the American hostages in Iran, which constitutes a flagrant violation of international law.

The Ministers examined the information emanating from Iran. While noting that there were a number of developments which could be important for the release of the hostages, in particular the completion of the second round of parliamentary elections and the forthcoming convening of the Majlis, they were obliged to recognise that no decisive progress leading to the release of the hostages had been made since 22nd April last.

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Consequently, they decided immediately to apply the measures provided For in the Security Council draft resolution of 10th January 1980, according to jointly agreed conditions and procedures. They agreed, in particular, that all contracts concluded after 4th November 1979 will be affected by these measures. They will continue to consult closely pursuant to Art. 224 of the Treaty of Rome.

The sole purpose of these measures is to hasten the release of the hostages. At the same time, the Ministers reaffirmed their intention to respect the independence of Iran and the right of the Iranian people to determine their own future.

The Ministers expressed great satisfaction at the decision of the UN Secretary-General to entrust to Mr. Adib Daoudi, member of the UN Commission of Inquiry, the task of entering into contact with the Iranian Government in order to enable the Commission to resume its work and to secure the resolution of the crisis. They fully support the Secretary-General and will remain in constant touch with him in order to establish whether the progress of the UN mission is such as to enable them rapidly to suspend the measures taken in respect of Iran.

3.5 p.m.
Lord GORONWY-ROBERTS: My Lords, the House will be grateful to the Foreign and Commonwealth Secretary for coming to the House to make that Statement. The House will equally share with him the deep regret that no decisive progress leading to the release of the hostages was reported at the meetings over the weekend, but we note with cautious satisfaction what the noble Lord said about there being some grounds for encouragement, and if the Foreign Secretary feels able to expand a little on that phrase, I am sure that we should all be very grateful.
With regard to the timing of sanctions, the Statement said that the meeting:
" decided to proceed without delay with economic sanctions set out in the Security Council draft resolution of 10th January ".
May I pointedly put to him the following question: When in fact will the sanctions take effect? When will they start? I am not pressing the noble Lord to see that they start precipitately. I think that I explained our attitude to sanctions sufficiently clearly, and I hope responsibly, in our debate last week. We should like to know whether the phrase "without delay" still means that there will be adequate time for every possible diplomatic approach and pressure to be made to Tehran in order to obviate the use of sanctions, if at all possible, and certainly
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very firmly to obviate the possibility of even sterner measures.
Is the Foreign Secretary— in whom we have very great confidence in regard to this matter, and other very delicate matters— convinced that there will be sufficient time for him and others to make every use of, for instance, the latest initiative in Tehran by Dr. Waldheim, the Secretary-General of the United Nations, that is in cause now?
With regard to the question of coordinating action, it is not very clear from the Statement whether this is coordination among the Nine, or among the Nine plus Japan, Australia, New Zealand and one or two other countries; or is it co-ordination among a wider range of countries?— the wider, the better, of course. The question that follows from that is: Will there be proper machinery for co-ordination? The phrase used in the Statement is:
"to act simultaneously with our partners on the basis of legal instruments "—
nationally conceived, I imagine—
"co-ordinated to achieve parallel effect ".
If possible we should like to be assured that there will be proper machinery for central co-ordination of the application of whatever sanctions are found to be necessary. In this way we shall perhaps learn from the admitted inadequacy of the machinery of monitoring and of application during the Rhodesian sanctions. If the sanctions prove to be necessary, we must not move towards them nationally with a loose kind of consultation deemed to achieve co-ordination. There should be proper machinery for this purpose.
As to the question of existing contracts, it seems that the action is to be rather more retrospective than was our impression when we debated the Bill, but I have only now heard the Statement and looked at it, and I should like to study that aspect of it more closely, as no doubt will my right honourable friends in another place. Suffice it to say— and I know that in every part of the House there is sympathy for this view— that whatever is done will, we are sure, take into account the undoubted and substantial anxieties of employers and trade unions in various industries and firms in different parts of the country. If there is a constructive delay before the application of sanctions, taken up by

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diplomatic and other moves, then the Foreign Secretary will be assured of the united support of this House and of another place.
Lord BANKS: My Lords, I, too, wish to join in thanking the Foreign and Commonwealth Secretary for the Statement that he has made this afternoon. We on these Benches have all along condemned as strongly as we could the holding of the hostages. We supported the Iran (Temporary Powers) Bill last week, though we had reservations about the effectiveness of sanctions, but we give a very high priority to the need for Western unity at the present time.
We recognise that the proposals announced in the Statement are a modest move towards full economic sanctions. I think I am right in saying that they fall considerably short of what would have been required by the vetoed United Nations resolution. They are limited of course because they affect only the contracts agreed after 4th November 1979, necessitating, as the Statement makes clear, the use of the 1939 Act, and not the Act which we passed last week; though ot course that will be used as well.
I should like to conclude by asking three questions. Is it correct that trade between the Community and Iran has been running at a rate of about £ 500 million per month? Have the Government any estimate of what proportion of that trade is likely to be affected by these sanctions? Finally, do the Government expect any difficulty in distinguishing between a new contract and the renewal of an existing contract?
3.8 p.m.
Lord CARRINGTON: My Lords, first, I ought to apologise to your Lordships for not having been present in the House during the passage of the legislation last week. During the last eight days I have spent only three hours in this country, and it was not possible for those three hours to be at the same time as when the legislation was being dealt with. I must apologise; but I have an idea of what went on.
The noble Lord, Lord Goronwy-Roberts, asked me what were the good signs. I believe that they are very mildly
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encouraging; I would not put it any higher than that. We have been disappointed over mildlyencouraging signs soofteninthe past that I should not care to go into this aspect in any greater detail. However, we should at any rate be grateful to the Secretary-General of the United Nations for the proposals that he has made, which meant starting again on the lines that he tried previously. I am afraid that the signs were not sufficiently encouraging to enable the nine Foreign Ministers truthfully to say that there had been decisive progress towards the release of the hostages, and consequently it was decided that the sanctions should come on forthwith. Depending upon the drafting of the Orders-in-Council, we expect that this will occur probably some time this week. Of course there will be an opportunity for debate, as I explained to your Lordships in the original Statement.
The reason why the nine Foreign Ministers chose the date of 4th November 1979 is, I think, obvious to your Lordships. It was a logical and presentationally sensible date. It was the date upon which the hostages were taken in Tehran, and it seemed that if we were going to take action of this kind against the Iranian Government the date on which the hostages were taken was a suitable date to choose. But, of course, because the legislation which your Lordships passed last week is not in any sense retrospective, it will be necessary to use the 1939 legislation for those contracts between 4th November 1979 and today— and those, of course, are equally subject to the procedure that I outlined in the Statement that I made to your Lordships. We intend to set up a co-ordinating machinery among the Nine which, I hope, will bring about what the noble Lord wants to happen; and we are co-ordinating with the other countries. I think your Lordships will have seen that the Japanese have already come out and followed suit with proposals which are much the same as the Nine have proposed.
With regard to the questions asked by the noble Lord, Lord Banks, I probably ought to have the figures with me, but I am afraid I have not got them, or the breakdown of them, and I could not give them without notice; but I will certainly get them and write to the noble Lord. I think that we shall have to look more closely at the problems which arise between

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new and existing and renewed contracts. As your Lordships will realise, this decision, although we had done a lot of work on it, was taken only yesterday morning, and so far there has not been any time to look into it in any great detail. But certainly work will have to be done in that respect.
Lord SHINWELL: My Lords, while applauding the efforts of the Foreign Secretary in this connection, may I ask whether he really believes that in view of the reluctance of some of the Government representatives at the conference, and their attitude, the sanctions are likely to prove effective? Further, was there any discussion, whether public or private, on the subject of the Russian invasion of Afghanistan; and can he say what was the reason for the hurried departure of President Giscard d'Estaing to meet Mr. Brezhnev? Was it for the purpose of asking not only his consent on the subject of sanctions against Iran but also about their attitude on Afghanistan?
Lord CARRINGTON: My Lords, I think that the Nine countries represented at the meeting in Naples yesterday, at which I was present, are all intending to do and to carry out the policies which were decided yesterday, and I have no doubt whatever about that. As to whether they are successful, time alone will tell; but I think there are two important factors which have to be borne in mind— and I have said this to the noble Lord before. One is that we are part of an alliance, and when our friends are in trouble and they ask us to do something, and we are concerned about the future of that alliance, we do not disregard our friends when they are in trouble. The second thing is that there is no doubt whatever about it that the very fact that the nine leading European countries have decided to take this action will be noted in Iran as evidence of the disapproval by the Nine of the action which the Iranian Government has taken and continues to take.
With regard to the other question which the noble Lord, Lord Shinwell, asked me, this, as the noble Lord opposite knows, was one of those private, unstructured meetings which are not supposed to take place with anybody's knowledge. On this occasion it took place with everybody's knowledge because we had to make a
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decision about Iran. But I do not think that an informal meeting of this kind ought to be the occasion when I let your Lordships know exactly what happened during the meeting. I think it was an informal meeting, and not a council meeting; but exceptionally it made the decision about Iran. With regard to the motives behind President Giscard d'Estaing's visit to Warsaw, I think perhaps the noble Lord might address himself to the source.
Lord GORONWY-ROBERTS: My Lords, may I, with the indulgence of the House, intervene briefly once more and assure the Foreign and Commonwealth Secretary that his absence was more than agreeable to the House— I hope he will not take that in the wrong way— in that we knew that he was engaged in very constructive work in other places. We only wish that the meetings he had in Vienna might conceivably be duplicated in, let us say, other capitals of Europe, such as Warsaw. We would feel a little more confidence about the future if that were so. But may I support my noble friend Lord Shinwell in what he has said, admittedly about an aspect of the discussions which did not figure in today's Statement; namely, our great concern as to how things are going in the exchanges about Afghanistan. No doubt the Foreign Secretary, as he always does, will seek the earliest possible opportunity of causing a Statement on the progress of discussions about Afghanistan, and the situation arising from the position there, to be made in the other place, and will himself present it in this place.
Lord CARRINGTON: My Lords, of course I will do that. I think that there is at the moment, in a sense, a disturbing lack of progress over Afghanistan. But last week there was an opportunity, particularly in Vienna, for an exchange of views which I think was very useful. I had an opportunity to meet Mr. Muskie and the French and German Foreign Ministers together, and we had a discussion; and I also had an opportunity to meet Mr. Gromyko. Nothing else, as far as I was concerned, but Afghanistan was discussed with Mr. Gromyko. I cannot say that I was enormously encouraged, in the sense that there is obviously still a very wide difference between the positions of the Soviet Union and Britain; but I still think that if there is

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any chance of success it is worth talking, and I hope that we shall go on doing so. But there should be no misunderstanding on the part of the Soviet Union that because we are prepared to go on talking it means that we have retreated in any degree from what we said at the beginning.

TRANSPORT BILL
3.17 p.m.
The PARLIAMENTARY UNDERSECRETARY of STATE, DEPARTMENT of the ENVIRONMENT (Lord Bellwin): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, that the House do now again resolve itself into Committee.— (LordBell-win.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 24 [Duty to give traffic commissioners information about vehicles]:
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 101:
Page 24, line 13, leave out ("passengers") and insert (" occupants of the public service vehicle ").
The noble Lord said: This amendment seeks to change the word "passengers" in line 13 for the words "occupants of the public service vehicle ". The provision in subsection (1) is that the holder of a public service vehicle operator's licence shall report to the traffic commissioners any failure or damage— and I quote—
" calculated to affect the safety of passengers or of persons using the road ".
The amendment seeks to ensure that anything calculated to affect the safety of the driver, and also the conductor if there is one, is also covered by this provision. It would appear that if the wording is left as it is this matter will not be covered in the clause. I beg to move.
Lord MOWBRAY and STOURTON: On such a sunny afternoon I am very happy to start off on a very sunny atmosphere and say that I thank the noble
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Lord for this most helpful amendment, which has the effect of ensuring, as he has said, that the driver of the vehicle is included in the category of those protected by the clause. I am most happy to accept it.
On Question, amendment agreed to.
3.20 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 102:
Page 24, line 14, after ("practicable") insert (" or in any event within seven days ").
The noble Lord said: I hope that the sunshine may continue at least for a few moments while I move Amendment No. 102 and, with your Lordships' permission, speak to Amendment No. 102A. At the Committee stage in the other place the Minister, Mr. Kenneth Clarke, said that a previous phrase, "as soon as may be" was something which was meaningless to him and that therefore he was substituting for that the words, "as soon as practicable". The matter of reporting the bad state of a vehicle is a serious one; and the words "as soon as practicable" have such an uncertainty that, while still wanting to adopt them, I would ask the Committee to say that at least a maximum period should be inserted. That is the reason for the insertion after those words of "or in any event within seven days". The same point applies to Amendment No. 102A and I will not burden the Committee with the same remarks in regard to that amendment. I beg to move.
Lord MOWBRAY and STOURTON: I fear that a cloud is coming over the sun at this particular moment. There is, I am afraid, in our opinion no point in spelling out a time limit in these cases. The time within which it is practicable and reasonable to report these occurrences or to supply the information must depend on the circumstances. For example, a driver who suspects that he has a mechanical defect might have the vehicle tested before reporting or it may occur at holiday times; so that an exact requirement of one week might be quite unreasonable for reporting a defect of a comparatively minor nature. The words "as soon as practicable" adequately cover the merits of each case better than the exact timing of "within seven days". I hope that the noble Lord will see that

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this is not a matter of our being obstructionist. We think that our wording is better.
Lord LLOYD of KILGERRAN: May I endeavour to remove what the noble Lord has said was a small cloud? It seems to me that in relation to an important matter like this, "practicable" is too general and unrealistic a word. I believe that there should be some time limit in addition. It is realistic to have a time limit. If we leave in the clause words like "when it is practicable", all kinds of parameters and difficulties arise. On an important matter like this there should be a time limit. There is no magic in the words "seven days"; and I do not think that the noble Lord, Lord Mishcon, would necessarily tie himself to a limit of seven days. But a time limit should be introduced rather than to leave this airy-fairy word in the Bill.
Lord DERWENT: What happens if the time limit decided upon is not practicable?
Lord MOWBRAY and STOURTON: I think that my noble friend Lord Derwent has a good point. I am conscious that I am speaking to two "legal gentlemen" in the noble Lords Lloyd of Kilgerran and Lord Mishcon. I am assured by learned counsel that there is judicial authority for construing "practicable" as meaning "capable of being carried out in action or feasible"— that is the meaning to be found in the Oxford English Dictionary — and as imposing a stricter standard than "reasonably practicable". What is "as soon as is practicable" must be determined on the facts of individual cases. The expression "as soon as practicable" can be compared perhaps with the expression "forthwith". There is a judicial authority for the view that "forthwith" is stronger than "within a reasonable time" and implies prompt and vigorous action. Whether there has been such action is a question of fact to be determined in the circumstances of the individual case. Also, there is judicial authority for construing "forthwith" as meaning "at once, having regard to the circumstances of the case" or "with as little delayas possible". It is considered, all in all, that in this context the expression "as soon as practicable" is clearer and more apt than "forthwith".
Lord ROBBINS: Would not the insertion of the word "immediately" satisfy-both parties— "immediately practicable"?
Lord MOWBRAY and STOURTON: I shall certainly ask our Parliamentary draftsmen to look at that. But "immediately", as my noble friend Lord Derwent said, can be impossible to comply with— for example, as I said, during holiday times. "Immediately practicable" really means "as soon as practicable".
Lord MISHCON: We have a long day before us and I do not intend to take up the time of the Committee on matters of this kind. I would only observe that I always find the tones of the noble Lord, Lord Lloyd of Kilgerran, so mellifluous when he agrees with what I say. I found his voice very acceptable on this amendment. I would only ask the Minister to consider this point before Report stage. Where there is serious risk (as is implied in the clause) to the safety of passengers and crew, it does seem to be so foolish, if I may use the term, to have an offence prescribed in a Bill for the contravention of the duty to inform the authorities of such a bad stage of repair or danger, and to leave the question so arguable before the courts as to whether or not the report was made "as soon as practicable". It means that in every single case there will be an argument. That was the reason I believe that inspired the agreement of the noble Lord, Lord Lloyd of Kilgerran. I merely ask the Minister if he will have another think about it before Report. I do not want to detain the Committee any longer on this.
Lord MOWBRAY and STOURTON: I shall certainly have another think, but I must point out that in another place we resisted this particular amendment in several Divisions. I have very little doubt that my answer will be the same at Report stage and at Third Reading as it is now. I shall certainly take on board what noble Lords have said.
Lord MISHCON: In the circumstances, I ask leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 102A and 102B not moved.]
Lord BELLWIN Lord BELLWIN moved Amendment No. 103:
Page 24, line 40, leave out (" knowingly ").
The noble Lord said: I have spoken to this amendment with Amendment No. 20. I beg to move.
On Question, amendment agreed to.
Clause 24, as amended, agreed to.
Clause 25 [Certificates of qualification]:
3.30 p.m.
On Question, Whether Clause 25 shall stand part of the Bill?
Lord LUCAS of CHILWORTH: May I ask my noble friend whether it is intended that the provisions for certificates of professional competence applicable to Northern Ireland are those that are currently ruling in this country? If so, is he able to say anything at all about the continuance of the current scheme whereby the qualifications are vetted by a group (including trade unions) before the certificate of professional competence is granted; or whether in fact (as seems to be felt in some quarters) the present method of awarding the certificate is going to be changed?
Lord BELLWIN: I am not sure that I can help my noble friend regarding the intention on this point. So far as I am aware, there is no intention to change the basic procedure as to that; the basic requirements now being set down in the Bill, which calls, as he knows, for the certificate as to good repute, professional competence, and so on, will apply generally. I would not have thought there was any reason why what will pertain here will be any different from what will pertain in Northern Ireland. I will gladly undertake to have a look at this point and see if I can confirm this and satisfy my noble friend.
Clause 25 agreed to.
Clause 26 [Appeals to the Minister]:
3.31 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 104:
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Page 26, line 6, after (" may ") insert (" within 14 days in the case of a decision under paragraphs (a) or (b) below, or 7 days in the case of a decision under paragraph (r) below ").
The noble Lord said: Clause 26 deals with the appeal to the Minister against first of all the refusal of an application by the holder against the removal or variation of any condition or indeed of his actual licence. Therefore these are important matters to any licence holder. Under subsection (9) of this clause provision is made for regulations which relate to those appeals, and there is a provision thereto that time limits shall be laid down in the regulations.
I have heard Members of the House of Lords from many quarters say that regulations are confusing to the citizen, and when his rights are very much an issue it is correct to try to put any time limits and any procedures, where possible, in an Act. I do not ask for the procedure in regard to appeals to be put in an Act; but I ask that in the Act somebody who wishes to appeal against something which is so vital should know by looking at the clause within which time it is that he has to appeal. Therefore I ask the Minister to make up his mind now as to that time limit and to put it in. I beg to move.
Lord BELLWIN: Time limits must of course be laid down within which appeals can be made. At present they are contained in regulations under the Road Traffic Act 1960 along with other necessary requirements about the procedure for making appeals. Subsection (9) of this clause provides that such matters must be prescribed in regulations and this amendment therefore is not necessary. In any case, the time limits suggested are very short— much shorter than at present. It would be unreasonable to impose such stringent requirements on licence holders. They are entitled to a reasonable time for consideration of whether or not to pursue an appeal, and time to prepare their case. At present one month is allowed and we will be discussing— and this really is moving towards what the noble Lord, Lord Mishcon, is wanting— with the industry and other interested parties whether this should be changed when we consult with them on the new regulations. I hope with that reply that the noble Lord may feel able to withdraw his amendment.
Lord LLOYD of KILGERRAN: The Committee will not be surprised that I am again supporting the noble Lord, Lord Mishcon, in view of the charming and attractive words that he used in relation to one of my previous speeches! To treat the matter seriously: in the Bill there should be a time limit introduced, particularly having regard to the words of subsection (9) of this clause. It is all very well to say that subsection (9) says:
" (9) An appeal under this section must be made within the prescribed time and in the prescribed manner, … ".
The person reading this of course will immediately know that there is a definition section, Section 23A, and that the word "prescribed" means "prescribed by regulations made by the Minister". Then of course he will know that there are regulations and he has to find these regulations.
One is now dealing with matter of fact affairs of transport involving drivers and people of that kind. It seems unrealistic to approach the matter in the way the Government are doing at the present time and that it would be helpful for the ordinary person to know some limits about the prescribed time. There is no magic about the actual times set out in this amendment; but I agree, despite the possibility of masses of legal opinions which the Government have received about this and judicial decisions about other matters which we heard from the noble Lord who is supporting the Minister, that as a practical matter time limits should be introduced in some form at this stage in the clause.
Lord BELLWIN: It seems that I will have to alter my approach in the way I refer to the noble Lord, Lord Lloyd of Kilgerran, if I am to get his support to a greater degree than I seem to be doing at present. I should have thought the point I made regarding the intention to consult with the industry and with other interested parties was the relevant one. We are not saying— are we?— that there should be no time. We are certainly very dubious about the time of seven days proposed in the amendment. Perhaps it would be helpful if I were to add that in addition to the present regulations there is a leaflet fully explaining the procedure. We intend to amend that leaflet and ensure its widest distribution. It will contain, in
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so far as time is concerned, that which comes forth from the discussions that I referred to. I hope that in the light of this the noble Lord may feel able to withdraw the amendment.
Lord AIREDALE: Has there not been time already for consultation with the industry with a view to putting the time limit in the Bill? The disadvantage of doing it by ministerial regulation is that Parliament can only either agree to the regulation or else throw it out and require the Government to come forward again with some other regulation giving some other time limit and the matter cannot be freely debated in Parliament, whereas if these important matters are put not in regulations but in the Bill, then in Committee stage in both Houses of Parliament the matter can be properly debated. A time limit can be arrived at of which Parliament approves.
Lord BELLWIN: I cannot tell the noble Lord the extent of the consultations or discussions— call them what you will— which have taken place already. That I do not know. The fact that at the present time one month is allowed— and here we are talking in an amendment of seven days— illustrates the point that there clearly needs to be something more than we have at the present time. Whether that should be done in the procedural way suggested or in the way that the noble Lord says, is a matter of opinion. At the end of the day what really matters is that we get a time that is reasonable to all concerned— and who more concerned, I would have thought, than the people within the industry and the interested parties themselves. I do not think I can add much more, although I am trying to be helpful. For the third time I wonder whether the noble Lord feels able to withdraw the amendment.
Lord MISHCON: I find the tones from the Liberal Benches most harmonious. The only principle that I am advancing is that the citizen shall know, on looking at a clause of the Bill which affects him vitally, what his time limits are. They should not be put in regulations. The question of how long the period of time should be is unimportant as compared with that principle. Regarding local government, consultations have been des-

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cribed by the noble Lord, Lord Bellwin, in a previous debate that we had in Committee as unending and difficult. It seems extraordinary that with an existing time limit of one month it is not possible, the industry having considered this matter no doubt very carefully, between now and Report stage or now and Third Reading to find whether or not the industry agrees with 28 days— which has been the period up to now— or whether they want a shorter or longer term and for the Minister to make up his mind. Therefore if the noble Minister will kindly say that he will endeavour to hurry up negotiations and consultations on this small matter, and if he finds, miraculously, that there is agreement between the Minister and the trade on this, it can be brought into the Bill and noble Lords who have been kind enough to agree with this amendment will no doubt be as pleased as I shall.
Lord LLOYD of KILGERRAN: May I, too, encourage the noble Lord, Lord Bellwin, to take this course, because it seems to me that what he is saying to an applicant is really: "Do not bother about the Act; all you need bother about are the regulations". That seems to me to be rather the wrong way round. The Act must be before the applicant on many occasions, and I should have thought that the introduction of a time limit of some kind would be the appropriate way of dealing with this matter.
Lord BELLWIN: I gladly undertake as the noble Lord, Lord Mishcon, said, to see whether by the time of the Report stage we have something which may enable him to feel happier about what we have here. At this moment I cannot offer anything, but I will certainly undertake to do that.
Lord MISHCON: On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
3.41 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 105:
Page 26, line 23, after (" may ") insert (" within 3 days of such refusal ").
The noble Lord said: This is not an appeal we are dealing with but a pro-
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cedure under which the traffic commissioners can decide or not that on an application by a licence-holder whose licence may have been suspended or indeed withdrawn, the effect of their decision shall not come into operation until the expiration of the period that is allowed for appeal to the Minister. Against that decision of the traffic commissioners there is a right of the licence-holder to go to the Minister and ask the Minister for a stay of execution— which I think is the appropriate term— and the time limit within which the Minister must do that is very sensibly laid down in the clause.
This is not governed by subsection (9) because it is not an appeal, and therefore there is no question of the Bill saying that regulations will be made about time limits. The one thing which is absent here is the time limit within which the aggrieved person wanting to appeal and wanting a stay of execution has to lodge his application for the Minister's determination. The 14 days is there for the Minister but not for the applicant. I have no doubt the Committee will take it for granted that the person concerned would want to do this as expeditiously as possible, and no doubt he would; but the real question is that the traffic commissioners ought to know where they stand. It may be a very bad case, and normally would be when they have revoked a licence. They would want, having refused a stay of execution of their decision pending an appeal, to know what was being done in the meantime by the operator. Is their decision to revoke to be operative and to continue to be operative until the Minister has come to his decision? Therefore the purpose of my amendment is to say that the person who is aggrieved by the traffic commissioners' decision not to have a stay of execution must make his application to the Minister— I repeat that it is not an appeal— within three days. I beg to move.
Lord MORRIS: I can see a practical problem with this amendment. If the traffic commissioners were to hear a case on Friday and if it happened to be a bank holiday weekend it would not leave very much time for the applicant to make his application to the Minister.
Lord MISHCON: If I may say so without sounding pompous, lawyers are used to that difficulty and rules are made which do delete non-working days, holidays and so on. But once again may I repeat to the Committee that it is not a question of time that binds me in this amendment; it is a question of principle.
Lord BELLWIN: Subsection (4) empowers traffic commissioners, if so requested, to suspend the operation of a change in the conditions of a licence or its revocation, suspension or curtailment until the expiration of the period within which an appeal must be lodged, and then until the appeal is disposed of. If the commissioners refuse to grant such a suspension of the operation of their decision, there may be an application to the Minister to direct them to grant it and there must be a decision on such an application within 14 days. A similar provision is to be found in the goods operator licensing system for goods vehicles.
Revocation of an operator's licence can destroy someone's livelihood perhaps beyond the possibility of repair, even by a successful appeal. On the other hand, to allow a criminal or utterly reckless operator to continue in business for the months it may take to determine an appeal could positively endanger the public and it would be wrong to make suspension of the commissioners' action an automatic consequence of an appeal. Therefore, for justice to be done there must be provision for a quick decision by the appellate body as to whether execution should be stayed. A special procedure will be required for dealing with applications for directions under this subsection.
They are not appeals and the procedure will not have to be laid down specifically or to be the same as prescribed under subsection (9). It is not envisaged that any time limit will need to be specified. In effect, an application could not be made once the time limit within which the appeal itself could be made had passed. In practice, if the matter is of such importance to the holder— and I believe the noble Lord, Lord Mishcon, made this point too— that he wishes to seek a direction, he might be expected to apply instantaneously. Even so, it would appear to be unreasonable to prevent the holder from applying at any time up to the end of the appeal limit, if he so wishes.
Lord MISHCON: I confess to some disappointment that the noble Minister read to the Committee a definition, description and clarification of a clause which I believe, if I may say so with deep respect, was clear to them before the explanation was even given. It does not deal in any way with the point which I tried to make to the Committee. I said, as the Minister was fair enough to repeat, that obviously the person concerned will, one would imagine, make his application as soon as possible. What I said was that because there is no time limit here, the traffic commissioners will not know what the position is because the application can be made at any time up to the time of the expiration of the appeal period. Again, because I feel this is a rather technical point, although I believe an important one, I wonder whether the noble Lord the Minister will be good enough to look at what has been said between now and the Report stage and possibly find that he can be rather more helpful on that occasion.
Lord BELLWIN: I was aware that I was in fact stating the position, but I felt that it was, as the noble Lord has said, such a complex subject that there was no harm in doing that. Indeed we may well feel the need to do that again before the day is out. I take the point that is being made and I have found difficulty in trying to be precisely clear as to exactly what is the point which has most concerned the noble Lord. I think I would have no difficulty at all in saying that we will consider this very carefully again before Report. I gladly undertake to do so.
Lord MISHCON: On that very courteous basis, I ask for the Committee's leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord MORRIS Lord MORRIS moved Amendment No. 106:
Page 26, line 25, at end insert, (" and pending this decision the licence shall remain in force.").
The noble Lord said: My only regret, in view of what has gone before, with regard to this amendment in this rather strange melange of names is that the name of the noble Lord, Lord Lloyd of Kilgerran, has not been added. I believe this amendment would make an improvement to the Bill. The point is very

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simple and not dissociated from the previous point made by the noble Lord, Lord Mishcon. As your Lordships are aware, Clause 26 (4) envisages the procedure in which the licence-holder has specifically requested a moratorium during the time allowed for appeal. If the commissioners agree to delay the operation of their decision to allow time for an appeal, there is no problem. If they refuse, there could be a period during which the contested decision is enforced, even though it may yet be overturned by the Minister.
The provision does not relate to urgent safety requirements and does not affect the power to put dangerous vehicles off the road. It does not involve a protracted delay, because the Minister has a maximum of only 14 days in which to decide that he will deal with a licence holder's application to him. In these circumstances, it is respectfully submitted that variations of the licence imposed by the traffic commissioners should not become operative during the few days until the Minister's decision is given. This is a short delay, which could prevent considerable hardship and disruption to the operations of a licence holder. I beg to move.
Lord BELLWIN: I listened very carefully to what my noble friend Lord Morris said on this amendment, but I should have thought this was essentially a matter of judgment. How far should we go in laying down safeguards for every eventuality? When do we reach the point when we say that we should leave it to the good sense of the traffic commissioners? After all, why do we have independent tribunals if we are not prepared to trust them with this kind of judgment?
What we are considering is what happens to a licence during the very short period of 14 days after application has been made to the Minister. It is extremely unlikely that the commissioners will take any action during that short period. Indeed, I feel there must be some presumption against it. There could be exceptional circumstances in which the commissioners believed that they could not, in the interests of the public, let an operator continue for even one more day, but is that not a matter of judgment? I stress that the circumstances would be
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exceptional, and is not that judgment one that we could trust the commissioners to make? I should respectfully have submitted that it was.
I must say, without any commitment, that if my noble friend really feels that this is a matter of such moment that he would like me to pursue it further, then I am certainly in a position to say that I will so do, which, perhaps, is not the kind of observation one makes when one first comes to the Dispatch Box. But, quite frankly, I am today in the business of getting on with this Bill, and if I feel that there is something I can do I am going to say so. Before sitting down, I hope my noble friend may feel that in the light of the explanation I have given, and despite my offer, he may be able to withdraw the amendment.
Lord MORRIS: I am most grateful to my noble friend. In the light of his remarks, I am most happy to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord BELLWIN Lord BELLWIN moved Amendment No. 107:
Page 27, line 15, at end insert—
(" In this subsection "local authority" means—
(i) in relation to England and Wales, any local authority within the meaning of the Local Government Act 1972;
(ii) in relation to Scotland, a regional, islands or district council.").
The noble Lord said: Clause 26 (8) defines the third parties who have a right of appeal on certain road service licence matters. They include local authorities. It was originally thought unnecessary to define "local authority" as we were making no change in the present position. However, one or two queries have made us realise that ambiguity, even ambiguity of long standing, is undesirable and this amendment therefore introduces a definition. I beg to move.
Lord UNDERHILL: I am delighted to see this amendment, because, in effect, it brings in the district councils, which is what we have tried to do by proposed amendments. Therefore, we express great appreciation to the Government for bringing in this amendment. But in view of what appears to us to be a conflict

