Sitting of 20 May 1980

Preamble
The House met at half-past Two o'clock
[Mr. SPEAKER in the Chair]

ORAL ANSWERS TO QUESTIONS
  LONDON TRANSPORT BILL
  Read the Third time and passed.
  SCOTTISH WIDOWS' FUND AND LIFE ASSURANCE SOCIETY BILL

    STANDARD LIFE ASSURANCE COMPANY BILL
    As amended, Considered; to be read the the Third time.
    LONDON TRANSPORT (NO. 2) BILL (By Order)
    Order for Second Reading read.
    To be read a Second time upon Thursday.

  EMPLOYMENT

    Unemployed Persons
    Mr. Dormandasked the Secretary of State for Employment when he expects the number of unemployed people to decline.
    The Secretary of State for Employment (Mr. James Prior): Given the world situation and the uncompetitive state of parts of British industry, unemployment is bound to rise over the next few months. I cannot usefully forecast when it will fall.
    Mr. Dormand: I thought that the Secretary of State might make reference to the timely drop in the figures today, although I understand that the trend in the seasonally adjusted figures continue upwards. That is confirmed by the right hon. Gentleman's answer and I am pleased
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    to note his assent to that view. Does he not agree that the most important thing—and the most distressing aspect of the present situation—is the continuing increase in the number of long-term unemployed? In those circumstances, will not the Government, at long last, consider reversing their present catastrophic policies?
    Mr. Prior: I agree with the hon. Gentleman that the problems of the long-term unemployed are bad and that the numbers are far too high. We are trying to help with the special temporary employment programme. Perhaps the best thing we can do for the long-term unemployed is to get interest rates down.
    Sir A. Meyer: Does my right hon. Friend despair of getting the unions to see that increases in wages unaccompanied by increases in production must, inevitably, mean job losses?
    Mr. Prior: I think that we have to go on and on talking about this and bringing home to everyone, trade unionists and non-trade unionists, that unless we can squeeze inflation out of the economy—wages are one of the important factors contributing to the high rate of inflation—we shall have to live with much higher levels of unemployment than are acceptable to the British people.
    Mr. John Grant: The right hon. Gentleman referred to the special temporary employment programme when speaking of the long-term unemployed but the Government have cut the special temporary employment programme. When will the Secretary of State stop wringing his hands about the long-term unemployed and take action to deal with the problem?
    Mr. Prior: One of the extraordinary things about the special temporary employment programme was that, until recently, the people for whom it was meant to cater were the long-term unemployed. On the whole, they were not using the programme and it has to be filled by other people. Since we cut back the scheme to the development areas, special development areas and other special areas, the number of eligible people going into the scheme has increased considerably.
    Several hon. Members rose—
    Mr. Speaker: Order. The subject of unemployment comes up in several questions later.

    Day of Action
    Mr. Rentenasked the Secretary of State for Employment what is his estimate of the number of people (a) who voluntarily refused to work on 14 May, and (b) who were unable to get to work, and thus involuntarily lost a day's pay, through political action taken by others.
    Mr. Needhamasked the Secretary of State for Employment how many working days were lost on 14 May.
    Mr. Prior: My Department's statistics of industrial stoppages relate only to terms and conditions of work, and exclude political action such as that on 14 May. We cannot make a close estimate of numbers of people involved, but such information as is available suggests that more than 90 per cent. of the work force went to work last Wednesday.
    Mr. Renten: Bearing in mind that the day of action certainly did not help to save any jobs or help to sell a single ton of British steel what consultation or measures of co-operation has my right hon. Friend in mind to discuss with trade union leaders in order to put over the point that jobs will be created in Britain only by new industry or will be saved only by higher productivity or more competitive output?
    Mr. Prior: I am always ready to talk to trade union leaders and trade unionists at any time. One of the points that I constantly make, whether in the National Economic Development Council or in other places, is similar to the point mentioned by my hon. Friend.
    Mr. Needham: In the light of what my right hon. Friend has just said, will he consider instituting a new category of days lost in furtherance of political disputes as distinct from days lost in furtherance of trade disputes? Would not that enable the country to tell the difference between real and bogus industrial action?
    Mr. Prior: I should prefer no days to be lost from either occurrence. I certainly hope that the experience of 14 May will mean that we do not have political strikes, which are new to this country. We should seek to solve our political differences in the House and not outside.
    Mr. James A. Dunn: Does the Secretary of State agree that the people who
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    stayed at work by no means wanted their action interpreted as a confirmation of their support for the Government's policies? Does he accept that people who make such an interpretation do a disservice to the solution of the problems which must be on the Secretary of State's mind?
    Mr. Prior: The sooner we put 14 May behind us as a nation and learn to live and work together the quicker the country will emerge from its problems.
    Mr. Lawrence: Is my right hon. Friend aware that some bus drivers in the West Midland were warned by the local branch of the Transport and General Workers Union that if they turned up for work on 14 May they would lose their union cards and, therefore, their jobs? Is my right hon. Friend further aware that the Employment Bill does not really protect anybody from losing a job and that until something is done about that the tyranny about which most of the country is complaining will continue?
    Mr. Prior: I do not agree with my hon. Friend about that. One must ask whether people did lose their union cards. In any case, they should look carefully at their rule books because expulsion under such circumstances is probably not in accordance with union rules. Under the Bill, as it is to be presented this afternoon in another place, there are at least unfair dismissal provisions for people who are excluded or expelled unfairly from a trade union. I believe that they will do a great deal to put the matter right. One of the main practices of extremists, when they want to take people out on strike, is to say that union cards will be taken away. We must refute that under all circumstances.

    Unemployment Trends
    Mr. Whiteheadasked the Secretary of State for Employment what is his Department's analysis of the underlying unemployment trends in Great Britain in the current year and in 1981.
    The Under-Secretary of State for Employment (Mr. Jim Lester): Unemployment has been rising in recent months and most forecasts agree that it will continue to rise in the near future. Changes in unemployment in the future depend

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    on a number of factors, the most important being the level of pay settlements and developments in world trade.
    Mr. Whitehead: Is the Under-Secretary aware that all the signs are that by mid-term in the Government's life unemployment will still be rising in manufacturing industry in the most productive parts of the country, such as that which I represent? Is not that a total condemnation of the Government's strategy?
    Mr. Lester: It certainly is not a total condemnation of the Government's strategy. Our strategy is the only one which is likely to provide secure employment in the future.
    Mr. Kenneth Carlisle: Does my hon. Friend agree that employment trends will improve if people are encouraged to retire earlier? Therefore, will the Government consider introducing earlier voluntary retirement?
    Mr. Lester: he job release scheme is designed to that end. The scheme is reviewed annually and it can be extended if needed.
    Mr. Robert C. Brown: Is the Under-Secretary aware that the Northern region, which has always had more than its fair share of unemployment, is rapidly becoming a disaster area? Will he concede that it is high time that the Government did more in terms of temporary employment schemes, and so on?
    Mr. Lester: I am pleased to tell the hon. Gentleman that I was in the Northern area on Saturday, presenting awards to apprentices who are looking ahead to the future in the Northern area in their professions. I recognise that there are great difficulties in the regions. It would be wrong to pretend otherwise. Our policy is to try to assist the regions in terms of infrastructure and by concentrating our aid. That is the only way to help the regions when the economy revives.
    Mr. Peter Lloyd: When my hon. Friend is considering unemployment trends will he make an estimate of what level it would have reached if Labour's electioneering scheme for vast deficit-financed public expenditure had been adhered to, with the inevitable consequence of even higher inflation and even more punitive interest rates?
    Mr. Lester: Some of us can remember that in the first year of the last Labour Government—1975–76—unemployment was increased by 478,000.

    TUC and CBI
    Mr. Knoxasked the Secretary of State for Employment when he proposes to have further consultations with the Trades Union Congress and the Confederation of British Industry about the long-term improvement of industrial relations.
    Mr. Prior: I have had a number of discussions with both the TUC and CBI about improving industrial relations. If representatives of these organisations wish to discuss their ideas with me I am always ready to devote time to further meetings.
    Mr. Knox: Does my right hon. Friend agree that if there is to be a long-term improvement in industrial relations it is important that employees, especially in large organisations, have a greater say about the destiny of the firm for which they work and their conditions of employment? In view of the reluctance of management and unions to do anything about that, has my right hon. Friend any proposals to encourage greater employee participation?
    Mr. Prior: I constantly urge employers to involve their work forces more in the decisions which affect them. I am urgently considering whether we can take further initiatives to get that message across.
    Mr. Freeson: Will the Secretary of State study as a possible initiative—as apparently did the late Sir John Methven—ideas about market socialism which have been put across by various people?
    Mr. Prior: I am not sure what the right hon. Gentleman means by "market socialism." If he is referring to cooperatives and co-operative ventures, I tell him that we have always given our support to such enterprises.
    Mr. Madel: Can my right hon. Friend confirm that it is open to the TUC and the CBI to make representations to him before he publishes draft codes of practice on improvements in industrial relations? Does he expect to publish any such codes before the autumn?
    Mr. Prior: Yes. I welcome any views on codes dealing with the closed shop

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    and picketing that we are likely to bring forward. We shall seek to introduce draft codes or perhaps codes which can be considered and consulted upon before the Summer Recess. The full codes will be introduced in the House in the autumn.

    Unemployment (Assisted Areas)
    Mr. Barry Jonesasked the Secretary of State for Employment by what amount he estimates unemployment has risen since May 1979 in the assisted areas of the United Kingdom.
    Mr. Jim Lester: Between May 1979 and April 1980 the number of people registered as unemployed in the assisted areas of Great Britain and in Northern Ireland increased by 146,299.
    Mr. Jones: Will not these ominous figures get worse? Is the Under-Secretary aware that in Flint, which is an assisted area, male unemployment stands in excess of 32 per cent? Does he accept that the assisted areas are vulnerable under the Government's current economic policy?
    Mr. Lester: Assisted areas have been vulnerable for the last 20 years. That is why they were made into assisted areas. Surely the hon. Gentleman will give credit to the Government who declared Shotton a special development area last December. The Welsh Development Agency plans to spend £61·8 million on land and factory building in Wales.
    Mr. Wigley: Does the Under-Secretary realise that the calamitous unemployment rate in Wales is hitting young people in particular? Is he aware that 40 per cent. of the unemployed in Wales are 24 years old or younger? What prospects does he hold out for school leavers?
    Mr. Lester: One of the reasons why we expanded the youth opportunities programme was to deal with that serious underlying problem. We continue to review all our measures annually to reflect such situations.
    Mr. Marland: The Forest of Dean is not an assisted area, but because of serious rising unemployment there, will my hon. Friend join me in trying to persuade the Department of Industry to establish some workshop units in that area?
    Mr. Lester: I have enough problems in my own Department without answering
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    for the Department of Industry. However, I shall examine what my hon. Friend says with the Secretary of State for Industry.

    Unemployment (Mexborough and Wombwell)
    Mr. Edwin Wainwrightasked the Secretary of State for Employment how many males and females, respectively, were registered as unemployed on the latest available date at the Mexborough and Wombwell employment exchanges.
    Mr. Jim Lester: At 8 May, 1,424 males and 807 females were registered as unemployed in the Mexborough employment office area. The corresponding figures for Wombwell were 631 and 327. The figures are provisional.
    Mr. Wainwright: Does the Minister realise that among the unemployed in those areas there are many who have a reasonable working life ahead of them but who are condemned to be unemployed for the rest of their lives? Will be bear in mind that the largest section being adversely affected is the young? Is he aware that when the National Coal Board has employed those that it needs, the remainder have no hope of finding reasonable employment? Does he also realise that the girls are in a worse position than the boys because there is no work available for them? When will he do something about that—not only by designating the area as a special development area, but by bringing in industry?
    Mr. Lester: I accept the seriousness of the problem facing young people. However, we should put the matter into perspective. In the last academic year 700,000 youngsters were available for work. The figures today show that 46,000 are without jobs. In the youth opportunities programme, under the guarantees, of those youngsters who have been unemployed for more than six months only 700 have not been offered places. While we agree about the seriousness of the position, we must put it into perspective.