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with a clause which the Minister rejected, I shall be writing to him to see whether that can be reopened.
Lord LLOYD of KILGERRAN: I feel that I should give some satisfaction to the noble Lord, Lord Bellwin, by saying that on this occasion I warmly support what he has been saying.
On Question, amendment agreed to.
Clause 26, as amended, agreed to.
3.54 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 107A:
After Clause 26, [in substitution for Amendment No. 113], insert the following new clause:
(" Further appeals on points of law
. — (1) An appeal lies at the instance of any of the persons mentioned in subsection (2) on any point of law arising from a decision of the Minister on an appeal from a decision of the traffic commissioners for any area—
(a) to the High Court where the proceedings before the traffic commissioners were in England or Wales; and
(b) to the Court of Session where the proceedings before the traffic commissioners were in Scotland.
(2) The persons who may appeal against any such decision of the Minister are—
(a) the person who appealed to the Minister,
(b) any person who had a right to appeal to the Minister against the relevant decision of the traffic commissioners but did not exercise that right; and
(c) the traffic commissioners whose decision was appealed against.
(3) The High Court or Court of Session may on an appeal under this section—
(a) give any decision which might have been given by the Minister; or
(b) remit the matter with the opinion or direction of the court for rehearing and determination by the Minister.
(4) No appeal to the Court of Appeal may be brought from a decision of the High Court under this section except with the leave of the High Court or the Court of Appeal.
(5) An appeal shall lie, with the leave of the Court of Session or the House of Lords, from any decision of the Court of Session under this section; and such leave may be given on such terms as to costs, expenses or otherwise as the Court of Session or the House of Lords determine.").
The noble Lord said: It will, I hope, aid clarity and understanding and save time for your Lordships if I deal with this new clause along with Amendment No. 112 and two very small consequential amendments to Schedules 5 and 9 (Nos. 128 and
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193). There is currently a right of appeal to the High Court on a point of law from any decision of the Minister on bus licensing appeals of the kind covered in Clause 26 of this Bill. That right is provided in Section 13 of the Tribunals and Inquiries Act 1971.
But the fact is that the references to appeals on traffic commissioner cases in the 1971 Act are misplaced in that Act. No one involved in a bus licensing appeal would expect to look in the Tribunals and Inquiries Act, for his rights of further appeal from the Minister's decision. He would reasonably expect to find those rights spelt out along with his other appeal rights in the relevant bus licensing enactment. That is what this group of amendments achieves.
The first amendment inserts into the Bill the right of appeal to the High Court, which is now provided in a similar form in Section 13 of the Tribunals and Inquiries Act. Amendment No. 112 provides for a parallel right of appeal from the Minister's decision on the new London appeals. This will be placed in Section 23 of the Transport (London) Act 1969 where the London appeal provisions will be found. The minor amendments to Schedule 5 and, in particular, Schedule 9 take out the references to traffic commissioner appeal cases in the 1971 Act.
Your Lordships will appreciate that the amendments do not reproduce exactly the wording of the 1971 Act. That wording was not the most appropriate for this subject. Furthermore, legal practice and usage has moved on since 1971 and the wording is, therefore, brought up to date. I would also stress that the appeals with which these amendments are concerned are not further appeals on the merits of the decision reached by the Minister. His decision on the balance of the arguments is final. Further appeal to the High Court is provided only where there is a point of law at issue. I beg to move.
Lord MISHCON: May I first welcome the very correct dictum of the noble Lord the Minister, which I should have loved to hear before, that in order that people may know what are their rights, these should be incorporated in the Bill and not referred to in a schedule. It is absolutely correct, as the noble Lord has

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said, that there is a right under the Tribunals and Inquiries Act 1971 to take the traffic commissioners, and, indeed, the Minister, on appeal to the High Court or to the Court of Session in Scotland, and, indeed, to the Court of Appeal if suitable permissions are given on a point of law. It is also absolutely true that this is a reproduction of Section 13 (5), which is now repealed by this Bill. But there is an odd situation arising out of the closing words of the Minister who said that it will not be for the High Court or the Court of Session, on an appeal, to go into the merits of a case before the traffic commissioners or before the Minister, and the sole point will be one of law.
Peculiarly enough— and I hope that the Minister will have taken advantage of this— in the old Section 13 (5) of the 1971 Act, which Act deals with tribunals that are very different in their objects and areas from those of the traffic commissioners, there is a power which is reproduced in subsection (3) of this amendment. That states that:
" The High Court or Court of Session may on an appeal under this section—
(a) give any decision which might have been given by the Minister ".
That means literally what it says: that the High Court and the Court of Session in Scotland arc empowered, if they want to on hearing an appeal and deciding that the traffic commissioners or the Minister misdirected themselves in some way on the law, to say, "We notice that under this section we are given the power to make the same decision as the Minister or the traffic commissioners might have made, and in the case of transport this is ludicrous.".
The Minister may well be thinking at this moment of saying to me in reply that this has been perfectly all right until now; we have not walked into any difficulties since the 1971 Act. However, the Bill now before the Committee deals with a very different situation: that there is a difference so far as onus is concerned before the traffic commissioners. An applicant can come before them and the traffic commissioners can refuse an operator's licence only if they find that to grant it would be contrary to the public interest. That would be a complete change of onus. Therefore your Lordships ought
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to envisage that there may be a number of matters now coming before the High Court on which the traffic commissioners can be challenged, and so can the Minister because of that change of onus where there is refusal of a licence.
Very helpfully to the Committee the Minister said that he was dealing not only with Amendment No. 107A but also with Amendment No. 112 which deals with appeals from the London Transport Executive to the Minister. This is now possible, whereas it was not possible under the old legislation. Amendment No. 112 deals with the situation where the London Transport Executive say that they do not want to have an agreement with somebody over transport in the London area. How extraordinary it would be if the court were given the power to do what the London Transport Executive and ihe Minister could do; namely, to sanction an agreement or to say that an agreement should not lake place. These are not considerations in transport which can lie with the High Court or the Court of Session.
This section of the 1971 Act having been repealed— I think it is Amendment No. 193 or Amendment No. 198 which does that in the case of the London Transport Executive, while an earlier one relates to the other matters coming before the traffic commissioners— I hope that the Minister will consider wiping out that provision which negates the very thing which he made so clear to the Committee; namely, that the High Court and the Court of Session cannot go into the merits of the matter.
Having said all that, I do not expect anything more from the Minister than again the statement that having possibly surprised him with this point— it is a new amendment and I had no opportunity to give the Minister notice of it— he would like to consider it and then let me know his views between now and Report stage so that I can consider whether or not to put forward an amendment.
Lord BELLWIN: Before I answer the noble Lord, may I ask him whether he has overlooked subsection (3) of Amendment No. 107A which says:
" The High Court or Court of Session may on an appeal under this section ",

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deal with any point of law arising? I wonder whether the noble Lord still feels the same having considered, I repeat, that
" An appeal lies at the instance of any of the persons mentioned in subsection (2) on any point of law arising "
and then, underneath, "under this section ". If the noble Lord still feels that he would like me to pursue the course that he proposes, I shall have no difficulty at all in so doing. The noble Lord may wish to consider this. If so, perhaps we can deal in any case with the whole matter in the way he suggested, which I am glad to do.
Lord MISHCON: I shall detain the Committee only for one minute. I should have been delighted to accept that point were it not for the wording in the second line of subsection (1):
"… on any point of law arising from a decision of the Minister ".
Since the word "decision" is used there, and not in regard to a point of law, there is in any view dubiety as to whether or not the decision later referred to is a decision on the merits.
Lord LLOYD of KILGERRAN: I did not want to interrupt this bipartisan conversation, but I spoke at Second Reading about appeals generally, and it seems to me that the amendment now introduced by the noble Lord, Lord Bellwin, clarifies many of the points and difficulties I had seen in the original Bill. I was glad to hear the Minister say that legal practice has moved on since 1971. It is always a great thing to have official recognition by the Government that legal practice is sometimes modified.
With great respect to the noble Lord, Lord Mishcon, I am sorry that on this sunny afternoon I cannot recognise the odd situation which he says arises from the speech of the noble Lord, Lord Bellwin. I am not quite clear as to the point he is endeavouring to make, but that is entirely my fault on this sunny afternoon.
On Question, amendment agreed to.
4.7 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 108:
After Clause 26, insert the following new clause:
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(" Partnerships and related matters
".— (1) Provision may be made by regulations for modifying the provisions of this Part, and any other statutory provisions relating to public service vehicles, in their application to the operation of vehicles and the provision of services by persons in partnership.
(2) A road service licence or PSV operator's licence shall not be granted to an unincorporated body as such or to more than one person jointly except in cases permitted by regulations under this section.").
The noble Lord said: This clause puts the position of partnerships beyond doubt by making it clear that licences can be held by partnerships though not by other unincorporated bodies. Regulations will spell out the details about good repute and the like. It will be made clear in the regulations that an individual can hold an operator's licence in his own name and as one of a partnership. I understand that this has been a matter of concern to the industry and I am sure that they will welcome this assurance. I beg to move.
Lord MISHCON: I am sure that the industry will be heartened by this amendment. Perhaps I can save the time of the Committee by speaking now to Amendment No. 139 which stands in my name and those of my noble friends. First, I repeat the point about the inappro-priateness of dealing by regulations with matters which really ought to be in a Bill. May I express the hope that the consultations the Minister may be having will enable him at the Report stage not to deal with this matter by way of regulations but to make it part of the Bill.
The reason that this matter is considered to be of considerable importance to operators is that it deals with Clause 18 (3) of the Bill which prohibits any person from holding two public service vehicle operators' licences in the same traffic area. There are many circumstances in which independent operators who are in partnership also own and operate public service vehicles as individuals; but because this partnership does not have a separate legal entity the operators concerned would be unable to continue the practice unless one or more of the existing firms was made into a limited company with a separate legal personality.
If the law can be evaded in that way, there seems to be no purpose in it and

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no reason to put people to the extra cost of company incorporation merely to protect the way in which they wish to operate. If the Minister could kindly give me an assurance that in his view the regulations will cover this point, I shall not be troubling the Committee with my amendment when it comes to be moved.
Lord BELLWIN: I am not sure that I can give the noble Lord that assurance. I can only say— and I seem to be saying it very much this afternoon because the sun is, apparently, still shining— that we will look at that as a possibility. I fear that it cannot by itself preclude— and I am sure the noble Lord does not expect it— my moving the amendment. I can only say again that because we are anxious that at the end of the day the Bill should be the very best Bill and that it should allow for all possible eventualities that one can foresee, of course we will take note of what the noble Lord has said.
Lord TEVIOT: Like other noble Lords I will speak only briefly, to remind my noble friend of his cardinal principle that statutory regulations should be avoided except when demonstrably necessary. One finds it difficult to see why it should be necessary to deal with this particular issue by way of regulations. I suggest to your Lordships that, so far as this Bill is concerned, the problems of operators brought together by partnership agreements can readily be covered by the Bill itself. I hope your Lordships will agree with me that, by including a definition of the word "person", which is in Amendment No. 139 in Clause 36, the practical problems which might be encountered in the operation of Part I of this Bill can be overcome.
The amendment to this effect is considered to be of great importance by many independent operators, in membership of the Confederation of Passenger Transport, in family businesses where for good reason a complex pattern of vehicle ownership may arise. I support the amendment.
On Question, amendment agreed to.
4.11 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 109:
After Clause 26, insert the following new clause:
(" Death, bankruptcy, etc. of licence-holder
— (1) A road service licence or PSV operator's licence is not assignable or, subject to the following provisions of this section, transmissible on death or in any other way.
(2) A road service licence or PSV operator's licence held by an individual terminates if he—
(a) dies; or
(b) is adjudged bankrupt or, in Scotland, has his estate sequestrated; or
(c) becomes a patient within the meaning of Part VIII of the Mental Health Act 1959 or, in Scotland, becomes incapable of managing his own affairs.
(3) In relation to a road service licence or PSV operator's licence held by an individual or by a company regulations may specify other events relating to the licence-holder on the occurrence of which the licence is to terminate.
(4) The traffic commissioners by whom a road service licence or PSV operator's licence was granted may—
(a) direct that the termination of the licence by subsection (2), or under subsection (3), be deferred for a period not exceeding 12 months or, if it appears to the commissioners that there are special circumstances, 18 months; and
(b) authorise the business of the licence-holder to be carried on under the licence by some other person during the period of deferment, subject to such conditions as the commissioners may impose.").
The noble Lord said: This is an unexciting but useful new clause which clarifies the law on this matter and meets more precisely the requirements of the Community Access Directive as to the circumstances in which businesses can continue to operate for short periods on the death of the holder or when other disruptive events occur. The clause will provide assurances to those who hold licences that, in the event of their death or incapacity, their business will not simply fold up owing to the termination of their licences, but their heirs or personal representatives will be able to carry on the business for a temporary period until more permanent arrangements are made. I beg to move.
Lord MORRIS: I rise to support this amendment but I am in need of clarification with regard to subsection (2) (c). It appears from the wording of this subsection that there is a presumption in Scottish law that if anyone becomes incapable of managing his business affairs he must necessarily be a lunatic. I may

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have misunderstood it but that is how it appears to me.
Lord MOWBRAY and STOURTON: I am not sure that I am able to satisfy my noble friend at this moment, but I will certainly find out and will let him know.
Lord MISHCON: I wish only to raise two points on this new clause. I think it is a most sensible clause and I am sure that the members of the Committee are glad to see it on the Marshalled List. One of my two points is major and the other, I must confess, is minor. The major one arises under subsection (3). The Committee will be aware that this is a question of a power to terminate a licence. Without any doubt at all, if we look at the matters in subsection (2), subject to the point raised by the noble Lord, Lord Morris, with regard to subsection (2) (c), it is eminently fair and reasonable; but hidden in subsection (3) we find that the regulations:
" may specify other events relating to the licence holder on the occurrence of which the licence is to terminate ".
I hope that anyone interpreting this subsection would say that it must be other events similar to those in subsection (2). That would be a reasonable interpretation, but it is an interpretation which is open to argument, and I do not feel that the Committee would be happy to give an overriding power without any discussion in Parliament with regard to the serious matter of the termination of a licence, by saying to the Minister: "That is perfectly all right, you may make regulations, if you will, which can terminate a licence; we do not know now what the occasions will be which are broadly described as ' other events' but we are perfectly happy with it." That does not seem to me to be a proper way to carry out our duty to examine legislation carefully, especially when it comes from another place and we are expected to devote that amount of skill and care which is not always apparent in the other place, but I hope is always apparent in your Lordships' House. In those circumstances, I ask the Minister if he will be good enough to look into the question of "other events."
My minor point is that there is also a phrase which is used in subsection (4) (a) where the termination can be deferred if it
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appears to the commissioners that there are special circumstances. Professional colleagues will know the trouble that those words "special circumstances" have caused in the Road Traffic Act in regard to endorsements and suspension of licences. There has been great argument and decisions have been made in the courts as to whether it is special circumstances relating to the person or special circumstances relating to matters in general. Here, one ought to know: are they special circumstances relating to the individual concerned— the personal circumstances— or are they special circumstances relating to a traffic problem, or are they meant to be both?— in which case, again for clarification, the Act ought to say so.
I merely ask that those two points should be looked at because they are of some importance, and if they can be looked at between now and Report stage, and if the noble Lord can repeat the words which are now happily heard on this side of the Committee, that these matters will be looked into (because they are points of substance) I certainly would not ask the Committee not to accept this new clause at this juncture.
Lord MOWBRAY and STOURTON: I understand that the regulation-making power in subsection (3), to which the noble Lord referred, enables events like bankruptcy and mental incapacity, which happen outside United Kingdom jurisdiction, to be covered. It will also enable other such parallel events in relation to a company winding up or the appointment of a receiver to be dealt with. But on this sunny day, like my noble friend I will certainly take this matter back and have a look at it, although I think we shall probably find that it is all right as it is.
Lord HARMAR-NICHOLLS: I want only to say a word on the point made by the noble Lord, Lord Mishcon, which was very impressive as it stood but, having had a little experience as a magistrate dealing with the particular example that he raised, I thought he should have gone a little further. He made his general point but I think he should have given a hint as to how he would interpret it: how he thinks the special circumstances ought to be written into the Bill. While I have a lot of sympathy with the point he made,

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that it is so much easier if you know exactly where the boundaries are in this sort of legislation, at the end of the day and no matter how hard you try you never can find words to cover everything; and what we are aiming to do is to educate people, who in the end have to give a decision, to use sensible discretion. If you try to remove all the discretion by trying to spell out everything you might well not enable people to dispense justice.
Lord HALE: The noble Lord, Lord Mowbray and Stourton, made some observations about the position of the holder and the heirs or relatives or successors of the holder, or very often those who had been working his business during the holder's long illness, and what would happen on his sudden death. What is the authority for carrying on pending an application to the traffic commissioners? Obviously one could expatiate at considerable length on this point. The PSV holder could be a victim of an air crash in Tenerife or something like that, or could be missing for a time. How is the operation of the licence to be continued pending the hearing by the traffic commissioners? Can the application to the traffic commissioners by the heirs be heard with a certain guaranteed speed, and can a temporary authority be issued from the office?
Lord MOWBRAY and STOURTON: I think it is precisely to deal with such a case, an accident in Tenerife or one of those tragedies, that this amendment is framed. The local service does not want to have to fold up, and this is precisely to cover this sort of eventuality. I do not think there is any problem for the son, daughter, daughter-in-law or representative. I will look at what the noble Lord has said, and if there is anything more that I can add I will write to him, but if he will read what I have said, I think the position is clear.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 110:
After Clause 26, insert the following new clause:
(" Fare-paying passengers on school buses
.— (1) Subject to subsection (2), a local education authority may—
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(a) use a school bus, when it is being used to provide free school transport, to carry as fare-paying passengers persons other than those for whom the free school transport is provided; and
(b) use a school bus, when it is not being used to provide free school transport, to provide a local bus service;
and the following provisions, that is to say, section 144 of the 1960 Act (public service vehicle drivers' licences) and sections 15, 16, 17 and 18 (1) of this Act shall not apply to the driving or use of a school bus in the course of its use by a local education authority in accordance with this subsection.
(2) Subsection (1) does not affect the duties of a local education authority in relation to the provision of free school transport or authorise a local education authority to make any charge for the carriage of a pupil on a journey which he is required to make in the course of his education at a school maintained by such an authority.
(3) In this section—
"free school transport" means transport provided by a local education authority in pursuance of arrangements under section 55 (1) of the Education Act 1944 for the purpose of facilitating the attendance of pupils at a place of education;
" local bus service "means a stage carriage service other than a service as regards which the condition specified in section 3 (3) (A) above is satisfied;
" school bus ", in relation to a local education authority, means a motor vehicle belonging to that authority which is used by that authority to provide free school transport.
(4) In the application of this section to Scotland—
(a) for the references to a local education authority there shall be substituted references to an education authority;
(b) in subsection (2) for "maintained by" there shall be substituted "under the management of"; and
(c) in subsection (3) for the definition of "free school transport" there shall be substituted—
"" free school transport" means transport between a pupil's home and place of education provided in pursuance of arrangements under subsection (1) () of section 51 of the Education (Scotland) Act 1962 (pupils for whom such transport facilities are necessary) or, in pursuance of subsection (2) of that section (other pupils allowed to use vacant seats free of charge) ".
(5) The repeal by this Act of section 12 of the Education (Miscellaneous Provisions) Act 1953 and section 118 (4) of the 1960 Act shall not affect the operation of those provisions in relation to any consent given under the said section 12 which is in force immediately before that repeal takes effect.").
The noble Lord said: I spoke on this amendment with Amendment No. 4. I beg to move.
Lord UNDERHILL: There is just one minor point. When we discussed this in conjunction with Amendment No. 4, I raised the question of the definition of "local bus service" that appears halfway down on page 5 of the Marshalled List. While the definition is given here, the point I raised was whether or not the local bus service was to be in the locality covered by the education authority or whether it could be anywhere. It would appear to me that that needs to be clearly defined one way or the other; otherwise there could be quite a lot of controversy and argument later on. We, of course, would prefer it to be within the area of the education authority. It needs to be defined.
Lord BELLWIN: I hear what the noble Lord says and I presume he said the same thing when we discussed it earlier. As I recall, I think I answered then by saying that a definition of this would take into account the 30-mile limit which we were talking about then. I will certainly refer to this again when we come to look at it, as we shall be doing.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 111:
After Clause 26, insert the following new clause: (" Use of certain vehicles by educational and other bodies.
— (1) In subsection (1) of section 1 of the Minibus Act 1977 (exemption of certain vehicles from requirements applicable to public service vehicles) for "vehicle which is adapted to carry more than seven but not more than sixteen passengers" there shall be substituted "small passenger-carrying vehicle", and after that subsection there shall be inserted the following subsection—
" (1A)] f a large pasesenger-carrying vehicle is used for carrying passengers for hire or reward, then, if and so long as the conditions set out in paragraphs (a) to (c) of subsection (1) above are satisfied, the following provisions shall not apply to the driving or use of the vehicle, namely—
(a) section 144 of the Road Traffic Act 1960 (public service vehicle driver's licences);
(b) section 23 (2) of the Transport (London) Act 1969 and section 4 of the Transport Act 1980 (licensing of stage carriage services); and
(c) section 18 (1) of the Transport Act 1980 (PSV operator's licences).".
(2) In section 1 (2) of that Act (persons authorised to grant permits) —
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(a) at the beginning of paragraph (a) (powers of traffic commissioners) there shall be inserted "in the case of small passenger-carrying vehicles,"; and
(b) at the beginning of paragraph (b) (powers of designated bodies) there shall be inserted "in the case of small or large passenger-carrying vehicles.".
(3) After section 1 (3) of that Act (designation orders) there shall be inserted the following subsection—
" (3A) Different provision may be made by orders under subsection (3) above in relation to large passenger-carrying vehicles from that made in relation to small passenger-carrying vehicles.";
and a designation order made under the said section 1 (3) before the commencement of this section shall not apply in relation to large passenger-carrying vehicles.
(4) In section 3 (1) of that Act (power to make regulations), in paragraph (e) (power to prescribe conditions of fitness) for "vehicles" there shall be substituted "small passenger-carrying vehicles".
(5) After section 3 (1) of that Act there shall be inserted the following subsection—
" (1A) Regulations made by virtue of any of paragraphs (a) to (d) of subsection (1) above may make different provision in relation to large passenger-carrying vehicles from that made in relation to small passenger-carrying vehicles.".
(6) In section 3 (2) of that Act (consequences of breach of regulations) for "Section 1 (1) "substitute" Subsection (1) or, as the case may be, subsection (1A) of section 1 ".
(7) In section 4 (2) of that Act (interpretation) after paragraph (b) there shall be inserted the following paragraph—
" (bb) "small passenger-carrying vehicle" means a vehicle which is adapted to carry more than eight but not more than sixteen passengers, and "large passenger-carrying vehicle" means a vehicle which is adapted to carry more than sixteen passengers; ".").
The noble Lord said: In moving this amendment, I would like to speak to Amendment No. 131 as well. I am sure this new clause is one which will be welcomed on both sides of the Committee. Perhaps it would help if I explained a little of the background to it. In recent years it has become increasingly difficult for charitable organisations, schools, church and youth groups and so on, to continue to offer transport, organised trips or whatever, on a purely charitable basis. The costs are often just too high, and they have had to recoup these costs by asking passengers for a contribution. This of course brings the vehicles into the PSV licensing net, with all that that implies. The Minibus Act 1977 was passed to deal with this problem by exempting

587
from the PSV regime minibuses used by voluntary and other similar bodies, pro-voided that certain safety standards are met and that there is no question of profit-making or running services for the public at large. All the indications are that the Act has worked extremely well.
During the passage of the present Bill in another place it was put to the Government that the Minibus Act was proving unduly restrictive in one particular respect; it did not cover vehicles with more than 16 passenger seats. The stark difference in licensing requirements for the small and large vehicles forces voluntary bodies, schools and so on, into choosing small vehicles, not because they are the most suitable size for their needs but because they can charge fares in them without getting involved in licensing. With this new clause we are seeking to provide a way round the difficulty without opening the door to lower vehicle safety standards or to unfair competition. The new clause provides certain licensing exemptions for larger vehicles used within the normal Minibus Act framework. There is no question of running for profit or picking up members of the general public.
There will be additional safeguards. First, although no PSV licence will be required for operator service or driver, the vehicles will remain PSVs and be subject to the normal PSV conditions of fitness. They will be subject to examination by the PSV examiners. Secondly, only specially designated bodies will have the power to grant permits for these larger vehicles. Our intention is to designate only local authorities and to describe in the order the kinds of bodies to which they may grant permits. In this way the authorities can exercise some control over the use of the larger vehicles. This is a small measure. I accept that very few organisations will need to make use of it, but it may be of considerable help to particular community welfare schemes whose need is for a larger vehicle. I recommend it to the Committee. I beg to move.
Lord UNDERHILL: I wish to thank the noble Lord for his explanation. When we first heard the noble Lord, Lord Bellwin, mention the possibility that the introduction of an amendment was in mind, we were frankly, apprehensive.
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The explanation we have heard, together with the notes on clauses which the noble Lord, Lord Bellwin, kindly made available to us have removed a lot of those apprehensions.
There are two questions that I should like to put to the noble Lord. We readily accept that the proposals in the amendment confine the use of these vehicles to community organisations or educational organisations. Therefore, we can understand why there is no need for a road service licence or a PSV operator's licence. We are pleased to note that the normal safety provisions will continue to apply because they are public service vehicles. The first question that I should like to put to the noble Lord relates to the fact that there will be no PSV driver's licence required. Bearing in mind that all the Act says about the size of these vehicles is "over 16 passengers", there is no limit; they could be double-decker vehicles, and no PSV driver's licence is apparently to be required. Surely this is a vital question of safety which the Bill omits to deal with. I should like to hear the Minister's comment on that.
Secondly, as I understand from reading the Bill and hearing the noble Lord's explanation, the granting of a permit by traffic commissioners will be confined to the small minibuses; they will not be able to give permits for the larger vehicles. On the other hand, the local authorities, if they are going to be the designated bodies will be able to give permits for the small and the larger vehicles; in fact, permits for the larger vehicles will only be able to be given by the local authorities. Why is there that distinction? I cannot understand why the traffic commissioners, who are very experienced people, should be confined solely to issuing permits for the smaller vehicles.
Lord MOWBRAY and STOURTON: The noble Lord has very ably made his point about the PSV driver's licence. I agree that it is a matter of judgment and opinion. We did not want to impose additional requirements, for example, where a driver is already used to driving larger vehicles other than for hire and reward. This is the type of area where we should see how things go. If what the noble Lord is frightened about were to come about, and there is a problem, then

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I can assure him that the Minibus Act contains a power to prescribe conditions to be fulfilled by drivers. Of course, in any event all drivers must be over 21.
He also asked why the local authorities will be particularly involved in this exercise and not the traffic commissioners. I think that it is really a matter for local charities, and local councils will probably know more about these local charitable bodies. Sometimes the local councils will themselves be involved. As the noble Lord is probably aware, one of the instigators of this clause was the London Borough of Camden which wished to help disabled people in its borough with these type of vehicles. I do not think that there is a serious matter of principle at issue here. I hope that I have sufficiently explained the situation to the noble Lord to remove his worries on the two matters which he raised.
Lord TEVIOT: While not wishing to pour cold water on the amendment, which has been very well expressed by my noble friend, I, too, share the forebodings or share the idea that has been put forward about the non-PSV driver driving a group of 16 people or more. I cannot see why it would be an impediment for the drivers of these minibuses, larger minibuses, or indeed double-deckers to take a PSV licence. It is not a terribly difficult thing to acquire and I should have thought that it was in the interests of everyone for the driver to go somewhere and take a course and take a PSV licence. As my noble friend has said, we must see how it goes. But I should have thought that that was a matter at which he should look immediately.
Viscount SIMON: I should like to support the noble Lord as regards the point he raised about the drivers' licences. I think that it is rather shocking that we should allow them, whether for charitable or whatever reasons, to have a driver who is not fully qualified to drive this type of vehicle. I do not know whether my recollection is at fault, but I can remember that not so long ago there was a tragic accident somewhere in Yorkshire in just such a case where a party of old age pensioners were being taken out. I do not know whether in that case the drivers had a licence, but I should have thought it very desirable that anyone
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taking such a coach for a trip with old people should have a proper licence for driving a large vehicle.
Lord MOWBRAY and STOURTON: I seem to be getting advice from all sides of the Committee. I shall certainly take the matter away and consider what noble Lords have said. As I said at the beginning of my remarks, it is a matter of judgment. We thought— and we still think— that it would be better not to require it at this stage, but I shall take the matter away and we shall consider the points that have been made by noble Lords on all sides of the Committee.
Lord UNDERHILL: I am grateful to the noble Lord for that kind gesture. I should like to make one final point before I leave the matter. The noble Lord said, "Let's see how it works." However, there could be a fatal accident while we are seeing how it works. Even if there were only one accident it could be a great tragedy; it could ruin a scheme; and it could lead to loss of life. Therefore, we hope that the matter will be looked at very carefully.
On Question, amendment agreed to.
Clause 27 agreed to.
Clause 28 [Amendment of Transport (London) Act 1969]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 112:
Page 29, line 18, at end insert:
("Further appeals on points of law
(23B.— (1) An appeal lies to the High Court at the instance of any of the persons mentioned in subsection (2) of this section on any point of law arising from a decision of the Minister on an appeal under section 23A of this Act.
(2) The persons who may appeal against any such decision of the Minister are—
(a) the person who appealed to the Minister;
(b) any person required to be notified of that appeal under subsection (2) of section 23A of this Act; and
(c) the Executive.
(3) The High Court may on an appeal under this section—
(a) give any decision which might have been given by the Minister; or
(b) remit the matter with the opinion or direction of the court for re-hearing and determination by the Minister.
(4) No appeal to the Court of Appeal may be brought from a decision of the High Court

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under this section except with the leave of the High Court or the Court of Appeal.").
The noble Lord said: I spoke to this amendment with Amendment No. 107A. I beg to move.
Lord MISHCON: When dealing with Amendment No. 107A I made the observations that I wanted to make as regards Amendment No. 112, so I shall not repeat them. The Minister has been kind enough to give an assurance that he will look at certain points and I am grateful to him.
On Question, amendment agreed to.
Clause 28, as amended, agreed to.
On Question, Whether Clause 29 shall stand part of the Bill?
Lord UNDERHILL: This Clause deals with the abolition of the need for conductors' licences. It may seem rather a small matter, but when I have explained a few points your Lordships will see that it could be of some consequence. First, I wonder whether or not there have been consultations with the union which covers the personnel involved. The Transport and General Workers' Union, which covers a great number of these personnel, has made certain points quite clear to me. It is concerned that the conductors' licence, which is at present required, gives some partial protection to conductors. It gives them a greater authority to collect fares. The union feels that the absence of a licence could expose a conductor to a greater degree of assault from those who seek to avoid paying fares.
Your Lordships will know that the licence is covered by a badge which the conductor wears and that is considered to be a partial protection. It carries a number and it is seen by most people to be a badge issued by a public authority and, therefore, it has some standing. The badge also bears the conductor's licence number. Therefore, if there is a complaint or any other matter arising to which reference needs to be made, the public or anyone else can easliy see the number of the conductor's licence.
Moreover, the removal of any control or licensing of conductors will, it would seem to me, carry also the abolition of the
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requirement that conductors must be at least 18 years of age. There will be nothing to stop an operator employing a 16-year-old. I know that the EEC regulations lay down that conductors must be over 18 for journeys of more than 50 kilometres. As regards that matter is not, in law, a conductor in charge of the vehicle, except for driving— or, if not in law, is it not generally recognised that the conductor is the person in charge other than actually driving the vehicle?
Conductors have responsibility for handling all types of problems and difficulties that arise. I know that it appears that the main purpose of the abolition of this provision by this clause is to remove the huge administrative task of issuing some 30, 000 individual licences for conductors. I do not know the views of the Transport and General Workers' Union on this matter, but in order to cover the legitimate points which I think it makes, I am wondering whether consideration has been given to issuing a block number of licences to an operator for the operator to issue and if necessary to report thereon to the commissioners. That would save the administrative problem, but it would also guarantee these points of partial protection which the personnel involved consider so important. I think that your Lordships will agree that we wish not only to save any bureaucratic administration but to ensure that the status, standing and authority of people such as conductors is not minimised in any way.
Lord TEVIOT: I thoroughly agree with what the noble Lord, Lord Underhill, has said. I believe that this clause was in no way discussed in the other place during all their 110 hours of discussion, and therefore it is very proper for the noble Lord to have raised it today. I know there is a need for cutting out administration and perhaps this is a very good way of doing it. The noble Lord mentioned a number of points and I would only dwell on one— namely, the conductor being in charge of the bus. The badge rather accentuates that point. He is very much in charge of the bus and has to deal with all sorts of funny situations. There are also times when he may threaten to call, or may even have to call, the police in dealing with someone who, say, is intoxicated or not

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very well in one way or another. That badge gave him some authority. I do not know what kind of brief my noble friend has at this stage, but I am eager to hear what he has to say on all these matters.
Lord BELLWIN: I am rather surprised that the noble Lord, Lord Underhill, made some of the points which he has made. In fact, the noble Lord may know that there were consultations with the trade union to which he refers; quite what the outcome of those were I am not in a position to say. But, for myself, I had assumed that that trade union had not objected to what is now being proposed.
This clause removes the requirement in Section 144, of the Road Traffic Act 1960 that public service vehicle conductors be licensed. We think that this is now an anachronistic function which the licensing authorities have performed since the controls were introduced on PSV operations in the Road Traffic Act 1930, and that it should now be abolished. The need for statutory screening of conductors to ensure that operators could employ only those licensed by virtue of physical fitness and good character might have been defensible in the early years, but nowadays conductors' suitability should properly be a matter for their employers or prospective employers, as it is in almost all other kinds of works. In fact, over the past decade only a handful of applications have been refused or licences revoked.
The noble Lord, Lord Underhill, very fairly referred to the point that I would have made; namely, that there is a considerable bureaucratic involvement here and an enormous clerical effort in handling some 30, 000 applications a year. Whether or not his point about issuing a block number of licences to an operator is an interesting, practical and valid one, I do not know, but I am quite sure that the fact that he has made it ensures that it will be considered elswhere. On the point of the badge, which my noble friend Lord Teviot and, indeed, the noble Lord, Lord Underhill, mentioned, surely there is absolutely nothing to stop an operator supplying a badge with a number to every conductor, if that is something he wishes to do.
Altogether, I should not have thought that this was particularly contentious;
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certainly we had no intimation that it was. In fact, I thought that it was so logical in what it sets out to do that it would automatically have been quite welcomed. However, I take the point about the possibility of a block number of licences. Of course we shall look at that, as, indeed, we intend to look at many of what I consider to be constructive and helpful suggestions that have been made earlier today.
Clause 29 agreed to.
Clause 30 agreed to.
4.44 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 114:
After Clause 30, insert the following new clause:
(" Repeal of s. 29 (4) of Transport Act 1968
. The provisions of section 29 (4) of the Transport Act 1968 (which relate to the Railways Board not having power to carry passengers by road) shall cease to have effect.").
The noble Lord said: On a number of occasions the Minister has explained that one of the purposes of the Bill is to bring more operators into the operation of public transport; in his words, to provide the opportunity for greater competition. The Bill provides that new applicants to run a service shall be granted a licence, unless to do so would be against the public interest. The provisions of Section 29 (4) of the Transport Act 1968 prevent the Railways Board from making any arrangements to carry passengers by road, except where a railway service has been temporarily interrupted or discontinued.
It seems unreasonable that in the light of all the new circumstances to be provided under the Bill, this bar should continue. My information is that although British Rail has power to provide bus services where a service is interrupted or closed, it does not go in for direct operation of buses itself, but relies upon reputable operators to do this under contract. I further understand that if this amendment is agreed, the relaxation of the powers would almost certainly be developed through contractors. This relaxation would not only be equitable— and if we are to have free competition for everybody, there is no reason whatever why it should be denied to British Rail— but would also enable increased development of integrated rail-bus services (which is