    Unemployment
    Mr. Leightonasked the Secretary of State for Employment what is the current level of unemployment.
    Mr. loan Evansasked the Secretary of State for Employment what is the latest estimate of unemployment in the United Kingdom.
    Mr. Prior: At 8 May, the provisional number of people registered as unemployed in the United Kingdom was 1,509,191.
    Mr. Leighton: Will the Secretary of State say whether that figure of 1½ million unemployed—soon to be increased with the next batch of school leavers—represents official policy, showing that the Government are on target, or does he regard it as a failure of Government policy? Does he agree that the tax revenue forgone from those people, had they been productively employed, in addition to the unemployment benefit that they are receiving, is the largest single component of the public sector borrowing requirement?
    Mr. Prior: The figures represent the facts of economic life in Britain and the failure of successive Governments to put the matter right.
    Mr. Evans: Will the Minister confirm that the May unemployment figures are the highest since the war, and that they are the highest seasonally adjusted figures since records began? Since the Government were prepared to do a U-turn yesterday in accordance with the wishes of the House will he try to achieve a U-turn in the Government's economic and financial policies which will, unless changed, lead to a serious crisis in employment in the years ahead?
    Mr. Prior: The policies of the previous Labour Administration, which doubled unemployment in five years and left an unemployment figure that was unacceptably high at the peak of economic activity in 1978–79, have left Britain a serious problem with which we have to deal now.
    Mr. Ralph Howell: Is my right hon. Friend aware that a large number of vacancies remains unfilled, and that a considerable number of the unemployed are voluntary unemployed? Many of them cannot afford to work. Has my right hon. Friend made any progress in the investigation that he promised on this matter some months ago?
    Mr. Prior: There is a mismatch, with jobs being available in some parts of the
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    country and the unemployed not being prepared to fill them. For the most part, there are a number of people who wish to have the jobs that are available. My hon. Friend will know that the Government have given a great deal of attention during the past few months to the points that he has raised, and have sought to do as much as they can about them. I am certain that the only answer is greater economic activity to reduce the numbers.
    Mr. Skinner: Is it not about time that the Minister stopped using phrases about unemployment and its causes relating to world and technical matters? Is it not a fact that one of the first actions of the Government was to remove exchange controls, thereby allowing money to be invested abroad? Is it not the Conservative Government who have cut public expenditure left, right and centre, thereby reducing the ability of manufacturers to purchase as many goods? Is it not the Government who are changing the leasing controls in the Budget, which will result in a manufacturer in my constituency losing about 40 or 50 jobs in the container industry?
    Mr. Prior: If we followed the economic policies of the hon. Gentleman we should have far higher unemployment than we have now.
    Mr. Bulmer: Since increases in pay that far outstrip any increase in output are a major cause of unemployment, will my right hon Friend say whether he sees any further justification for retaining the Clegg Commission?
    Mr. Prior: On the subject of the Clegg Commission, all that I wish to say today is that it made a very serious mistake indeed over teachers' salaries. That is bound to be a factor in the consideration of its future that is now taking place. I do not wish to go further than that.
    Mr. Varley: Does the Secretary of State recall that before the general election he said in quite categoric terms that he would set out to reduce the number of unemployed? When is that likely to happen? If it is not to happen, will he admit that he seriously misled the country at that time?
    Mr. Prior: I do not think that I have ever misled the country on that subject. I was one of the few who, when the previous Labour Administration said that

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    they would reduce unemployment to 700,000 by the end of 1979, said that that was an unrealistically low figure. I believe that, given the period of the lifetime of the Government, we shall do considerably better than the Opposition did when they were in Government.

    Pneumoconiosis (Compensation)
    Mr. Wigleyasked the Secretary of State for Employment whether he is satisfied that applicants for compensation under the Pneumoconiosis etc. (Workers Compensation) Act 1979 are being answered as quickly as possible; and if he will make a statement on those cases which are causing difficulty.
    The Under-Secretary of State for Employment (Mr. Patrick Mayhew): Yes, in all the circumstances. The necessary investigations are requiring very protracted work. Out of the 2,533 applications made before the end of 1979 fewer than a quarter are now outstanding. Over 300 claims made since then have also been cleared. Overall, the main problems have arisen over the requirement that all relevant employers must have ceased to carry on business.
    Mr. Wigley: Will not the Minister accept that a figure of 600 outstanding claimants since before last January is an unsatisfactory level, given that the measure has been enacted for almost a year? In circumstances where all the evidence is not forthcoming, will he give the benefit of the doubt to marginal cases? Will he say anything about those who are employed in quarries which may have employed them for only two or three years out of a total quarrying working lifetime of 20 or 30 years? Is he in a position to make a statement on that matter?
    Mr. Mayhew: The difficulty that we face with the statutory definition of a relevant employer is that we must satisfy ourselves that he was the person by whom the claimant was employed at any time during the period that he was developing the disease, and against whom he might have had a claim for damages in respect of the disablement. There is no such employer still in business. I have reconsidered the extent to which the Act permits some discretion, and it is proving
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    possible to adopt a slightly more favourable approach than had at first seemed necessary.
    Mr. Needham: Will my hon. and learned Friend please remind the House about the circumstances in which the Bill reached the statute book, and what exactly happened under the previous Administration with regard to these matters?
    Mr. Mayhew: The Act was passed by the House, having been introduced by the previous Labour Government in the very last days of their Administration. Not the least of the difficulties of its application arose from the very short consideration that the House was able to give to the Bill.
    Mr. Ashley: Is the Minister aware that the point that he made is correct? The Act has many shortcomings. Is he aware that the pneumoconiosis medical panels have rejected the medical advice of skilled doctors, consultants and pathologists? Those panels should be abolished. Does he agree that the decision of the doctors and consultants in mining areas should be accepted as evidence of pneumoconiosis?
    Mr. Mayhew: The right hon. Gentleman knows that I have answered that question in the past, and that the pneumoconiosis medical panels are not the responsibility of my Department. He knows also the relevance of their decisions under the terms of the Act passed by the previous Administration.

    Textile and Footwear Workers (Retraining)
    Mr. Trippierasked the Secretary of State for Employment if he will introduce a special scheme of retraining for textile and footwear workers who have recently lost their jobs.
    Mr. Jim Lester: I am aware of the problems facing redundant textile and footwear workers, and training facilities from which they may benefit are currently available under the training opportunities scheme. I am informed by the Manpower Services Commission that these facilities are expected to be adequate to meet the retraining needs of these workers. However, if my hon. Friend has evidence of particular training needs which

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    may arise that cannot be met from existing provision, I shall be glad to consider the matter further.
    Mr. Trippier: I recognise that my hon. Friend is endeavouring to be helpful. Does he accept that it is extremely difficult for workers in these two industries to transfer to other employment at the age of, say, 50 or between 50 and retirement age? In view of the special pressures on these two industries, would it not be possible for a special scheme to be devised to help them?
    Mr. Lester: The problem mentioned by my hon. Friend applies to all workers in their fifties. I am assured that many of the courses available are designed to take that into account. As I have already said, if my hon. Friend has any evidence of special need, I am prepared to consider it.
    Mr. Woolmer: Is the Minister aware that the textile and clothing industry is likely to lose 70,000 workers in the next 12 months? In West Yorkshire alone 4,000 or 5,000 workers in the textile industry will probably lose their jobs. Will the Minister assure us that he will look again at the question of selective assistance to industrial areas which are losing jobs in the textile industry and that he will bring industry as well as training to those areas and, therefore, hope to the workers?
    Mr. Lester: The Department of Industry, to which this question is really addressed, has already agreed, over the three-year wind-down of the regional areas, to look carefully before any alterations take place and to take into account changes that have occurred since. I am sure that will be taken into account.
    Mr. Nicholas Winterton: Will my hon. Friend give further consideration to the valid point made by my hon. Friend the Member for Rossendale (Mr. Trippier)? Is he aware that thousands of people are losing their jobs each month in the textile industry and that the existing retraining schemes are totally inadequate to provide sufficient places for the numbers being made unemployed? Will he try to persuade his right hon. and hon. Friends in the Department of Trade to take action to ensure that the textile industry survives rather than have to provide costly retraining
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    schemes for those who are made redundant?
    Mr. Lester: None of us can be unaware of the problems of the textile industry, not least because of the effective representations of my hon. Friend. As I have already suggested, I am informed that training places exist for those who seek them. If there is any evidence that that is not the case, naturally we shall look into it.
    Mr. Arthur Davidson: Retraining facilities are necessary, but is the Minister aware that the real danger is that there will be no firms to receive people, even if they are retrained? Is he further aware that it is not only the textile industry that is suffering badly, but light engineering, building and every industry throughout Lancashire?
    Mr. Lester: Having travelled the area quite frequently, I cannot accept that the situation is as serious as the hon. and learned Gentleman suggested. I understand that the textile industry is already the most protected industry in the country, even though it is experiencing these severe problems. We are all concerned about it. But it is a question of balancing the interests of the home market against the interests of the export market, in which the textile industry does very well.
    Mr. McNally: Is the Minister aware that, despite the helpful answers that he gives to those lion. Members in Tory marginals, the textile industry is being destroyed by the Departments of Trade and Industry? Will he now acknowledge that his Department is simply acquiescing in the destruction of a great industry?
    Mr. Lester: The textile industry is being destroyed by customers in this country who are apparently going to the shops and not buying British textiles.

    Northern Region
    Dr. David Clarkasked the Secretary of State for Employment what were the total number of people out of work in the Northern region on the latest available figures; and what plans he has to reduce the level of unemployment in the region.
    Mr. Jim Lester: At 8 May the provisional number of people registered as

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    unemployed in the Northern region was 128,880.
    As we have already suggested, changes in unemployment patterns in the future depend on a number of factors, not least being pay settlements, productivity and correct design of good products that are saleable.
    Dr. Clark: Does the Minister realise that that represents 9·3 per cent. of the insured population, which encompasses levels of 19 per cent. male unemployment in South Shields? Will he take the opportunity now to answer the second part of my question: what plans has he to reduce the level of unemployment in the Northern region?
    Mr. Lester: I accept the figures put forward by the hon. Gentleman. As I said, I was in his area only last weekend. The spending policy of the previous Labour Government did not provide the answers that the hon. Gentleman needs. We are trying to concentrate aid where it is most needed, to reduce Government demands and to create a genuine cycle of employment through real jobs, through people buying real products.
    Mr. Urwin: Does the Minister realise that the figure of 9·3 per cent. represents half as much again as the national average and is the highest regional percentage, with the exception of Northern Ireland? Does he accept that it is time that the Government changed their economic and industrial policies in favour of the under-privileged areas of the United Kingdom?
    Mr. Lester: We have already changed our policies to try to concentrate on those under-privileged areas. I think that the right hon. Gentleman should at least admit that we have been successful in obtaining shipbuilding orders through Government assistance in those areas.
    There is a serious underlying structural change in the Northern region as bad as anywhere. That has been going on for many more years than this Government have been in power, and we all want to see an end to it.
    Mr. Peter Bottomley: Is my hon. Friend aware that the influence of pay settlements is one aspect of increased unemployment, a matter which has not
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    been mentioned by any Opposition Members all afternoon?
    Mr. Lester: One of the anomalies in this country is that the highest areas for wages outside London are the Northern region and the North-West.
    Mr. Wrigglesworth: Is the Minister aware that Government Departments which have promised orders to British shipbuilders have not yet placed those orders with the specific yards that will build them? Will he speak to his colleagues in other Departments which have these orders ready to be put to shipbuilding yards and make sure that they are put immediately to help to alleviate the unemployment problems in the Northern region?
    Mr. Lester: I shall do anything that I possibly can to be helpful.

    Employment Agencies (Recruiting Practices)
    Mr. Dubsasked the Secretary of State for Employment, in view of evidence that employment agencies recruit from overseas resident domestics who have dependent children without informing them that they are liable to be removed for failing to declare such dependent children, if he will conduct an inquiry into the practices of these agencies; and if he will make a statement.
    Mr. Jim Lester: If the hon. Member will let me have the evidence to which he refers, I shall be pleased to have the matter investigated.
    Mr. Dubs: Does the Minister accept that several hundred of these unfortunate women, who have come to this country without appropriate warnings from his Department, are now under possible threat of expulsion? Should he not talk to Home Office Ministers and ensure that these women are treated with leniency?
    Mr. Lester: I understand that it is a question, not of having appropriate warnings but of people coming to this country on the basis that they have no dependants and no children and, having subsequently got the right to live here, finding that they have got children and dependants. That is the problem.
    Mr. James A. Dunn: Does the hon. Gentleman accept that in his answer he makes the first mistake? According to reports that I have read, the people to whom the question refers are ignorant of our customs and would not be asked at the point of reception whether they had dependants. In those circumstances I am sure that the hon. Gentleman will agree that these people find themselves alone and in grave difficulties. Will he consult his right hon. Friend the Home Secretary to see whether more compassion and understanding can be injected into this serious problem?
    Mr. Lester: As I have already suggested, if any hon. Member cares to give me the evidence, I shall be pleased to have it investigated.

    Industrial Training Boards
    Mr. Michael Brownasked the Secretary of State for Employment if he will make a statement on the future of industrial training boards.
    Mr. Prior: I welcome the fundamental review that the Manpower Services Commission is now making of our industrial training arrangements generally, including the operations of the industrial training boards, and look forward to receiving the report of its review in July. The Government will then consider what action needs to be taken.
    Mr. Brown: I am grateful to my right hon. Friend for that reply. It seems that there is the possibility that the Government will take action. Is my right hon. Friend aware, however, that in my constituency many small employers of labour, particularly of young people and apprentices, resent the manner in which the industrial training boards enforce petty restrictions upon them? Will he bear in mind, when the report of the review is received, that considerable pressure is building up among employers for the abolition of the industrial training boards?
    Mr. Prior: I should like to have chapter and verse of what my hon. Friend has stated about the problems of small companies. I agree that we would be silly not to face the fact that considerable pressure is building up among certain employers about the attitude of the industrial training boards.
    Mr. Spriggs: Is the right hon. Gentleman aware that industrial training projects, to which I have referred before, are being hampered as a result of the criteria laid down for the training of young people? Will he use his good offices to approach the Manpower Services Commission with a view to changing the criteria so as to allow indexed training projects to come into force at the earliest possible moment?
    Mr. Prior: I shall certainly consult the Manpower Services Commission to see whether we can meet the hon. Gentleman's point
    Mr. Bruce-Gardyne: Has my right hon. Friend studied the staggering arrangements being made for the chief executives of these boards, one of whom is apparently earning more than anyone else in Whitehall, and receiving an index-linked salary as well as an index-linked pension? Is it not time that the contracts of these gentlemen were revised or, preferably, withdrawn?
    Mr. Prior: I have studied the matter We have been studying it for some considerable time. Unfortunately, these index-linked agreements were already in force when we came into office. They apply to one man. Like our predecessors, we are bound by that undertaking. These are matters that bring the boards into great disrepute.
    Mr. Radice: Will the right hon. Gentleman confirm that many industrial training boards are now running out of money at a time when employers are cutting back on training? Is it not time that the Government took action?
    Mr. Prior: I see no reason why industrial training boards, if they are doing a good job, should be running out of money. They can get a levy from employers, and they do. There is no earthly reason for thinking that the industrial training boards should be short of money.

    North-West England
    Mr. Strawasked the Secretary of State for Employment if he will state the latest unemployment figures, and percentage rates, for the United Kingdom and the North-West of England.
    Mr. Jim Lester: At 8 May, the provisional number registered as unemployed

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    and the unemployment rates for the United Kingdom were 1,509,191 and 6·2 per cent., and for the North-West region, 226,274 and 7·9 per cent.
    Mr. Straw: Is the Minister aware that, as a result of the Government's policies not a week goes past without an announcement of major closures and redundancies, not only in the textile and footwear industries, but right across the manufacturing heartlands of the the North-West? Will he say by how much more unemployment in the North-West has to rise before the Government change their policy and start to assist industry rather than destroy it?
    Mr. Lester: The hon. Gentleman talks about Government policies that mean massive spending. The previous Government doubled unemployment by pursuing just that approach. Unemployment is increasing in the area due to world prices and the overall situation in the economy. It is not due to Government policies.
    Dr. Mawhinney: Will my hon. Friend agree that if the attitudes announced by Mr. Basnett yesterday were translated into actions this would substantially increase unemployment in the United Kingdom?
    Mr. Lester: There is no question about that. The attitude that we want to see reflected is that of Sir Michael Edwardes, who said in a recent speech that we wanted positive co-operation to produce profitable jobs in British industry.
    Mr. James Lamond: When the Minister said a few minutes ago that he understood that the textile industry enjoyed a high level of protection was he aware of the letter sent by Mr. Bob Lloyd-Jones, director-general of the British Textile Employers' Association, to his right hon. Friend the Prime Minister pointing out that the greatest exporting force that the world has ever known—the textile industry—is on the point of extinction? Is he aware that it is nonsense, according to Mr. Bob Lloyd-Jones, for Ministers to stand at the Dispatch Box and say that the industry enjoys any measure of effective protection?
    Mr. Lester: The temporary short-time working scheme was kept by my Department particularly because of the needs of the textile industry. The other protection
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    is a matter for the Department of Trade. The hon. Gentleman will know the views that it has put forward. This is a question, as I have said already, of balancing the interests of the home market against the effective exports that the textile industry is able to achieve.
    Mr. Nicholas Winterton: Is my hon. Friend aware that, because of changes in the Government's regional aid policy, many areas of the North-West will not be able to obtain assistance from EEC sources? Will my hon. Friend have a word with his right hon. Friend the Secretary of State for Industry to see whether a formula can be devised whereby Britain can claim its rightful portion of EEC aid for industry, particularly in the North-West, which is suffering heavy redundancies because of the problems facing the textile and footwear industries?
    Mr. Lester: I understand that a system is already devised and that the Department of Industry will consider carefully all changes in the light of changes since the original decisions were made.

    Unemployed Persons
    Mr. Roy Hughesasked the Secretary of State for Employment what is the number of unemployed in the United Kingdom at the latest available date; and what are the figures for women and young people, respectively.
    Mr. Jim Lester: At 8 May, the provisional number of people registered as unemployed in the United Kingdom was 1,509,191 of whom 460,639 were females. An age analysis was last made in April when the number under 20 years of age was 258,210 out of a total of 1.522,927.
    Mr. Hughes: Are not these figures reaching near catastrophic proportions, certainly in such areas as South Wales? Do not the Government think that they have done enough damage to the economy already, particularly regarding unemployment? Have not sanctions against Iran disrupted our trade and, therefore, employment prospects?
    Mr. Lester: The figures cause everyone concern. Where we disagree is about the methods for bringing them down. We believe that the figures will be brought down by making British industry more competitive through products that sell. That is the only way, in the end, to provide jobs.

    DEPARTMENT OF ENERGY (PERMANENT SECRETARY)
    Ql. Mr. Paimerasked the Prime Minister what are the functions of the permanent secretary in the Department of Energy; and whether experience in diplomacy and Oriental languages is a necessary or desirable qualification for this post.
    The Prime Minister (Mrs. Margaret Thatcher): The functions are similar to those of the official head of any Department, namely to be responsible for the efficient management of the Department and to give assistance to Ministers in carrying out their duties. Proficiency in languages, including those spoken in some major oil-producing countries, although not a necessary qualification, is a distinct asset both in bilateral discussions and international conferences.
    Mr. Palmer: With all due respect to the talents of Sir Donald Maitland, was not this a special opportunity to appoint someone as head of a Department whose mind has been sharpened by the harsh disciplines of science and engineering? Why do we go on supposing that to know everything about nothing in particular is a good thing?
    The Prime Minister: I shall reply to the latter part of the hon. Gentleman's question first. The hon. Gentleman must not assume that, although he and I have either engineering or scientific qualifications, this necessarily puts us above our fellows in administering Departments, although some of us, of course, would claim to be more equal than others. With regard to choosing an engineer or a scientist as head of that Department, there are, I am afraid, very few candidates available. I am convinced that we have chosen the best person to be permanent secretary of that Department.
    Mr. Latham: When the permanent secretary deals with Middle Eastern oil producers does he stress to them that the general directive of Her Majesty's Government is that the State of Israel should continue to exist within secure and defensible borders?
    The Prime Minister: This is always stressed whenever we are dealing with the future of the Middle East. Two things need to go ahead together—the recognition
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    of the right of Israel to exist behind secure boundaries alongside the recognition of the rights of the Palestinian people.
    Mr. Hooley: Is the Prime Minister aware that the appointment of an amateur with no training in science and technology might have been tolerable if she had not abolished the energy commission which would have been able to give the Secretary of State much-needed, good technical advice on matters within his responsibility?
    The Prime Minister: I have not the slightest shadow of doubt that the Secretary of State and the permanent secretary will receive excellent advice from well qualified scientific people.

    NORTHERN REGION
    Q2. Mr. Radiceasked the Prime Minister if she will pay an official visit to the Northern region.
    The Prime Minister: I shall do so next Friday.
    Mr. Radice: Is the right hon. Lady aware that unemployment in the Northern region has risen every month since last November and that most people in the region believe that her Government just could not care less?
    The Prime Minister: The hon. Gentleman will remember his own Government's record of more than doubling the level of unemployment.
    Mr. Beith: Will the Prime Minister take note of what is happening in the fishing ports of the North of England? Does she realise that the aid given so far to the industry simply will not last long enough for the fishing industry to survive until the next round of consultations is completed? Is she prepared to make substantial further aid available to the industry?
    The Prime Minister: About £3 million was the amount required by the industry. Its distribution is being handled by the industry, and is being used partly for exploring further waters to which the fishing fleets can go. I recognise that there are particular difficulties facing fleets that fish in distant waters. My right hon. Friend the Minister of Agriculture,

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    Fisheries and Food is in touch with the fishermen about that matter.
    Mr. Alexander: Will my right hon. Friend take time today to talk to the Head of Government of Saudi Arabia—
    Mr. Speaker: Order. The hon. Gentleman realises that this is not an open question.
    Mr. Alexander: I apologise, Mr. Speaker.
    Mr. Speaker: I hope that the hon. Gentleman will be lucky later, but I cannot guarantee it.
    Mr. Adley: Is my right hon. Friend aware that many of the athletes who will go to the Olympic Games—
    Mr. Speaker: Order. We are dealing with the Northern region.
    Mr. Adley: I was referring to those athletes who come from the Northern region and who are a particularly strong part of our Olympic Games contingent.
    Mr. Speaker: Order. I appeal to hon. Members not to try to twist a question into—[Interruption.] Order. Some of those who are shouting are among those who do this. An open question is fair game, but where it is a substantive question I hope that the House will play the game and try to have it that way.
    Mr. Robert C. Brown: Before the right hon. Lady goes to the Northern region on Friday, will she please get a decision from the Ministry of Defence on the order for 77 Chieftain tanks so that she can visit Vickers Elswick factory and tell the 350 workers who are now due for redundancy that they will not be made redundant because the order is there?
    The Prime Minister: I shall have to disappoint the hon. Gentleman. I do not think that the decision will be ready before I go north on Friday.