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something that all noble Lords would like to see) with, in particular, the provision of bus services to railway stations. This could possibly be developed on a general scale if this amendment is agreed. I beg to move.
Lord BELLWIN: As I understand it, the legal position at present is that the Railways Board has powers to operate bus services where the rail service has been temporarily interrupted or in replacement of a railway passenger service which has been closed. The Government are not aware of any circumstances which might arise in the future which would make it necessary for the board to have wider powers to operate bus services than those which it already has. The Railways Board has made no representations to my right honourable friend the Minister about the need for wider powers, although of course, it is always open to them to do so.
However, even if wider powers were thought appropriate, I do not think that an amendment along these lines would be sufficient. The intention of this amendment appears to be to attempt to resurrect the somewhat complex and qualified powers to operate bus services granted in 1928 to the four main private rail companies by the four railway-road transport Acts of 1928. Those local acts relate to quite different circumstances from those of today, and would be a quite inappropriate way of granting to the Railways Board broad powers to operate bus services. In these circumstances, we could not agree to accept this amendment.
Lord UNDERHILL: I am sorry to learn from the noble Lord that the amendment cannot be accepted because one would have thought that this would fit in with the very thing which the Government seek; that is, the widest possible competition. I simply cannot understand why British Rail should be the one body that is precluded. I do not know whether or not British Rail has made representations to the Minister's noble friend the Secretary of State, but I do know that the right honourable Albert Booth, Member of Parliament, has raised this matter with the Secretary of State as recently as early in April. What the outcome of that was, I do not know. However, I
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should seriously like to ask the Minister to take a look at this in order to follow the Government's own desires for competition.
Lord BELLWIN: Obviously, I do not know what representations Mr. Albert Booth has or has not made. What I do know is what I have already said, that, to the best of my knowledge and information— and as recently as today no one has altered it— the Railways Board has made no such representations. I should have thought that that was most apposite. However, I shall, of course, make inquiries along the lines which the noble Lord, Lord Underhill, suggests. If there should prove to be a need further to consider the point, the noble Lord can be assured that it will be considered. However, as I stand here at the moment I should have thought that the most significant point is the one about the attitude of the British Railways Board.
Viscount HANWORTH: What matters to many of us is that the consumers should have a reasonable transport service. Of course, since the Beeching axe, in many cases they have not had one. It seems that what the railways provide could often be improved by a bus service which would be linked in with the railway timetable. I can appreciate the view that one does not want to start the railways running their own buses, which, in a way, is diversifying, and this might be a temptation. But it seems to me that it would be perfectly reasonable to allow them to do so as long as they did not run their own fleet.
Lord TEVIOT: I have hesitated to intervene so far on this, but it is an amendment on which I disagree with the noble Lord, Lord Underhill, and one viewed rather with pessisism by the transport industry. I take the point of the noble Viscount, Lord Hanworth, but I think he ended up by saying that the existing operator should run these services. In that case surely the bus companies concerned ought to be responsible for this, and so far as I know they do not want to ask British Railways to run any trains. Therefore, I would say that it is better to leave matters as they are.
Viscount HANWORTH: One must realise that many bus services are in fact

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supported by the local council, and of course the railway would be free to alter their timetable to suit themselves without any notice to the bus company. One hopes that they would give it. I think there is a case for allowing a limited number of connections organised by the railway but using an outside contractor.
Lord BELLWIN: There are already circumstances and situations in which British Rail make arrangements with bus operators to provide bus links to rail networks. I am reminded that a recent example is the new Kettering to Corby bus service. All I can add to what I said before is that for myself the mind boggles when one considers some of the problems that would face both kinds of service. If we were to have it laid down that there should be obligations for them to coordinate in the way that I understand the amendment means, then I can think of all sorts of great problems which would arise. However, bearing in mind that there obviously is flexibility, or room for flexibility, at the present time, I thought that that might have satisfied noble Lords.
On Question, amendment negatived.
Clause 31 agreed to.
Clauses 32 and 33 agreed to.
4.52 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 115:
After Clause 33, insert the following new clause:
(" Temporary modification of penalty
. In section 96 (11 A) of the Transport Act 1968, at the end add—
" Provided that, until 31st December 1983 or such later date as the Minister may by order for the purposes of this subsection prescribe, where a driver or member of the crew of a motor vehicle has contravened any such requirement of the applicable community rules but—
(a) has not, insofar as is material to the offence, driven or been on duty for more, or been off duty for less, than the periods provided in the domestic drivers' hours' code, or
(b) the offence relates to distance driven, the fine shall not exceed £ 1." ").
The noble Lord said: I hope that the Committee, and certainly the noble Minister, will have realised that the attitude of the Opposition throughout in regard
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to the Committee stage of this Bill has been, as was said at Second Reading, to adopt the democratic decision in another place in regard to the philosophy of this Bill, and then try to do its best to help noble Lords, wherever they may sit, to make this an effective Bill. I cannot think of a more constructive example of that than the amendment I am about to move, which has indeed nothing to do with philosophy at all but an awful lot to do with practicability.
The first thing I want to stress regarding this proposed clause is that it is transitional and aimed at meeting what is felt to be a temporary situation. The United Kingdom is in the process of phasing in the Community rules contained in regulation EEC 543/69, as amended. The phasing in will not be completed until the end of this year, but next year, in 1981, Britain will be following the Community regulation, in so far as it is applicable, in its entirety.
There are a number of matters which the United Kingdom has been seeking to have amended in the EEC regulations; notably, the retention of the fixed week, Sunday to Saturday, as opposed to the rolling week of any seven consecutive days. There are other matters which other countries want to raise. It is anticipated that if the subject is reopened by the Council of Ministers there would be a broad reconsideration of the existing regulations, possibly involving a number of changes.
Because of the phasing-in arrangements the worst of the regulation has not yet had impact on British transport operations. It is thought that it would be undesirable for heavy penalties to be imposed in respect of legal provisions which it is widely recognised will require alteration. Indeed, quite apart from the question of heavy penalties there is the question of whether prosecutions ought even to be instituted. It is to cover the period of negotiation of these changes that the proposed new clause envisages modification in the present British law regarding enforcement for a three-year period. Because it cannot be certain that negotiations can be completed in those three years, particularly having regard to the proposed expansion of the Community, provision is made for further temporary extension of the period by ministerial order.
I wish again to make it clear that what is proposed by this amendment is a transitional arrangement based on a rational approach to the subject, and is certainly not meant to be an irresponsible attack upon regulations which Britain agreed to accept on joining the EEC. The need for transition has been recognised in other member States, even those who were parties to the formulation of the requirements laid down in Regulation 543/69. The notable example of this is France, but I shall not bore the Members of the Committee by saying how France and other countries are dealing with these transitional matters unless the Minister— which I do not anticipate— is unhelpful in his reply, in which case I may have to trouble the Committee with those details in order to show how justified this amendment is.
There is a substantial body of opinion in the transport industry which feels that the current European regulation, which is being severely enforced in the United Kingdom, is working to the detriment of British operators as compared with those in other member States, and that it is both logical and desirable to relax the level of enforcement until final agreement and harmonisation of conditions are achieved for the whole of the enlarged Community.
It is obviously important that any change sanctioned by Parliament does not leave a vaccum in enforcement in this country, and therefore the amendment is designed to continue the same strict level of enforcement where anyone contravenes our pre-EEC law. To achieve this the proposed clause envisages two levels of offence with maximum penalties appropriate to each, although the offence would continue to be against the European regulation as incorporated into the provision of Part IV of the Transport Act 1968, as amended.
If I may use the analogy to the Committee, it is rather like saying that if a motorist exceeds the 30 mph speed limit but does not exceed 40 mph the penalty will be X pounds but if in a 30 mph restricted area he exceed 40 mph the penalty will be 2X pounds. This is a decision within the jurisdiction of Parliament, which has the responsibility for enforcing the European law. I commend this amendment to the Committee.
Lord TEVIOT: I cannot be sufficiently strong in my support of this new clause. It is the most important amendment we have had this afternoon. Your Lordships will remember the problems of reforming law on drivers' hours which started with the Transport Act 1968, at which time, during the long Recess, I conducted my own experiments to support the arguments on the views presented to the House. My main memory of driving coaches throughout that summer was the need for flexibility in the law. A long day's driving might be followed by a short one— excursions to the seaside, with plenty of time to relax. The work could be hard, but it had its compensations. So I understand the problems of the industry with this very rigid EEC regulation.
This rigidity means that the European law must inevitably be amended in the near future. It seems that everyone in Europe wants to see changes, and the trouble is that there is no unanimity on the precise changes which should be made. It is because of this— to allow time for the law to be amended— that this new clause is necessary as a temporary transitional measure. It must be understood that the question of fixing penalties is left within the discretion of individual member states. That is stated in Article 18 of this regulation, No. 543/69, so if it is a matter for the member states, then the "competent authority" is our British Parliament. In other countries they treat this regulation in a rather more cavalier fashion. It is openly admitted that 543— a number quoted with much disaffection— is frequently honoured in the breach.
The noble Lord, Lord Mishcon, mentioned France and said he would not bore the Committee. I too do not want to bore the Committee but I must mention a few points about France in this connection. While the Government in France say that the provisions of 543 are the law, the Secretary of State for Transport has made it clear that his enforcement staff have been instructed not to prosecute unless other, more relaxed, limits have been contravened. These limits are, in fact, similar to the old British law, which still applies where transport operators in Britain are outside the scope of the EEC regulation. I have with me copies of the French journals in which these matters are clearly set out, but that is well known

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to the Government. One appreciates that this is a subject on which it might be inappropriate for the Government themselves to introduce this temporary change in the law, but, if it is the will of Parliament, I feel sure they would be glad to accept it.
Without wishing to be patronising, one appreciates that the Committee will not be familiar with the technical complexities of a regulation such as this. As I say, it is the rigidity and complexity which create so many problems. To give one example— and the noble Lord, Lord Mishcon, mentioned this— the greatest single problem in Britain in this sphere is the rolling week of any seven days, whereas we have always used a fixed week, from Sunday to Saturday. The effect of the change is that a new week starts or finishes every single day, and operators have to schedule for seven rolling weeks every fixed week. That has to be done in a demand-responsive industry, where, for example, a fine summer day may bring out two or three times as many trippers as would have travelled if the day were wet. That is not a trivial example because it is not our bus services, which are exempt, but the express and excursion coaches which are now beginning to suffer from this EEC restriction.
I have tried to concentrate on the aspects of the new clause of which I have personal knowledge. The noble Lord, Lord Mishcon, explained its implications in a way which the Committee will have appreciated. I have been anxious to add the views of the driver who, at the end of the day, is the man who suffers from a theoretical, insensitive and frequently misguided piece of European legislation. The new clause offers a sensible and necessary bridge until such time as the regulation can be brought nearer to reality. It is with some fervour that I appeal to noble Lords on all sides of the Committee to agree to the new clause.
Lord BELLWIN: I do not know if the noble Lord, Lord Mishcon, will consider my remarks helpful. I suspect he may consider them not unhelpful, but perhaps not sufficiently helpful to get him to where he would like to be. The noble Lord will be aware that the EEC rules on drivers' hours were agreed long before we joined
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the Community. Thus, we had no say in their drafting, and certainly many of the provisions are not those we would have chosen for ourselves. Nevertheless, I am encouraged by the industry's attempts to adapt to this more stringent regime. The effect of the amendment would be to nullify the EEC drivers' hours rules where they apply in this country, as nobody would take a £ 1 fine seriously. Indeed, to put a £ 1 fine in the amendment is derisory, as doubtless it is intended to be. Regretfully, therefore, I have no alternative but to reject it. I am advised that in any case it would be a breach of the Treaty of Rome and would be overridden by the provisions of the European Communities Act. There is now European Court case law making it clear that national law which obstructs the implementation of EEC regulations is of no effect
I listened carefully to the points which were made and the reference to EEC Regulation No. 543/69, which says that it is "binding in its entirety" and is "directly applicable" to all member states. Whether or not that is, as my noble friend Lord Teviot said, honoured in the breach rather than in the observance, is something of which I am not aware. That and the whole question of how far a country like France does or does not observe the regulations is a very wide subject indeed, but, so far as we are concerned, we try to abide by the regulations, and try, if we do not like them, to have them altered by negotiation. I can tell noble Lords that most member states are at present against any changes in EEC regulations. We watch the position very closely in Brussels. The three years we negotiated were the maximum we could get and, as for the rolling week point to which my noble friend referred, there is no evidence yet that it is causing many problems, though of course it is something we shall have to watch very carefully.
A ruling by the European Court in 1978— the Ratti case— found that national law that obstructed the implementation of EEC regulations was of no effect, and thus the amendment could be interpreted as bringing the law into disrepute. I am not without sympathy, despite what I have said, with what the noble Lord, Lord Mishcon, said, because quite clearly there

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are arguments which, in my view, are strong. But I think the overriding factor here has to be the position in regard to the EEC regulations, to which we at least try to conform, and the fact that the case law which is now being built up on this is not without relevance. Therefore, perhaps not without some regret, I must advice the Committee to reject the amendment.
Lord MISHCON: The forecast of the Minister, that I would have some pleasure and some displeasure at his remarks, was completely accurate. My pleasure is that I have his sympathy. My displeasure is that it is passive sympathy and that nothing has been proffered by the noble Lord to deal with the situation which he himself acknowledges is unjust. Are we really to continue to be faced with a situation where other Governments in the Community decide to do various things to protect their trade and industry and our Government sit idly by?
I promised noble Lords earlier that I would not bore the Committee, unless I had to, with examples of what happens elsewhere, but I am afraid the Minister has made it necessary for me to bring to the Committee's attention what is being done elsewhere in regard to Regulation No. 543/69— for example, in France. I am reliabily informed that the regulation did not start to be seriously applied in the original six member states until the mid 1970s. In the summer of 1975 M. Marcel Cavaille, the French Secretary of State for Transport, made it known that for a transitional period after 1st September 1975, while the law would remain in accordance with Regulation 543/69— as would be the case with the new clause proposed by the amendment— transport operators would not normally be prosecuted if they did not exceed certain limits which were more relaxed than those prescribed in the EEC regulations.
It is interesting to know what the limits were: maximum period of continuous driving, five hours as against the EEC requirement of four hours; maximum driving in a day, 10 hours as against the EEC requirement of eight hours; minimum daily rest, eight hours as against the EEC requirement of 10 hours, with compensation allowed. If an offender were
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to be prosecuted, it was made clear that the courts would apply the European regulation but it was understood that this would happen only if prosecutions were initiated on other grounds beyond those I have just indicated.
I had hoped that at the very least the Minister might have said that perhaps it is not appropriate to include such a situation in an Act of Parliament, though I am advised that it is perfectly proper for our Parliament to decide— while acknowledging thatthis isthelaw— what the penalty shall be during the transitional period while these matters are being looked at. If the Minister is advised to the contrary— that it is not proper for Parliament to pass such an amendment; and I do not concede that that is so— then I should have thought that at the very least the Minister would have said that he would if necessary confer with his right honourable friend the Secretary of State for the Home Department, and see that an intimation was given to the police in regard to these offences that, for a transitional period, if there was merely a breach of the regulation— and it is not a home-based situation, as it was, and still may be after negotiation— prosecution should not normally be brought.
I personally regard that as being possibly less advantageous to the point that the Minister is apparently making; namely, that what is being considered here would be a breach. I should have thought that to repeat the law and to say that the EEC regulation is binding, but that there should be only a nominal penalty, would be the way to get over the matter; and I cannot see the slightest harm in that. But for us to place our own operators in a disadvantageous position as compared with other members of the community— when everyone knows what is happening and when these matters are being negotiated— seems to me to be entirely wrong. Unfortunately without such a provision as that contained in the amendment our courts will be completely misled when prosecutions are brought and the matters come before them. There may be imposed convictions and fines which are completely out of proportion, having regard to the situation which your Lordships' Committee has patiently listened to me develop this afternoon.
Lord BELLWIN: I do not think that I can go much farther on this matter. I am surprised if in fact the noble Lord, Lord Mishcon, is really pressing the point that we should follow the French example which in so many ways we deplore when they depart from the regulations. I should not have thought that that was the way we wanted to go. Nevertheless the noble Lord made some very telling observations in his closing points. I certainly cannot agree that we can accept this matter. I repeat what I said previously; namely, that we are obliged to consider carefully the points that the noble Lord makes, particularly his final points. I assure him that we shall look at them very carefully, but for the moment I cannot accept the amendment as it stands.
Lord MISHCON: It is with some hesitation that in regard to this amendment I take the course that the Minister has invited me to take. I know how helpful the Minister tries to be, and I know that he, like so many of us, wishes the Bill to be as effective as possible, whether or not we like the original policy in regard to it. I am accepting his assurance in its literal sense: that he will really have the matter looked at very carefully, with those of his colleagues who may be able to assist in regard to questions of police prosecutions and so on. On the clear understanding that he will be good enough to let me know— and no doubt the noble Lord, Lord Teviot, would also wish to be informed— of progress regarding his thoughts and those of his right honourable friend on this matter, and will do so well before Report stage, so that if necessary we shall know that we have to repeat the amendment in some form or other at that stage, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 4 agreed to.
Clause 34 [Supplementary provisions with respect to offences]:
5.15 p.m.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 116:
Page 32, line 2, leave out (" body corporate ") and insert (" company ").
The noble Lord said: I spoke to this amendment when dealing with Amendment No. 78. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 117 to 119:
Page 32, line 5, leave out (" body corporate ") and insert (" company ").
line 7, leave out (" body corporate ") and insert (" company ").
line 9, leave out (" body corporate ") and insert (" company ").
On Question, amendments agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 120:
Page 32, line 12, leave out (" body corporate ") and insert (" company ").
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 121:
Page 32, line 13, leave out subsections (3) to (8).
The noble Lord said: This is a largely technical amendment consequential on the new clause about partnerships. Any special provisions about partnerships will, under that new clause, be made in regulations. There is no need to have special provisions about unincorporated associations, since they will not be permitted to hold licences as such. Therefore we can simplify the Bill and delete the subsections in question. I beg to move.
On Question, amendment agreed to.
Clause 34, as amended, agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 122:
After Clause 34, insert the following new clause:
(" Defences available to persons charged with certain offences.
.— (1) It shall be a defence for a person charged with an offence under any of the provisions mentioned in subsection (2) to prove that there was a reasonable excuse for the act or omission in respect of which he is charged.
(2) The provisions referred to in subsection (1) are—
(a) sections 7 (7), 14 (6), 23 (5) and 24 (4);
(b) in the 1960 Act—
(i) so much of section 144 (8) as relates to contravention of section 144 (l) (a);
(ii) sections 146 (2) and (3), 147 (2) and 148 (2);
(iii) so much of section 232 (3) as relates to failure to comply with the requirement of section 232 (2) (6); and
(iv) section 239.

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(3) It shall be a defence for a person charged with an offence under any of the provisions mentioned in subsection (4) to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of any offence under that provision.
(4) The provisions referred to in subsection (3) are—
(a) sections 4 (5) and (6), 16 (3), 17 (8) (Z>), 18 (5) and 21 (7);
(b) in the 1960 Act—
(i) so much of section 144 (8) as relates to contravention of section 144 (1) (); and
(ii) sections 148 (2) and 157 (2).").
The noble Lord said: I spoke to this amendment along with Amendment No. 20. I beg to move.
Lord MISHCON: I rise only to ensure that a point that I previously made when the noble Minister spoke on this matter has been looked at by him. Alternatively, if he has not had the opportunity to do so, which I can quite understand, I should like to know whether he still has the point in mind. I should like to take the Committee through only the four matters dealt with in subsection (2) (a) of the new clause; namely, Clauses 7 (7), 14 (6), 23 (5) and 24 (4). With regard to all those matters it is a defence to prove that there was a reasonable excuse for the act or omission in respect of which the defendant is charged.
Clause 7 (1) deals with failing to supply particulars of a change in fares. I have not the slightest quarrel in regard to a reasonable excuse for the act or omission being a defence in that case. Clause 14 (6) deals with failing to give or publish a notice in regard to stage carriage services in trial areas. I have not the slightest quarrel with the provision that a reasonable excuse should be a defence in that connection. Clause 24 (4) deals with failure to give traffic commissioners information about certain matters. Again, though the Bill originally included the word "knowingly", I have not the slightest objection to the fact that now a reasonable excuse for the act or the omission is a defence.
However, I have the strongest feelings regarding Clause 23 (5), which deals with failure to give the commissioners information of relevant convictions. The only defence in that regard in the Bill as drawn was that the person concerned did not knowingly commit the offence. To alter
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the situation from that which included the word "knowingly" to a defence that there is a reasonable excuse for the act or omission seems to open an avenue of defence in regard to failure to give details of a relevant conviction which may be of the utmost seriousness and importance in regard both to the traffic commissioners and the question of safety of transport. I asked the Minister to look at that again. I do not know whether he has had the opportunity to do so. If he has, he will doubtless intimate it; if he has not, I merely ask for his assurance that he will look at it very soon.
Lord BELLWIN: I can gladly assure the noble Lord that we are in fact looking at it, and that I will certainly let him have this decision, and anything else which goes with it, by the time we come to Report stage.
On Question, amendment agreed to.
5.21 p.m.
Schedule 5 [Minor and consequential amendments relating to public service vehicles]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 123:
Page 62, line 10, leave out paragraph 13.
The noble Lord said: In order to simplify the provisions governing a breach of regulations, we have decided that all aspects of the keeping and producing of documents required for international services should be dealt with in the regulations which govern the operation of international coach services. This paragraph is therefore no longer necessary. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 124:
Page 62, line 42, at end insert—
(" TRANSPORT ACT 1962 (c. 46)
In section 4 (5) (by virtue of which the Railways Board are not authorised to carry passengers by road in certain hackney carriages adapted to carry less than eight passengers), for "eight" substitute "nine".").
The noble Lord said: This is a purely consequential amendment. It brings the passenger seat threshold in this subsection of the 1962 Act into line with the definition

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of a public service vehicle in Clause 2 of this Bill, where the threshold has been increased from 8 to 9. I beg to move.
On Question, amendment agreed to.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 125:
Page 63, line 7, after (" 1980) ") insert (" and if in relation to a new bus service it is available to the general public ").
The noble Lord said: In moving Amendment No. 125 I should like, in addition, to speak to Amendment No. 181. This amendment, No. 125, proposes the insertion, in the place specified in the amendment, of the words:
"and if in relation to a new bus service it is available to the general public ….".
Amendment No. 181 proposes to omit, from the place specified in the amendment, the words,
" is available to the general public and ….".
These two sets of words may seem contradictory, but I shall endeavour to explain as simply as I can. These two amendments both relate to amendments which the Bill as at present worded would make to subsection (8) of Section 92 of the Finance Act 1965, which applies to new bus grants and reimbursement of fuel oil duty for bus services.
In trial areas, with which Amendment No.. 125 is concerned, under the Bill any operator could convert a regular contract into a fare-paying service so as to qualify for this Government support; and we must keep in mind that there will be no licensing or other controls in trial areas. Moreover, a change of this kind could be purely artificial. An operator could arrange that a company hiring its vehicle for the purpose of transporting the company's workers should charge the workers a nominal fare. This would make the service one which was eligible for the Government support. I am certain that this is not what the Government intend, but I am advised that this is what could take place under the present wording of the Bill.
Amendment No. 181, which relates to Clause 52, is the reverse situation— the position outside the trial areas. There are at present bus services which may carry only certain persons; for instance, a fare-paying school bus and a works' bus service. Passengers on those services
610
are restricted by the licence to pupils of a school or employees of a particular works. These services qualify for Government support. I am advised that under the terms of the Bill they would cease to do so. The fact that the Government are changing various definitions in the Bill should not penalise these special regular services. So existing operators, in the circumstances outlined, should not be penalised; and in the trial areas there should surely be a safeguard for the expenditure of public money. These are the two points which these two amendments seek to deal with. I beg to move.
Lord BELLWIN: I think the need for this amendment falls with the amendment to Clause 52. If there was no general test of availability to the general public for eligibility for fuel duty rebates and new bus grant, I can see that one might be required in trial areas; but it must surely be right for the availability test to be general. The new bus grant and fuel duty rebate have always been designed to help the local bus network. As a consequence of the changes in definitions of the different categories of bus service made by this Bill, it has been necessary to change the criteria for eligibility for these grants. In doing this we have kept the basic purpose of the grants always before us. They were not intended to help services with a special clientele, and, in the past, most of these have been excluded by the minimum fare condition of the stage carriage. We are now excluding them in so many words.
Admittedly, a few services now eligible for grant will either lose their eligibility or will have to be opened to the general public. If they are so opened, this may mean a new public transport facility. If they are not, then those benefiting from them— say, the workers or the employer— will have to meet some (presumably a little) extra cost. But there is an important point of principle here on which we are firm. Parliament has agreed to make available money as an aid to public transport, not for private arrangements. We must maintain this important distinction.
Lord UNDERHILL: The noble Lord has explained quite definitely that some services outside the trial areas will lose Government grants. What he has not

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explained is why these grants have been paid for some period but the Government have now decided to stop them, because it is in completely changed circumstances that they have decided that they shall no longer continue. What I did not gather from the noble Lord— and it may be my own fault that I did not grasp it— is this. He did not deal with the point I made, which is the second amendment, dealing with the position in the trial areas. Here, undoubtedly, there could be artificial arrangements which could mean the expenditure of Government grants in circumstances which, frankly, cannot possibly be justified. On that point, perhaps the noble Lord would say why, there, they are prepared to expend Government money, whereas in the case of other services, which have continued for some time now to have Government grants, the Government propose to stop them outside the trial areas.
Lord BELLWIN: All I can add, really, is that since availability to the general public is to be a criterion of eligibility throughout Great Britain, there is no need for any special provision for the trial areas. As to the other points made, I fear there is nothing more I can add at this time; but I would have thought that the arguments made were pretty convincing in this instance. I hope the noble Lord may feel so.
On Question, amendment negatived.
5.30 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 126:
Page 63, line 41, at end insert ("; and
(b) for the definition of "bus service" substitute—
" "bus service" means a stage carriage service within the meaning of Part I of the Transport Act 1980 which is neither—
(a) an excursion or tour; nor
(b) a service as regards which the condition specified in section 3 (3) () of the Transport Act 1980 (long journeys only) is satisfied;"").
The noble Lord said: This amendment is purely consequential on the re-definition in the Bill of "stage carriage" and "express carriage" and brings the definition of "bus service" in the Transport Act 1968 into line with the Bill. I hope the
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Committee will feel able to accept the Amendment. I beg to move.
On Question, Amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 127:
Page 64, line 4, leave out paragraph 2.
The noble Lord said: This small amendment corrects an error in Schedule 5. It deletes a provision which need never have been included. I beg to move.
On Question, amendment agreed to.
The DEPUTY CHAIRMAN of COMMITTEES (Baroness Wootton of Abinger): If Amendment No. 128 is agreed to, I shall not be able to call Amendment No. 128A:
Lord BELLWIN Lord BELLWIN moved Amendment No. 128:
Page 64, leave out lines 8 to 13.
The noble Lord said: I spoke to this amendment when moving Amendment No. 107A. I beg to move.
On Question, amendment agreed to.
Lord MORRIS Lord MORRIS moved Amendment No. 128B.:
Page 65, line 20, leave out (" of operator ").
The noble Lord said: I hope it will be for the convenience of the Committee if, in moving this amendment, I speak to Amendment No. 129. I am rather at a loss as to why Amendment No. 128A falls, but that is another matter. This amendment is a purely drafting amendment of sublime simplicity. It corrects two references in the Bill in Schedule 5 to the description of Clause 14 of the Bill. The rubric to Clause 14 reads:
" Duty to publish particulars of stage carriage services in trial areas ".
I believe it would be helpful if references in other parts of the Bill to what will become Section 14 of the Transport Act 1980 are consistent and precise. I beg to move.
Lord MOWBRAY and STOURTON: I am grateful to my noble friend Lord Morris for his helpful drafting amendment which provides consistency in the reference in Schedule 5 to the description of Clause 14. I am pleased to accept it.
On Question, amendment agreed to.
Lord MORRIS Lord MORRIS moved Amendment No. 129:
Page 65, line 21, leave out (" bus service in trial area ") and insert (" stage carriage services in trial areas ").
Lord MOWBRAY and STOURTON: I should like to thank my noble friend for this amendment. The Government willingly accept it.
Lord MISHCON: May I inquire whether the noble Lord, Lord Morris, is thinking of changing his profession and becoming a parliamentary draftsman?— because the number of occasions on which he has suggested drafting improvements which have been accepted by the Government, while possibly making the responsible parliamentary draftsman not so happy, makes the Committee happy that they have Lord Morris in their midst.
Lord MORRIS: All that I would say to that is, God forbid!
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 130:
Page 65, line 22, after (" 2 (9) ") insert—
(a) in the definition of "commercial vehicle" for "not more than five passengers" substitute "not more than eight passengers"; and
(b) ").
The noble Lord said: The Passenger Vehicles (Experimental Areas) Act 1977 permits various relaxations to the bus licensing system on an experimental basis but limits those with commercial vehicles to vehicles adapted to carrying not more than five passengers. This limit of five is out of line with that of eight which we are adopting generally in the Bill. The small increase on the limit will facilitate experiments with the use of commercially operated small minibuses. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 131:
Page 65, leave out lines 31 to 33.
The noble Lord said: I spoke to this amendment when moving Amendment No. 111. I beg to move.
On Question, amendment agreed to.
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 132 and 133:
Page 67, line 25, leave out (" Subsections (6) and (7) ") and insert (" Subsection (6) ")
line 28, leave out (" they apply ") and insert (" it applies ").
The noble Lord said: I spoke to these amendments when moving Amendment No. 20. I beg to move the two amendments en bloc.
On Question, amendments agreed to.
Schedule 5, as amended, agreed to.
Clause 36 [Interpretation of Part I]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendments Nos. 134 and 135:
Page 33, line 13, at end insert—
(" "company" means a body corporate; ") line 18, at end insert—
(" "director", in relation to a company, includes any person who occupies the position of a director, by whatever name called; ").
The noble Lord said: I spoke to these amendments when moving Amendment No. 78. I beg to move the two amendments en bloc.
On Question, amendments agreed to.
[Amendment No. J36 not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 137:
Page 33, line 29, leave out from (" concerned ") to (" the ") in line 31 and insert (", whether or not any driver leaves or enters ").
The noble Lord said: This is a useful Opposition amendment to the definition of "international operations" and was accepted in Committee in another place. We have since discovered that the definition can be expressed more clearly and concisely. This is what this amendment does. I beg to move.
On Question, amendment agreed to.
5.38 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 138:
Page 33, leave out lines 36 and 37 and insert—
(" "operating centre" includes office and shop premises and maintenance facilities owned or rented by a holder of or an applicant for a public service vehicle operator's licence and, in relation to a

615
vehicle, means the place at which the vehicle is normally maintained or based; ").
The noble Lord said: This amendment seeks to give a more precise definition of "operating centre "by substituting the words in the present Bill for those that are on the scheduled list. The words in the Bill are:
" ' operating centre', in relation to a vehicle, means the base or centre at which the vehicle is normally kept".
We regard that as totally inadequate, Every public service vehicle business, noble Lords will agree, should be properly conducted. This requires a suitable operating centre. It can be safely left to the traffic commissioners to decide what is suitable in each individual case. Where the operator carries out his own maintenance the provision of the necessary facilities will have to be taken into account. But where maintenance is contracted out, there should be suitable parking arrangements for vehicles and also there is a need for each operator to have office facilities adequate for his type and size of operation. These things are essential to good public service and should be specifically referred to in the legislation.
While Clause 18 (3) of the Bill limits any one person to one licence in any traffic area, Clause 18 (2) provides for a licence holder having:
" one or more operating centres in that traffic area ".
Indeed, facilities may often be shared among different centres and the position required to be looked at as a whole. For example, minor maintenance may be carried out where the vehicle is based or kept but all major work should be carried out at other premises. Again, a small operator may keep vehicles on a coach park or car park overnight and have them maintained by someone else, perhaps on a wholly satisfactory contract basis, but would also need to have office premises. These facilities must be looked at as a whole. This approach which, it is submitted, is the only practical one means that the operating centre needs to be defined. The proposed definition to replace that at present in Clause 36 reflects a situation which, in moving this amendment, I have endeavoured to set out. I beg to move.
Lord BELLWIN: I am bound to say
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that this amendment makes nonsense of the phrase "operating centre" as used in the Bill. Under Clause 18, licences can only be granted by the traffic commissioners in whose area the applicant has an operating centre. The same clause provides that the vehicles authorised to be used under the licence are only those whose operating centre is in the area of the commissioners who granted the licence. Clearly, the operating centre must be identifiable at a particular place. It cannot be any number of different places. If the operator has a large concern, such as an NBC subsidiary, these places may not even be in the same traffic area.
The noble Lord, Lord Underhill, is apparently concerned that commissioners should be able to look at an operator's premises in deciding on a licence application. I fail to see why. The commissioners are only concerned with the operators' suitability to run public service vehicles. They will be interested in where those vehicles are maintained— but this may not be at the operator's own premises. He may have a contract with another operator or a nearby garage. Hence the wording of Clause 20 (3) which directs the commissioners' attention to maintenance facilities or arrangements. The commissioners will be interested in how the operator proposes to run his business— his financial standing, professional competence and good repute. But they have no interest in the state of his shops or offices; and, as I have said on an earlier amendment, they have no locus in environmental matters.
Lord UNDERHILL: I will take note of what the Minister has said and look at this more carefully in the Official Report. We are anxious that the licensing commissioners should be able to look at the whole question of an operation which in proposing the amendment we had in mind would cover all the points to which I referred. In view of the Minister's reply, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
Lord MISHCON Lord MISHCON had given Notice of his intention to move Amendment No. 139:
Page 33, line 43, at end insert—
(" "person" includes any unincorporated body such as a partnership, club or

617
association, which is for the purposes of this Part of this Act a separate entity from its members; ").
The noble Lord said: We have had a full discussion before the Committee regarding Amendment No. 108. Now that this amendment is called, apart from partnerships, clubs or associations that arc dealt with in the amendment, would the Minister please, in accordance with his kind undertaking, also look at clubs and associations in the light of what I said? On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 140 not moved.]
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 141:
Page 34, leave out lines 20 to 22.
The noble Lord said: I beg to move this amendment and to take with it Amendment No. 185. These are standard definitions which are needed to avoid doubt as to the meaning of "modification" and "statutory provision". They are now placed in Clause 58, and apply to the whole Bill. Without these amendments, the use of these expressions in Clause 58 could have been open to some confusion. The definitions provided are well prece-dented. I beg to move.
Lord MORRIS: May I ask a question regarding the amendment to Clause 58? The amendment inserts the definition of "modification" and reads:
"includes addition, omission and alteration, and related expressions shall be construed accordingly".
To my mind this means that "modification" has some other meaning. I wonder whether my noble friend would be good enough to tell me what meaning it could possibly have other than the meaning as defined.
Lord MOWBRAY and STOURTON: I should not like to reply off the cuff. I will certainly find out and let my noble friend and anyone else who is interested have the answer.
On Question, amendment agreed to.
5.45 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment 142:
Page 35, line 7, at end insert—
618
(" (4) In this part of the Act "prescribed" means prescribed by regulations and "regulations" means regulations made under section 160 of the Road Traffic Act I960.").
The noble Lord said: We hope that it is considered helpful to move this amendment. We are trying to identify the powers of the Minister for making the various regulations envisaged in the Bill. We think that our cross-reference to the 1960 Act may do this. I beg to move.
Lord MOWBRAY and STOURTON: I am advised that this amendment is unnecessary, although we sympathise with the noble Lord for moving it. Clause 1 of this Bill, subsection (3), provides for the construction of Part I as if it were contained in Part III of the Road Traffic Act 1960. We must read the two together as if they were a single enactment.
Some sections of Part III of the 1960 Act have of course been repealed. The rest remain, some with amendments. Section 160 is one of those. It enables the Minister to make regulations for any purpose for which regulations may be made under "this Part of this Act "and for
" prescribing anything which may be prescribed under this Part of this Act ".
Because of Clause 1 the term
" this Part of this Act "
will on enactment include Part I of this 1980 Bill. Moreover, Clause 1 (3) specifically mentions that the interpretations in Clause 36 will apply to the 1960 Act. It is therefore not only unnecessary to refer to regulations being made under Section 160 of the 1960 Act but it would be a rather odd interpretation to apply to that Act. All this to-ing and fro-ing between enactments is, of course, confusing. Consolidation is needed and as my noble friend Lord Bellwin indicated at Second Reading, it is already underway. I am afraid that is very complicated but I hope my speech was intelligible to the noble Lord opposite.
Lord UNDERHILL: I thank the noble Lord for explaining why we cannot be helpful to him. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 36, as amended, agreed to.
Clause 37 [Transfer of undertaking of National Freight Corporation]:
Lord MISHCON Lord MISHCON moved Amendment No. 143:
Page 35, line 22, at end insert—
(" Provided that no such order shall be made until a draft thereof has been laid before, and approved by a resolution of, both Houses of Parliament.").
The noble Lord said: We are now entering into a different part of this Bill, one which deals with the demise of the National Freight Corporation, its resurrection— if I may say so— into that of a limited company and its consignment to heaven or hell dependent upon who in private enterprise manages to succeed. In another place a Member— understandably passionately— described the various stages. He also apparently had great powers of elocution: he described it as the write-off rip-off followed by the sell-off rip-off and then by the strip-off rip-off!
In the very delicate and gentlemanly atmosphere of this Committee, I do not copy these descriptions at all; and by agreement— as Members of the Committee know— there will be no argument about policy but only how to carry out the policy dictated— "dictated" is the wrong word— decided in another place to the best advantage of the industry and those engaged in it.
The amendment before the Committee at the present stage is that no order shall be made fixing the appointed day until a draft has been laid before both Houses of Parliament and approved by a resolution.
The amendment is not intended in any way at all to be a trick amendment, a delaying amendment or an obstructive amendment. It is to preserve the sovereignty of Parliament in dealing with a matter which is of great importance to the nation.
At the moment, when the appointed day occurs, the whole of the National Freight Corporation goes "without further assurance", if I may use the term in the Bill, to a company which is defined as a company limited by law or an ordinary limited company. As from that stage— but one does not know when— two things will follow. One is a complete write-off of the indebtedness of the National Freight Corporation, amounting to £ 100 million, which takes place just before the
620
appointed day. One does not know what the precise amount will be on the appointed day, because one does not know when the appointed day will be.
Then it is the intention of this Bill that there shall be a sale thereafter, again at a date unknown, on terms unknown and to purchasers unknown. The company will be operating under a memorandum and articles of association, the terms of which have not yet been disclosed to either House of Parliament. I need not tell your Lordships, many of whom are experienced in commercial matters, how vital memorandums and articles of association are. For example, they deal in matters of this kind with provisions which safeguard the question of sale to foreign interests, which is a matter that has been of some concern to the nation in other industries in recent times.
Therefore, what my noble friends and I are seeking to do by this amendment— and, I repeat, with no wish to delay or impede— is to see that when an order is made (I repeat that we do not know when it is going to be) for the appointed day to occur, Parliament shall have an opportunity of considering that order, the terms of it, the relevance of that date to various considerations: I shall not repeat those to which I have already drawn your Lordships' attention. It seems to me that, unless Parliament is to throw its obligations upon Ministers, which has been criticised in very many places and indeed in this Chamber and in another place by those independent Members who believe in preserving the sovereignty of Parliament, and unless we are to fail to follow the principle of parliamentary responsibility, then it is absolutely wrong for anyone to oppose this amendment too.
That does not mean that the Minister will not seek to do so, but I hope that, having heard this speech, having been imbued, as he was in his local government days, with the independence of individual councillors when they sat at a council meeting, and having now learned— as I am sure he has done so easily— what parliamentary duties mean to those of your Lordships who still keep your independence and what they will mean to honourable Members in another place, he may be converted and in those circumstances will gracefully accept this amendment.
Lord BELLWIN: The matter has been so beautifully put that I should like only to say that, although it is quite true that in another incarnation I was always impressed by the independence of individual councillors, I was also impressed by the fact that when the time came to put your hand up to vote you alv/ays voted in line with the party, and so I fear that the independence broke down at the end of the day.
Lord MISHCON: May I intervene, with your Lordships' permission, to say that that is not the experience in this place, as I hope the noble Lord will find in a few minutes.
Lord BELLWIN: No, I have already found that is not the experience in this place: I entirely accept that without question. I must say in fairness, however, before I leave this, that I occasionally found the same thing in another sphere. I accept that the appointed day order is an important technical device in determining exactly when the NFC's undertaking is to be transferred to the successor company; but the appointed day will not represent any new policy departure or give rise to any new issues of substance. It will merely give effect to the provisions set out in Part II of the Bill and to which Parliament will have already given approval. Thus, it is quite inappropriate for the appointed day order to be subject to an Affirmative Resolution or, for that matter, to any additional parliamentary procedure. It would simply mean repeating discussion which had already been held, and extensively held, on the Bill itself.
The noble Lord, Lord Mishcon, was concerned that the Bill is not specific enough on the nature of the successor company or on the Minister's intentions. The Bill is quite specific as to the nature of the successor company. Subsection (5) provides that the company must be a standard Companies Act company, limited by shares and with all the shares held by or on behalf of the Minister. The Government's intention on the use of the provisions is quite clear. The Minister will form a company, acting under powers already available to him as a natural person, for the sole purpose of nomination as the successor company to the National Freight Corporation.
622
I do not share the fears of the noble Lord, Lord Mishcon, as to all the dreadful things that might happen under this part, and indeed under the whole, of the proposals as regards the NFC and I fear that on this occasion I would have to oppose the amendment.
Lord MISHCON: The Committee will have noticed that not one single reason has been given by the Minister as to why the order should not be affirmed by both Houses of Parliament. The Minister has not pleaded that this would in any event mean a delay— it would have been extraordinary if he had because, as I have said, the appointed day has not yet been fixed. Nobody knows when it is going to be. There will not be any hurry thereafter. It is a question of a sell-off and it is purely a question of becoming, as we have heard, an ordinary limited company.
It is not very common for any transfer of this importance to take place without— and I am repeating some of the things I said before, but I am going to add to them— Parliament knowing the amount of the debt that is, the precise nature and amount of the debt to be extinguished by means of a Bill; without knowing what are the powers, duties and rights by way of protection in regard to new shareholders, who may become shareholders of the company limited by shares; and without knowing— I did not mention this before— the nature of the securities to be given to the Minister in compensation, among other things, for the debt which is to be extinguished; without knowing what the intention of the Minister is after the appointed day in regard to the date of sale; without knowing the nature of the purchaser the Minister is going to find. I could in fact dilate upon this, because the Minister was kind enough to write to me but I shall be dealing with his letter in regard to another amendment and I will not embarrass him unnecessarily by quoting his letter now.
It is completely uncertain— this I can tell your Lordships— as to the type of purchaser that is to be found. It may be thrown to the market and so on. In all those circumstances, I ask your Lordships, wherever you may be sitting, to have regard to the sovereignty of Parliament in a matter of this kind, and I ask all your

623
Lordships, regardless of party or of no party at all, to have that principle in mind when voting on this amendment— and we shall in fact be dividing upon it.
Lord BELLWIN: I really feel that we are making of this something which it is not. I should repeat what I said before, but perhaps in another way. The fact is that on this matter of such great moment, to which the noble Lord, Lord Mishcon, is drawing attention, the order designating the appointed day will not be subject to parliamentary procedure, as it will not involve any new policy departure. The noble Lord said that I had not given any reason why we take this line, but I thought that I had given the very best reason of all; namely, that the matter would have been extensively discussed on the Bill itself. That has been so in another place and will be so here.
This procedure is simply the mechanical step which is necessary to bring into operation the relevant provisions in Part II of the Bill. It is desirable to retain maximum flexibility as to the date on which the NFC's undertaking is transferred to the successor company, and the appointed day procedure is the technical means intended to achieve this. But the designation of the day will not give rise to any policy issue of substance. It will merely put into effect— and this is the key part— provisions that have been fully debated in Parliament.
I am not sure whether the noble Lord would like me to go into greater detail as to the kind of company it will be; I suspect that he does not wish me to do that. But the point is that I am satisfied, and I feel that this Committee will be satisfied that the proposals here are entirely in keeping with what has gone before as a matter of policy in another place, with which we are concerned on this part of the Bill in this Committee. Therefore, if the matter is pressed to a Division I hope that your Lordships will accept the Government's line on this, which I think is a very fair one in all the circumstances.
Lord MORRIS: I rise to support my noble friend on this point. The noble Lord, Lord Mishcon, showed a certain fear for putative shareholders, but it is worth saying that any future shareholder
624
has the ultimate right of protection. He does not have to buy shares in this company when it is formed. He will have every opportunity to decide whether or not to do so. I do not think there is any reason for the noble Lord, Lord Mishcon, to express fear on behalf of any future shareholder.
Lord MISHCON: I rise only to clarify the point and will do it very quickly. I was not expressing fears on behalf of shareholders. I was expressing fears on behalf of the nation, as to who the shareholders might be.
Viscount SIMON: When I first read the amendment and heard what was said. I was inclined to support the noble Lord. Lord Bellwin, but I wonder whether he could help by explaining this to me. As I understand the position, the order will simply establish the appointed day. Does it do anything else? Does it simply say "The appointed day will be such-and-such "'? Does it give any of the information for which the noble Lord, Lord Mishcon, has asked'.' If this is the only way that we are to know how the outline of this plan is being filled in, then I agree that we should like to see that outline filled in before Parliament. But, on the face of it, all that the order will do is to say, "The 1st January shall be the appointed day". It will not say anything else.
Lord BELLWIN: That is absolutely right. The purpose and effect of the amendment, as I am advised and as I interpret it, is to make subject to Affirmative Resolution the order whereby the Minister, with the consent of the Treasury, appoints the day on which the NFC's undertaking is transferred to the successor company. As drafted, the order is not at all subject to parliamentary procedure.
Lord MISHCON: Will I be forgiven if I rise— and I promise that it will be for the last time— in order to make one point abundantly clear? It is a completely truthful answer which the Minister has given, as one would expect of him, but the truth has been expressed in a summarised form. It is absolutely correct that all it will say is, "This is going to be the appointed day", but whether Parliament agrees that that should be the appointed day and that vesting should take place

625
depends on the situation at that time, for the very good reason that immediately the order is made certain things flow, of which Parliament will be completely unaware. I must repeat them, only because the noble Viscount, Lord Simon, who is always so clear on these matters, appears to be under a possible misunderstanding which may be shared by other noble Lords.
The fact of the matter is that on that day vesting takes place into a limited company, the memorandum and articles are not seen by Parliament, the nature of the provisions to protect against foreign shareholders and so on are not seen by Parliament, and the amount of the debt to be extinguished— which is completely dependent on when that day is— is not known. All those things will be before Parliament, because questions could be asked in this House and in another place, in order to clarify certain issues before an Affirmative Resolution was made. That is the importance of the whole matter. If it were a technicality, I should not have been taking up the time of your Lordships as I have done. It is a matter of principle in regard to the sovereignty of Parliament.
Lord BELLWIN: I must make one
further point which was touched on by the noble Lord, Lord Mishcon, and which is relevant to the concern expressed by the noble Viscount, Lord Simon. The fact is that when the company is set up, the memorandum and articles must be registered at Companies House. There will be no secret about that and, for convenience, we can arrange for a copy to be placed in the Library of the House as, in any case, they will have to be in existence before the appointed day. That would avoid the charges of noble Lords opposite about the NFC being transferred to some shadowy, unknown organisation. I could elaborate on this again, but there is probably no point at this time. As I said originally, the essence of the amendment concerns the appointed day. The noble Lord, Lord Mishcon, was quite right. Yes, I interpreted it as it was literally set out, and that is what we have to do when considering this amendment.
6.8 p.m.
On Question, Whether the said amendment (No. 143) shall be agreed to?
Their Lordships divided: Contents, 48; Not-Contents, 98.

CONTENTS

Ardwick, L.

Gosford, E.

Peart, L.

Bacon, B.

Hale, L.

Pitt of Hampstead, L.

Beswick, L.

Houghton of Sowerby, L.

Ponsonby of Shulbrede, L. [Teller.]

Blease, L.

Janner, L.

Boston of Faversham, L.

Jeger, B.

Sefton of Garston, L.

Brockway, L.

Leatherland, L.

Shinwell, L.

Caradon, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

Cledwyn of Penrhos, L.

Leonard, L.

Stone, L.

Collison, L.

Llewelyn-Davies of Hastoe, B.

Strabolgi, L.

David, B.

Lovell-Davis, L.

Strauss, L.

Davies of Leek, L.

Maelor, L.

Taylor of Mansfield, L.

Davies of Penrhys, L.

Milner of Leeds, L.

Underhill, L.

Donaldson of Kingsbridge, L.

Mishcon, L.

Wallace of Coslany, L. [Teller.]

Fisher of Rednal, B.

Noel-Baker, L.

Whaddon, L.

Gaitskell, B.

Northfield, L.

Wootton of Abinger, B.

Glenamara, L.

Oram, L.

Wynne-Jones, L.

Goronwy-Roberts, L.

NOT-CONTENTS

Ailesbury, M.

Cathcart, E.

De Freyne, L.

Alexander of Tunis, E.

Chesham, L.

Denham, L. [Teller.]

Alport, L.

Chitnis, L.

Drumalbyn, L.

Amory, V.

Cockfield, L.

Ellenborough, L.

Armstrong, L.

Colville of Culross, V.

Elliot of Harwood, B.

Auckland, L.

Cork and Orrery, E.

Exeter, M.

Avon, E.

Cottesloe, L.

Faithfull, B.

Beaumont of Whitley, L.

Craigavon, V.

Ferrers, E.

Bellwin, L.

Craigmyle, L.

Fortescue, E.

Belstead, L.

Cullen of Ashbourne, L.

Gainford, L.

Brougham and Vaux, L.

Daventry, V.

Glasgow, E.

Caithness, E.

Davidson, V.

Glenkinglas, L.

Campbell of Croy, L.

de Clifford, L.

Godber of Willington, L.

Gowrie, E.

McFadzean, L.

Romney, E.

Gridley, L.

Macleod of Borve, B.

Sandford, L.

Grimston of Westbury, L.

Mansfield, E.

Sandys, L. [Teller.]

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

Margadale, L.

Selsdon, L.

Marley, L.

Sempill, Ly.

Hampton, L.

Masham of Ilton, B.

Sharpies, B.

Harmar-Nicholls, L.

Merrivale, L.

Simon, V.

Hatherton, L.

Morris, L.

Spens, L.

Henley, L.

Mottistone, L.

Stamp, L.

Hereford, V.

Mowbray and Stourton, L.

Strathspey, L.

Hornsby-Smith, B.

Murton of Lindisfarne, L.

Teviot, L.

Hylton-Foster, B.

Northchurch, B.

Trefgarne, L.

Keyes, L.

Nugent of Guildford, L.

Trenchard, V.

Killearn, L.

Orkney, E.

Trumpington, B.

Kilmany, L.

Orr-Ewing, L.

Vaux of Harrowden, L,

Kimberley, E.

Rawlinson of Ewell, L.

Vickers, B.

Lauderdale, E.

Redmayne, L.

Vivian, L.

Long, V.

Reigate, L.

Wigoder, L.

Lucas of Chilworth, L.

Renton, L.

Wynford, L.

Lyell, L.

Rochester, L.

Young, B.

Resolved in the negative and amendment disagreed to accordingly.
6.16 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 144:
Page 35, line 27, leave out subsection (4).
The noble Lord said: Members of the Committee will know that this amendment relates to subsection (4) of the clause which transfers the undertaking of the National Freight Corporation to a company limited by shares. What subsection (4) seeks to do is to extinguish immediately before the appointed day the commencing capital debt of the corporation and outstanding loans to the corporation from the Minister. The total of that amount appears to be some £ 58.72 million of the commencing capital debt and some £ 41.3 million of subsequent borrowings, making a total of £ 100 million. This is money that is owed to the nation. It was being repaid, in regard to interest payments, by the National Freight Corporation at the rate of £ 8 million a year.
The Committee may well wonder why that debt should be extinguished if the company to which the corporation is to be transferred is to be sold off on the market or to some other purchaser or purchasers in the private sector. As I understand it, at the moment the Minister is not sure which way he is going to dispose of this undertaking— or, if he is sure, his decision has not been communicated to the House.
It seems wrong that the nation should be deprived of these very substantial sums merely because it would benefit a private
628
purchaser or private shareholders. I observed that at the Second Reading in another place the Parliamentary Secretary said:
" One of the immediate effects of our proposals is that the capital structure will be very much more attractive ".
I have no doubt that it will be more attractive, but the taxpayer, and the nation, ought to find it much more unattractive.
It may be argued that this is a sensible provision, because the Minister is going to get some securities in place of the loans and the initial capital outlay of £ 57.3 million, and that if those securities are sold on the market or to the public they will be that much more valuable by virtue of the extinguishment of the debt and therefore the nation will get it back in that way. With great respect to any such argument, that just is not the way— and your Lordships will know this very well without any word from me— in which a valuation will take place. It will not be upon the value of net assets if shares are sold, and certainly if they are sold in sections where only a minority interest is passed. These shares will be bought upon the basis of past earnings and some computation will be made by those skilled in these matters as to what, on the basis of past earnings and on the anticipation of future earnings, the shares may be worth. In the interests of the shareholders and the nation, subsection (4) should not be part of this Bill. I beg to move.
Lord BELLWIN: There is no question whatsoever of the Government's existing financial interest in NFC just being thrown to one side. The debt will not be written

629
off without further ado. The liabilities will instead be exchanged for securities which the successor company will be required to issue to the Government under Clause 38. In other words, the Government's financial interest will take the form of securities rather than capital debt as at present. The exact nature of these securities stands to be decided nearer the appointed day. It is likely that they will consist mainly of shares but there will also be scope for other types of security (for example some fixed interest loan stock) if that is thought appropriate.
Noble Lords opposite really have no grounds to complain about the writing off of debt because I should like to remind them that their Government's capital reconstruction wrote off entirely debts totalling £ 53 million. So, all else apart, I do not think the noble Lord will be too surprised to hear that we oppose this amendment.
Lord MISHCON: Nor will the noble Lord the Minister be surprised if in one sentence I answer his last observation: it is a very different thing to write off part of a debt for the benefit of the nation represented by the National Freight Corporation. However, if one writes off a further £ 100 million for the benefit of the subsequent purchaser in the private sector one is dealing with a very different matter— and the noble Lord knows it.
Viscount SIMON: I should like to ask the noble Lord, Lord Mishcon, to help me again. It seems to me that the way in which people will assess the value of these shares (or whatever it is that are sold) is a complicated matter but surely when buying shares in a company which owes £ 100 million and buying shares in a company which does not, the amount to be paid for the shares will take that into account, will it not?
Lord MISHCON: I know that when the noble Viscount addresses questions to me he always does so in order to be helpful and I take that question in precisely that spirit. Of course it is correct— and I cannot deny it— that any purchaser will very much prefer to buy his way into a company which owes £ 100 million less than otherwise would be the case. The point that I am making is that the nation will lose by it, in the sense that the price that
630
will be offered, although it may be a more beneficial price, would not be so to the extent of £ 100 million, whereas, if the £ 100 million remained as a debt and had to be paid off subsequently, the full £ 100 million would be paid.
If I may try to clarify what I have said, it would be a perfect argument if one could say that the £ 100 million was going to be represented by an additional £ 100 million (if we wipe it off) that would come to the nation. The noble Viscount himself has said that calculations are not made in that easy way and he has indicated— and he is quite correct— that a bigger price would definitely be given if the £ 100 million were extinguished. Of course he is right, but my point is that it would not be to the extent of £ 100 million. Therefore if the £ 100 million had remained as a debt for the private sector to take over, the nation could have expected to receive the full £ 100 million.
Viscount SIMON: The noble Lord is more confident than I am about inflation being caught. I am not sure that I would not prefer to receive £ 75 million in cash as a result of the difference in the price rather than get £ 100 million paid over a period from the loan to the company.
Lord MISHCON: I will answer that question from the noble Viscount very briefly. There would not be any question of waiting. As I understand it, it is not a deferred loan; it is a loan which could become immediately payable. Therefore the purchaser would have to provide for the repayment of the loan since the National Freight Corporation would be passing on this liability to the company and therefore presumably the company would have to pay. The securities would be sold and the loan would have to be repaid.
Viscount SIMON: We can turn this into a discussion between the noble Lord, Lord Mishcon, and myself, but I think he has made my point. If in fact the company has to repay the loan at once it will have to recover the cash and where would it recover the cash from, except by selling the shares?
6.27 p.m.
On Question, Whether the said amendment (No. 144) shall be agreed to?
Their Lordships divided: Contents, 48; Not-Contents, 87.

CONTENTS

Ardwick, L.

Hale, L.

Peart, L.

Bacon, B.

Houghton of Sowerby, L.

Pitt of Hampstead, L.

Blease, L.

Janner, L.

Ponsonby of Shulbrede, L. [Teller.]

Boston of Faversham, L.

Jeger, B.

Brockway, L.

Kaldor, L.

Ritchie-Calder, L.

Cledwyn of Penrhos, L.

Leatherland, L.

Sefton of Garston, L.

Coliison, L.

Lee of Newton, L.

Stewart of Alvechurch, B.

David, B. [Teller.]

Leonard, L.

Strabolgi, L.

Davies of Leek, L.

Llewelyn-Davies of Hastoe, B.

Strauss, L.

Davies of Penrhys, L.

Lovell-Davis, L.

Taylor of Mansfield, L.

Donaldson of Kingsbridge, L.

Maelor, L.

Underhill, L.

Fisher of Rednal, B.

Milner of Leeds, L.

Wallace of Coslany, L.

Gaitskell, B.

Mishcon, L.

Whaddon, L.

Glenamara, L.

Noel-Baker, L.

Winterbottom, L.

Goronwy-Roberts, L.

Northfield, L.

Wootton of Abinger, B.

Gosford, E.

Oram, L.

Wynne-Jones, L.

Gregson, L.

NOT-CONTENTS

Ailesbury, M.

Gainford, L.

Mottistone, L.

Airey of Abingdon, B.

Glasgow, E.

Mowbray and Stourton, L.

Alport, L.

Glenkinglas, L.

Murton of Lindisfarne, L.

Amory, V.

Godber of Wellington, L.

Northchurch, B.

Auckland, L.

Gowrie, E.

Nugent of Guildford, L.

Beaumont of Whitley, L.

Gridley, L.

Orkney, E.

Bellwin, L.

Grimston of Westbury, L.

Rawlinson of Ewell, L.

Belstead, L.

Hampton, L.

Redmayne, L.

Caithness, E.

Hatherton, L.

Reigate, L.

Campbell of Croy, L.

Henley, L.

Renton, L.

Cathcart, E.

Hereford, V.

Rochester, L.

Chesham, L.

Hornsby-Smith, B.

Romney, E.

Chitnis, L.

Hylton-Foster, B.

Sandford, L.

Cockfield, L.

Killearn, L.

Sandys, L. [Teller.]

Colville of Culross, V.

Kilmany, L.

Selsden, L.

Cork and Orrery, E.

Kilmarnock, L.

Sempill, Ly.

Craigavon, V.

Kimberley, E.

Sharpies, B.

Craigmyle, L.

Lauderdale, E.

Simon, V.

Cullen of Ashbourne, L.

Long, V.

Spens, L.

Daventry, V.

Lucas of Chilworth, L.

Stamp, L.

Davidson, V.

Lyell, L.

Strathspey, L.

de Clifford, L.

McFadzean, L.

Teviot, L.

De Freyne, L.

Macleod of Borve, B.

Trenchard, V.

Denham, L. [Teller.]

Mansfield, E.

Trumpington, B.

Drumalbyn, L.

Margadale, L.

Vaux of Harrowden, L.

Ellenborough, L.

Marley, L.

Vickers, B.

Elliot of Harwood, B.

Masham of Ilton, B.

Vivian, L.

Faithfull, B.

Monson, L.

Wigoder, L.

Fortescue, E.

Morris, L.

Wynford, L.

Resolved in the negative, and amendment disagreed to accordingly.
Clause 37 agreed to.
Schedule 6 [Supplementary provisions with respect to transfer under section 37]:
6.37 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 145:
Page 68, line 36, at end insert—
(". The transfer to the successor company by virtue of section 37 of the property, rights, liabilities and obligations of the Corporation shall have effect notwithstanding any statutory
632
or other restriction on the powers of any other body affected by the transfer.").
The noble Lord said: This amendment appears rather general and its purpose may not be immediately clear. However, I can assure noble Lords that the amendment is aimed at a particular problem. This concerns British Transport Advertising Limited, a non-profit-making joint subsidiary of the British Railways Board and the National Bus Company. They have a contract with the NFC whereby on an agency basis they enter into contracts with third-parties for display of advertisements of those third parties on NFC property.

633
It appears that, although under Clause 37 this contract will be transferred from the NFC to the successor company, BTA will, as the Bill now stands, be unable to perform it. This is because they are limited by Section 14 of the 1962 Transport Act to dealings with other transport boards, to which select group the NFC will on the appointed day cease to belong.
The amendment, therefore, seeks to safeguard this contract. It does this by ensuring that the transfer to the successor company on the appointed day of the property, rights, liabilities and obligations of the corporation shall have effect notwithstanding any statutory or other restriction on the powers of any other body affected by the transfer. This overrides the general limitation of British Transport Advertising to dealings with transport boards and therefore makes it possible for BTA to continue to fulfil their contract.
I should perhaps also add that the effect of the amendment will be of a transitory nature only. It applies only to obligations, et cetera, which are transferred under the Bill on the appointed day. These will run their course, but there is no permanent widening of the powers of British Transport Advertising or any other body in a similar case. Indeed, no other bodies are known to be affected in such a way. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 145A:
Page 68, line 40, leave out (" (a) ").
The noble Lord said: It would be convenient, with your Lordships' permission, to take with Amendment No. 145A, Amendment No. 145B, to Schedule 6, No. 164A to Clause 41 and Amendments Nos. 180F and 180G to Clause 51. The amendments are essentially technical, but, even so, your Lordships may like to have some explanation as to their purpose, which will probably not be apparent from the Marshalled List. It is the policy of the Bill that, on the appointed day, the successor company should step into the shoes of the corporation. Clause 37 and Schedule 6 are intended to secure a smooth transition. They transfer the rights, liabilities and obligations of the corporation to the successor company. However, an agreement can refer to the
634
corporation without imposing obligations or conferring rights. We have discovered one such reference in the trust deed constituting the NFC (1978) Pension. Fund. There may be other such references lurking in other documents. The amendments to Schedule 6 widen the existing transitional provisions so as to convert, as from the appointed day, any such reference into a reference to the successor company. The amendments to Clauses 41 and 51 are associated drafting amendments. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 145B:
Page 68, line 42, leave out from (" 37 ") to ("a") in line 3 on page 69 and insert (" that agreement shall have effect on and after that day as if—
(a) the successor company had been a party to the agreement; and
(b) for any reference (in whatever terms and whether expressly or by implication) to the Corporation there were substituted, in relation to anything falling to be done on or after that day, a reference to the successor company; and
(c) for any reference (in whatever terms and whether expressly or by implication) to an officer or employee of the Corporation, not being a party to the agreement and beneficially interested therein, there were substituted, in relation to anything falling to be done on or after that day, ").
The noble Lord said: I spoke to this amendment with Amendment No. 145A. I beg to move.
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 145C:
Page 69, line 37, at end insert—
(" Pension schemes
. — (1) Subject to sub-paragraph (2), the provisions of section 74 of the Transport Act 1962 (Minister's powers to make provision about pensions in the nationalised transport industry) shall have effect on and after the appointed day as if—
(a) the expression "Board" included the successor company; and
(b) the references in subsection (l) (a) (ii) of that section to the Commission included references to the Corporation; and
(c) the reference in subsection (2) (e) of that section to a pension scheme in which employees of the Commission, or a subsidiary of the Commission, participated before the date there mentioned included a reference to a pension scheme in which

635
employees of, or of a subsidiary of, the Corporation participated before the appointed day.
(2) Except on the application of the successor company, no order shall be made under the said section 74 on or after the appointed day which has the effect of placing the successor company or a subsidiary of the successor company in any worse position; but for this purpose the successor company or a subsidiary shall not be regarded as being placed in a worse position because an order provides that any changes in a pension scheme are not to be effected without the consent of the Minister.
(3) An order such as is mentioned in subparagraph (2) which is made without the application of the successor company shall not be invalid because in fact it does not have the effect of securing that the successor company and its subsidiaries are not placed in any worse position, but except in so far as the successor company approves the effect of the order the Minister shall as soon as may be make the necessary amending order.
(4) Subject to sub-paragraph (6), any order under the said section 74 and any regulations to which paragraph 17 of Schedule 7 to the Transport Act 1962 applies (which continues in force certain earlier pension provisions) which—
(a) are in force immediately before the appointed day; and
(b) relate to the Corporation, its employees or its pensions schemes,
shall continue in force, subject to any provision made by virtue of sub-paragraph (1), and as respects anything falling to be done on or after the appointed day shall have effect as if for any reference (however worded and whether express or implied) to the Corporation there were substituted a reference to the successor company.
(5) A person who on the appointed day—
(a) ceases to be employed by the Corporation and becomes employed by the successor company; or
(b) is employed by a company which immediately before the appointed day was a subsidiary of the Corporation but on that day becomes a subsidiary of the successor company,
shall not thereby cease to be eligible to participate in any pension scheme in which he was a participant immediately before the appointed day.
(6) Subject to sub-paragraph (5), a person who on or after the appointed day leaves or enters the employment of the group consisting of the successor company and its subsidiaries (in this sub-paragraph referred to as "the NFC group") shall not be eligible by virtue of any provision of an order under the said section 74 made before that day—
(a) to participate in any of the Corporation's pension schemes by reason of any employment outside the NFC group; or
(b) to participate in a pension scheme other than one of the Corporation's pension schemes by reason of his employment within the NFC group.
636
(7) In this paragraph—
(a) "participant", in relation to a pension scheme, means—
(i) in relation to a scheme under which benefits are or will be receivable as of right, a person who has pension rights under the scheme (whether he has contributed or not); and
(ii) in relation to a scheme under which benefits are not or will not be receivable as of right, a person who (whether he is referred to in the scheme as a member, as a contributor or otherwise) has contributed under the scheme and has pension rights thereunder;
and "participate" and "eligible to participate" shall be construed accordingly,
(b) " pension", "pension rights" and "pension scheme" have the same meaning as in section 74 of the Transport Act 1962; and
(c) references to the Corporation's pension schemes are to schemes established by the Corporation or in relation to which the rights, liabilities and functions of the Transport Holding Company were transferred to the Corporation by the British Transport (Pensions of Employees) (No. 1) Order 1968.").
The noble Lord said: Amendment No. 145C is to do with pensions, but it has nothing to do with Clauses 41 and 42 or with Part III of the Bill. It inserts into the Bill transitional provisions to secure that the transmutation of the NFC into the successor company has no untoward consequences on the pensions front. The background to the amendment is this. First, until recently, it was the practice for many nationalised transport industry pension arrangements to be embodied in orders made under Section 74 of the Transport Act 1962. Many such orders are in force, and some have a continuing effect. Some existing pension schemes cannot be amended except by such an order. Secondly, there is a measure of criss-crossing of pension scheme membership between British Rail and NFC schemes. About 3, 000 British Rail employees are members of NFC schemes and about 1, 500 NFC employees are in British Rail schemes.
The amendment provides for existing orders to remain in force after the appointed day and for references in them to be read as references to the successor company. So— and it is important to note this— the rules of existing pension schemes will not be affected. The amendment also provides— and this is also an important point which must be understood—that