    PRIME MINISTER (ENGAGEMENTS)
    Mr. Strawasked the Prime Minister if she will list her official engagements for 20 May.
    The Prime Minister: In addition to my duties in this House, I shall be having
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    meetings with ministerial colleagues and others, including one with the Secretary-General of the United Nations, Dr. Kurt Waldheim. This evening I shall be giving a dinner for Dr. Waldheim.
    Mr. Straw: Does the Prime Minister agree that the decision of the Independent Broadcasting Authority to ban the "World in Action" programme on the Government communications headquarters in Hong Kong will suggest to many that serious breaches of security must be involved to justify such a cover-up? Will she say whether she initiated any investigation into these allegations and whether she will make a report to the House in due course?
    The Prime Minister: The decision to which the hon. Gentleman referred had no such implications. It was a decision by the IBA, taken wholly independently for reasons which the IBA spelt out at the time it gave the decision.
    With regard to the allegations to which the hon. Gentleman refers they were made some time ago, were taken seriously—as they should be—when they were made, were independently investigated and were found largely to be unfounded. But where they were well founded, the requisite improvements were put into operation.
    Mr. Cyril D. Townsend: At a time when the British Government are, correctly, clobbering our growing trade with Iran, will my right hon. Friend point out to President Carter that the American people are again providing money to finance weapons for the Provisional Irish Republican Army at the same time as the American Administration are preventing the Royal Ulster Constabulary from having the handguns that it needs to return the fire?
    The Prime Minister: We are being asked to do everything that we can to help our American allies to try to secure the release of the hostages. At the same time, I am very well aware that we asked them to supply a revolver type of pistol for the RUC. My hon. Friend will know that, on the first matter, the Government thought it best to lay orders which do not have retrospective effect on existing contracts, and that I would expect to be more formally announced shortly. With regard to the latter point, our request has not yet been turned down, but I am

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    grateful to my hon. Friend for reminding us forcefully that it is still on the table.
    Mr. Foot: Referring to the right hon. Lady's latest reply, may I ask whether she does not agree that the lesson of the last day or two is that U-turns can be conducted with great grace and skill? She is really very good at it when she tries, as we saw over Zimbabwe. May I ask her, therefore, the question which the whole country is asking? When will she start to reverse the policies which have led to the record increase in inflation under her Government?
    The Prime Minister: I am grateful to the right hon. Gentleman for his compliment. I recognise that it comes from an expert in these matters. With regard to advice from him on matters such as increasing prices, I really do not think that he is an expert in telling us how to get these down, bearing in mind that he was a member of a Government who raised electricity prices by 169 per cent., who raised postal charges by 148 per cent., rail transport by 172 per cent.—[Interruption.]
    Mr. Speaker: Order. Hon. Member's must listen to things that they do not wish to hear.
    The Prime Minister: —food charges by 120 per cent., and rates and water charges by 148 per cent.
    Mr. Foot: Perhaps I may respond to the right hon. Lady and offer her a few more compliments. When will she be able to bring any prices down? So far, all that she has done is to push them up.
    The Prime Minister: I think that the right hon. Gentleman will find that the retail prices index will come down—[HON. MEMBERS: "When?"] The right hon. Gentleman will know full well when it will come down, for a technical reason. It will come down in July-August. [HON. MEMBERS: "Oh."]
    Mr. Foot: Will the right hon. Lady now tell us when she thinks the RPI will come down to the figure at which it was when she assumed office?
    The Prime Minister: just hope that it will not go up as high as it did under the right hon. Gentleman's Party before it comes down. It might come down faster if the right hon. Gentleman did not
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    urge unions to increase their pay claims and did not urge more spending on the Government, because to urge more spending on the Government is a way of urging more inflation.
    Mr. Ian Lloyd: My right hon. Friend will be aware that the ACARD has published yet another excellent report on research and development in public purchasing affecting all Departments of State. Have the Cabinet considered the recommendations of that report? Apart from herself, which Minister will have responsibility for ensuring that they are carried out?
    The Prime Minister: The Government's policy towards public purchasing has been announced from this Dispatch Box. Naturally, we wish all of those who make public purchases, as far as possible, to buy British, commensurate with getting the quality and delivery.
    Mr. Molyneaux: In view of tomorrow's visit by the Prime Minister of the Irish Republic, does not the right hon. Lady think it advisable, to avoid misunderstanding and misrepresentation, to reaffirm today that undertaking that she has given on other occasions—namely, that she does not contemplate discussing the internal constitutional affairs of the United Kingdom with external representatives of any Government or politicians?
    The Prime Minister: The future of the constitutional affairs of Northern Ireland is a matter for the people of Northern Ireland, this Government and this Parliament, and no one else.
    Mr. Best: Will my hon. Friend draw to the attention of the British Olympic Committee the revelation, in today's edition of The Times, of a former KGB official and TASS correspondent that several middle-ranking Soviet officials welcomed the call by President Carter for a boycott on the Olympic Games because they hoped that it would make the Kremlin think again about its disastrous decision to force itself upon Afghanistan? Will my right hon. Friend urge Sir Denis Follows to think again in the interests of the British public and the peace of the world?
    The Prime Minister: I have today written again to Sir Denis Follows urging him to think again about the decision to

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    recommend British athletes to go to Moscow, especially in view of the American decision, the West German decision and the decisions of an increasing number of Governments. I believe that it would be advisable if our International Olympic Committee thought again.
    Mr. Bidwell: Does the right hon. Lady applaud the decision taken by the President of France to meet the Russian leaders? Would it not have been better, from the point of view of getting the hostages out of Iran and helping President Carter, if we had not been involved in the silly boycott of the Olympic Games?
    The Prime Minister: I have indicated forcefully my view that one way to bring home to the Russian people the enormity of what has happened by their Government invading Afghanistan is to boycott the Olympic Games. That will bring it home to the Russian people more forcefully than anything else. With regard to the President of France, I am not responsible for the President of France.
    Mr. Farr: On a point of order, Mr. Speaker. Do you think it fair, when 60 or 70 hon. Members are seeking to catch your eye, that the de facto Leader of the Opposition should rise in his place repeatedly and catch your eye on no fewer than three or four occasions? It makes it difficult for other hon. Members to get a word in edgeways.
    Mr. Speaker: The hon. Gentleman has raised that issue with me before. As he and the House are aware, I have said that some extra latitude is allowed to official Opposition spokesmen.
    Mr. Urwin: Further to that point of Order, Mr. Speaker. Will you take note of the fact that because of the tactics employed by one or two Conservative Members there were several hon. Members representing Northern region constituencies that are greatly affected by high unemployment who were unable to question the Minister on that issue?
    Mr. Speaker: We must not use points of order to continue the argument.

TRANSPORT ACT 1962 (AMENDMENT)
3.32 pm
Mr. Tony Speller: I beg to move,
That leave be given to bring in a Bill to empower the Minister of Transport to waive sections 54 and 56 of the Transport Act 1962 upon specific application by British Railways naming the section of line to be re-opened on a trial basis.
It is a great pleasure to see the interest in the extension of our railway system so clearly portrayed by the full Benches around me.
Mr. Speaker: Order. I think that the hon. Gentleman will have even greater interest if he will wait for a moment. I hope that hon. Members leaving the Chamber will do so quietly.
Mr. Speller: It seems that we have rather more points in the House than there are in the British Rail network. On this journey I merely ask for leave to bring in the most minor and general of regulations. It will allow British Rail to re-open closed lines on an experimental basis without having to go through the costly and time-consuming procedure that now applies, quite correctly, should British Rail seek to close a line.
I cannot believe that any hon. Member does not agree that in times of fuel shortage, high fuel costs and, in the rural area from which I come, quite inadequate roads, it is better to move passengers by train rather than by car.
I accept that the provisions of the 1962 Act are entirely sensible, but should the House be willing to allow British Rail the expediency of being able to reopen a line and, if the experiment is a failure, to close it again—perhaps British Rail would think that 18 months is a reasonable period—I believe that there would be great hope for many small lines that have been killed off post-Beeching. In my area I have in mind the small line from Barnstaple to Bideford. In the area of my hon. Friend the Member for Devon, West (Mr. Mills) I have in mind the line from Exeter to Okehampton.
I am aware that there are more national implications than I first thought when I considered the west country. It is worth a try to encourage passengers back on to the railways. It is worth a try to encourage British Rail to be

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rather more adventurous. I fully understand its problems. It dare not reopen lines when it cannot afford the cost of later closures.
Question put and agreed to.
Bill ordered to be brought in by Mr. Tony Speller, Mr. Robert Adley, Mr. Jack Aspinwall, Mr. Walter Johnson, Mr. Iain Mills, Mr. Peter Mills, Mr. Ron Lewis and Mr. Peter Snape.
Mr. Tony Speller accordingly presented a Bill to empower the Minister of Transport to waive sections 54 and 56 of the Transport Act 1962 upon specific application by British Railways naming the section of line to reopened on a trial basis: And the same was read the First time; and ordered to be read a Second time upon Friday 4 July and to be printed. [Bill 211.]

IRAN (SANCTIONS)
3.37 pm
Mr. Tain Dalyell: I beg to move, that this House do now adjourn.
Leave having been given on Monday 19 May under Standing Order No. 9 to discuss:
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 back-date the imposition of sanctions to 4th November 1979.
I shall be brief, Mr. Speaker. Yesterday you gave leave under the Standing Order No. 9 procedure for a very specific topic to be discussed, namely, the retrospective element in the Iran (Temporary Powers) Act. For reasons that I do not think the House will require me to rehearse, circumstances have changed. It would be an abuse of the procedure of the House if we were to succumb to the temptation to try to raise all sorts of other interesting issues arising from the general issue of sanctions policy.
There is a particular reason for not trying to exploit the Standing Order No. 9 procedure unfairly and to injure it by abusing it at a time when decisions on foreign affairs, especially with our EEC partners, are by nature ever more fast-moving. The Standing Order No. 9 procedure represents the best brake that the the House has over what would otherwise be faits accompli.
The salutary feature about yesterday's episode is that it means that a Minister—however senior and prestigious—before entering into an agreement with our EEC partners, with the Americans or with anyone else, must seriously ask himself "Can I be sure that the House of Commons will wear such a policy? "
I close with the thought that yesterday proved that the House will not be a rubber stamp for any Government, and that a Minister must realise that he or she at any time may have to face the hurdle of the Standing Order No. 9 procedure. It is in that spirit that I ask the House to adjourn.
3.40 pm
The Lord Privy Seal (Sir Ian Gilmour): the hon. Member for West Lothian (Mr. Dalyell) has played a notable part

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throughout these proceedings on sanctions. The House will have greatly admired the restraint that he has shown this afternoon. I shall try to be almost as brief as he was, but I hope that the House will understand that I cannot be quite so brief.
After my statement yesterday about decisions taken on the implementation of sanctions against Iran by Foreign Ministers of the European Community meeting informally in Naples over the weekend, the House made its view very clear that the inclusion of retrospection, however limited, was unacceptable.
The Government have therefore decided that sanctions will not be retrospective. No orders will be laid before the House which ban the supply of goods under arrangements made before the date on which those orders were laid. Last night we informed our European Community partners and the Government of the United States that, in view of the opposition of this House to retrospection, we would no longer be prepared to proceed to apply any element of retrospection among the decisions that we agreed to at the meeting in Naples. Arrangements that ban the supply of arms continue in force.
The result of the Government's decision not to go ahead with the retrospective element in the decision of the Nine will now be that the Orders in Council which will be laid before the House to implement sanctions, will not apply to the export of goods under arrangements made before the date of those orders. The Government hope to make these orders as soon as possible. But it is our intention to make sure that the orders cover the same ground as the parallel orders that our partners in the Nine will be making, to give effect to the sanctions measures to which we have all agreed.
I am sure that the House will agree that it is important to make sure that we all go along this road at the same pace and that we cover the same ground. The necessary procedures for co-ordinating with our partners are already in hand.
I can also assure the House that when the orders are laid before the House there will be an opportunity for the House to debate them. As explained to the House during the debate on the Iran (Temporary Powers)
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Act, any orders made under the Act will lapse if the House does not approve them within 28 days. The House was also given an assurance that any orders made under the 1939 Act will also be made subject to a parallel procedure. That is to say that, although the 1939 Act does not provide for orders made under it to be subject to a resolution by the House, in this case, because of the obvious importance of the question and the clearly expressed views of the House, the Government have undertaken to revoke any orders made under the 1939 Act if the approval of the House for such orders is not forthcoming.
The House has been virtually united in its condemnation of the illegal detention of the American hostages in Iran. The Government thought it right to play a leading part in working towards their release. One of the measures decided upon, in conjunction with our European partners, was the implementation of the sanctions put forward in the vetoed Security Council resolution. Although we recognise that sanctions are of limited value, we continue to believe that the policy of applying them is right, in order to demonstrate our solidarity with our friend and ally, and with the limited objective of securing the release of the hostages.
Our Community partners have hitherto taken the view that the appropriate way of showing such solidarity would be to apply sanctions to contracts concluded after 4 November 1979. But we accept the view of the House that sanctions applied in the United Kingdom should not be retrospective. We shall continue to work for the release of the hostages through what means we have, through quiet diplomacy and insistent persuasion. This is by no means incompatible with the operation of sanctions, and we trust that our efforts and the efforts of our partners will help to bear fruit.
3.45 pm
Mr. Peter Shore: The House is grateful to my hon. Friend the Member for West Lothian (Mr. Dalyell) for raising this debate. I echo the words of the Lord Privy Seal in welcoming both the manner and matter of his short but cogent speech. He is entitled to great personal credit for his energy and tenacity in pressing this issue,

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for the effectiveness of his intervention yesterday, and for his sucess in obtaining a debate under Standing Order No. 9. Not least, credit is due because, he has brought about an almost unprecedented change in Government policy. That change was unprecedented both in the speed with which Ministers reversed their decisions, and in the nature of the change, which affects agreements that were reached with eight other countries only 36 hours earlier.
I, too, will be short. We all know what happened. The story does not simply concern the reaction of the House yesterday to the Lord Privy Seal's statement. When the Government launched a two-day debate on the Iran (Temporary Powers) Bill last week, they had already taken a policy decision to activate the powers under the Iran (Temporary Powers) Bill, if no progress had been made to secure the release of the American hostages. That would have affected future contracts.
Ministers reminded the House that the Government had in reserve the heavier powers contained in the 1939 Act. However, their intention was clear. They indicated that these powers would not be invoked for some time. That was the strong and inescapable impression that they gave. Among other things, that is why no serious response was made in ministerial replies to the anxieties that had been expressed by hon. Members from all parties about the disruption of existing contracts and the problems of compensation.
After the Bill had been enacted, the Foreign Secretary went to Vienna and then to Naples. During the course of his discussions in those cities he was persuaded not only to activate the powers under the Iran (Temporary Powers) Act 1980 from a date to be announced in the relevant order, but to backdate sanctions to 4 November 1979. That was the date on which the American hostages were unlawfully seized. That was contrary to the understanding and wishes of the House. It was also contrary to the terms of the Iran (Temporary Powers) Act.
If 4 November had been contemplated for a moment as the starting date, the Iran (Temporary Powers) Bill would not have excluded—as it did—all contracts
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that had been signed previously. Clause 1(2)(a) would have stated that an Order in Council would not apply to any contract made before 4 November. However, the existing text states that an Order in Council
" shall not apply to any contract made before the date on which the Order is made."
Yesterday the House heard the Lord Privy Seal's statement. Hon. Members felt strongly aggrieved. They felt that they had been deceived during those two days of debate. I believe that the Government did not intend to deceive the House last Monday and Tuesday. I believe that they were forced to deceive retrospectively, as a result of agreements that had been reached in Naples on the Saturday and Sunday. There is no reason for me to labour these points. The Government's decision last night has explicitly conceded them.
I have one question to ask the Lord Privy Seal before attempting to draw some lessons from this experience. The question relates to the powers contained in the 1939 Act. If the Government intend at some future stage to seek the approval of the House and to activate any of those powers, I hope that they will lay an affirmative order, rather than one that would reflect the type of order for which provision is contained in the Iran (Temporary Powers) Act. Perhaps the Lord Privy Seal has already agreed to that. However, I should be grateful for confirmation. We might otherwise find ourselves dealing with an order that had come into effect before the House had had a chance to debate it. That would be quite contrary to the wishes of hon. Members.
I warmly endorse the comments of my hon. Friend the Member for West Lothian about the importance of Standing Order No. 9 procedures. They were introduced about 12 years ago. They have given the House of Commons, under the guidance of Mr. Speaker, an ability to respond immediately to events in a way that was previously inconceivable. They are of great value to all who believe in the authority of the House of Commons and in the central importance of debate on the Floor of the House.
An Adjournment debate which is raised under Standing Order No. 9 serves to remind Ministers that their control over our timetable is far from perfect. It

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reminds the nation that issues of great interest and importance can be debated without delay. It reminds all hon. Members of the central truth of British parliamentary democracy, namely, that, however large a Government's majority may be, they ultimately depend on the votes of hon. Members.
Secondly, these events have taught a most important lesson about the conduct of British foreign policy. Provided that Ministers have the support of the House of Commons they can conclude firm agreements with other countries on all matters that they think important. But if Ministers think that in their dealings with other countries they are free agents who can safely yield to the pressures of other nations and just assume the consent of the House of Commons, they are profoundly mistaken.
This is important in our relations both with the United States and the EEC. We are friends and allies of the United States, and the whole House has made it plain that the United States has our strong support for concerted, non-military measures to bring about the early release of the hostages. We believe that they have been grievously wronged, and that the Iranians have committed a most serious offence against international law. But we have the right and the duty to decide the nature and timing of the measures that we can take in order to assist the release of the hostages. It is our judgment, and not our obedience, that we offer.
The view of the House and the Government was made clear last week. It was sensible to proceed slowly using modest sanctions as a minor accompaniment to diplomatic and political measures. The use of stronger sanctions was not ruled out in future, but it was not the general view last week of either the Government or the House that this was the time to invoke them. We already knew then that the United States had a different view, but that was in no way sufficient reason for the Foreign Secretary to go further than the House intended.
The lesson for the EEC is also clear. There can be no question of a common foreign policy, of speaking with one voice, except on those occasions when it is the will of the House to do so. The result of the Naples agreement and of
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last night's reversal is, of course, a shambles. I do not welcome a situation in which our Foreign Ministers, in their dealings with the EEC, can be accused of being uncertain or irresolute. I have said in another context, and I say it again, that British Ministers should say what they mean and mean what they say. We have taken that position on many other matters of great importance, including that of the budget contribution before the Dublin meetings last year.
The Government will have to deal with the problem that they have created. The Foreign Secretary is bound to find it embarrassing. The important thing for the EEC to understand is that in Britain the House of Commons is supreme. That does not mean that British Ministers cannot make firm and binding commitments. It means that in Britain, at least, commitments must be preceded by agreement in the House of Commons.
My third point is practical. Clearly there is a need for greater co-ordination between Foreign Office Ministers than we have had so far. There is a problem here. If Senior Ministers are obliged, as in the case of the Lord Privy Seal and the Foreign Secretary, to undertake a series of overseas visits, and if junior Ministers are given the responsibility of handling sensitive legislation, there is an obvious danger that senior Ministers will become out of touch and insensitive to the opinions and understandings of the House. This is even more a problem when the Foreign Secretary is in another place.
We had a classic example of such in-sensitivity yesterday. The Lord Privy Seal made a number of tart comments to my right hon. and hon. Friends which, had he been able to listen to the debates last week, he would not have made. It is not for me to suggest how this problem can best be dealt with, but it is a problem and Foreign Ministers should seek seriously to overcome it.
I do not wish to carry the matter any further today. The Government were right to bow to the will of the House. There are worth-while lessons to be learnt and our allies and friends may rest assured that in asserting, as we have, the supremacy of the House of Commons we in no way resile from our view of the total unacceptability of the Iranian conduct towards the American hostages. We shall

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seek to assist their early release in every sensible way.
3.55 pm
Mr. Russell Johnston: I wish to ask only two questions, but first, like the right hon. Member for Stepney and Poplar (Mr. Shore) and the Lord Privy Seal, I think it proper to pay a tribute to the hon. Member for West Lothian (Mr. Dalyell). All the firms that would have been affected by the retrospective legislations should be grateful to him for his action. Very often we are annoyed by the hon. Member's persistence, but on this occasion it has been wholly vindicated.
The Minister emphasised throughout that the Nine seek to move in parallel in bringing the sanctions into effect. Will this position change? Will the Government's decision affect what the other eight Governments do? Presumably the others persuaded us to make the matter retrospective. Will they not now make it retrospective themselves? What is the position?
The right hon. Member for Stepney and Poplar described the Government's action as somewhat "shambolic ". I do not know about that, but I do find it very strange. I do not understand why a British Government, in consultation with Foreign Ministers, should enter into a commitment and then go back on it. Either they should decide that, mistakenly or reluctantly, they propose to enter the commitment and adhere to it, or they should tell their European colleagues that they genuinely feel that they cannot take this commitment and therefore they will not enter it. In other words, surely the Government have been guilty of profoundly misjudging the situation. I agree that certainly one cannot accuse them of seeking consciously to deceive, but clearly they have seriously misjudged the situation.
Several Hon. Members rose—
Mr. Speaker: Order. I believe that it is the will of the House—
Mr. Eric S. Heffer: On a point of order, Mr. Speaker—
Mr. Speaker: Order. I am on my feet I will call the hon. Member for Liverpool, Walton (Mr. Heffer), but he must wait his turn like anyone else.
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I believe that it is the will of the House that we come to a conclusion on this matter quickly. I hope that those hon. Members who, nevertheless, feel that they must speak, will bear that in mind.
3.58 pm
Mr. Eric S. Heffer: I want to ask the Lord Privy Seal one question. Had he given way to me during his speech, all this could have been avoided. My question is on precisely the same point as that made by the hon. Member for Inverness (Mr. Johnston). This is very important. The right hon. Gentleman said that there would be a co-ordination of activity between the Government and our friends in Europe. Precisely what does that mean? Does it now mean that the EEC countries have agreed that sanctions will not be retrospective for them either, or does it mean that we are actually going it alone? I should be very pleased if it were the latter.
3.59 pm
Sir Ian Gilmour: With the leave of the House, I shall answer the questions that have been put to me.
The right hon. Member for Stepney and Poplar (Mr. Shore) asked for an assurance about orders. In my statement I said that although there is no provision in the 1939 Act for making such orders, we shall apply exactly the same procedure for orders under the 1939 Act as for those made under the Act passed last week. I further assure the House that we shall ensure that the debate on those orders, if any, takes place as soon as possible.
Mr. Shore: That is precisely the point. I did not mishear the right hon. Gentleman. If the Government use the 1939 Act with the affirmative order procedure in the 1980 Act, that order will come into effect before it can be debated. To avoid that difficulty I asked the right hon. Gentleman to use the normal affirmative order procedure, where drafts cannot come into effect until the House has debated and approved them.
Sir I. Gilmour: I was seeking to make the point that now that any possibility of retrospection has been removed from orders made under the 1939 Act, I do not believe that there is cause to make a distinction between orders made respectively, under the 1939 Act and the Act passed last week. I shall certainly think