637
nobody will have to change his pension scheme in consequence of the conversion of the NFC into the successor company. In particular, the existing criss-crossing of pension scheme membership can continue, though after the appointed day employees who transfer to or from the successor company will have to join their new employer's pension scheme, which is, of course, the normal practice in the private sector.
The amendment also provides for a limited order-making power to continue in relation to the successor company's schemes. I should say that we have no desire to use this power and it is most unlikely that we would do so except on the application of the successor company. The power is necessary, however, to provide a means of amending existing orders if this should turn out to be desirable. I beg to move.
Lord MISHCON: The Committee will have observed that this is a new amendment which found its way on to the Second Marshalled List. Unfortunately the Minister has not been able to accord the usual courtesy of supplying notes on clauses and he must, therefore, forgive me if the questions that I pose to him turn out to be misconceived. We have done our best in the interval— it has been a very short one— with such expert guidance as we have, to understand the amendment which in general terms seems acceptable, but upon which certain questions do arise.
I am perfectly sure that the Minister will not be able— or possibly even if he were able would not wish— at this time to give answers to these questions. Therefore, I assure him that all that I expect this evening is that a record should be made of the questions that I pose and if, with his usual courtesy, he could let me have replies at his convenience, I would be most grateful because, as he will realise, dependent upon his replies would be the decision as to whether amendments are put down at a further stage.
The first question is as follows. Suppose British Rail wished to give their own employees in membership of the NFC group pension funds an option to join the British Rail pension schemes, and the successor company object on the ground that it would weaken the financial position
638
of their pension funds, how can the successor company be compelled to allow such transfer to take place? Obviously, if they cannot, some amendment will be needed.
Secondly, suppose in future a ministerial order is made which causes an extra liability to arise in respect of members of British Rail pension schemes, what provision is there to ensure that the NFC group meet their fair share of the burden in respect of their own employees who belong to the British Rail pension schemes so that that portion of the liability does not fall on the British Railways Board? Again, such a provision should be included if it is not there.
Thirdly, and finally, there seems to be an ambiguity about persons who are transferred from the corporation to the NFC group on the appointed day— and I emphasise the word "on". It seems clear that such persons can retain their membership of their former pension scheme but do they do so by virtue of subparagraph (5) or by virtue of an order made under Section 74 of the Transport Act 1972? If— and I think that this seems likely from the wording, but one is not sure— it is by virtue of sub-paragraph (5), what provision is there to ensure that the NFC group reimburse to British Rail an appropriate share of the costs? I am advised that this happens at present in the case of the NFC. As I have said, if the Minister would be kind enough to consider those questions and on advice, very probably, let me have replies to them, I shall know where to go from there.
Lord BELLWIN: Of coure, I gladly undertake to do that. I am sorry, indeed, about the inability to deliver the notes on clauses. We have done so as regards just about all the clauses in the Bill as best we could, but with the great pressures of time and the pressures that there are on everybody it sometimes happens that it is not possible, and this was one of those times. Yes, of course, I shall endeavour to see that the noble Lord has a reply to his three questions. I was wondering whether he would have asked a fourth question!
On Question, amendment agreed to.
Lord UNDERHILL Lord UNDERHILL moved Amendment 146A:

639
(" 9. The obligations of the Corporation transferred by virtue of section 37 include—
(a) the settlement by negotiation of terms and conditions of employment of persons employed,
(b) the resolution of trade disputes within the meaning of the Trade Union and Labour Relations Act 1974,
(c) the promotion and encouragement of measures affecting efficiency, in any respect, in the carrying on of the activities by the Corporation and any subsidiary company, and
(d) the discussion of other matters of mutual interest to the parties to the agreements.").
The noble Lord said: May I first apologise to the Committee for having to put down this manuscript amendment in place of Amendment No. 146. In fact, the only change in the manuscript amendment arises in the introduction. That was changed to enable it to fit into the appropriate place in the Bill.
The purpose of the amendment is to protect the machinery of negotiation within the National Freight Corporation and to maintain trade union rights on consultation. Since the creation of the corporation in 1969 the industrial relations issues have been pursued through an agreed machinery of negotiation. The machinery operated was built on the well-established system followed on the railways. In addition to a machinery of negotiation, there is also provision for trade union consultation within subsidiary companies of the National Freight Corporation and direct with the corporation.
Section 45 of the Transport Act 1968 imposed a duty on the Railways Board and the NFC to undertake reviews of the affairs of the respective organisations and to report to the Minister. Subsection (2) of that section of the 1968 Act also laid down that, before reaching conclusions in consequence of a review, the board or the corporation should seek consultation with organisations representing those employed.
The NFC and, in particular, National Carriers, a subsidiary, have been exemplary employers so far as consultation is concerned. National Carriers have gone so far as to invite the trade unions to become involved in corporate planning. Schedule 9 to the Bill now before us repeals that part of the 1968 Act relating
640
to consultation with National Freight Corporation employees, presumably on the basis that there is no longer any obligation to report to the Minister. That repeal is regrettable.
While the Government remain the major shareholder and the current composition of the board of the Freight Corporation remains largely unaltered, there is no reason to believe that consultation will not continue with the unions as hitherto. However, in the event of a change of ownership that cannot be guaranteed. In a situation where the ownership of the corporation is transferred, the amendment seeks to provide for the maintenance of machinery of negotiation, and for the continuation of existing arrangements for staff consultation; that is, that consultation will continue to take place at company level and with the National Freight Corporation or the successor company. I beg to move manuscript Amendment No. 146A.
Lord BELLWIN: This amendment would impose duties concerning industrial democracy on the successor company along the lines of those to which the NFC is subject as a nationalised transport industry. The Government are very much in favour of genuine consultation and participation in industry. Their commitment in this area is demonstrated by the insertion in the Companies Bill, at present before Parliament, of a provision to require directors to have regard to the interests of the company's employees in general as well as the interests of its members.
I welcome the progress that the NFC has made in developing machinery for participation. This has proved invaluable in the past, as the noble Lord, Lord Underhill, has said, and also to the benefit of the corporation and its employees. No doubt the successor company will wish to build on this. But this will be a matter for the company itself to decide. It is an essential feature of a policy that the successor company should be a normal Companies Act company, subject only to the general legislation which governs all companies, and not to special statutory duties. Therefore, I am sure noble Lords will not be too surprised to hear that the Government must also resist this amendment.
Lord UNDERHILL: I am very sorry to hear what the noble Lord has had to say because I am sure that the whole Committee will wish to see, in undertakings of this kind, that there are not only satisfactory industrial relations but also opportunities to consult with the appropriate unions on the workings and efficiency of the company. In the past when companies have been transferred or broken up, maybe under separate public ownership, we have been able to maintain these provisions. But in the light of what the noble Lord has said, it is clear that there is no intention of including this in the Bill. Therefore, we shall read very carefully what he has had to say in the Official Report. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
6.52 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 147:
Page 70, line 41, at end insert—
(" Promotion of research and development 9. The obligations of the Corporation transferred by virtue of section 36 include any obligation under subsection (2) of section 46 of the Transport Act 1968 to promote research into matters affecting the functions of the Corporation or any subsidiary and the doing of such work as is requisite to enable the results of such research to be turned to account.").
The noble Lord said: This amendment asks, not for the insertion of trade union rights, but that we should make certain that in the successor company there will continue the promotion of research and development. Section 46 of the 1968 Act imposed on the board, constituted under that Act, a definite duty to carry out research. As was stressed during the Second Reading debate, all sections in the other House praised the National Freight Corporation for its efficiency and for the fact that it had a very high reputation within the road haulage industry for its research and development work. For example, the Freight Corporation's project on energy saving is unique to the industry, and recently the corporation also carried out a detailed study of the economic and operational potential for heavier lorries.
It would appear from the Bill that Section 46 of the 1968 Act is not being repealed, and the National Freight
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Corporation will continue to have a duty to undertake research. This is what we are endeavouring to write into the Bill.
The Price Commission Report on the road haulage industry found that the National Freight Corporation was by far the largest individual operator. In 1977 the turnover from the corporation's freight services was almost three times that of the largest private operator. As your Lordships will be aware, road haulage is a highly fragmented industry with 85 per cent. of the 46, 000 professional hauliers operating five vehicles or fewer. Possible fragmentation through the breakup of the National Freight Corporation could only be considered a backward step, as it must inevitably make research and development in the industry more difficult. The amendment seeks to ensure that the promotion of research and development will continue, and that is the purpose of the amendment which I beg to move.
The DEPUTY CHAIRMAN of COMMITTEES (Lord Alport): I have to advise your Lordships that in the second line of this amendment "section 36" should read "section 37".
Lord BELLWIN: The section of the 1968 Act which this amendment seeks to apply to the successor company typifies the unnecessary restrictions under which the NFC is forced to operate as a nationalised industry. Clearly the successor company will, while operating commercially, carry out research in those areas which may be of value to it. To impose a statutory obligation to do so on a private company would, however, be totally inappropriate, and contrary to the aims of the Bill, which seeks precisely to remove restrictions of this kind. Like some other amendments on this part of the Bill by noble Lords opposite, this amendment seeks to impose on the successor company statutory obligations of exactly the kind which this Bill seeks to remove. These are the very kind of public sector obligations which many think have held back the NFC from achieving its potential. We cannot accept this amendment.
Viscount SIMON: I wonder whether the noble Lord, Lord Bellwin, can tell us what will happen to the staff of the National Freight Corporation who have been engaged in these research activities.

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Are they to be split up and thrown on one side?
Lord BELLWIN: As I speak, I do not know how many of the staff are engaged on research facilities. I do not know if any are engaged solely and only on research facilities. Clearly I do not know that at this moment in time. But the intention of the Bill is to transfer the ownership of the successor company and that will operate as a commercial company. If in the past this activity has been proven by carrying out research as it has been carried out— or in some other way that they may so wish— then, of course, they will continue to do so. But clearly it would be impossible to impose a statutory obligation on a company— to which, in effect, we shall be selling the NFC— that they should among other things carry out research for some purpose which may then be entirely inappropriate to what they are doing. As to what the staff would do, I repeat that it depends on what staff we are talking about, what exactly they are doing and what the direction will be of the successor company.
Lord UNDERHILL: I am very sorry to have to be critical because the noble Lord has been so helpful and co-operative on other matters. But I am surprised that in the light of this amendment, frankly, the department has not supplied the Minister with the figures as to the number of personnel in the corporation and its subsidiaries who are engaged on research and development work, particularly in view of the praise from a number of places that has been given to this development work.
I am also surprised at the reasoning given by the noble Lord as to why this provision should not go in the Bill, because it is an admission that when it is a public corporation there is a statutory responsibility as regards research and development. Now the noble Lord says that it will be transferred to a private company and it will be up to that company to decide whether or not it does it. If ever there was a justification for a public corporation, and in view ofits good record, this is it. There is obviously a clear difference between us and, although I shall not divide the Committee, I shall not withdraw the amendment.
Lord BELLWIN: I should like to make one further observation on this. If the successor company should be satisfied that what is being achieved by the research is indeed of such importance to the future advancement of the National Freight Corporation, I have no doubt whatever but that they will continue to do exactly the same thing. If it really is so good, they would be rather foolish not to go on doing so. But who is to say and who is to know?— certainly not us at this moment.
Lord MISHCON: I think what hurts so badly to those who sit on this side of the Committee— and I have an idea that this concern will be shared by many in whatever parts of the Committee they may sit, including the noble Viscount, Lord Simon, who has already put a question on this— is that it just shows— and I am not trying to make any dramatic point— the complete callousness with which the transfer of a great corporation such as this to private enterprise is made that, when we come to the Committee stage (and the Bill has already been through another place), the Government are unable to say, this amendment having been put down for some time, how many employees there are who are engaged on research; whether indeed they are engaged on research exclusively, or not. The noble Viscount's question was most pertinent. Possibly he was as surprised as I was when there was a reply such as that given by the noble Lord, Lord Bellwin.
Lord BELLWIN: With respect, I should have to say that it is not the Government that does not know, it is I, speaking here, who do not have this particular information at my fingertips. I am quite sure that there will not be the slightest difficulty in my getting this information. Whether it has relevance to the issue, I doubt very much.
Will your Lordships excuse me for one moment? I am still not in a position to give the actual numbers of people concerned. I think it is fair to say that the comment just received says in fact that the R and D of the NFC should not be overestimated. The research, on the other hand, is commercially orientated. If that is so, then I should have thought it highly likely that, if it is achieving what it should do in a commercially orientated way, then it will continue. But of course,

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a guarantee I cannot give. I need hardly say that the numbers in question will certainly be sent to noble Lords opposite and to anyone who is interested.
Viscount SIMON: As we cannot get any further on this at the moment, can the noble Lord give us an assurance, or obtain an assurance before the next stage of the Bill, that, in the interim period after the appointed day when the shares are vested in the Minister but before he has disposed of them, he will undertake not to dismantle the organisation that does research and development, and indeed the organisation that looks after the industrial relations?
Lord BELLWIN: There is no problem at all in my confirming that, because it is the clearly expressed intention that the Government want the NFC to go over in its entirety to the successor company, so there is no difficulty in my saying "yes" to the noble Viscount.
Lord MISHCON: Will the noble Minister please carry on with that undertaking before we adjourn and say that he will also see that such a department is not shut down, and that people in research are not dismissed on any sale of the securities from the company to the market?
On Question, amendment negatived.
Schedule 6, as amended, agreed to.
Lord BELLWIN: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

DENTAL QUALIFICATIONS (EEC RECOGNITION) ORDER 1980
7.4 p.m.
Lord LYELL: My Lords, I beg to move that the Dental Qualifications (EEC Recognition) Order 1980, a draft of which was laid before the House on 22nd April 1980, be approved. This Order-in-Council is intended to make those changes in existing legislation which are necessary to implement the directives of the Council
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of the European Communities concerning the mutual recognition of dental qualifications. The statutory power for making the order is contained in Section 2 (2) of the European Communities Act 1972, and the Affirmative Resolution procedure is adopted in anticipation of the continuing desire of Parliament to debate matters relating to the manner in which Community obligations involving substantial changes in United Kingdom legislation are proposed to be met.
The Treaty of Rome, among other things, provides for the issue to member states of directives covering the mutual recognition of qualifications and the granting of the right of establishment to various professional groups. The directives relating to doctors and nurses have already been implemented in the United Kingdom. The dental directives are similar in form and content to those already implemented. The recognition directive has the general effect of requiring member States to permit the practice of dentistry by nationals of other member states if their qualifications and experience meet the specified standards. The Dental Training Directive specifies in broad outline the training which students must in future undergo before they obtain qualifications which will be recognised elsewhere in the European Community.
My Lords, we are concerned tonight with the draft order for the implementation of the directives in so far as implementation involves changes which require legislation, and I turn now to the content of the draft. Article I cites the title of the order and specifies 1st June 1980 as the date on which it comes into operation. Article 2 identifies the two dental directives and contains other definitions. Article 3 provides for a substantial insertion in the Dentists Act 1957. The new Section 2A provides entitlement to registration in the dentists register, and thereby entitlement to practise dentistry in the United Kingdom, to EEC nationals who hold one of the European diplomas in dentistry listed in the new Schedule 1A if the diploma was obtained in accordance with the requirements of the training directive. It also provides entitlement to registration to those holding earlier diplomas if the syllabus complied with the training directive, or if the holder has lawfully and recently practised dentistry for at least

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three consecutive years. In Section 2B there is set out the same requirement as to linguistic knowledge as is found in The Medical Qualifications (EEC Recognition) Order 1977 and in The Nursing Qualifications (EEC Recognition) Order 1979.
It is, I think, common knowledge that this requirement that registration shall lapse after six months unless the practitioner satisfies the registrar that he has the necessary knowledge of English, has been challenged by the European Communities' Commission as being contrary to the Treaty of Rome and that there is the possibility that the Commission's view may be supported by the European Court. The Government have argued that it accords with the EEC directives because the provision in the directive which is common to those for a number of professions, is that,
"Member states shall see to it that, where appropriate, the persons concerned acquire, in their interest and in that of their patients, the linguistic knowledge necessary for the exercise of their profession in the host member state ".
Whether the objectives of this requirement might eventually be achieved in some other way has been under discussion with the interested bodies, including the Commission, for some months but there is an understandable reluctance among the professional bodies involved in the United Kingdom to depart from the principle already established in the doctors' and nurses' orders that registration should be linked to the acquisition of the necessary linguistic competence. It is therefore expedient meanwhile to establish the same basis as regards linguistic competence for dentists as has already been established for doctors and nurses. Thus while consultation continues on the language question the other non-controversial measures contained in the draft order can be implemented so that the registration and establishment in practice of dentists who have an adequate command of the language will no longer be impeded.
Paragraphs (2) and (3) of Article 3 make some minor amendments to the Dentists Act. Section 16 (1) of the Act is amended so that the qualified European practitioner may have his name registered in the same list of the dentists register as those of dentists with United Kingdom qualifications, and in Section 50 (1) is
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added a necessary definition of "recognised European diploma". There then follows the insertion of the new Schedule 1A listing the scheduled European diplomas to which I referred earlier. Article 4 of the draft order provides that a dentist who has been disqualified in a member State from practising dentistry because of some criminal offence or professional misconduct shall not, while so disqualified, be entitled to registration under the provisions of the proposed new Section 2A.
Article 4 (2) (a) of the order emphasises that a disqualifying decision in this respect is limited to one expressed to be made on the grounds that the dentist has committed a criminal offence or has misconducted himself in a professional respect and not on any other grounds. Article 4 (2) (b) emphasises that the effect of a disqualifying decision is that the dentist is prohibited from practising in his own state.
The Joint Committee on Statutory Instruments have expressed concern that this provision might be the cause of injustice in that it would allow a person disqualified in his own State for a criminal offence of a trivial nature to be debarred from his entitlement to registration in this country. The Joint Committee asked why, in Article 4 (2) (a) of the order, the reference was to a criminal offence simpliciter and that the article contained no qualification that it should not be of a trivial nature. The reason is that it is for each member state to decide what its disciplinary legislation shall be. There is no need to assume that in framing and operating disciplinary legislation, controlling bodies of the dental profession in respective member states will not be responsible or fair minded.
Article 4 (4) of the order provides that a person refused registration in the United Kingdom on the grounds of a disqualifying decision in his own state may appeal to the General Dental Council. Any such appeal is to be decided by the disciplinary committee of the General Dental Council and is to be noted that the issue before the disciplinary committee in such an appeal is the issue whether or not the disqualifying decision was a disqualifying decision within the meaning of Article 4 (2). It is not for the disciplinary committee to go into the merits of whether or not it would have disqualified the dentist

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concerned had it been seized of the matter. Article 5 makes the General Dental Council the authority competent to issue certificates in relation to specialist training or practice which they would not otherwise issue.
I come to Article 6. The dental directives, like those relating to doctors and nurses, require member states to permit fully qualified and established nationals of other states, subject to the rights and obligations which apply to their own professionals, to render services temporarily without first securing normal registration. Because in the United Kingdom the practice of dentistry is permitted only to those who are registered, it is necessary to make special arrangements to control and legalise such temporary provision of service. This is done in Article 6. The principal control measure is by means of a written notification to be provided by the practitioner to the registrar of the General Dental Council giving particulars of the services to be rendered and the periods in which the practitioner expects to render them. Certification must also be provided of the possession of qualifications and the lawful practice of dentistry in his own country. Sections 34 (1) and 35 (1) of the Dentists Act 1957 are amended to permit such persons to practise dentistry and to use dental practitioners' titles. In the Medicines Act 1968, the Misuse of Drugs Act 1971 and the Poisons Act 1972 the definition of dentist is amended to place these persons on a par with registered dentists in relation to the handling and use of drugs.
As persons rendering dental services temporarily while visiting the United Kingdom will not be registered in the dentists' register, the disciplinary procedures provided in the Dentists Act for use against registered dentists could not be applied. Article 7 provides a parallel procedure which might be operated by the disciplinary committee of the General Dental Council to impose a prohibition on the person concerned in respect of the rendering of dental services in the United Kingdom in the future.
The recognition directive requires that in the temporary provision of services, the visiting dentist shall be subject to the same rules of conduct which apply in the host state. The wording of Article 7 therefore follows closely that used in
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Section 25 of the Dentists Act 1957 which relates to the erasure of a name from the dentists' register kept by the General Dental Council in the United Kingdom. In particular, the disciplinary committee of the General Dental Council, under Section 25 of the Act, may not cause erasure of a person's name on account of a conviction for an offence which does not, either from the trivial nature of the offence or from the circumstances under which it was committed, disqualify a person from practising dentistry. Consequently, article 7 (2) of the draft order excludes consideration of criminal offences of a trivial nature when the disciplinary committee is considering imposing a prohibition on a visiting dentist providing services temporarily.
The provisions of this draft order constitute no departure in principle from those contained in the existing orders relating to doctors and nurses. Furthermore, the drafting of the EEC directives in 1978 and, more recently, the means of implementing them in the United Kingdom have been the subject of the closest consultation and agreement both with the General Dental Council, on which will fall the duty of registering EEC dentists who wish to work here, and with the British Dental Association representing the profession itself.
This order is not directly concerned with the recognition and acceptance of our own dentists in other member states, which is of course the other side of the coin which was minted by the Council of Ministers when the dental directives were adopted. Nevertheless, our own dentists are assured of corresponding benefits as other states implement similar measures, which the directives require them to do. The amendment of United Kingdom legislation by means of the Dental Qualifications (EEC Recognition) Order 1980 is an aspect of this mutual co-operation. I beg to move.
Moved, That the draft order laid before the House on 22nd April be approved.— (LordLyell.)
Baroness DAVID: My Lords, I thank the Minister for the very full account he has given of the order and for answering the points which were raised by the Joint Committee about the disciplinary provisions. I have no comments to make,

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except to say that we are very glad about the requirement of linguistic knowledge, because it is obviously extremely important when foreigners come to practise in this country that patients can understand them; there must be full communication. We therefore support and approve the order.
On Question, Motion agreed to.
Lord SANDYS: My Lords, I beg to move that the House do now adjourn during pleasure until 8 o'clock.
Moved, accordingly and, on Question, Motion agreed to.
[The Sitting was suspended from 7.19 until 8 p.m.]

TRANSPORT BILL
House again in Committee.
Clause 38 [Initial government holding in successor company]:
Lord MISHCON Lord MISHCON moved Amendment No. 148:
Page 36, line 8, at end insert (" and the Minister or his nominees shall at all times retain such a proportion of the said securities as shall give to the Minister a controlling interest by way of having a majority of voting power in the successor company ").
The noble Lord said: I wonder whether the Minister, having had a very well deserved but short respite, will look rather more favourably at this amendment than he otherwise would have done. I wonder whether the Committee can persuade the Minister and those who support him that, having achieved the main aim of the Bill— namely, that the National Freight Corporation shall be transferred to a successor company— and having achieved the opportunity for the private sector to invest in the successor company, it is the element of doctrinaire thinking carried to the absolute extreme not to retain at least voting control in the hands of the Government on behalf of the nation. The National Freight Corporation has over 30, 000 employees. Its assets are very considerable. At 31st December 1978 they amounted to £ 183 million. The corporation earned fervent praise from the present Minister when he did not hold his present exhausted position—
Lord DONALDSON of KINGS-BRIDGE: Exalted.
Lord MISHCON: I am so sorry; I am corrected by my noble friend. I said "exhausted" position. I was thinking of the noble Lord, Lord Bellwin, when I used that word. I meant "exalted" position when I referred to the right honourable gentleman Mr. Norman Fowler.
I have specially worded the amendment so as to relate to the control of voting power— though the parliamentary draftsman might improve upon the wording— and not to 51 per cent. of the shares. I have done that on purpose so that there could be an issue of shares to the private sector, which would retain all the rights to dividends, profit and so on and would therefore encourage investment. But at least in the national interest the control would be vested in the Government, who would have the right to see what kind of board there was, and how the employees were protected. Indeed, the Government would even know how many people there were in the research department and in those circumstances might be rather more concerned about their future. What I suggest seems to be the right thing to do.
I hope that the Government do not wish to go down an extreme doctrinaire road and say, "Oh, no, it isn't just a question of denationalising or of giving free enterprise the opportunity. We are going to see that the nation has nothing to do with the running of what was a very successful enterprise in the past". It is in that spirit that I beg to move the amendment.
Lord MORRIS: I cannot help feeling that the noble Lord, Lord Mishcon, is inadvertently misleading himself on this amendment when he refers "merely to retaining" voting power in the successor company. Surely, the voting power is the power when it comes to considering a company. To try to divide the voting power in terms of, say, the rights of interest in profits or capital interest is not possible, because those who have the voting power can always vote away the financial interests, be it by way of profits, dividend, or capital interest of the future shareholders.
Lord MISHCON: I am sure that the Committee is not prepared to have a discussion on company law, which would bore it, even though the subject may be of interest to the noble Lord, Lord Morris, and myself. Quite obviously there is nothing to prevent the inclusion of a provision that the memorandum and articles of association cannot be altered unless a certain number of votes is cast— say, 75 per cent. Therefore, it is possible to include in the original memorandum and articles of association what are the rights of profits for the various holders of shares, and that is unalterable unless some other shareholders go in with those who have 51 per cent. of the voting control. I do not wish to continue this argument with the noble Lord, Lord Morris, but he may take it from me— I hope that he will— that it is quite possible to secure the rights of shareholders to dividends and profits as set out in an original memorandum and articles of association and still have 51 per cent. of the voting control.
Lord BELLWIN: If it is doctrinaire to wish to transfer control of the NFC firmly, fully and irrevocably to the private sector, then surely it is equally doctrinaire, from the other point of view, to wish to retain it as it is at present, or to retain a control. I take the last point of the noble Lord, Lord Mishcon; it is quite right by itself. However, in the context of what we are discussing here I consider that the point made by my noble friend Lord Morris is apposite.
I should not have mentioned this particular matter again today, but in view of the fact that the noble Lord very kindly has given me the opportunity so to do, I think that both he and the noble Viscount, Lord Simon, will be interested to learn that I now do know the number of NFC people employed on R and D. The fact is that there are no people employed full-time on R and D by the NFC. I think that that information will comfort the noble Viscount, Lord Simon, in that he will not have to be too worried about what will happen to those people. It may not comfort the noble Lord, Lord Underhill; but nor will it dismay him.
I should now like to proceed to try to answer the other points that the noble Lord, Lord Mishcon, made regarding
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the amendment. I do not wish once again to go over the Second Reading arguments, but I am convinced that there is no justification at all for state involvement in road transport, cold storage, removals, travel et cetera. As we see the matter— not in the same way as noble Lords opposite see it, yet equally categorically and clearly— state ownership has denied the NFC management the commercial freedom which is open to private sector firms. It has shielded them from the rigours of commercial disciplines, and the overall result has been a history of financial losses and commercial mistakes, the burden of which has been borne by the taxpayers. Thus, it is clearly in everyone's interest— that is, Government, taxpayer, and not least the NFC itself— to get the corporation out of the public sector altogether. The amendment proposed thus stands entirely in the way of Government policy. It is quite fundamental, and we must therefore oppose it.
Viscount SIMON: I have a good deal of sympathy, not with the principles of nationalisation, as the noble Lord, Lord Mishcon, knows, but for some provision by which the interest of the State could be in some way preserved, simply because they have the responsibility of having built up, through this organisation, this very considerable business with, as the noble Lord said, a large number of employees. I think he gave the number, but I do not remember what it was.
Lord MISHCON: It was 35, 000.
Viscount SIMON: It is not at all unusual, I think, when an ordinary Companies Act company, to which the noble Lord, Lord Bellwin, referred, takes over another company, that some guarantee is given as to the employment of the staff of the company. I am just wondering whether there is any provision by which this can be safeguarded when the appointed day comes. The difficulty as I see it— and I speak entirely subject to correction, because I do not know the intricacies of the law— is that they will presumably be offered employment by a new company, but, as it is a new company, they will have to start all over again their period of service before they are entitled to redundancy payments if they are put off. Is there some arrangement— I have not

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discovered it anywhere in the schedule— by which the existing employees of a company are protected, or can the new company, acting according to their commercial judgment, just get rid of them all? This is the sort of question which worries me a little.
Lord BELLWIN: I am open to correction here, but I would have thought that there was no question of the danger which the noble Lord mentions. If the employment is taken over by a successor company, or another company, then they certainly also take over the responsibilities to the employees of that company as regards redundancy or whatever. I would have thought that that was absolutely so.
Lord UNDERHILL: Perhaps I may briefly intervene, because I think the noble Lord said that one reason why the Government wanted to change their policy on the Freight Corporation was because it has made so many losses over recent years. I have been looking quickly at the report of the Freight Corporation for the last 12 months. There was a trading profit in 1978 of £ 20.1 million. This was an increase of £ 9.6 million over the previous year. Profit on trading has risen by some £ 30 million over the past three years. I believe that some five years ago there was a loss, but ever since, due to their forward-looking policy and forward-looking management, there have been consistent profits. Therefore, that appears to be a very bad argument that the noble Lord has put forward.
Lord BELLWIN: I would not think
it was a bad argument. I would suggest that the profit to which the noble Lord has just referred is the gross profit. Whether or not that is the profit before taking into account interest and other charges, I would very much question because my information is that the company is now breaking even overall. But I should like to say that, if it is breaking even or making a profit, then it is to the credit of all concerned, because it is in spite of the limitations which its present status imposes upon it, certainly not because of this; and I am sure that this will not be overlooked as a potential and possibility by the prospective purchaser.
Lord MISHCON: I make only a brief comment, and it is this. I hope that nobody will be voting upon this matter, if a vote is in fact necessitated, on the basis of whether or not there is profit or whether or not there is redundancy. I think it is a general question of the need to have control of this corporation in the national interest by at least the percentage that I mentioned. I therefore hope that the Committee will feel that that is a principle that they ought to endorse. It is not one, I beg to assure the noble Viscount, which embeds within it the principle of nationalisation. That is not so at all; it is the very principle that I remember the noble Lord, Lord Lloyd of Kilgerran, mentioning on Second Reading was one with which he had the utmost sympathy.
8.15 p.m.
On Question, Whether the said amendment (No. 148) shall be agreed to?
Their Lordships divided: Contents, 31; Not-Contents, 64.

CONTENTS

Bacon, B.

Gosford, E.

Ponsonby of Shulbrede, L. [Teller.]

Blease, L, [Teller.]

Hale, L.

Boston of Faversham, L.

Hall, V.

Rhodes, L.

Brockway, L.

Houghton, of Sovverbv, L.

Stewart of Alvechurch, B.

Cledwyn of Penrhos, L.

Kaldor, L.

Strabolgi, L.

Collison, L.

Lee of Newton, L.

Taylor of Mansfield, L.

David, B.

Llewelyn-Davtcs, L.

Underhill, L.

Davies of Leek, L.

Lovell-Davies, L.

Wells-Pestell, L,

Donaldson of Kingsbridge, L.

Maelor, L.

Whaddon, L.

Elwyn-Jones, L.

Mishcon, L.

Wynne-Jones, L.

Glenamara, L.

Peart, L.

NOT-CONTENTS

Abinger, L.

Balerno, L.

Brougham and Vaux, L.

Airey of Abingdon, B.

Bellwin, L.

Caithness, E.

Ampthill, L.

Belstead, L.

Campbell of Croy, L.

Chesham, L.

Gridley, L.

Mowbray and Stourton, L.

Cockfield, L.

Grimston of Westbury, L.

Murton of Lindisfarne, L.

Cork and Orrery, E.

Hampton, L.

Orkney, E.

Craigavon, V.

Hatherton, L.

Orr-Ewing, L.

Craigmyle, L.

Henley, L.

Reigate, L.

Cullen of Ashbourne, L.

Hereford, V.

Renton, L.

de Clifford, L.

Hornsby-Smith, B.

Sandys, L. [Teller.]

De Freyne, L.

Kilmany, L.

Sharpies, B.