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about the matter, and I have undertaken that debates will take place as soon as possible.
I am sorry that I did not give way to the hon. Member for Liverpool, Walton (Mr. Heffer). As he knows, I normally give way, but I was hoping to bring the proceedings to a close as soon as possible. The answer to the question proposed by the hon. Gentleman and the hon. Member for Inverness (Mr. Johnston) is that it is too soon to know. We notified our partners only last night, and we cannot say what will happen. As I said, we accept the need for co-ordination and for moving at the same pace down the same path.
Mr. Dalyell: I beg to ask leave to withdraw the motion.
Motion, by leave, withdrawn.

ORDERS OF THE DAY

  HOUSING BILL
  [2ND ALLOTTED DAY]
  As amended (in the Standing Committee), further considered.

Clause 7

  DISCOUNT
  Amendment moved [19 May]: No. 9, in page 6, line 15, after first ' the ' insert ' regular '.
  Mr. Speaker: I should inform the House that the timetable motion will come into effect at different times from those that we expected. The guillotine will fall at 5.54 pm instead of 5.30 pm, 6.54 pm instead of 6.30 pm, 9.24 pm instead of 9 pm, 10.24 pm instead of 10 pm and 12.24 am instead of midnight. The times are available for any hon. Member who has been unable to write them down.
  I remind the House that with amendment No. 9 we are taking Government amendments Nos. 10 and 11.
  4.3 pm
  The Minister for Housing and Construction (Mr. John Stanley): I was explaining last night that the amendment associated with Government amendment No. 9, which I was in course of moving, was to bring about a small redefinition of members of the Armed Forces who will be able to benefit from the discount under the right to buy that we are applying to them. We thought it right to make it clear in the legislation that the Service men should be able to benefit would be members of the Regular forces. We have decided to adopt the definition in section 1 of the House of Commons Disqualification Act 1975, as amended by section 20 of the Armed Forces Act 1976. This is as follows:
  " ' Regular armed forces of the Crown ' means the Royal Navy, the regular forces as defined by section 225 of the Army Act 1955, the regular air force as defined by section 223 of the Air Force Act 1955, Queen Alexandra's Royal Navy Nursing Service and the Women's Royal Naval Service ".
  That extends the scope of the legislation to those who were members of or would be normally regarded as the Regular Armed Forces, which I hope will meet with the wishes of the House.
  Dr. Brian Mawhinney: Bearing in mind the recently published defence White Paper, which makes it clear that Service men will be allowed to purchase at similar discounts surplus Service accommodation, is there anything in the amendment to enable Service men who have previously lived in council accommodation to have that term added to the length of time in Service accommodation for discount purposes?
  Mr. Stanley: The Housing Bill provision in chapter 1 relates to part V local authority accommodation and the equivalent of local authority accommodation provided by the new towns and housing associations. To the extent that the legislation has effect here, it applies only in respect of purchases of those dwellings. The question of the sale of existing houses or flats that may be in the ownership of the Ministry of Defence is for my right hon. Friend the Secretary of State for Defence. It is outside the scope of this legislation.
  Mr. Michael McNairWilson: The amendments are more than manuscript changes. Clause 7 is extremely important. It sets out the discounts available to council house tenants. The changes attempt to define more precisely what is meant by Armed Forces within the meaning of the Bill.
  Is my hon. Friend satisfied with the definition that he has included? Why are the Women's Royal Army Corps and the Women's Royal Air Force omitted, together with the two nursing organisations that apply to the Army and Royal Air Force? Only the Women's Royal Naval Service and the nursing service applicable to the Royal Navy are included.
  What are the criteria for deciding that members of the Regular Armed Forces should be given the benefits of those discounts but other Ministry of Defence personnel left out? My hon. Friend may say that the danger inherent in being a member of the Armed Forces has encouraged him and his colleagues to add them to this Bill to acknowledge that hazard. It that is so, has my hon. Friend considered the Ministry of Defence personnel who work at the Atomic Weapons Research Establishment at Aldermaston, in my constituency? They are engaged in the active areas and contribute mightily
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  to the production of nuclear material that goes into our Polaris submarines. My hon. Friend will know from the report produced by Sir Edward Pochin in 1978 that there is considerable hazard for those working at Aldermaston. If the Armed Forces are included for that reason, those people are also worthy of inclusion.
  Ever since the Ministry of Defence decided to sell the houses occupied by personnel at the Atomic Weapons Research Establishment to the Property Services Agency, the question has been a bone of contention in my constituency. The agency was told that it could offer the houses first to the Newbury district council and only then to the sitting tenants. I took up the matter with the previous Government and more recently with my hon. Friend. I still await a letter to complete the correspondence.
  The definition will make it all but impossible for hope to remain in the hearts of those members of the Ministry of Defence who work at Aldermaston. They believed, as perhaps I believed, that when the Conservative Government was returned last year they might have the chance to buy the houses in which many of them have lived for 20 years or more and enjoy the same discount enjoyed by a council tenant who could claim the same length of residency. Alas, because the PSA, prompted by the previous Government, had decided to offer the houses to Newbury district council, which took up the offer, because they were sold at unbelievable, knock-down prices of between £4,000 and £10,000, which bore no resemblance to their market value, no houses have been offered to the Ministry of Defence tenants who continue to live in them.
  When the Government came to power, hope rose in the hearts of those tenants. The Conservative-controlled district council also thought that the fact that those people had been tenants in Government-owned properties for so long would give them a chance to benefit. Under the heading:
  " Fairer deal promised for ex-MoD tenants ".
  the Newbury Weekly News reported on 5 July last year:
  " Over 100 former Ministry of Defence houses throughout the Newbury district are to be included in the district council's sale of council houses scheme … Now, following a decision by the council's policy committee this

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  week tenants' terms of residence will include the MoD period—thus making some eligible for full 50 per cent discounts."
  Those tenants were thrilled by that news and many thought that at long last the injustice done to them by the previous Government was to be put right. I need hardly tell the Minister how disappointed they were to find that they had been excluded. I plead their case again.
  I recognise the right of members of the Armed Forces to be given discounts, but when talking about the Armed Forces it is difficult to draw a line between the members of the Services and employees of the Ministry of Defence who, I hope I have shown the House, are involved in hazardous work that is vital to the maintenance of our Polaris fleet.
  I have suggested that the amendments are defective because they leave out the WRAF, the WRAC and two of the women's nursing services which are just as much part of the Regular Armed Forces as is the Queen Alexandra's Royal Naval Nursing Service—and the Royal Marines do not seem to get a mention, though perhaps they are subsumed in the Royal Navy. If I am right, the amendments will have to be looked at again before the Bill becomes law. I hope that at that time my hon. Friend the Minister will give a thought to the 100 house-holders in Ministry of Defence property who find that their homes are owned by the Newbury district council and that they are to treated as though they were council house tenants of one year's standing.
  I am sure that my hon. Friend will agree that, in equity, that cannot be right. Those tenants are performing hazardous and nationally important jobs. I suggest that, when we are considering discounts, they deserve as much recognition as do members of the Armed Forces.
  Mr. Frank Allaun: (Salford, East): The hon. Member for Newbury (Mr. McNair-Wilson) made an interesting speech and pointed to other categories who, because they undergo risk and hazard, should be entitled to the benefit of being able to buy council houses at a high discount. However, there are others who undergo greater risks and hazards—for example, miners, spidermen and trawlermen.
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  I am not opposed to Service men having their full rights. Indeed, I believe that they are entitled to better pay and conditions and should have the right to belong to a trade union in order to achieve those benefits. However, if giving enhanced discounts to Service men or council tenants who buy results in the great majority of would-be council tenants being deprived of the opportunity either to buy a house or to get similar discounts, I am opposed to the proposal.
  The case of the hon. Member for Newbury seems fair enough, but he is pleading that even more people should get discounts on the purchase of houses. The effect of that would be higher rents for all council tenants who do not buy and higher rates for everybody, because of the losses incurred by local authorities who will have to go on paying the interest charges on those houses for the next 60 years. It would also be disadvantageous to the community as a whole, for the reasons that we have outlined in other debates.
  4.15 pm
  The right to buy should be available to nobody. Everybody who has a council house should continue as a tenant. We should certainly not approve the worst feature of the Bill, which is that councils who do not want to sell houses to tenants should be compelled to do so. That is contrary to all our ideas of local democracy and, therefore, I cannot agree with what the hon. Member for Newbury was saying.
  Mr. Tristan Garel-Jones: I am glad that the hon. Gentleman made it clear that he opposes all sales of council houses. My hon. Friend the Member for Newbury (Mr. McNair-Wilson) was suggesting that the miners, to whom the hon. Member for Salford, East (Mr. Allaun) referred, who undoubtedly undertake hazardous jobs, will enjoy the right to buy by virtue of being tenants if they live in council houses. My hon. Friend was suggesting that, in equity, the same right should be extended to those to whom he was referring.
  Mr. Allaun: I accept that if we agree to the principle of the sale of council houses it is inequitable that those to whom the hon. Member for Newbury referred should be excluded.
  Mr. Hugh D. Brown: I hope that I shall be forgiven for intruding on an English and Welsh Housing Bill, but the Minister's reply about the lack of reciprocal arrangements for those in Ministry of Defence houses surprised me. He cannot get away with making the bland statement that it is a matter for the Secretary of State for Defence. In fact, almost every other Government Department is involved.
  On the equivalent Scottish Bill we were assured that a certain percentage of prison department houses would be sold, as would health board houses. In considering the definition of Armed Forces, we are not discussing only the extension of the categories who will have rights once they become council tenants. We are surely entitled to some indication of the Government's thinking.
  The Government are forcing the sale of council houses on local authorities and if I were a member of the Armed Forces or an employee of the prison department, I should want to know why I could not be given an opportunity to buy a Government-owned house. It is appalling that the Minister should hide behind the traditional reply that it is a matter for his colleagues. I hope that he will expand on that.
  Mr. Garel-Jones: Before my hon. Friend the Minister replies, I should like to draw his attention to the fate of police officers and serving policemen. I have had many representations by police officers in Hertfordshire. They recognise that the police authority is having discussions with the Home Office to see whether some arrangements can be made for certain police houses to be offered for sale, but it is unlikely that the discounts will be as great as the discounts offered to council house tenants. I hope that some arrangement can be made whereby these people—to whom the general public are indebted—can be offered the same conditions as those that are being offered to everyone else.
  Dr. Mawhinney: As the hon. Member who raised the question originally, may I join my hon. Friend the Member for Newbury (Mr. McNair-Wilson) in asking the Minister to give further consideration to this amendment. One of the most advanced Air Force bases in the country is situated in my constituency, and it is
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  critical to the defence of Britain. It would be somewhat invidious to separate those people in the operational wing from those on the support side of that base. They all contribute to the defence of the country.
  I understand the point made by the Minister yesterday, which required him to seek a narrower definition within this clause. Having listened to his speech I would suppose that the hon. Member for Salford, East (Mr. Allaun), was not present at that time and, therefore, is unaware of the need to define this clause more narrowly. Nevertheless, I share the misgivings voiced by my hon. Friend the Member for Newbury, and I hope that the Minister will give some assurance that he he will look again at the clause before the Bill completes its remaining stages through this House and another place.
  Mr. Stanley: My hon. Friend the Member for Newbury (Mr. McNair-Wilson) spoke eloquently on behalf of his constituents, and I am grateful to him for raising the extent of the coverage of members of the Regular branches of the women's Services. It is our intention to cover all Regular members of the Armed Services, both men and women. I hope that both the Regular women's Services of the Army and Air Force are covered within the relevant sections of the Army Act 1955 and the Air Force Act 1955, the definitions of which I referred to. I assure my hon. Friend that I shall look again at the definitions in order to double check that they are included. I shall also look at the nursing branches to which he referred. If I may, I shall write to him to confirm the position in such a manner that the information will be available to all hon. Members. Should there be any need for a further amendment, I shall indicate that also.
  My hon. Friend the Member for Newbury also raised the question of civilian members of the Ministry of Defence. A difficult judgment has had to be made, because there are many members of the public services who might have a claim to the benefit of the right-to-buy discount, which we felt it was right to extend to those people in uniform on a regular basis. We took account of the fact that the work of those in the military services is hazardous. We are conscious that they are under a special form of military jurisdiction. By the nature of their work, it is more difficult for them to establish a

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  permanent home. They have to be able to move regularly, and often at short notice, and it is, therefore, more difficult for them to put down roots. They are in a different position from civilians who have a greater opportunity to establish permanent roots.
  Inevitaby, wherever we draw the line, there will be some difficult cases. That is unavoidable. When we considered the possibilities that were referred to by my hon. Friend the Member for Newbury, we also had to consider other civilians in the public services, not only in the Ministry of Defence but in other branches of the public service where, on grounds of the hazardous nature of their job and the need to move to different parts of the country, a case could be made for them, too. When we looked at the possibilities, we decided that if we made the extension into the civilian branches it would become still more difficult to establish a hard-and-fast rational line as to where the statutory entitlement under the right to buy should be drawn.
  We reached the conclusion that the only rational place where we could draw the line was between those who were under military jurisdiction—those people in uniform on a regular basis—and those who were not. I am sorry that that is a dissappointment to the constituents of my hon. Friend, but they can draw some comfort from the fact that, as a result of the right-to-buy discounts that I have included here, they will be able to benefit from a one-third discount after three years' qualification which has not been available previously.
  In answer to the point raised by the hon. Member for Glasgow, Provan (Mr. Brown), may I say that it is right, in an English and Welsh context, that the terms of disposal of publicly-owned houses that are owned by other Government Departments must be a matter for individual Ministers who are responsible for those dwellings. The Government have considered the general policy on disposals. It must be a matter for each Department to decide, but we want to be satisfied that the existing enabling powers enable individual Departments and public authorites to make disposal on the same basis of the discounts under the right-to-buy legislation. It must be a decision for
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  each Department as to how those powers are used, but sufficient statutory rules should exist on an enabling basis so that people can be offered discounts on the same terms under the right-to-buy provision in the Bill.
  The same principle applies to the point raised by my hon. Friend the Member for Watford (Mr. Garel-Jones). We have examined this matter in terms of the statutory powers that are available to county councils which own most of the police houses. We have ensured that where a local authority—a county council in this case—uses powers to sell a police house to a tenant, there is no statutory provision to prevent it from selling on the same discount basis under the right-to-buy legislation.
  Amendment agreed to.
  Mr. D. A. Trippier: I beg to move amendment No. 142, in page 6, line 17, at end insert—
  '; or
  (c) if the secure tenant succeeded to his tenancy under section 29(2) or (3) below—

  (i) the secure tenant,

  (ii) the secure tenant from whom he succeeded, or

  (iii) that predecessor's spouse, was a secure tenant.'

  The purpose of this amendment is to extend the entitlement of discount rates to all those who are entitled to buy. The Bill extends the discount provisions in time of death to the spouse. I do not believe that that is sufficient. It should be extended to include another member of the family if he or she has succeeded to the tenancy and has been living in the same house.
  My attention was drawn to this matter initially by a constituent who had lived with her mother for 57 years. Although she subsequently married, she continued to live with her parents. During the later part of her parents' life, she, not her parents, paid the rent. However, it was not until the death of the surviving parent that the tenancy was altered to her name. That often happens. Despite the fact that my constituent has been living in this house for such a protracted period, she is not entitled to the maximum 50 per cent. discount, and this is morally wrong.
  4.30 pm
  I am also aware of two other instances of injustice in my constituency. I have

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  great sympathy with the tenants concerned. Where a son or daughter takes over the payment of rent, usually on the retirement of an elderly parent, it is not common practice to have the tenancy changed, and the House should accept that to make such a suggestion to the parent would be extremely difficult. There is no earthly reason why the Bill should not be amended to make provision for cases of this kind.
  The Rent Act 1977 gives security of tenure not only for the lifetime of the original tenant but also for the lifetime of his statutory successor, that is, the first successor, and also for the lifetime of the latter's successor, that is, the second successor. A successor is defined as someone who must be either the spouse of the person he or she succeeds or, if there is no spouse, a member of the tenant's family who had been living with the tenant for six months.
  Subsections (2) and (3) of clause 29 simplify the specifications for succession but extend the period of qualification for residence from six months to 12 months, which is very fair. If the principle of selling council houses to sitting tenants is right—and I believe it is—it is the Government's responsibility to clear up anomalies of this kind. I should be extremely grateful if my hon. Friend would give me an assurance that the Bill will be amended, either here or in the Lords, to cover the provisions to which I have referred.
  Mr. John Lee: I support the amendment which has been initiated and moved by my hon. Friend the Member for Rossendale (Mr. Trippier). It is a logical amendment. It encourages home ownership, which Conservative Members particularly support, and it has equity on its side, it surely cannot be right to deprive sons and daughters, who might have stayed at home to look after not only elderly parents but also handicapped parents, of the right to buy on attractive terms. I commend the amendment to the House.
  Mr. Stanley: I am grateful to my hon. Friends for the way in which they have moved the amendment. I appreciate wry much the point they have made. It has concerned a number of hon. Members who have written to us about the position
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  of discount entitlement in relation to those who have succeeded to a tenancy, particularly in the sorts of cases raised by my hon. Friend the Member for Rossendale (Mr. Trippier) where someone has been living in the house for a great many years, perhaps since birth, and may latterly have taken over a substantial measure—possibly the entire measure—of responsibility of maintaining the property and contributing a great deal to the rent, if not paying all of it.
  We have been considering the possibility of an amendment to deal with such cases, and I am glad to tell my hon. Friends that we intend to introduce one in another place. What we have in mind would not produce precisely the same result as is sought in the amendment, but I hope that, when I have explained our intention, my hon. Friends will be able to agree with what we propose.
  We have accepted that, like spouses, many adult children living with parents will have contributed towards the household's costs, and may even have carried the major share of them. We accept that a concession ought to be made in these circumstances if the child subsequently suceeds to the tenancy and exercises the right to buy.
  We have concluded that a landlord should have discretion, however, to make discount available in respect of periods going back beyond the start of the tenancy of the person exercising the right to buy. We propose to adopt a similar provision to that in the Tenants' Rights, Etc. (Scotland) Bill, where such a provision already exists—that a tenant who has succeeded to a parents' secure tenancy should be able to receive discount entitlement in respect of time spent living with the parents since reaching the age of !6. Because of the great variety of personal and family circumstances, however, we think it is right that this discount entitlement, on succession, should be available at the discretion of the local authority.
  My hon. Friend has introduced an important amendment. It is defective in one or two respects. I hope that he will seek to withdraw it, in view of the clear assurance that I have been able to give, that we intend to bring forward in another place the amendment that I have described.
  Mr. Gerald Kaufman: The amendment is an example of the kind of thing that happens when a Government embark along the road on which this Government have embarked in chapter I of the Bill, namely, that of dissipating public assets in this way. It becomes a situation in which the logic of the dissipation of the assets requires, at the margin, the enlargement of the dissipation, due to the perfectly valid case that the hon. Member for Rossendale (Mr. Trippier) puts forward, where a relative lives with someone in the way described and contributes to the household expenses. To the official Opposition the dissipation of the assets is unacceptable, and therefore we would certainly have opposed the amendment. We are pleased that the Minister has not accepted it in the terms in which it was tabled.
  We shall examine the amendment that the Minister tables for consideration in another place. We are pleased, at any rate, that any discount arrangements may be at the discretion of the local authority, but we shall have to examine precisely what those arrangements are. Our attitude to the amendment, when it returns from another place for consideration here, will be very much governed by the discretion committed to the local authority. If that discretion is not satisfactory to us, we shall oppose and vote against that amendment, just as we would have opposed and voted against this amendment if the hon. Gentleman had persisted with it.
  Mr. Trippier: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made: No. 10, in page 6, line 37, leave out ' armed forces ' and insert
  ' regular armed forces of the Crown '.
  No. 11, in page 6, line 45, at end insert—
  '( ) In this section "regular armed forces of the Crown" has the same meaning as in section 1 of the House of Commons Disqualification Act 1975.'.
  No. 12, in page 6, line 45, at end insert—
  ' (6A) Where the person or one of the persons exercising the right to buy, or the spouse of that person or of any of those persons, is a previous purchaser, a period shall be taken into
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  account as a period during which the previous purchaser was, or was the spouse of, a secure tenant or during which he or his spouse occupied accommodation provided for him or his spouse as a member of the regular armed forces of the Crown, only if it falls after the completion of the previous purchase or, if more than one, the last of them.
  (6B) In subsection (6A) above "previous purchaser" and "previous purchase" have the same meanings as in section 1(5A) above.'.—[Mr. Stanley.]