Denham, L. [Teller.]

Kilmarnock, L.

Simon, V.

Drumalbyn, L.

Kimberley, E.

Skelmersdale, L.

Ellenborough, L.

Lloyd of Kilgerran, L.

Swinfen, L.

Elliot of Harwood, B.

Long, V.

Teviot, L.

Faithfull, B.

Lyell, L.

Trefgarne, L.

Ferrers, E.

McFadzean, L.

Trenchard, V.

Fortescue, E.

Macleod of Borve, B.

Trumpington, B.

Gainford, L.

Margadale, L.

Vaux of Harrowden, L.

Glasgow, E.

Morris, L.

Vickers, B.

Godber of Willington, L.

Mottistone, L.

Wigoder, L.

Gowrie, E.

Resolved in the negative, and amendment disagreed to accordingly.

[Amendment No. 149 not moved.]
8.23 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 150:
Page 36, line 8, at end insert—
(" () The securities which the Minister or his nominees determine should be offered for sale shall be in respect of the whole of the successor company and not of a subsidiary of the successor company").
The noble Lord said: I have the idea that the Committee may be in the mood for short speeches at this stage, and I therefore propose to make one in regard to an important amendment which deals with ensuring that the securities which the Minister determines should be offered for sale shall be in respect of the whole of the successor company and not a subsidiary of the successor company. I believe the best way of making a short speech— and, hopefully, an effective one— is to deliver to the Committee three short quotations, one from the Minister— and I am quoting from col. 1129 of the Second Reading debate on 27th November.
"… 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 ".
Mr. Higgins, a fervent and informed member of the party opposite on matters of transport, said in column 1190 that it was not right to break up the NFC and, if broken up, that it would have:
"… a traumatic effect on morale and [would discourage] senior management. The NFC
658
would not [be] given a fair chance. The Minister has the right approach … [The employees] are concerned about their long-term job prospects".
My last quotation is from the speech of the Parliamentary Secretary in the Second Reading debate (in column 1243):
" We believe that the corporation makes sense as a whole. We are therefore selling it as a corporation and we are resisting pressures to sell off Pickfords and so on ".
I could not have said with more expressive power what this amendment seeks to achieve: namely, that it should be sold off as an entity, and not to the detriment, I am quite sure, of the nation, in bits and pieces. In those circumstances, I commend the quotations of the three representatives of the Government and look forward to being able to quote my noble friend Lord Bellwin (if I may so term him) as a fourth proponent of the same principle and therefore in favour of this amendment.
Lord BELLWIN: The noble Lord, Lord Mishcon, may quote me as a disciple with exactly the same views; but that is not to say that, because of that, we feel the amendment is necessary. The essential purpose of the Bill is to enable shares in the successor company to be sold to investors with the aim of transferring control of the enterprise as a whole to the private sector. The Government have repeatedly made it clear that they have absolutely no intention of bringing about separate disposal of subsidiary companies. But, in any case, the shares of the subsidiaries will be held by the successor company rather than by the Minister.
It is not possible to say whether at some future date the new company will wish to dispose of or acquire subsidiaries. At present, there seems no reason to

659
forecast any disposals. Transfer of ownership of subsidiaries is a normal business activity in which the National Freight Corporation has already been involved. There is no difference at all between what the noble Lord, Lord Mishcon, is suggesting and what the Bill says. There is no necessity at all for this amendment.
Lord MISHCON: There is nothing in the Bill which secures the principle of the amendment. I would remind the noble Lord that this amendment has nothing to do with endeavouring to stop the sale of subsidiaries in the years ahead. The amendment is quite specific. It says that the securities to be offered for sale
" shall be in respect of the whole of the successor company and not of a subsidiary ".
And these are the securities which the Minister or his nominees will be selling. Therefore, it will be entirely in the Minister's hands. As I understand it— and I do not want to predetermine what the noble Lord may be about to say now— if the noble Lord is saying that this is a principle which the Government adopt, then one only wants to be able to give security to the employees (and to the nation, I may say) by having this properly incorporated in the Bill. I repeat that I am merely dealing with what the Minister does and not with what the future shareholders do.
Lord BELLWIN: I must confess I am not entirely with the point. The amendment, as I understand it, would add a new subsection to Clause 38 restricting the way in which securities of the successor company are offered for sale. The proposed subsection would stipulate that the securities offered for sale must be of the successor company and not of any of its subsidiaries. We are talking about the intentions of the Government in selling the NFC to the successor company. The quotations that the noble Lord read out, and which I have confirmed tonight, make it clear that that is the intention: that it will be sold to the successor company as a whole entity. But the amendment goes on to restrict the way in which shares of the successor company are offered for sale. That was not the same thing. I think our intention is the same; but as I understand the way in which the
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amendment is worded— and I am open to correction— it could mean that slight difference, which is all-important.
Viscount SIMON: With great respect, there is no question of selling something to the successor company. The successor company is created and then shares in the successor company are offered for sale. The object of Lord Mishcon's amendment is simply that they are offered for sale as they stand as shares in the company and not as shares in subsidiaries held by the company.
Lord BELLWIN: I am much obliged to the noble Viscount. That is quite right. When one figures through a process of course that is absolutely right. That is exactly the way it is intended. I still make the same point: namely, the amendment is not necessary because the intention is, as I have said, that the company be disposed of as a whole, in its entirety. Those were the quotations which the noble Lord read out and with which I concur.
Lord MISHCON: I hope the noble Lord will be patient with me. If he concurs with every word of the amendment and merely has the point that it is unnecessary, I hope that in those circumstances he will not dream of opposing it. If intentions expressed in either House of Parliament were all that was necessary in order to govern the future events of this nation, there would be no point in having Bills or Acts of Parliament.
All I am trying to do is to enshrine in the Bill something which the Minister said he intends to do; the Parliamentary Secretary in another place said he intends to do; and the Minister has repeated both on Second Reading and now that the Government intend to do. I merely wish to give the security to everybody to see it in the Bill. I take it from what the Minister says that he does not oppose it being in the Bill.
Lord BELLWIN: There is a difference here, a difference of interpretation or understanding. The fact is that the Minister will never own any shares in the subsidiary company at all. Therefore, there can be no question of his disposing of them. Maybe that is where we are at slightly cross purposes. The shares will

661
be held by the successor company, not by the Minister. I would have thought that was it. What I will say is that if it should prove to be based upon what the noble Lord has said— I cannot accept the amendment as it is— that the effect of the amendment will be the same as the Government's intention, while my understanding is that it is not, of course I will come back with it to the noble Lord.
Lord MISHCON: The Minister is saying— this is how I have understood him— that if the amendment on further consideration means what I have said it means tonight, then it will be an amendment that will be accepted by the Government; if it is capable of another interpretation he may have to have second thoughts. If that is the understanding between us, then I am perfectly prepared not to press the amendment tonight and to see exactly
[Amendment No. 151 not moved.]
Clause 38 agreed to.
how on further examination the Minister finds his interpretation on advice.
Lord BELLWIN: Not quite. On that basis, I could not accept it. The basis is the one that I have said. If it should prove to be that the wording of the amendment means contrary to what I think it means, that it in no way inhibits the Government's intentions in this matter, then of course we shall accept it. But only if it should do that. I will gladly say, as I said a moment ago, that of course we will look at it.
8.35 p.m.
On Question, Whether the said amendment (No. 150) shall be agreed to?
Their Lordships divided: Contents, 35; Not-Contents, 63.

CONTENTS

Bacon, B.

Hale, L.

Rhodes, L.

Blease, L.

Hall, V.

Sefton of Garston, L.

Boston of Faversham, L.

Houghton of Sowerby, L.

Simon, V.

Brockway, L.

Kaldor, L.

Stewart of Alvechurch, B.

Cledwyn of Penrhos, L.

Lee of Newton, L.

Strabolgi, L. [Teller.]

Collison, L.

Lloyd of Kilgerran, L,

Taylor of Mansfield, L.

David, B.

Lovell-Davis, L.

Underhill, L.

Davies of Leek, L.

Maelor, L.

Wells-Pestell, L.

Donaldson of Kingsbridge, L.

Mishcon, L.

Whaddon, L.

Elwyn-Jones, L.

Peart, L.

Wigoder, L.

Gaitskell, B.

Ponsonby of Shulbrede, L. [Teller.]

Wynne-Jones, L.

Glenamara, L.

Gosford, E.

NOT-CONTENTS

Abinger, L.

Elliot of Harwood, B.

Margadale, L.

Airey of Abingdon, B.

Faithfull, B.

Morris, L.

Ampthill, L.

Ferrers, E.

Mottistone, L.

Auckland, L.

Fortescue, E.

Mowbray and Stourron, L.

Balerno, L.

Gainford, L.

Murton of Lindisfarne, L.

Bellwin, L.

Glasgow, E.

Orkney, E.

Belstead, L.

Godber of Willington, L.

Orr-Ewing, L.

Bessborough, E.

Gowrie, E.

Reigate, L.

Brougham and Vaux, L.

Gridley, L.

Renton, L.

Caithness, E.

Grimston of Westbury, L.

Sandford, L.

Campbell of Croy, E.

Hatherton, L.

Sandys, L. [Teller.]

Chesham, L.

Henley, L.

Selkirk, E.

Cockfield, L.

Hereford, V.

Sharpies, B.

Cork and Orrery, E.

Holderness, L.

Skelmersdale, L.

Craigavon, V.

Horsnby-Smith, B.

Swinfen, L.

Craigmyle, L.

Kilmany, L.

Teviot, L.

Cullen of Ashbourne, L.

Kimberley, E.

Trefgarne, L.

de Clifford, L.

Long, V.

Trenchard, V.

Denham, L. [Teller.]

Lyell, L.

Trumpington, B.

Drumalbyn, L.

McFadzean, L.

Vaux of Harrowden, L.

Ellenborough, L.

Macleod of Borve, B.

Vickers, B.

Resolved in the negative, and amendment disagreed to accordingly.

8.43 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 152:
After Clause 38, insert the following new clause:

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(" Laying of Memorandum and articles of association of the successor company
. 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.").
The noble Lord said: Again, I hope I can be brief. I understood the Minister to say that there would be a full opportunity for Parliament to see the memorandum and articles of association of the successor company, and indeed to debate them if necessary. If that is confirmed by the noble Lord, I have no need to proceed with this amendment. I shall be happy to withdraw it.
Lord BELLWIN: Yes, I am pleased to confirm that that is so. I, too, have a set piece to say but I feel perhaps in the circumstances there is no need to deal with that. It will be as I said previously: the memorandum and articles of association will be made available and a copy will be put in the Library of the House before the appointed day. Unless the noble Lord wishes me to expand on the point, I shall be quite happy not to do so.
Lord MISHCON: I am quite happy with the Minister's assurance, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
[Amendment No. 153 not moved.]
Clause 39 [Transitional provisions with respect to reserves, etc.]:
[Amendment No. 154 not moved.]
Lord MISHCON Lord MISHCON moved Amendment No. 155:
Page 37, line 16, 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 noble Lord said: Amendment No. 155 deals with the question of tax losses and any tax losses being taken for the benefit of any purchaser. The Committee may feel that it is a very, very wrong principle that the taxpayer should suffer as a result of private enterprise making profits in the future on the acquisition of this company in the market by being able to take advantage of losses made in
664
various subsidiaries in the past by the National Freight Corporation. It seems to be a most insidious way of dealing with out tax affairs and I hope the Committee will regard it as such. I must say I was somewhat amused, if the Committee will forgive my saying so, on reading the contribution made by the honourable Member for Faversham on the 22nd Sitting of Standing Committee "H" on this Bill, on 14th February, at col. 1634. The honourable Member said, and I quote:
" If it is to begin life as a free enterprise company "—
Lord SANDYS: It is a convention in this Chamber— and I myself have been called to order on this particular one— that only Government Ministers may be quoted from Standing Committee and not Members of another place.
Lord MISHCON: I am most grateful for the correction. I am in some difficulty, because the Minister in fact answered him and to quote the answer of the Minister without being able to quote the contribution to which he made the answer is rather difficult.
Lord MOWBRAY and STOURTON: I think the solution is that they are allowed to be paraphrased.
Lord MISHCON: I am most grateful for the help I am getting from all sides, which is really most courteous. May I take it in this way. The honourable Member for Faversham made a reference to the happy position in which a future purchaser would be by being able to take advantage of these tax losses, and the Minister, the Parliamentary Secretary, Mr. Kenneth Clarke, replied as follows— I am quoting from column 1644:
" My honourable friend the Member for Faversham raised a specific point about tax losses and the position of the new company. He has touched on a very pertinent point, to which I am not able to give an instant answer ".
After that it was made quite clear in Committee by the Minister— and I think at the Report stage, too— that there would be an opportunity to take advantage of tax losses in subsidiary companies where that business was carried on, as against future profits of that individual subsidiary company. It is a principle that I am asking the Committee to deal with.

665
As I said, it seems absolutely wrong that the ordinary taxpayer should have to pay more, if I may put it this way, in regard to his tax liabilities by virtue of a purchaser here being able to take advantage of tax losses inside the National Freight Corporation's subsidiaries.
Lord BELLWIN: I believe this amendment springs from a misconception which I understood had been cleared up in another place. It seeks to withhold from the successor company any tax losses which before the appointed day were available to the NFC. But as my honourable friend in another place spelt out in Committee— and I would refer here to Hansard of 21st February, column 1785: I think I am in order as he is a Minister— tax losses made by NFC subsidiaries, principally National Carriers, are available to be set off only against future trading profits of the same business. There is therefore no way in which another company can buy a controlling interest in the successor company and in some way use NCL's past lax losses to offset future profits in another subsidiary or another part of the business. These tax losses therefore cannot be considered as some kind of asset which a purchaser might wish to acquire so as to avoid paying taxes on his other businesses. To accept this amendment would be to create a positive tax disadvantage for subsidiaries of the successor company which would not otherwise exist.
If the amendment were to become effective, companies such as the NCL would not be able to set off past tax losses against future trading profits. Their competitiveness would suffer and prospects for both the companies involved, and their employees, would be severely worsened. I cannot believe that this is what the noble Lord, Lord Mishcon, wishes to see and, in these circumstances, I wonder whether he would care to withdraw his amendment.
Lord MISHCON: If I may say so with great respect, the noble Lord merely repeated what I had, I hope, properly told the Committee was the position as explained by the Minister; that is, that tax losses would be available to be set against future profits only within the subsidiary that had made the losses. But my point is that if that subsidiary is taken over by private enterprise, as is
666
envisaged here, that means that previous tax losses can be taken advantage of. One either agrees with this principle or one does not. But the facts are as I stated them. I was not under any misunderstanding, and I hope that the Committee was not. The principle still remains the same. I think it wrong and I ask the Committee so to decide.
On Question, amendment negatived.
Clause 39 agreed to.
Clause 40 agreed to.
8.52 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 156:
After Clause 40, insert the following new clause:
(" Avoidance of asset stripping
.— (1) It shall be unlawful for the successor company or a subsidiary of the successor company to dispose of any interest in land which forms part of the undertaking of the Corporation without the written consent of the Minister.
(2) The Minister shall not give his consent under subsection (I) unless he is satisfied that the proposed disposition would not constitute a transaction of an unusual nature for the successor company or the subsidiary in question of the successor company to enter into having regard to the activities (being activities which relate to the transport of freight) in which the successor company or the subsidiary is engaged at the time of the proposed disposition and which would constitute a transaction which would not be reasonably necessary for, or which would be contrary to, the purpose of those activities.
(3) A consent given under subsection (1) may be given subject to conditions, including conditions enabling the Minister to require the proposed disposition to be made in favour of such person as he may nominate provided that, in the case of such a nomination, the disposition is to be made on terms reasonably comparable to those which the successor company or subsidiary could have obtained if the disposition had been made to a willing purchaser buying at arm's length on the open market.
(4) In this section "subsidiary" has the same meaning as in the Companies Act 1948.").
The noble Lord said: Again, I hope to move this amendment briefly, in spite of the fact that it is a long one. It seeks to ensure that land and buildings owned by the successor company, as a result of the take-over from the National Freight Corporation, shall not be sold off in the future destiny, whatever it may be, of this company. In other words, it is a protection against asset-stripping.
So that the Committee should know what it is dealing with, I ought to say that the assets of the National Freight Corporation at 31st December 1978 were £ 183 million, of which some £ 58 million— that is, about one-third— represented land and buildings. There is a note to the accounts which states that the market value is in excess of book value. I cannot guide the Committeee— no doubt the Minister can— as to the present value of the land and buildings, and this will have to be in any prospectus when it is floated off to the public. As I said, the intention is to stop asset stripping, which I think would be the wish of the Committee. That is the reasoning and the thought behind this amendment and I beg to move.
Lord BELLWIN: This new clause would impose an intolerable limitation on the commercial freedom of the new company. There is no reason why the company should wish to dispose of any property on a large scale. But it is essential that it can take advantage of any opportunities to dispose of property no longer required, as and when these arise, without going through the laborious procedure of seeking ministerial consent in the way that the new clause proposes. Such restrictions could prevent any negotiations from ever being completed. Disposal of redundant property is a normal part of everyday commercial activity; indeed, the NFC does it now without prompting any controversy. The whole purpose of the Bill is to ensure that the new company, as from the appointed day, has the commercial freedom enjoyed by any private sector company. This new clause would be entirely inconsistent with this and for that reason we cannot accept it.
Lord MISHCON: All I can say in regard to that is: if the Minister feels that it would be a wrong principle for asset stripping to take place, would he not agree that, at least, an undertaking by the Government at this stage that that would be discouraged would meet part of the point of this amendment?
Lord BELLWIN: As the noble Lord knows, I am at all times anxious to be helpful. Indeed, throughout all the 150-odd amendments that we have discussed we have, in the main, been so. But we are now talking about fundamentals on
668
which there is clearly a difference of view between noble Lords opposite and we on this side. There is nothing wrong with that; we knew it at the time of Second Reading. It was said so and it is so.
But if you talk of asset stripping in the emotive sense and, at the same time, consider the point I made a moment ago— namely, that it is normal commercial practice for any company which has properties or anything else which may be surplus to its requirements, as the NFC finds to be the position at the present time— you would not call that asset stripping. Or would noble Lords describe as asset stripping what the NFC now does, in the normal course of its business, when it sells some property or land? They may say that it is that in the use of the term, but it is part of the normal commercial and, presumably, logical process. All we are wanting to ensure is that the successor company which takes over is not so restricted that it cannot operate in a normal open, commercial way. For that reason, I say, again, that I am not able to be as helpful as the noble Lord would like.
On Question, amendment negatived.
8.57 p.m.
Lord UNDERHILL Lord UNDERHILL moved Amendment No. 157:
After Clause 40, insert the following new clause:
(" Compensation for loss of employment etc.
. — (1) The Minister shall by regulations provide for the payment by the Minister or by such person as may be prescribed by or determined under the regulations of compensation to or in respect of any person who is, or prior to the making of the regulations, has been in any employment as may be so prescribed and who suffers loss of employment or loss or diminution of emoluments or pension rights or worsening of his position which is attributable to any provision of this Act or any instrument made under this Act.
(2) Regulations made under this section may—
(a) include provision as to the manner in which and the person to whom any claim for compensation is to be made, and for the determination of all questions arising under the regulations,
(b) make different provision for different classes of persons and for other circumstances and make or authorise the Minister to make exceptions and conditions,
(c) be framed so as to take effect from a date earlier than the making of the regulations,

669
but so that regulations having effect from a date earlier than the date of their making shall not place any individual in a worse position than he would have been if the regulations had been so framed as to have effect only from the date of their making.").
The noble Lord said: This amendment is to protect the overall conditions of service of staff on the transfer of ownership of the National Freight Corporation. A very powerful case could be made out for this, but in view of the time I shall be extremely brief. It has been longstanding practice, when employees are involuntarily transferred from one employment to another, that provision should be made for compensation in various circumstances. For example, under the Railways Act 1921, many of the smaller railway companies were amalgamated into four companies, and the Act specifically provided for compensation in the event of any employee having his conditions of service worsened. Similarly, in the Transport Act 1947 there was provision for compensation when the railway companies were taken into public ownership. As your Lordships will recall, this principle has been extended far beyond the railway industry and legislation protecting the interests of employees was introduced by the Conservative Government when they brought in local government reorganisation in 1973. Therefore, the principle is one which is accepted. The same provision was made in 1968, when the British Railways Board was divided into three parts.
To sum up, the purpose of this amendment is to include provision for compensation for staff who, if transferred to the employment of another organisation as a result of the sale of shares, suffer loss of employment or a worsening in their general conditions of service, compared to those they would have had if they had remained with the National Freight Corporation or the successor company. It is a principle which has been accepted before. It was accepted and written into the Local Government Reorganisation Act, and we should like to see this amendment written into this Bill. I beg to move.
Lord BELLWIN: The concern over this issue, while fully understood, is, in my view, entirely misplaced. Employees have no cause to fear the transfer of ownership to the private sector. The
670
Government believe that by taking advantage of the greater commercial freedom available in the private sector, the company will be assured of a secure and prosperous future. This will help to ensure greater job security for employees. In any case, the proposal is wholly unacceptable on the point of principle. It entirely contradicts one of the fundamental aims of the Bill, which is to free the National Freight Corporation from stifling restrictions and impositions of precisely this kind. It is essential that the rights and obligations of the successor company should from the outset correspond to those of any Companies Act company without any of the special obligations that now apply to the National Freight Corporation as a statutory corporation. Only then can the company compete on fair and equal terms in the free market.
Obligations of the kind proposed in the amendment could involve the company in an open-ended commitment. It would be a severe burden; it would be a deterrent to investors. The need to make provision for this type of compensation is long past. The staff will have the benefit of the substantial protection afforded to all employees in both the public and the private sectors by the Employment Protection Acts. There is no reason at all why employees of the company should have any special protection beyond what is available to all employees.
As for the point on the Bill representing a removal of the protection already given to employees in earlier legislation, this is not so. The legislation provides in Schedule 6, paragraph 4, for the company to take on the compensating functions now carried out by the National Freight Corporation under the Transport Holding Company Act 1968. I fear that once again we cannot accept the amendment.
Lord UNDERHILL: I am sorry that the noble Lord cannot accept the amendment. His reference to the schedule related to the obligations at present existing; it has got nothing to do with the position of employees who are to be transferred as a result of the disposal of the National Freight Corporation. I am sorry that the noble Lord used the words "stifling restrictions" because we are talking about compensation for employees who suffer not as a result of

671
anything that they have done but as a result of legislation passed by Parliament. What we are endeavouring to do in the amendment is to protect their interests in the same way as noble Lords opposite undoubtedly supported similar provisions in the Local Government Act.
If it is being suggested that when one is dealing with the public service, conditions should be of a higher character than when one transfers to a private shareholding, it is a suggestion which I am sorry that the noble Lord should make. Previous legislation throughout the whole
Clause 41 [Funding of relevant pension obligations]:
9.11 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 158:
Page 38, line 1, leave out ("may, with the consent of the Treasury ") and insert (" shall ").
of the railway industry and its subsidiaries has made this provision; it has been in past legislation and it is an important aspect of industrial relations, which very shortly we shall be considering in this House. I am sorry that the noble Lord cannot accept the amendment. It is a question of great principle and I cannot withdraw the amendment.
9.3 p.m.
On Question, Whether the said Amendment (No. 157) shall be agreed to?
Their Lordships divided: Contents, 30; Not-Contents, 65.

CONTENTS

Blease, L.

Gosford, E.

Ponsonby of Shulbrede, L. [Teller.]

Boston of Faversham, L.

Hale, L.

Brockway, L.

Hall, V.

Sefton of Garston, L.

Cledwyn of Penrhos, L.

Houghton of Sowerby. L.

Simon, V.

Collison, L.

Kaldor, L.

Strabolgi, L. [Teller.]

David, B.

Lloyd of Kilgerran, L.

Underhill, L.

Davies of Leek, L.

Lovell-Davies, L.

Wells-Pestell, L.

Donaldson of Kingsbridge, L.

Maelor, L.

Whaddon, L.

Elwyn-Jones, L.

Mishcon, L.

Wigoder, L.

Gladwyn, L.

Peart, L.

Wynne-Jones, L.

Glenamara, L.

NOT-CONTENTS

Abinger, L.

Elliot of Harwood, B.

Morris, L.

Airey of Abingdon, B.

Faithfull, B.

Mottistone. L.

Ampthill, L.

Ferrers, E.

Mowbray and Stourton, L.

Armstrong, L.

Fortescue, E.

Murton of Lindisfarne, L.

Auckland, L.

Gainford, L.

Orkney, E.

Balerno, L.

Glasgow, E.

Orr-Ewing, L.

Bellwin, L.

Godber of Willington, L.

Reigate, L.

Belstead, L.

Gowrie, E.

Renton, L.

Bessborough, E.

Gridley, L.

Sandford, L.

Brougham and Vaux, L.

Grimston of Westbury, L.

Sandys, L. [Teller.]

Caithness, E.

Hatherton, L.

Selsdon, L.

Campbell of Croy, L.

Henley, L.

Sharpies, B.

Chesham, L.

Hereford, V.

Skelmersdale, L.

Cockfield, L.

Holderness, L.

Swinfen, L.

Cork and Orrery, E.

Hornsby-Smith, B.

Teviot, L.

Craigavon, V.

Kilmany, L.

Trefgarne, L.

Craigmyle, L.

Kimberley, E.

Trenchard, V.

Cullen of Ashbourne, L.

Long, V.

Trumpington, B.

de Clifford, L.

Lyell, L.

Vaux of Harrowden, L.

Denham, L. [Teller.]

McFadzean, L.

Vickers, B.

Drumalbyn, L.

Macleod of Borve, B.

Wynford, L.

Ellenborough, L.

Margadale, L.

Resolved in the negative, and amendment disagreed to accordingly.

The noble Lord said: I hope to earn a slight amount of popularity in the Committee by speaking to Amendments Nos. 158 to 164 and doing it briefly. As I understand it, this clause refers to road-based obligations of the NFC under pension schemes. It provides that if on the offer for sale there is a deficit in the funding of the relevant pension obligations the Minister may, by various methods, make up the funding. The amendment

673
aims, in view of the fact that the employers may be in jeopardy in private hands (as would not be the case in a public corporation) to make it mandatory upon the Minister to hand over with the pension fund obligations being properly covered and not conditional, among other things, upon the amount the Minister receives for the relevant securities that will be sold. The requisite sum to fund the obligations is to be jointly determined under these amendments by the Minister and the trustee of the funds. I hope that this idea will commend itself to the Minister, and I beg to move Amendment No. 158.
Lord SANDYS: From this side of the Committee I can say that we are very much obliged to the noble Lord, Lord Mishcon, for dealing with Amendments Nos. 158 to 164 together. I am anxious to point out to the noble Lord, first, as I hold in my hand a copy of the Official Report of Standing Committee H, one particular matter. He will of course be aware that considerable discussion took place on these amendments relating to this clause and indeed later amendments, all of which (with the exception of Amendment No. 161) have been discussed in considerable detail in another place.
I say this in no sense in criticism, but what I am attempting to emphasise is that considerable care has been devoted in another place to examining the particular arguments. Where probing amendments have been withdrawn I think it could fairly be said at this stage that the details of the particular situation have been very fully discussed.
I think the point I should like to make further about amendments in this particular situation is this. Where an amendment has been tabled and called and spoken to and indeed resolved in another place one can say with some justification that it is a spent amendment. If, however, it is associated with a group of new amendments or there is a new aspect, I think we will naturally re-examine the position. But as my right honourable friends and honourable friends in another place have spoken to nearly all these amendments together, I think there is remarkably little we can add other than to emphasise particular aspects. I listened with great interest to Lord Mishcon's speech on Second Reading, and I have since then
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read it again. I know how much importance he attaches to this group of amendments.
I should like now to turn to the substance of Amendment No. 158 and say this. This amendment, we believe, would serve little purpose. It is the normal convention to require Treasury approval in financial legislation of this kind, and I see no reason to break with this convention. As part of the normal processes of government the Treasury would in fact be consulted anyway whether or not this was written into the Act. The change, therefore, from "may" to "shall" would have no practical effect, since the Minister would still retain discretion on the amount of payment. My right honourable friend's remarks in column 1806 in Standing Committee H on 26th February also refer to this.
In regard to Amendments Nos. 160, 162 and 164, if I may be permitted to speak to them together as the noble Lord, Lord Mishcon, has done so, I think I can consolidate my remarks and say this. The NFC's road-based pension liabilities stand at present to be discharged by the corporation out of revenue. The payments are currently £ 2-| million a year, which compares with the total turnover of the corporation of £ 480 million. The previous administration saw no call to support these road-based obligations, and I see no reason to question that decision. The position will, however, be rather different when the corporation comes to be moved out of the public sector. Investors might well be concerned if the balance sheet reflected pension fund deficiencies. Clauses 40 and 41 have therefore been included in the Bill to facilitate the sale of shares. Investors are likely to prefer to pay a higher price for NFC without the deficiencies rather than a lower price with the deficiencies. What we are, therefore, proposing is that a part of the proceeds of the sale should be set aside to fund those deficiencies.
However, it would not be desirable to write into the statute a requirement that funding should be complete. What constitutes complete funding would be a matter of actuarial judgment, and the judgement of actuaries in such matters can differ widely. Attempts to write a requirement of this kind into the statute could lead to unproductive litigation.

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I can, however, give the assurance that the Government intend that the amount of funding to be offered under this section will be sufficient to enable the actuaries to certify that the NFC's pension funds are in a satisfactory state.
On the individual amendments, No. 160 would delete subsection (3) from Clause 41. Subsection (3), as your Lordships are already aware, is one of the less important provisions in the Bill. It was included more by way of tidiness than anything else, since it secures that the power to apply the proceeds of sale to the funding of the road-based obligations is available even if the proceeds of sale fall short of the sum originally specified. It is, however, unlikely that we would ever wish to make use of the power, but I see no virtue in deleting it.
Amendment No. 162 would introduce a requirement that any payment made under subsection (4) should be sufficient fully to fund the obligation. As I have explained, what constitutes full funding is a matter of actuarial judgment, and it would not be helpful to write a requirement of that kind into the statute.
Amendment No. 164 would require the successor company to make payments to the funds to cover any difference between the payments made by the Minister and full funding. Apart from the problem of defining full funding, this amendment would be otiose and surplus. Clause 41 is concerned with the obligations of the successor company and its road-based subsidiaries. Because they are obligations, the successor company is already required to meet any deficiencies corresponding to them. The only question is whether they should be met by immediate lump sum payments, or by periodical deficiency payments, and on that the amendment is silent. The obligation will already rest with the company, so the amendment would achieve nothing.
I have not specifically spoken to Amendment No. 163 which I think my noble friend Lord Cullen of Ashbourne may wish to speak to separately. However, I can assure the noble Lord, Lord Mishcon, that we regret that we cannot accept his amendments.
Lord MISHCON: I think that it would be very sensible if I were able to study
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what the noble Lord has said when I read the Official Report, and then see if there is any further step that ought to be taken in the other stages of the Bill. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 159 to 164 not moved.]
Lord BELLWIN Lord BELLWIN moved Amendment No. 164A:
Page 38, line 41, leave out ("specified in") and insert (" for the time being within ").
The noble Lord said: I spoke to this amendment when we dealt with Amendment No. 145A. I beg to move.
Lord MISHCON: I am not quite sure that the Minister is right. He may be right, but in view of the hour, I think that both of us had better see what the situation is after we read the report of the proceedings. We can deal with the matter, if necessary, later on.
On Question, amendment agreed to.
Lord MISHCON Lord MISHCON moved Amendment No. 165:
Page 38, line 43, at end insert—
(" (7) National Freight Corporation pension schemes other than the relevant pension obligations defined in sections 41 and 44 of this Act shall continue to operate and shall not be worsened by the successor company.").
The noble Lord said: Happily I can, once again, be very brief. This amendment deals with pensions other than road-based and rail-based pensions— that is to say, current service obligations. The purpose of the amendment is to see that they shall not be worsened by the successor company. I hope that this amendment, at least, can be agreed to by the Minister.
Lord SANDYS: I fear that I am going to disappoint the noble Lord, Lord Mishcon, in that regard. This amendment, once again, was moved in another place in Standing Committee. I refer your Lordships to column 1852 of the proceedings of Standing Committee "H". My honourable friend the Parliamentary Secretary to the Ministry of Transport, Mr. Kenneth Clarke, spoke to this matter in some detail at column 1859. I think that at this hour it would be unnecessary

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to repeat his words in full, but I quote that reference for a particular purpose? The amendment was negatived at that particular stage.
It is a matter of regret that the drafting of this amendment has remained exactly as it was then.
Lord MISHCON: It should be "section 45".
Lord SANDYS: I am at a loss to know the point that the noble Lord is making.
Lord MISHCON: I thought that the Minister, with his usual kindness, was trying to help me, because it should read: "… defined in sections 41 and 45 of this Act" and not "section 44", as the Bill now stands. I thought that the noble Lord was referring to that.
Lord SANDYS: Yes, I think that this is a printer's error. I should like to point out that it is an error which appears to have been repeated on this occasion. The purpose of the amendment is to impose a restriction on the successor company which does not apply to the corporation at present and which does not apply to private sector companies. It is thus inconsistent with the general policy of Part II of the Bill, which seeks to put the successor company into the shoes of the NFC, but to free it from limitations appropriate only to a statutory corporation. In any event, the amendment does not appear to relate very closely to the actual facts of the corporation's present pension arrangements. It may be helpful to the Committee if I very briefly describe those arrangements.
Ninety-five per cent. of the corporation's employees are members of one or other of the two big schemes established in 1971— either the Salaried Staff scheme or the Wages Grades scheme. Each of these schemes has both rail-based and road-based members and pensioners. Relevant pension obligations, as defined in Clause 42, are owed in respect of each of these schemes. I might say that relevant pension obligations, as defined in Part III of the Bill, are also owed in respect of each of these schemes. One must, however, bear in mind that a pension obligation which is relevant for the purposes of Clauses 41 and 42 is irrelevant for Part III of the Bill, and, of course, vice versa.
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When the new schemes were set up in 1971, those employees who joined were allowed to transfer some or all of their previous pensionable service to the new schemes. They were granted back-service credits. The corporation guaranteed the payment of the benefits corresponding to the back-service credits. These guarantees make up the greater part of the historic pensions obligations of the corporation. The corporation's obligations will pass to the successor company, and Clauses 41 and 42 and Part III of the Bill are intended to provide the wherewithal for those obligations to be discharged.
The security for the current service pension rights of NFC employees is provided by the funds themselves. They and their employer have paid contributions into the funds and these contributions have been invested by the trustee outside the corporation's business. The investments are held on trust and are not available for use by the corporation or by any successor company. I might say that as far as we are aware the current service sections of the funds are adequately funded and the assets are sufficient to support the benefits laid down in the rules of the Funds.
That deals with the corporation's main pension schemes. The other 5 per cent. of the corporation's employees are members of old British Rail schemes, or of old NFC schemes, or of no scheme at all I would underline one point. These employees have had the opportunity to join the new schemes. If they did not do so, it would have been their own decision. The amendment is, of course, concerned with the old NFC schemes; that is to say, the schemes inherited from the Transport Holding Company. I understand that these schemes are in a satisfactory condition and that the assets will be sufficient to meet their liabilities. I should say that these schemes are also funded schemes and that their assets are not at the disposal of the corporation or the successor company.
Finally, there are some NFC employees who are not members of formally constituted pension schemes but who are entitled to what are called "customary practice" or "ex gratia" pensions. These terms are somewhat misleading, as the pensions concerned are now, to all

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intents and purposes, legal entitlements. In any event, the pensions concerned have now been brought into the NFC (1978) Pension Fund, and are relevant pension obligations for the purposes of the Bill. I regret that I cannot advise your Lordships to accept this amendment which is, as I have said at all too great a length, unnecessary in practice and in principle, and will conflict with the policy of the Bill.
Lord MISHCON: I am most grateful to the noble Lord for the trouble he has taken in regard to the detailed reply which he has given to the observations that I made. They are worthy of such respect that I would want to ponder upon them when they appear in the Official Report, and then possibly he would permit me to communicate with him if I have any further points to raise.
Amendment, by leave, withdrawn.
Clause 41, as amended, agreed to.
Clause 42 agreed to.
[Amendment 166 not moved.]
Clause 43 agreed to.
Schedule 7 agreed to.
Clause 44 [Payments by Minister in respect of B.R. and N.F.C. pension schemes]:
9.32 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 166 A:
Page 41, line 3, leave out (" sections 48 and 49 ") and insert (" section 49 ").
The noble Lord said: With Amendment 166A, which is a paving amendment, with your Lordships' permission it would be convenient to take Amendments Nos. 177A, 177B, 179A, 179B, 180A, 180C, 180D and 180H. All these amendments relate to Clause 48, which is the clause which deals with surpluses in "basic" schemes. I anticipate that there may be differences of opinion about this clause when we come to later amendments in the Marshalled List. However, I hope these amendments will not cause any difficulties. Amendments 166A,
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177A, 177B, 179A and 179B correct a technical defect in the clause as now drafted. We had inadvertently contrived to reduce the Minister's liabilities to the supplementation scheme by more than the reduction in the liabilities of the supplementation scheme. Amendment 177B recasts subsection (2) of Clause 48 to remove this defect, and the other amendments are consequential drafting amendments.
Amendment 180A discharges an undertaking given in another place. There are some British Rail pension schemes, including in particular the British Transport Police Force Superannuation Fund, which pay increases of pensions to some of their pensioners but not to others. The others receive their pensions increases from the supplementation scheme. The amendment provides that Clause 48 will only apply to so much of any surplus in such a scheme as is attributable to those of the members and pensioners as stand to receive their increases from the supplementation scheme.
Amendments Nos. 180C and 180D also discharge an undertaking given in another place. Surprising as it may seem, the rules of some British Rail schemes do not permit the trustees or the management committees to increase the pensions paid by those schemes. The amendments confer on them the necessary power. I should make clear that the trustees will not be obliged to increase pensions, but they will have the power to do so if they wish. Amendment 180H is a consequential drafting amendment which moves a definition now in Clause 48 into the main definitions clause, since the definition is now needed elsewhere in Part III. I beg to move.
Lord MISHCON: The Minister is to be congratulated on the ease with which he managed to meander through the maze of amendments which he discussed together. If I am not quite so successful in treading my path through them, I hope he will forgive me, but there are some observations I wish to make on some of the amendments with which he dealt. First, in regard to Amendment No. 177B— and I do not expect the Minister to reply now, but it would be a courtesy if he would communicate with me on the points I am now raising— the wording does not seem very clear. Suppose that in 1985 a surplus is revealed in one of the basic

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schemes (for example, the LMSR section of the BR superannuation fund) and that 85 per cent. of the surplus is sufficient to meet either, first, 90 per cent. of the cost of the 1986 scheme of supplementation or, secondly, 10 per cent. of the cost of all future schemes of supplementation.
It is understood to be the intention, which BR would, I understand, support— and I say at once that many of the observations I am making tonight on pensions come out of the concern of the BR pension funds, whose officers have supplied me with certain information— that interpretation B should apply; that was the second interpretation I gave, the 10 per cent. of the cost of all future schemes of supplementation. If we are supposed to consider all future schemes of supplementation as a group in order to reach that second interpretation, which I called interpretation B, we must presumably also treat them as a group for the purpose of understanding the opening phrase, and that is:
" If, at any time before the increases first become payable under the supplementation scheme ".
This would lead to the position where, as soon as a scheme of supplementation had been introduced, Section 48 would cease to apply to the basic scheme for ever. I think it very doubtful if that is the Government's intention. There is a further problem about the wording. It states:
"… the obligation to pay or secure the payment of the increases or, if less, the relevant proportion of the increases shall not be regarded as a relevant pension obligation ".
If that were so, then of course it would not qualify for Government support. Until the board pays the increases, they are not under an obligation to pay them. Reference might usefully be made here to Clause 45 (6) (b). Suppose, in the example already quoted, the board decides to reduce future schemes of supplementation by 10 per cent. so that a supplement which would otherwise have been £ 100 becomes £ 90, thereby hoping to get Government support for the whole £ 90— and that, I understand, is the intention— under the proposed wording, the board's obligation is only £ 90 and it would appear that £ 10 of that is not to be regarded as a relevant pension obligation. Hence Government support would be available for only £ 80 and not £ 90 as intended.
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In regard to Amendment No. 180A, although acceptable in principle, I must tell the noble Lord in sheer honesty that I wonder whether he really means the clause to imply what it appears to imply. There seems to be some ambiguity, at the very least, as to whether the assets and liabilities for members of the basic scheme who have not yet retired are to be taken into account. This is because such members are not yet in receipt of
"… pensions increases of which are payable under the supplementation scheme ".
Lastly, as to Amendment No. 180B, this would be acceptable if the word "all" between (a) and (b) were changed to "and". As drafted, the Minister could fail to support the transfer value but also meet less than the whole of the pensions obligations. As I said, I do not expect the Minister to reply now. These are matters of detail, although they are matters of great importance to the pension scheme people. I therefore hope he will be kind enough to read what I have said and let me have his observations in due course.
Lord BELLWIN: Of course I shall readily and gladly do that. I may be able to help a little by confirming that we intend interpretation B rather than interpretation A. Certainly we shall look at all the other points, and we might have to do this in regard to the complex matters relating to many other amendments with which we are yet to deal. It is very difficult to absorb this kind of matter the first time round without looking at it in writing, and I am sure that no one on either side would expect otherwise.
Viscount SIMON: When the noble Lord is looking at this matter again— as he says he will— will he pay particular attention to Amendment 180A and the word "of" in the last line?
On Question, amendment agreed to.
9.41 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 167:
Page 41, line 26, after (" year ") insert (" which may be applied towards the payment of such of the pensions, increases and expenses payable under or incurred in connection with the scheme as correspond to the obligations ").
The noble Lord said: This is a drafting amendment. It picks up a stitch which

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was dropped when Clause 44 was originally drafted. Clauses 46 (3) and 44 (2), when taken together, provide for unfunded proportions of unity to be determined for certain British Rail and NFC pension schemes. The schemes concerned are those which have negligible assets with which to discharge their historic pensions liabilities. For these schemes the Minister's payments under Clause 44 will be equal to the difference between the total historic pensions outgo of the schemes and the corresponding income and assets.
The amendment is necessary to make sure that only the "historic" income (if one may call it that) of the scheme is brought into the calculation. The scheme might have non-historic liabilities, and an income to correspond. The non-historic income obviously ought to be used to meet the non-historic liabilities, and the amendment makes sure that it is available for this purpose. I beg to move.
On Question, amendment agreed to.
Clause 44, as amended, agreed to.
Clause 45 [Meaning of "the relevant pension obligations"]:
Lord MISHCON Lord MISHCON moved Amendment No. 168:
Page 42, line 16, after ("scheme") insert (" taking account of the amendments which were introduced with effect from the date when employments in respect of which pension rights are earned under the scheme were contracted out under the Social Security Pensions Act 1975 ").
The noble Lord said: The main railway pension schemes were contracted out under the Social Security Pensions Act 1975. This took place with effect from 6th April 1978, and hence the pension scheme rule changes made in order to meet the statutory contracting out conditions occurred after 1st January 1975, which is the date mentioned in Clause 45 (l) (a) of the Bill. This means that the changes do not count as "relevant pension obligations" even though they relate to the same period of pensionable service as the other relevant pension obligations, and hence they would not qualify for Government support.
It may be argued that one of the most important effects of contracting out is that the national insurance scheme is responsible now for paying post-retirement pension increases on part of the fund
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pension. This means that the railway pension funds no longer have to meet the whole of the liability for pension increases and this has resulted in a saving in the Government support which would otherwise have been required. It therefore seems not unreasonable that, having made this saving, the Government should be prepared to meet the relatively very small additional cost which would be involved if they support the additional liabilities resulting from the contracting out changes. This is what the amendment is designed to achieve, and I beg to move.
Lord SANDYS: I have listened with interest to the arguments of the noble Lord, Lord Mishcon, and perhaps I should first remind the Committee of the purpose of Part III of the Bill. It is intended to reproduce by a different means the support for the board's historic pensions obligations that was to have been provided under the Railways Act 1974. In particular, we are seeking to define the relevant pension obligations of the board in Clause 45 of the Bill in such a way that they equate to the obligations that were to have been supported under the Railways Act 1974. The pensions provisions of the 1974 Act formed only one part of a comprehensive reconstruction of the board's finances. We are not seeking to reopen the general financial settlement laid down in the 1974 Act.
It is not in dispute, I think, that support was not going to be provided under the 1974 Act for the increases in the board's obligations which are the subject of the present amendments. These increases flowed from a decision which the board themselves took. They decided to change the rules of certain of their pension schemes so that the employees who were members of those schemes could be contracted out of the state earnings-related scheme. They were not obliged to take that decision, but they considered that it was in their interests to do so.
It is true that contracting out will have consequences for future supplementation payments. But there are two things that I would say to that. First— and I admit that the argument is somewhat technical— there is a risk of not comparing like with like. If the employees concerned had not been contracted out, their total

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pension entitlements would have been higher than those entitlements in fact are. Thus, it is not surprising that the cost of providing those pension entitlements would have been higher than it in fact is. But the Bill, like the 1974 Act, is concerned with the pension entitlements that existed at 1st January 1975, and not with subsequent increases in those entitlements. Secondly— and this brings me back to my main point— we are treating the change in the burden of supplementation no differently under the Bill than it was to have been treated under the 1974 Act.
I quite agree that we ought to avoid unnecessary administrative complications; but that it not an argument for widening public expenditure commitments. In any event, I am not persuaded that the administrative difficulties here are insoluble. I am informed that there have been discussions by officials on the question, and for our part we have made it clear that, when it comes to arithmetic, we are ready to accept a degree of approximation.
I would suggest to noble Lords that it would be as well to be cautious before suggesting that it would be equitable for this or that obligation to be brought within the Bill, or that it is anomalous that this or that obligation is excluded from Clause 45. The principle underlying the clause is simple. It is aimed at obligations owed on 1st January 1975, and later obligations to pay supplementation. The Bill, like the 1974 Act, is concerned with obligations incurred in the past. It left the board with full responsibility for the future. The obligations owed at 1st January 1975 may have been something of a rag-bag. Most inheritances are. But if we are going to look at the merits of later obligations with a view to including them in the Bill, we might also look at the inherited obligations which are in the Bill to see whether there are any that merit exclusion.
The Government have not undertaken such a review as we are proposing to retain the principle to which I have referred. However, if we were to move to some different basis it could not be assumed that all the changes would be in one direction. For example, for some British Rail employees, present and future service is a historic liability, as is the indexation of the pensions corresponding to that service. This might be thought to
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be odd, since current and future employment is not what is normally understood by the term "historic" liability. Nevertheless, the obligation was owed on 1st January 1975, and it is within the Bill. I am sorry I have had to speak at some length here. I am sure that it will be very much easier to follow these arguments when we relate them to each other in the Official Report; but I regret that we cannot accept this amendment.
Lord MISHCON: I will study all that the noble Lord has said. I find his reply somewhat disappointing. Perhaps I shall see a glimmer of light when I read the Official Report.
Amendment, by leave, withdrawn.
9.51 p.m.
Lord BELLWIN Lord BELLWIN moved Amendment No. 168A:
Page 42, line 20, after second ("of") insert (" or sums representing accrued rights in respect of").
The noble Lord said: With Amendment No. 168A it would be convenient, with the Committee's permission, to take Amendments Nos. 171 A, 172A, 180B and 180E on the Marshalled List. These amendments raise two aspects of transfer values; that is to say, the payments made by one pension scheme to another when a member transfers. Amendments Nos. 168A and 171A discharge an undertaking given in another place: they provide for the historic element of a transfer value paid by a British Rail or NFC pension scheme to be treated as part of the historic pensions outgo of the scheme, even though the board or the corporation were not at the operative date under an obligation to guarantee the payment.
New clause 180B is intended to permit block transfers. The board or the successor company might at some fufure date wish to give their employees the option to transfer to new pension schemes. The new clause provides for the old schemes, if I may call them that, to receive the same support as if the people concerned had not transferred. These arrangements are complementary to each other. In the case of individual transfers, or transfers to other employers. Amendments Nos. 168A and 171A provide for support for the transfer payment. In the case of block transfers, the new clause will

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apply. Amendments Nos. 172A and 180E are consequential drafting amendments. I beg to move.
On Question, amendment agreed to.
Lord MISHCON Lord MISHCON moved Amendment No. 169:
Page 42, line 20, leave out (" and ").
The noble Lord said: Perhaps with the permission of the Committee, I may take Amendments Nos. 169, 170 and 172 together. When I reach Amendment No. 171, I propose to withdraw it in view of Amendment No. 168A. Under the Bill as drafted, there seems to be a danger that members of the BT Commission Male Wages Grades, pensions scheme will lose the benefit of the future pension increases for which the Government Actuary allowed in the 1974 valuation. It was assessed at that time at 4 per cent. per annum. The valuation was made as at 31 st March 1974 and the Government Actuary reported on 17th October 1974 that he has assumed:
"… the average annual rate of increase in the pension benefits in future for both pensioners and members in service will be 4 per cent. ".
Even after allowing for these increases, the valuation showed a surplus of £ 1-42 million and pensions for all active members and pensioners were increased by 28p a week. Later in 1974, the pension scheme became part of the BR 1974 pension fund. If the funding arrangements under the Railways Act 1974 had remained undisturbed, then in calculating the amount of funding debt to be prescribed in respect of the BR 1974 pension fund, clearly account should be taken of the value of the prospective increases in pensions from the BTC Male Wage Grades pension scheme. This would have enabled the BR 1974 pension fund to provide the future pension increases of 4 per cent. per annum for which the Actuary had allowed.
If the fund had had a favourable investment experience, the members might well have benefited to a greater extent than 4 per cent. per annum. Under the Transport Bill, it would seem that the situation is different. There appears to be no provision for Government support to pay for the pension increases in question. Once the assets of the BR 1974 pension
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fund have been exhausted— as will happen during the first few months of operation after the Bill has become law, then even if the valuation of the BTC Male Wages Grade pension scheme showed that the 4 per cent. increases could justifiably be paid, there would not appear to be any provision whereby the Government could make the necessary money available. This is because the increased pensions would result from a rule change after 1st January 1975. I suggest that the situation is clearly unjust since there was a firm expectation existing before 1 st January 1975 that these pension increases could be paid, and the amendment seeks to restore that position. I beg to move.
Lord BELLWIN: We are dealing with Amendments No. 169 and, as I understand it, Nos. 170 and 172. Amendments Nos. 171 and 169 were tabled also in another place and my honourable and learned friend the Parliamentary Secretary agreed to consider the point which they raised. As a result, Government Amendment No. 168A has appeared on the Order Paper. It is one of a group of Government amendments on transfer values and, if the noble Lord, Lord Mishcon, is willing to withdraw Amendments Nos. 169 and 171, perhaps I might speak to the Government amendments on transfer values as a group. A number of rather complex points arise on this amendment, and it may assist the Committee if I briefly explain the background before I come to the point of the amendments.
The British Transport Commission (Male Wages Grades) Pension Scheme was established by the BTC in 1954. The scheme was closed to new entrants in 1967, when the British Railways Board established a new pension scheme for their wages grades, the British Railways (Wages Grades) Pension Fund. The BTC scheme was of an unusual type. It is contributory, but there is no fund. Members' contributions were treated by the BTC as income, and benefits were paid by the Commission out of revenue. Responsibility for the scheme was transferred to the British Railways (1974) Pension Fund, which was a fund established in 1974 to embrace the various railway pension schemes which had no assets. The benefits of the BTC scheme are fixed in money terms, and by today's standards are very poor. For instance,

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the basic pension entitlement under the scheme is 9 old pence a week for every year of service, with a maximum of £ 1-50 a week for 40 years' service. The scheme at present comprises 5, 000 serving members and 15, 000 pensioners. It was previously much larger, but many of the original members exercised the option, which was offered to all members in 1967, to transfer into the more modern wages grade scheme, which provides for better benefits.
As I have explained, the scheme has no assets, but its rules provide for five-yearly actuarial valuations, to be conducted on a notional basis. These valuations assume notional contributions from the employer. The last valuation of the scheme was conducted in 1974. This was done by the Government Actuary, because he happened to be the scheme's actuary, but his valuation was not in any way related to the introduction of the new Government support arrangements which were introduced in the same year. That valuation, which was done on a notional basis, revealed a notional surplus. The actuary therefore recommended that this surplus should be used to increase the benefits by 22 per cent., and this was duly done by means of an order which provided for a flat-rate increase in the benefits of 28p per week. However, in order to decide how much of the surplus he could recommend for distribution, the actuary made an assumption about the likely future rate of increase in benefits: he chose to assume 4 per cent. per annum. I must stress however that this was merely an assumption used for the purposes of the 1974 Actuarial valuation: There was nothing in the rules of the scheme at the time to provide for these increases; nor has this been written into the rules of the scheme subsequently.
The board have, however, represented to the department that, because the actuary made an assumption that benefits would be increased by 4 per cent. per annum from 1974, there was some presumption that these increases would be made. The purpose of the amendments we are considering is to provide that such increases would qualify for Government support under the new arrangements proposed in this Bill, notwithstanding the fact that they were not provided for in the rules of the scheme in 1975.
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It has always been a central principle of the Government's approach to the arrangements for support for the British Railways pension obligations that the support should be restricted to what are termed "historic" obligations. The word "historic" means obligations on the board as at 1st January 1975. There is, of course, no objection to the board improving the terms of their pension scheme subsequent to 1975, but there is no Government commitment to meet the cost of such improvements. It seems to me clear beyond doubt that the board were under no obligation, in 1975, to improve the benefits of this scheme and so I regret that the cost of such improvements cannot possibly qualify for Government support. I must therefore advise the Committee to reject the amendment.
In giving this advice, I am very conscious that the pension benefits provided by this scheme are derisory by modern standards and I can further accept that the fact that the scheme is operated on the basis of notional funding has meant that the members have not enjoyed as much of the benefits which inflation can bring to pension funds as they would had the scheme been properly funded. But that is not the point at issue here.
It is perhaps convenient to remind ourselves of the basic principle of the legislation we are considering. The purpose of the 1974 Act was to assist the board to meet certain binding commitments to its pension funds, commitments which existed at that date. The 1974 Act was not concerned with terms of the pension entitlements themselves, whether they were good or bad. The present Bill seeks to reproduce the support that was provided for in 1974, but by a different method. It was not the purpose of the 1974 Act to allow improvements to benefits provided by outdated pension schemes, nor is it the purpose of the present Bill. If the board consider, in their judgment, that it would be right to allow some improvements to the benefits provided by this scheme, that is a matter entirely within their discretion, but they cannot expect that the cost be reimbursed under this Bill.
When similar amendments to those we are now considering were considered in another place, the Parliamentary Secretary to the Ministry of Transport undertook to consider whether the cost of the 4 per cent.

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per annum improvements would have qualified for support under the 1974 Act arrangements. This is a hypothetical question to which I fear there is no answer. I am advised that, during the five years between the passing of the Railways Act 1974 and the suspension of the negotiations about its implementation in 1979, the board never raised this point with the department. They now maintain that they would have raised the point before the grand revaluation was completed, and they would have pressed the department to make allowance for these improvements in pension terms in settling the funding debt to be provided under the 1974 Act. I am clear, however, for the reasons that I have explained, that the department would not have been prepared to agree to this, because it would have been in breach of the principle that the Government are only providing support in respect of "historic" obligations. I have, of course, every sympathy with the members of this scheme, who are in receipt of only very poor pensions under it, but we must not forget that these rail-waymen all rejected the option to transfer into a modern scheme with better benefits. And even the benefits of the BTC scheme are fully indexed in line with inflation after the member of the scheme retires. Therefore, while sympathising and not without some regret, I must advise the Committee to reject these amendments.
Lord MISHCON: I thank the Minister for his expression of sympathy, but it does not appear to have very much practical application. I equally note his expression of regret, and I hope that it, at least, covers the pomise to look further into this matter. It may very well be that some-
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thing can be done about it before Report Stage, which will satisfy the basic requirement of the amendment, in which case I shall not have to press this matter further on behalf of myself and my noble friends. This is a very sorry position, as the Minister himself confirmed.
On Question, amendment negatived.
[Amendment No. 170 not moved.]
Lord MISHCON Lord MISHCON had given Notice of his intention to move Amendment No. 171:
Page 42, line 25, at end insert—
" and
(d) any obligations of the Board in respect of any sums payable under the scheme in respect of any person and representing the whole or any part of his accrued pension rights under the scheme, insofar as those accrued pension rights correspond to obligations of the Board which were owed on the operative date in connection with the scheme.").
The noble Lord said: I shall not move this amendment, in view of what happened on Amendment No. 168A.
Lord BELLWIN Lord BELLWIN moved Amendment No. 171A:
Page 42, line 35, after (" of") insert (" or sums representing accrued rights in respect of ").
On Question, amendment agreed to.
[Amendment No. 172 not moved.]
Lord BELLWIN Lord BELLWIN moved Amendment No. 172A:
Page 44, leave out lines 8 and 9.
On Question, amendment agreed to.
Clause 45, as amended, agreed to.
Clause 46 [Unfunded proportion of relevant pension obligations]:
[Amendment No. 173 not moved.]
10.7 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 174:
Page 44, line 30, at end insert—
(" () In determining what proportion of the relevant pension obligations of each BR or NFC pension scheme has not been funded the Minister shall use the same economic assumptions for every pension scheme subject to the determination.").
The noble Lord said: During the Commons Committee stage at, I think, column 2027 of the Official Report, the Government gave an assurance that they would be adopting the same general assumptions for the BR and NFC pension schemes, and the amendment was on that basis withdrawn. If the Minister would kindly confirm that assurance, I could take a similar course now. I merely wanted the assurance reiterated, so that there was no doubt about it. I beg to move.
Lord SANDYS: I am looking at the Official Report of the Commons Committee stage, column 2027. I think that when this amendment was debated in another place, my right honourable friend the Minister gave an assurance about the general approach that we intended to adopt when the unfunded proportions were determined, and I am happy to repeat that assurance in this House. I wonder whether that is a sufficient answer to the noble Lord at this stage, or would he prefer to hear the remainder of my comments on the amendment?
Lord MISHCON: I am sure that the Committee would be greatly educated by the Minister elaborating on what was said, but as I merely sought a repetition of the assurance I think I can spare the Committee's time. In view of theassurance which has been repeated, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord MISHCON Lord MISHCON moved Amendment No. 174A:
[In substitution for Amendment No. 177]
Page 44, line 30, at end insert—
(" () Before confirming or varying the said determination the Minister shall consult the
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persons administering the pension scheme concerned about the proportion he proposes to specify in the said order in respect of the scheme, and in the event of those persons giving notice in writing to the Minister within two months that they object to the said proportion, the Minister shall appoint an independent actuary, to be nominated by the president for the time being of the Institute of Actuaries, to report before the end of the second financial year on the proportion which would be appropriate and the Minister shall thereupon by order confirm or vary the proportion so as to give effect to the said report.").
The noble Lord said: This amendment provides for arbitration on the actuarial basis. The Department of Transport wrote on 7th December 1977, that the basis for the valuation to be made in connection with the Railways Act 1974— and I quote this to the Committee with some emphasis, in view of the statement made by the noble Lord, Lord Belstead, when he dealt with matters akin to it on Second Reading—
" will be freely agreed by all the parties involved— the Government, the Board and the Funds on the basis of the actuarial advice available to them. "
Reference was also made in that same letter to the report of the Public Accounts Committee. The letter continued:
" However, if policy were to be changed in the light of this review, one must I think assume that this would be done in such a way as to leave the position of members and pensioners of the fund as secure as it is now. In other words, if a change were made, the security which is effected by full funding would be replaced by some other equally effective security for the membership ".
In the Second Reading debate the Parliamentary Secretary, Mr. Clarke, made the following statement on the actuarial basis, and I quote him:
" The actuarial basis is being considered, and we hope that it will eventually be agreed between the Government and the board and the unions, but we cannot guarantee that. Someone has to decide, and actuarial judgments involve a matter of opinion in the final analysis. Certainly at present we would hope to reach agreement, if we can, on the actuarial basis ".
The Parliamentary Secretary also stated:
" There is absolutely no threat to the pension rights of the railwaymen who are affected by these historic rights provisions ".
Clearly the Parliamentary Secretary's statement meant only that he will try to reach agreement on the actuarial basis, but in the last resort the decision must be the Minister's. This is quite different from the 1977 statement which I quoted, that

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the basis for the valuation would be— I quote it again:
"freely agreed by all the parties involved ".
In the light of the 1977 assurance, one would clearly have expected that if there had been any failure to reach agreement on the actuarial basis, then some kind of outside arbitration might well have been decided upon in order to avoid the undertaking being breached.
The present amendment proposes to keep the spirit of the 1977 undertaking inviolate. It provides for completely independent arbitration which would be binding on the Minister. If this amendment is accepted, not only will justice be done but it will be seen to be done.
10.12 p.m.
Lord BELLWIN: The question of the choice of actuarial assumptions has caused almost as much misunderstanding as the rest of the pensions provisions put together. It is said that the Bill changes the position that existed under the 1974 Act. Let me make the position about the choice of actuarial assumptions quite clear.
First, there is the former position. Under the Act the Minister was to determine the amount of funding debt that was to be created. He did not have to obtain the agreement of anybody else. The position was the same under the Bill as introduced, but in another place my right honourable friend the Minister wrote into the Bill a requirement that there should be consultation with the parties before the unfunded proportions are determined. He will have to consult with the management committee of the scheme concerned— with the board or the corporation, as the case may be. Secondly, there is the extra-statutory position. I believe that it was the intention of the previous Administration to seek to reach agreement on the actuarial assumptions to be used with the board, the corporation and the pension schemes. However, as I commented on Second Reading, it takes two to reach an agreement.
The noble Lord, Lord Mishcon, has referred to a letter written in December 1977. That letter was written to an outside body and it is available to me. I understand that the circumstances in
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which that letter was written were as follows. It was written in the context of one of the interim funding orders which were made under the Railways Act 1974. These funding orders were to lead up to a grand revaluation of the board's historic liabilities. That particular funding order was calculated on a different basis from its predecessors. The letter was written at the request of the board for the sole purpose of confirming that there was at that time no intention of abandoning the grand revaluation itself. While its wording might have given a different impression, both the addressee of the letter and its signatory knew that this was its purpose. It was not intended to constitute a new commitment as to the choice of actuarial assumptions.
We will be consulting those concerned before the unfunded proportions are determined. We will be trying to reach agreement but we cannot undertake to reach an agreement. This is no different from the position under the 1974 Act. If there is disagreement, then the decision has to be taken by somebody and that decision is the Minister's reponsibility. Substantial sums of the taxpayers' money are at stake and it seems right for the Minister who is accountable to Parliament and the public to take the decision. We do not regard this as a suitable matter for arbitration. The key issues are not issues of actuarial theory or practice. They are not issues on which the Government can pass responsibility to an outside arbitrator. Therefore we cannot endorse the amendment.
Lord MISHCON: The Committee will possibly realise that we are coming to some important amendments in a moment. I am referring to that of the noble Lord, Lord Selsdon, and to Amendment No. 176, and I have an idea that it may lead to clarity of thought if I withdraw this amendment at this stage instead of having it formally confirmed or negatived, and leave the decision as to what is done in regard to this amendment until after we have seen the result of either Amendment No. 175A or Amendment No. 176. On that basis I ask leave to withdraw the amendment, but the principle which I have tried to enunciate is certainly not withdrawn.
Amendment, by leave, withdrawn.
10.17 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 175:
Page 44, line 48, at end insert—
(" () The Minister shall inform the Trustee in the case of NFC pension schemes and the Management Committee of the Fund in the case of BR pension schemes what proportion of the scheme is funded and how this proportion has been calculated before he makes an order under subsection (1).").
The noble Lord said: Happily I can be very brief on this amendment. The purpose of this clause is to place the basis of calculation on record so that if difficulties should arise in the future it will enable a proper assessment of the reasons for the difficulties to be made. It will also ensure that those who run the pension schemes have an opportunity to check that the facts which have been taken into account are correct from a technical viewpoint. I beg to move.
Lord CULLEN of ASHBOURNE: This amendment was one of a group debated in Commons Committee and later rejected on a Division. A requirement in the Bill on the lines of the amendment would serve a real legal purpose only if the information to be provided by the Minister were to be used at some further stage of the proceedings. It is not, however, envisaged that there will be any further proceedings once the unfunded proportions have been determined.
I would begin by reminding your Lordships of the amendment which my right honourable friend moved in another place to what is now Clause 46. That amendment followed upon discussion of a group of amendments which included the present amendment. The Bill now lays down a statutory requirement for consultation with the board, the corporation, and the BR and the NFC schemes before final determinations of the unfunded proportions. I would hope that the requirement to consult would produce the general effect which the amendment would produce. It would, however, have the advantage that information would pass in both directions. It would not be a question merely of the Minister stating what it was that he intended to do. It would also be a question of the views of the board and of the schemes themselves being relayed back to the Minister.
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I ought perhaps also to make clear that subsection (5) of Clause 46 has not been included in the Bill merely by way of ornamentation. At the technical level, we are envisaging that the actual arithmetic of determining the unfunded proportion will be done by the actuary to the scheme, and not by the Minister or the Government Actuary. He will have to be informed what assumptions have, after consultation, been decided on. Indeed, we would envisage that the actuaries will participate in the discussions and consultations.
There is no question of the schemes being left in the dark about how the unfunded proportions have been calculated. Accordingly, I would advise your Lordships that the amendment is unnecessary.
Lord MISHCON: Again, I am going to study what the noble Lord the Minister has said in order to see whether this matter could or should be brought forward at the Report stage. In those circumstances I ask leave of the Committee to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord SELSDON Lord SELSDON moved Amendment No. 175A:
Page 45, line 4, at end insert—
(" (6) Either the Minister or the persons administering a BR pension scheme shall have the right to require a review of the unfunded proportion from time to time, provided that no such review shall be made before 31st December 1986 or before the expiry of 5 years after the previous review under this subsection unless the Minister and the persons administering the scheme consent. Within 2 years after such a review is required the Minister, after consulting with the persons administering the scheme and the Board, shall make the best possible estimate of the proportion of the pensions corresponding to the relevant pension obligations which cannot then be met by the assets held by the scheme in respect of such obligations and shall make an order to replace the proportion referred to in subsection (i) by the said estimate, which order shall be subject to annulment in pursuance of a resolution of the Commons House of Parliament.").
The noble Lord said: I have two reasons for moving this amendment. One is a personal one in that my family were associated with one of the railways prior to nationalisation and I know that my antecedents, respecting the hereditary principle, would like me to make sure that

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their former employees were well protected and looked after for future generations. Secondly, I feel that there is a chance that we could reach a situation in the future of considerable unfairness, whether this be to the taxpayer or to the employee of British Railways.
The reason for this is that I do not have full confidence in the ability of Government, Civil Service departments, or Government actuaries to forecast the level of inflation in the future. This is an assumption which must be made if a fair assessment of the unfunded portion is to be made. I quote examples of unfairness. The one I think of first is, if in the assessment a level of inflation is assumed and that level of inflation rises, then the commitment by the Railways Board to fund pensions increases, and they may not be able to afford this. Consequently, if the level of inflation falls the taxpayer will be contributing a higher level than could be deemed to be fair.
This amendment simply calls for a review. I do not necessarily say it is worded correctly, but what I would ask is that the Government would give consideration to an amendment of their own that might consider a review every five years, or at a convenient or suitable date.
I must inevitably try and bring this point back to the individual. I have asked for, and obtained, examples of just one particular situation, which is a true one. There is the case of a Miss W who was a secretary with British Rail for 40 years. She entered the service of LNER in 1940 and retired as a senior secretary earlier this month on a pension of £ 50 a week. She now looks after an aged father in Ilford. She originally joined the LNER superannuation fund, but in 1970 she elected to join the new pension fund which was then introduced. This meant she had to pay more, but her pension would be price protected after retirement. She does not understand all these things. My question to the Government is, will her pension be price protected after retirement if there are insufficient funds available from the board, and if so by whom?
There are other points that have been raised on this. For example, we know that the Railways Act 1974 provided for
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a once-for-all assessment, and the Government quite rightly quote this to us. But this was under a funding situation as opposed to a pay-as-you-go situation, so there is a difference. Arguments which were advanced in another place are perhaps not as strong as people may have thought at that particular time. When I was approached to raise this I tried to assess in my own mind whether we were talking about a political amendment— that is, people were trying to reintroduce points made in another place and defeated in a Division— or whether we really did have an unfair situation.
I have a feeling that this situation could be unfair if you bear in mind the possible oscillation in levels of inflation. I would submit that noble Lords opposite have an opinion that the Government's policies may not reduce the level of inflation and that inflation may remain high. I, on the other hand, believe that inflation will begin to fall. They may, therefore, argue that there will be insufficient funds to fund pensions, and I might argue that there could be too much money, which is taxpayers' money. Somewhere in between lie the Government, because there can be no one else in the middle. My proposal is simply that there should be an opportunity to review, and that as we always have confidence in Ministers of Transport and those in this field we should leave it to Ministers at a future date. I beg to move.
Lord BELLWIN: I am most grateful to my noble friend Lord Selsdon, not only for the amendment, but for the way in which he has moved it, which I think commands even greater consideration and respect for it than might have been elicited simply by looking at the amendment as originally tabled.
Let me deal with the two main points that he has mentioned, the first of which is his concern about the effects of the forecasts of levels of inflation. May I respectfully suggest that the critical question, in fact, is not the level of inflation, but the real returns on the investments and the real movements in pay rates'? The forecast of inflation is actually less important than under the 1974 Act, because the Government will not be paying a fixed proportion of the liabilities. If inflation rises, the Government's payments will rise, and vice versa.

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It would seem clear from the example of Miss W which my noble friend quoted that perhaps he has not fully appreciated the purpose of the Bill. The purpose of the Bill is to reproduce the fixed and limited Government support that was to have been provided under the Railways Act 1974 to assist the Railways Board to discharge their historic pensions obligations. The Bill does not affect the legal duty of the board to secure that Miss W's pension is paid. To suggest that Miss W's pension might be reduced, is to suggest that the board of a nationalised industry will default on their payments to their creditors. No Government has allowed a nationalised industry to default on its financial commitments and it is worrying even to suggest that pensioners are at risk.
The amendment presents openly an issue which underlies new Clause 176, which the noble Lord, Lord Underhill, and his noble friends have tabled. The question is whether the unfunded proportion should be open to review, and whether the ultimate responsibility for the historic liabilities should be transferred to the Government.
The substance of the amendment is that the Minister should take full responsibility for the historic pensions liabilities. Support would take the form of long-term deficit financing. Many of the arguments for the amendment are equally arguments for deficit financing of railway passenger services. But we know from experience that deficit financing is a bad system.
Your Lordships should bear in mind that the quantum of the historic liabilities is not fixed and immutable. It depends, at the margin, on current management decisions of the board and of the corporation. So if, for instance, overtime and bonus payments were to be consolidated into basic pay, the quantum of the historic liabilities would rise.
Equally, the value that will be obtained from the historic assets will depend on the decisions of BRB's and NFC's fund managers. At the moment they have a strong incentive to achieve the best possible return on their assets. If they fail to obtain a return on their works of art, for instance, the board will want to know the reason why. Under the amendment,
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however, they would have no incentive to do anything of the sort, because it would be the taxpayer who would be footing the bill.
The Committee has been told that surpluses and deficiencies might emerge under the Bill— and so they might. But much bigger surpluses or deficiencies would have emerged under the 1974 Act. The size of these deficiencies can easily be exaggerated. I do not blame the board for seeking to transfer responsibility for the historic liabilities. But the case for a transfer is nothing like so strong as has been suggested. Within the range of actuarial assumptions that actuaries ordinarily use, the surpluses or deficiencies that one might expect would be no longer than might be expected in any normal on-going pension fund.
Clearly one has to have sympathy for the amendment as tabled. I should certainly like to say to my noble friend that, while we cannot accept it as it is at present, he himself suggested— at least, I assumed he was suggesting— that perhaps we might look at it to see whether we are, indeed, entirely satisfied that there could not be any of the problems which I think very properly concern him. I certainly undertake that we shall do that, and do it quickly. I cannot accept the amendment as it is for the reasons that I have given. However, I repeat the fact that I think we owe it to the noble Lord to look at it in this way, and I gladly undertake to do so.
Lord RENTON: I am glad that my noble friend Lord Bellwin has decided to look at this amendment again, because undoubtedly my noble friend Lord Selsdon put forward a very convincing argument. At this stage, I should like to make an appeal to the noble Lord, Lord Mishcon, because the amendment which he moved— No. 174A— has basically the same intention, the same purpose, as that of my noble friend Lord Selsdon. But, of course, my noble friend's amendment has the advantage that it will be unnecessary to make what I would call "risky actuarial assumptions".
Therefore, I think that if assumptions have to be made of the kind that the noble Lord, Lord Mishcon, mentioned— whether with an independent actuary or with the actuary who in any event will

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advise those concerned and who is referred to in Clause 46— then difficulties are certain to arise. Those difficulties will make it less likely that my noble friend Lord Bell-win can help. But to have what one would call a realistic— if you like, open-ended— review of the kind envisaged by my noble friend Lord Selsdon would, I think, give rise to a much more satisfactory result.
Lord MISHCON: I almost rush to the Dispatch Box in order to deal at this hour very shortly and simply with a matter that I believe the noble Minister and I thought would take a very long time. I say that because of the arguments that could be advanced both ways in. regard to what was said on Second Reading and what is said now. There is not a scrap of politics in the amendment in the name of the noble Lord, Lord Selsdon, or in the amendment which stands in my name and that of my noble friends. Our one desire— and we think that it is a united desire of this Committee— is to see that justice is done, that there is honourable dealing, that promises are promises and that Governments are honourable, whatever may be their political complexion.
It is in that spirit that I understand that the noble Lord, Lord Selsdon, asks in his amendment for reviews which are subject to notices and which, therefore, may not take place if all goes well. I thought that the contribution of the noble Lord, Lord Renton, was as usual most helpful, most calm and most considered. If this Committee can accept the proposition of the noble Lord, Lord Selsdon, in this amendment I would not dream, and nor would my noble friends, of moving the amendment in my name and theirs. We should be perfectly content.
All that I want to do is to protect the position of the noble Lord, Lord Selsdon, who moved— I thought, in such an attractive way— the amendment that came before the Committee. I want to protect him and all the members of the Committee in order to see precisely what it is to which the Minister is agreeing. If the Minister is saying— as I believe the noble Lord, Lord Renton, thought he was saying, and as your Lordships and I hope he is saying, because there is a case for having a look, if it be necessary, on either side in
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the future— that what is required here is some thought about the proper way of doing it (whether it be the precise way of the noble Lord, Lord Selsdon, or the amendment which follows and which I hope I shall not now move), then I shall immediately take my seat. I pledge my support and that of my friends to the noble Lord, Lord Selsdon. I trouble the Committee no more with my amendment and we can all go peacefully to bed tonight knowing that justice has been done, whereas at the moment there is a grave injustice.
Lord BELLWIN: I clearly cannot say that I can accept the amendment as it is, nor do I think that my noble friend Lord Selsdon is asking me to do that. What I can do is to confirm that I think the points that he raises, and indeed the other points made by the noble Lord, Lord Mishcon, in his succeeding amendment, are of sufficient merit to deserve our taking it away to have another look. Where I shall get to with it, or where my right honourable friend will get to, I cannot say as I stand here now, but I say that I think we ought to do just that and I gladly undertake to do that before we come back next time.
Lord MISHCON: I think it may be for the noble Lord, Lord Selsdon, to speak more than I, but I feel that the Minister has expressed sympathy with the idea— I think that should be recorded— and a wish to try to be accommodating. In those circumstances, and if that be the spirit, I certainly would be prepared, if the noble Lord, Lord Selsdon, is, to withdraw my amendment when it comes. I believe that the noble Lord, Lord Selsdon, may have the same view about his amendment.
Lord SELSDON: I am most grateful to noble Lords for their comments, and particularly for the unheralded support from noble Lords opposite. I have two brief points to make, because if the noble Lord, Lord Mishcon, and I can take credit for shortening this session tonight I am sure that noble Lords will be most grateful to us. I am grateful for these comments made by my noble friend, and his reassurance that nobody would suffer because the Government would be bound to stand behind British Rail is much appreciated because, as he knows, at the moment there

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is no Government guarantee, and this was causing concern.
I would, however, take issue with him on one point. He said that the trustees would not have the incentive to manage the investments efficiently. He knows that trustees are required by law to manage their investments efficiently, and I know he would not wish to cast any doubts at all upon the abilities or the motives of pension fund managers who are, of course, over and above all politics. In view of his comments, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 46 agreed to.
[Amendment No. 176 not moved.]
Clause 47 agreed to.
Clause 48 [Reduction of payments in respect of certain supplementation schemes]:
Lord BELLWIN Lord BELLWIN moved Amendment No. 177A:
Page 45, line 30, after (" obligation ") insert (" arising after the passing of this Act ").
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 177B:
Page 45, leave out lines 34 to 44 and insert—
(" (2) If, at any time before the increases first become payable under the supplementation scheme, the actuary to the basic scheme certifies that the assets of that scheme exceed its liabilities, then, in relation to the supplementation scheme, the obligation to pay or secure the payment of the increases or, if less, the relevant proportion of the increases shall not be regarded as a relevant pension obligation for the purposes of any determination made under section 47 (1) for a financial year beginning after the date of the actuary's certificate.").
On Question, amendment agreed to.
Lord MISHCON Lord MISHCON moved Amendment No. 178:
Page 45, line 35, leave out (" exceed its liabilities ") and insert (" exceeded its liabilities on 31st December 1979").
The noble Lord said: I shall try to be as brief as I can. Under the Railways Act 1974, an allowance for surpluses existing at 31st December 1979 might have been made in calculating the funding to be
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created at that date. No allowance could however have been made for surpluses revealed after that date. It is therefore unfair to take account of such future surpluses now, and inconsistent with the Minister's assurance that no pensioner will be worse off.
I appreciate that the counter-argument is that under the funding arrangements there would have been less likely to be future surpluses since certain funds would have been amalgamated and the combined fund would have been less likely to show a surplus than the two funds taken individually. There is, I admit, some truth in this in respect of surpluses arising from certain causes, for example inflation, although the amalgamations could not have taken place without the consent of the trade unions. Indeed, the board had given an undertaking to the unions in the autumn of 1978 that amalgamations could not take place without their consent.
However, it does not apply to surpluses arising from other causes, for example mortality in excess of that assumed. To give an example, consider a small pension fund where some of the pensioners die prematurely in a future year. Under the 1974 Act, arrangements there would have been a resulting surplus, to increase the pensions of the remaining pensioners, some of whose pensions may be very small. Under the Bill, 85 per cent. of that surplus will be clawed back by the Government. How can it be said that the pensioners will be no worse off? I beg to move.
The DEPUTY CHAIRMAN of COMMITTEES (Viscount Hood): I am afraid that the noble Lord, Lord Mishcon, is out of order in moving this amendment. It is my fault; I should not have called it because the passage to which the noble Lord has been speaking was amended by the previous amendment.
Lord MISHCON: Whether what I have said appears in the Official Report I know not. If it does, I shall at least have made some point and achieved some object.
Lord BELLWIN: I will only use a term I have heard since arriving in your Lordships' House: "I hear what you say."
10.42 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 179:
Page 45, line 44, at end insert—
(" () 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 be increased for each financial year after the date of the actuary's certificate by the aggregate 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.").
The noble Lord said: I hope that if this time I am out of order, your Lordships will be spared and I shall be silenced at the outset of my remarks. Under the Bill as drafted, it will be possible for the Government to claw back 85 per cent. of the surplus by reducing supplementation payments and for the basic pension scheme concerned then to run into unforeseen financial difficulties. The amendment seeks to provide that in such circumstances the Government support will be increased again. The wording of the amendment is a mirror image of subsection (2). In the Commons Report stage the Parliamentary Secretary stated that he could not meet this point, his reasons being:
" 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 ".
I do not comment any further on the Minister's view of how people behave in matters of this kind, but I go on to deal with his argument on the basis that it is a worthy argument. It overlooks the fact that, if a scheme did distribute a surplus, the members and pensioners would retain only 15 per cent. of it. If the scheme then went back into deficit, the additional support payments from the Government would be limited to 85 per cent. of the amount by which the liabilities of the scheme exceeded the assets. The amendment is a straightforward safeguard which would not be abused. I beg to move.
Lord BELLWIN: In Committee in another place the Parliamentary Secretary promised to think further about this amendment. My advice to the Committee is that an amendment is not necessary, and that for the effect to be achieved it would be necessary to complicate still further what is already a complicated clause. The effect of the amendment as drafted would largely be to nullify the purpose of Clause 48. Once Clause 48 had operated once, the basic scheme could so arrange matters that the offset under the clause operated for one year only. That would be done by arranging for benefits to be increased with effect from one year ahead, thus increasing the liabilities of the scheme from that date.
This is not merely a drafting point. If the principle of the amendment were accepted, the Government would be obliged to take power to control the way in which improvements to the pension schemes were made, because otherwise the whole purpose of the clause would be nullified in the way that I suggested.
In all this legislation we are anxious not to become directly involved in the actual rules of the funds on the terms of the benefits. We would be reluctant to have to do so in the very specialised circumstances involved here, and as I shall explain, the likelihood that arrangements of the kind which this amendment is proposing are required is remote in the extreme.
There is one general point about the clause; namely, that it concerns the way in which we envisage a surplus being distributed. It is not the intention that 85 per cent. of any surplus should be distributed immediately. It is not the intention that a surplus should go to offset all, or most, of next year's scheme of supplementation. What is intended is that a small proportion of next year's scheme of supplementation should be offset; the same proportion of the scheme of supplementation in the year after that; and so on. In other words, the proportion of the surplus that is used to offset supplementation will be very gradually distributed over the term of the pensions liabilities of the basic scheme.
There is a substantial measure of self-correction under such an arrangement. The basic schemes to which the clause

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applies are schemes where the benefits are largely fixed in money terms; and for all these basic schemes pensions in payment are fixed. The most likely scenario in which the balance of assets and liabilities would be less favourable at one actuarial valuation than it was at the previous valuation would be one in which the expected inflation rate had dropped sharply. But in such circumstances, the burden of meeting the relevant proportion of future schemes of supplementation would equally fall. Equally, if the rate of inflation were to rise, so would the rate of return on the assets of the scheme, and thus the size of the surplus.
This self-correction can best be illustrated by example. Suppose the actuary certifies that a basic scheme is in surplus. Suppose he certifies that the relevant proportion is 30 per cent. That means that 30 per cent. of the cost of future supplementation stands to be met by the basic scheme. Suppose that inflation then falls to zero. Obviously the interest earned on the assets of the scheme will also fall. But there will be no future supplementation and therefore no offsetting under the clause. Thus, there would be a smaller surplus, but none of it would stand to be distributed in supplementation. I have deliberately chosen an extreme example, but it shows that there is self-correction in the clause as it stands.
The clause does not specify what basis of valuation the actuary is to use. It will be open to him to hold back a contingency reserve by using a prudent basis of valuation. All the clause says is that, in so far as a surplus is distributed, a certain proportion should be used to offset supplementation. It does not compel a distribution if the actuary thinks that it would be proper to hold some, or even all, of a surplus back for the time being.
In view of that explanation I wonder whether the noble Lord will feel able to withdraw the amendment. Bearing in mind how lengthy and complicated it was, he may wish to consider it further after he has read it.
Lord MISHCON: I shall do just that. In those circumstances I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord BELLWIN Lord BELLWIN moved Amendment No. 179A:
Page 46, line 2, after (" proportion ") insert (" (if any) certified by the actuary to the basic scheme to be the proportion ").
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 179B:
Page 46, line 3, leave out (" the basic ") and insert (" that").
On Question, amendment agreed to.
10.49 p.m.
Lord MISHCON Lord MISHCON moved Amendment No. 180:
Page 46, line 4, leave out (" 85 ") and insert (" 60 ").
The noble Lord said: It has been the practice for a number of years that pension increases granted by the board under schemes of supplementation should be reduced by the amount of any increase which the pensioners have had from their basic scheme after retirement. The justification for this offsetting is that the purpose of the schemes of supplementation is to place the pensioner in the same position in terms of purchasing power as he was in when he retired. If he has had an increase from his basic scheme, then to that extent there is no need for him to be supplemented in addition. In practice however the offsetting has been less than complete. This is partly because offsetting does not occur until at the earliest the next date on which increases are granted under a scheme of supplementation, and partly because there is no offsetting in respect of 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 last few years the proportion of the surplus which has been offset has so far averaged only about 60 per cent., or perhaps rather less. That is the background to this amendment, which I now move.
Lord BELLWIN: Under the Bill, the unfunded proportions of unity stand to be determined for the two supplementation schemes; that is, the British Rail (1974) Pension Fund and the NFC (1978) Pension Fund. That means that the taxpayer will become responsible for the

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whole of the historic pensions payments of these two funds. It will not surprise your Lordships if I say that neither the board nor the corporation, nor the pension funds, nor the unions, have raised any objection to this arrangement. Things would have been different under the Acts of 1974 and 1978. Fixed amounts of funding debt would have been allocated to the schemes, and these amounts might not have proved to be sufficient.
We ought to pause to consider what would have happened if the taxpayer had not stepped in. In the private sector, when a surplus is revealed in a pension scheme which does not provide in its rules for automatic pension increases, it is normal practice, although not universal, for pension increases to existing pensioners to be treated as a first charge on the surplus, although not necessarily to the exclusion of other forms of distribution. Furthermore, in the past, when the cost of supplementation fell on the board rather than on the Exchequer, it was common for part of any surplus to be used to reduce the board's liability for supplementation.
I could go on to talk further about this particular point, but I think your Lordships will have gathered by now that there is really no question of the surplus in the new section being used to meet the cost of supplementation to pensioners in other schemes. It may be that this, too, is something which the noble Lord may feel he wants to discuss again at a later stage, or he may feel that such as I have said is sufficient for the time being. If he would care that I should supplement my comments on supplementation in another form, needless to say I shall be very pleased to do so.
Lord MISHCON: I think it would be extremely helpful if that did take place, because there are many arguments, on which I am briefed, to what the noble Minister has already said, and it would be most inconsiderate if I inflicted those arguments on the Committee now. It would be much more practical, I think, if we had an exchange.
Lord BELLWIN: I will write.
Lord MISHCON: I am most grateful.
Amendment, by leave, withdrawn.
Lord BELLWIN Lord BELLWIN moved Amendment No. 180A:
Page 46, leave out lines 16 to 21 and insert—
(" (5) References in this section to the assets and liabilities of the basic scheme are references to the assets and liabilities of that scheme so far as it relates to the payment of pensions increases of which are payable under the supplementation scheme.")
The noble Lord said: I have already spoken to this amendment, as I have to all those up to and including Amendment No. 180H. I beg to move No. 180A.
On Question, amendment agreed to. Clause 48, as amended, agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 180B:
After Clause 48, insert the following new clause:
" Exclusion of payments in respect of certain transfer values
(. Where the whole or any part of a person's accrued pension rights under a B.R. or N.F.C pension scheme are transferred to any other pension scheme, being a scheme established by the Board or the successor company or any subsidiary of either of those bodies, the Minister may direct that for the purposes of—
(a) any determination of the aggregate amount of the pensions, increases and expenses payable under or incurred in connection with the first-mentioned scheme; or
(b) any determination under section 47 (1) in relation to that scheme,
it shall be assumed that the said rights had not been transferred and that the payment of any sum representing those rights had not been made)."
On Question, amendment agreed to.
Clause 49 agreed to.
Clause 50 [Supplemental provisions]:
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 180Cand 180D:
Page 47, line 19, after (" scheme ") insert (" or any other pension scheme established by the Board or the Corporation ")
line 21, leave out (" bringing it") and insert (" enabling them to pay increases of pensions payable under the scheme or otherwise bringing the scheme ")
On Question, amendments agreed to.
Clause 50, as amended, agreed to.
Clause 51 [Interpretation of Part III]:
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 180E to 180H:
Page 48, line 15, at end insert—
(" "subsidiary" has the same meaning as in the Transport Act 1962; ")
line 20, leave out (" specified in") and insert (" for the time being within ")
line 24, leave out (" specified in") and insert (" for the time being within ")
line 27, at end insert—
(" () References in this Part to any pension scheme established by the Board include references to any scheme in relation to which the rights, liabilities and functions of the British Transport Commission were transferred to the Board by the British Transport Reorganisation (Pensions of Employees) (No. 3) Order 1962.")
On Question, amendments agreed to.
Clause 51, as amended, agreed to.
Schedule 8 agreed to.
Clause 52 [Grants towards duty charged on bus fuel, and new bus grants]:
[Amendment No. 181 not moved.]
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 182 and 183:
Page 48, line 40, leave out (" the Transport Act 1968 ") and insert (" that Part ")
line 42, leave out (" the Transport Act 1980 ") and insert (" that Act ")
The noble Lord said: I have not spoken to these amendments, but I can deal with them quickly. They are drafting amendments, and I think call for no special comment. I beg to move.
On Question, amendments agreed to.
Clause 52, as amended, agreed to.
Clauses 53 to 55 agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 184:
After Clause 55, insert the following new clause:
" Abolition of Railways and Coastal Shipping Committee
(. The Railways and Coastal Shipping Committee established under section 150 of the Transport Act 1968 is hereby abolished)."
The noble Lord said: I can speak to this amendment if the Committee feel it necessary. There is nothing that I need particularly to explain. I think it is straightforward. I beg to move.
Viscount SIMON: I do not want to detain the Committee, but this is an area in which at one time I had considerable
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interest. I only want to ask the noble Lord if he could confirm whether this does away with the committee on which problems about competition between the railways and coastal shipping were discussed. Has this clause been agreed with the General Council of British Shipping?
Lord BELLWIN: The purpose of the clause is to secure the abolition of the committee to which the noble Viscount referred. It forms part of Government policy to review and, where possible, to reduce the number of non-governmental bodies. It was established by the then Minister in 1969. The committee has not met since 1974. During the whole of its existence, it received no complaints about charges. I should have thought that, in the circumstances, there would not be too much concern.
On Question, amendment agreed to.
Clauses 56 and 57 agreed to.
Clause 58 [Citation, etc.]:
Lord MOWBRAY and STOURTON Lord MOWBRAY and STOURTON moved Amendment No. 185:
Page 50, line 24, at end insert—
(" "modification" includes addition, omission and alteration, and related expressions shall be construed accordingly;
"statutory provision" means a provision contained in an Act or in subordinate legislation within the meaning of the Interpretation Act 1978.").
On Question, amendment agreed to.
Lord BELLWIN Lord BELLWIN moved Amendment No. 186:
Page 50, line 28, after (" 55 ") insert (" (Abolition of Railways and Coastal Shipping Committee) ').
On Question, amendment agreed to.
Lord TEVIOT Lord TEVIOT moved Amendment No. 187:
Page 50, line 41, at end insert—
(" Provided that section 12 shall not come into force until 3 years after the passing of this Act.").
The noble Lord said: This is where the train is going to stop, for I am afraid that I will move this amendment and discuss it. It is like the drawing room comedy before the war when a well-dressed gentleman— not me— always came in in

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the third act and put everything right. I do not say this amendment does that. We have already debated the provisions relating to trial areas and your Lordships are well aware of the concern that is felt in many quarters regarding their possible effect. It has been suggested that it was the established operators of bus services who opposed the trial areas because they wished to protect their vested interests, or perhaps it was thought that they failed to be adventurous. It is difficult to know where a network bus operator thinks that the interests of the travelling public start. There are private companies which operate networks as well as public sector undertakings.
I am sure that we are all agreed, and have said often before, that in Parliament our responsibility is to protect, first, the public interest, and only secondly the legitimate interests of others. The problems of trial areas relate to the travelling public. In many cases, bus operators would be delighted to withdraw services if their responsibility was commercial only, but they recognise that they perform a public service. If therefore the network is destroyed, the problems of restoring any services withdrawn will be ten times greater than merely maintaining the existing provision of services. If anyone doubts this then let him look at the example of the USA. In that great country public transport was allowed to decay. Now the President himself takes a personal interest in restoration and is ready to invest tens of billions of dollars because he sees it to be in that country's interest.
Compared to this, trial areas are very small fry. But the principle is the same. Moreover, we have through this Bill provisions which will radically alter the licensing— and the pattern of provision— of bus services in this country. I ask the Committee to recognise the need for this new system to find its own equilibrium— and I submit that this will take several years. Until the new system has been tried, and proved to be successful— or otherwise— it would be premature to have the impact of total delicensing in trial areas. I do not suggest that the merits of this further experiment should be ignored. What I do suggest is that counties concerned, and the Government, should not rush in where angels fear to
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tread. For this reason I commend to you this amendment, which will allow a three-year period to elapse before the further experiment of trial areas is superimposed on the changes made by this Bill. I beg to move.
11.2 p.m.
Lord BELLWIN: Contrary to the arguments deployed by my noble friend, trial areas are an integral part of the reform of the bus licensing system that this Bill is designed to bring about. Everything we are doing is aimed at increasing competition and efficiency in the bus industry. Everywhere it will be easier to get road service licences, and the balance of presumption before the traffic commissioners will be changed. And it will be open to county councils and their Scottish equivalents to go further, and to choose to have road service licensing abolished altogether in their area. County councils may feel— and it is a view with which I have much sympathy— that unfettered competition will better serve the people of their area than traffic commissioner restrictions. If they do, they will be able to apply to my right honourable friend the Minister for designation as a trial area, and, after he has considered the proposal and any representations received, he will decide whether to make the order as requested.
Experience in trial areas— and I can assure the Committee that they will be carefully monitored— will help to decide the question whether road service licensing is on balance in the public interest, and will be a guide to future policy. Experimentation here, as in the physical sciences, will help valid conclusions to be reached.
I see no reason for putting off the time at which applications for designation can be made. If counties want freedom, I do not see why they should have to waste three years waiting for it like a princess in a fairy tale. The Government are not compelling any county to apply at once, though we certainly hope that two or three will, soon after the Bill comes into force. If a county wants to wait and see what are the effects of the other changes in the Bill, before making up its mind, there will be nothing to stop it; there is no time limit in the Bill for applications.
I have listened throughout the whole Committee stage of this Bill to my noble

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friend Lord Teviot speaking on a number of occasions, and I have the greatest respect for his experience and knowledge, as he knows. But the trial areas are exactly what they say they are: trial areas. There is no compulsion, no pressing for anyone to go into them; but once we are going to go into them— and why should we not give a trial?— let us give them a fair wind so that we can see. If it should prove to be that they are not the solution to what we are seeking, then so be it. But if they are, as I have said before, look at the prize that is there to be won. The least we can do is to give them a fair wind in that trial. This really is fundamental to the Bill, and I hope the Committee will not accept the amendment.
Lord UNDERHILL: It was not my intention to intervene, but the noble Lord the Minister has compelled me to do so. I rise to support the amendment moved by the noble Lord, Lord Teviot. Noble Lords will realise that we have been critical of some aspects and we are very pleased that the noble Lord the Minister agreed to look at a number of these; otherwise I would have taken part in the discussion on whether Clause 12 shall stand part of the Bill. However, the Minister has agreed to look into certain aspects of that clause.
I am surprised the Minister says that the trial area scheme is an essential part of the Bill— if it is, we have been wasting something like 15 hours in this Committee and 33 sittings in a Standing Committee elsewhere. We are not opposed to innovations or changes, but to rush into a trial area scheme might be unwise in view of the fact that noble Lords opposite would agree that there are some very far-reaching propoals in the Bill and they should be worked through to see exactly what their effect is. Some of the changes could have a considerable effect. I would like to ask this: Have the Government assessed what has happened to the 15 routex schemes? Have they indicated to the Committee whether they have been successful? That was an experimental scheme which had Government support.
My noble friends and I suggest that this amendment is worthy of consideration. It would give the counties the utmost time to consider the position in the light of the new proposals and would give existing opera-
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tors ample time to look at their position, and a similar opportunity to new operators, without asking anybody to rush into a hasty decision on this matter.
Lord RENTON: I regret to say that I hope my noble friend's amendment will not be accepted. For a third of a century I represented a huge rural constituency, and throughout that time the bus services declined. They declined for various reasons with which, at this late hour, I shall not trouble your Lordships. Also the experiment whereby local authorities could subsidise bus services did not work very well either; and the only hope that people living in rural villages have, who do not have transport of their own, is that the trial areas should be attempted as soon as possible.
Lord TEVIOT: The intervention of the noble Lord, Lord Underhill, was a surprise and a pleasure to me. From what he said I think I shall answer the point of my noble friend Lord Renton first. He represented an excellent county, the source of so many of our cereal crops and vegetables and of our architectural heritage— the county of Huntingdon. We rush through it frequently on the train; it is bounded in one corner by St. Ives, and there is Ramsey. I can well see what he means: I think it was probably represented by the National Bus Company, and it is a small area. But I would hate to think how, even in that area, if it were a trial area, the services would be decimated. If there is anybody lurking in Godmanchester, St. Ives or Ramsey, they might like to come to the rescue.
Turning back to the comments of the noble Lord, Lord Underhill, his support was a rather pleasant surprise because if I was going to get any support I should have expected to get it before my noble friend gave his answer. On Part I of the Bill, I think we were extremely tolerant. We let my noble friend off the hook by accepting his undertaking that he would go back and consult about it. I am quite sure that between now and Report stage we are going to get some delightful surprises. I mean that: this is not a flippant or cynical remark. In the other place, some amendments were made. We often quote ministerial promises which, for one reason or another— probably very good reasons— are not fulfilled in the

719
final stages. But we look forward to so much in Committee stages in your Lordships' House. Trial areas are very experimental, and those in the industry are extremely frightened of them. This is a very radical Bill and one should watch to see what happens, and that there is a trial period. Therefore, I am afraid that I shall not withdraw this amendment.
On Question, amendment negatived.
Clause 58, as amended, agreed to.
Schedule 9 [Repeals]:
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 188 and 189:
Page 72, line 34, at beginning insert—

1 & 2 Eliz 2 c. 33.

ducation (Miscel laneous Provisions) Act 1953.

Section 12.")

Page 74, line 3, column 3, leave out ("entry relating to") and insert (" entries relating to section 12 of the Education (Miscellaneous Provisions) Act 1953 and").
The noble Lord said: I have already spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 190 and 191:
Page 74, line 20, column 3, leave out (" 138 (1) (a) ") and insert ("138, in subsection (1) (a) ")
line 22, column 3, at end insert (", and in sub-section (3) (a) the words "subject as mentioned in subsection (l) (a) of this section".").
The noble Lord said: These are both very minor consequential amendments. I beg to move.
On Question, amendments agreed to.
Lord BELLWIN Lord BELLWIN moved Amendments Nos. 192 to 194 en bloc:
Page 74, line 43, column 3, at end insert ("; and paragraph 11.")
line 44, column 3, leave out from beginning to end of line 48 and insert—
("Section 13 (5).
In section 13 (6) (a) the words from "or to a decision "to" traffic commissioners ".").
Page 77, line 9, column 3, at end insert (" Section 150.").
The noble Lord said: I have already spoken to these amendments. I beg to move.
On Question, amendments agreed to.
Schedule 9, as amended, agreed to.
In the Title:
Lord BELLWIN Lord BELLWIN moved Amendment No. 195:
Line 8, after (" Council ") insert (" and the Railways and Coastal Shipping Committee ").
On Question, amendment agreed to.
Title, as amended, agreed to.
House resumed: Bill reported with the amendments.

  ENERGY CONSERVATION: ADVICE TO LAs
  ENERGY CONSERVATION: ADVICE TO LAs
  HOME INSULATION: GRANTS
  HOME INSULATION: GRANTS
  LISTED WETLANDS: RAMSAR CONVENTION
  LISTED WETLANDS: RAMSAR CONVENTION
  WETLAND SITES: HEILIGENHAFEN CONFERENCE CRITERIA
  WETLAND SITES: HEILIGENHAFEN CONFERENCE CRITERIA
  WETLAND SITES: LISTING AND PROTECTION
  WETLAND SITES: LISTING AND PROTECTION