Clause 8

  REPAYMENT OF DISCOUNT ON EARLY DISPOSAL OF FREEHOLD OR LEASE
  Mr. Jack Straw: I beg to move amendment No. 13, in page 7, line 9, at beginning insert
  ' subject to sub-section (2A) below '.
  Mr. Deputy Speaker (Mr. Bernard Weatherill): With this it will be convenient to take the following amendments:
  No. 14, in page 7, line 13, at end insert—
  ' (2A) Where the conveyance or grant has been made following the exercise by the tenants of rights referred under subsection (2)(6) of section 15, the purchase price upon which the calculation of discount repayable shall be based shall be the value of the dwelling-house at the date of the conveyance or grant.'.
  No. 29, in clause 15, page 11, line 28 leave out from ' notice ' to end of line 34.
  No. 31, in clause 15, page 12, line 5, leave out subsection (5).
  No. 32, in clause 15, page 12, line 7, leave out ' two ' and insert ' one '.
  No. 33, in clause 15, page 12, line 11, leave out ' two ' and insert ' one '.
  No. 34, in clause 15, page 12, line 14, leave out ' two ' and insert ' one '.
  No. 161, in clause 15, page 12, line 7, leave out ' two year ' and insert ' six months '.
  No. 162, in clause 15, page 12, line 14, leave out ' two years ' and insert ' six months '.
  Mr. Straw: Under clause 15, tenants whose income falls below certain prescribed limits will have the right to pay £100 to the local authority and by that payment to gain an option, which is exercisable for the following two years, to buy their dwelling at the price that obtained when they paid their £100 down, and not at the price that prevailed when they came to purchase the property, irrespective of

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  the increase in the value of the houses in the meantime.
  Mr. Frank Allaun: Monstrous.
  Mr. Straw: It is our judgment that this is indeed a monstrous provision, and that it is one of the most unjustifiable and objectionable parts of a thoroughly objectionable Bill.
  The amendments are designed to deal with this option. Amendments Nos. 29 to 31 seek to delete the option provisions altogether. If that is not acceptable to Conservative Members after they have heard my arguments, they may then come to amendments Nos. 32 and 33, which seek to reduce the option period from two years to one year. Amendments Nos. 13 and 14—I hope that Conservative Members will pay particular attention to them—provide that those who exercise these options should not be able to make windfall profits of some hundreds—and in many cases thousands—of pounds which would otherwise fall available to them under the exercise of the option.
  Let me deal first with our objections to the principle of these options. We object to the options as provided in the Bill because they are unfair to other tenants, unfair to owner-occupiers, unfair to those in the private sector—young couples trying to scrape together the money to get a mortgage to buy a house—and unfair to the ratepayers and taxpayers of this country, because of the dissipation and the throwing away of public assets.
  In many ways these options amount to a fraud upon the public purse because of the way in which they seek to throw away public assets without justification. We object to the options provision because it will lead to large windfall profits being made by some tenants and the fact that those windfall profits will lead to the possibility of great abuse by tenants. The possibility of such abuse could create an administrative nightmare for local authorities which have to administer the options scheme. We also object to the options provision because, as I shall demonstrate, it is wholly unnecessary, even given the reason which Ministers have advanced for its being in the Bill in the first place.
  It is the duty of any Government to seek to deal fairly with the various sections
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  of the community in respect of which they pass legislation. That, above all, must be the case when we deal with housing, which is one of the most prized assets of all, and one of the most basic necessities of life. Do we have a Government who are dealing fairly with the provision of housing? We have a Government who, far from dealing fairly with the provision of housing, are dealing with it most unfairly. Those in the public sector who remain tenants will find their rents forced up and up during the life-time of this Government. Those rents are already about to be forced up by £2 during the next year, and as public expenditure forecasts indicate, they will probably more than double by the end of the period of office of this Government. And that is before we allow fully for inflation.
  The Government have dealt far from fairly with owner-occupiers in the private sector. Having castigated the previous Labour Government for their level of mortgage interest rates, what have this Government done? As a result of their monetary policy they have forced the mortgage rate up to a record level. The result of that has been to create great hardship for hundreds of thousands of owner-occupiers.
  A the same time, the Government's other policies are creating a desperate housing shortage for those who are in real need—those who live with families, who are homeless or who live in the private sector. Yet, while the Government are wholly dismissive of the claims of the overwhelming majority of people in housing need—both in the owner-occupied and the public and private tenanted sectors—in the Bill they offer not only discounts of between 33 per cent. and 50 per cent. to tenants who exercise the right to buy—and we object to that—but they gratuitously offer what amounts to an additional discount which can, as I demonstrated in Committee, and will demonstrate here again, lead to tenants making substantial windfall profits, for no good reason.
  The only justification that we have been able to glean from the Government for these provisions is that they are so desperate to ensure that council estates are broken up—so desperate is the gauleiter of housing, the Secretary of State, to seek to buy off the political affiliations

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  of tenants on council estates—that they have to go in for what is no more than an abject form of bribery. And because that bribery has been effected with money provided by the ratepayers and taxpayers of this country it amounts to a fraud upon the public purse.
  As I have said, because of the large windfall gains that will be made there will be widespread abuse. There is no question but that tenants will have every incentive to understate their income in order to gain the right to an option and subsequently pay rent at a level that will, inevitably, be lower than their mortgage repayments over the following two years. They can then exercise their option and sell within two years, so making their windfall profits.
  Mr. John Heddle rose—
  Mr. Straw: The view that abuse will occur is shared not just by Opposition Members, and not just by Labour-controlled local authorities, but by the Association of Municipal Authorities when it was Conservative-controlled. Before the last general election the AMA said that
  " the proposal to grant a two-year option to purchase at a fixed price, upon payment of a returnable deposit of £100, is open to considerable abuse."
  4.45 pm
  Mr. Heddle: The hon. Member has used the expression "windfall profits" six times during the last five minutes. I invite him to agree with me that no such windfall profits will be made because when the tenant has exercised his right to buy—whether it be after six months, nine months, a year or two years—he has to live in that property for five years before he is free of paying back any of the profit, if indeed there is a profit, to the local authority.
  Mr. Straw: The hon. Member must have been asleep in Committee when we discussed this matter in great detail and when I demonstrated—I believe convincingly—that even during the period when the discount obtained the tenant who had exercised an option would make an additional profit over and above that which a tenant in an identical position would make had he not exercised the option. If the hon. Gentleman disagrees
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  with me, I invite him to look at the Official Report of Standing Committee F for the eighth sitting on Thursday 14 February. At no stage were the calculations that I produced for the Committee challenged by Ministers or by Conservative Members. I repeat that the existence of the option provisions will lead to many and great administrative complications.
  Before I deal with the way in which windfall profits arise, may I say that the option provisions are wholly unnecessary? Options are written into contracts between private buyers and sellers where there is a danger that a potential vendor will sell his property to someone else unless the potential buyer can pin down the seller to agreeing to give the buyer the first option during a period. Under the right-to-buy provision in the Bill, the tenant already has an option, which he is able to exercise so long as he remains a tenant. Therefore, there is no justification for providing this option, because it is already written into the Bill.
  Now let me deal with the details of how tenants will make their windfall profits. Let us consider two tenants in identical houses, who live next door to each other, who have identical tenancy records in terms of the length of time that they have been tenants, who have identical incomes and who both complete a purchase on the same day at a value on that day of £10,000. One of them completes in the exercise of an option that he made two years previously, and the other completes without the exercise of an option.
  If those properties are sold the next day, the tenant who has exercised the option will make a windfall profit. of hundreds of pounds, and if the property is sold two or three years later he will make an additional windfall profit of well over £1,500. I gave the Minister the calculations on this in Committee—column 379–80 of the Official Report for 14 February 1980 of Standing Committee F. On modest assumptions about the rate of inflation, I showed that if the sale took place between the second and third years after purchase the windfall profit would be £1,680.
  The Minister said at the end of that sitting that he would study with great care the figures that I had provided, and I look forward to hearing what he has to say

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  about them. He knows that the figures that I gave are incontrovertible. The amendment proposes to deal with that injustice in a way which we believe will not even offend the sensibilities of Conservative Members, who are greatly attached to the option principles.
  The amendment provides that during the five-year period in which the discount operates the amount of discount to be returned to the local authority on the sale of the property is based upon the value of the house at the point of purchase and not on the value when the option is exercised. I hope that the Government will accept the amendment. Unless their housing policy is based upon the ethics of the bingo hall and the morality of the street market, they have an obligation to accept amendments which are designed to introduce an element of equity into an otherwise wholly unjustifiable and objectionable Bill.
  Mr. Allan Roberts: The provision which the amendment aims to remove is an administrative nightmare for local authorities. Let us suppose that a local authority plans to modernise an estate of council houses—not that much of that will happen because of the cuts in the housing investment programme. A tenant might put down a £100 deposit and reserve an option to purchase his property in the next two years at the market price on the date of the deposit. What will the local authority do? Will it proceed with the modernisation of the property? If it does, will the modernisation add to the value of the house at the date of the deposit being made, at the date of the work being carried out or at the date that the option is exercised and the tenant begins to purchase?
  An administrative nightmare is being created. It will be impossible for local authorities to make rational decisions. Discretion should be allowed in such legislation. The Government are attempting to force councils virtually to give away their council houses. Their desire to sell council houses is not shared by masses of council house tenants. If it were, the number of purchases would be higher. The Government are trying to prove that they are right in claiming that council house tenants want to purchase their homes.
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  Let us consider what will happen when a tenant fails to obtain a mortgage and, under other provisions, gets together with members of his family who live in the same property and decides to purchase. The tenant and three others could each deposit £25 and exercise the right to buy two years later at the price at which the property was valued when the deposit was made. It is amazing that such advantages should be given to tenants and their families when it is almost impossible for young couples in the private sector to obtain a mortgage and when it is almost impossible for people to afford to buy a house because of the high interest rates imposed by the Government.
  Local authorities are being forced virtually to give away their houses when would-be owner-occupiers outside the council sector have to struggle as a result of Government policies. One can see clearly that the Government are not concerned about extending owner-occupation but are conducting a vendetta against public sector housing.
  The two-year option means that the Government are giving a discount, not of 50 per cent, but of 75 per cent. Local authorities will be forced in law to sell a public asset at 75 per cent. less than the market value. That is a scandal and a dissipation of public funds. As soon as ratepayers, taxpayers, tenants who do not want to buy and owner-occupiers realise what the Government are doing, they will recognise that the Government are attacking public sector housing for doctrinaire reasons and that they do not really wish to extend owner-occupation.
  Mr. Frank Allaun: I need not elaborate. I am opposed to the sale of council houses. I am even more strongly opposed to compelling local authorities which do not want to sell to do so.
  At the next general election I assume that the Labour Party will say in its manifesto that it will no longer compel local authorities to sell council houses. I am confident that that is the official policy. I can envisage queues of council tenants lining up at the town hall and plonking down £100, because councils will be forced, even under a Labour Government, to sell houses to such would-be buyers. That is contrary to the parliamentary doctrine that one Government cannot

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  bind a subsequent Government. It is tantamount to saying that a Labour Government will force a Conservative Government to sell denationalised industries back to the public. That is retrospective legislation.
  Let us examine what my hon. Friend the Member for Bootle (Mr. Roberts) said. Up to 50 per cent. discount is being given. In the last two years the price of houses has risen by about 40 per cent. One could put down the £100 and, two years later, save about 40 per cent. on the cost of the house. That is on top of the 50 per cent. discount. That is the biggest give-away in history. I cannot see the present Government compelling private landlords to give away their houses. Only communal property can be given away in such a manner.
  The scheme will attract villains, shysters and crooks. I could name some. I shall explain how the corruption will work. Somebody can go to a tenant and say "Look, you put down your name to buy your own house. Of course, we realise that the purchase price weekly is greater than the rent. Never mind. We shall pay you half the purchase price so that you will pay less than you are now paying in rent. At the end of five years you sell the house and I, as the moneylender, take 50 per cent. of the profit." That will be an attractive proposition to thousands of people.
  5 pm
  Last night my hon. Friend the Member for Workington (Mr. Campbell-Savours) said that in the Lake District houses costing £15,000 could be sold by 1983–84 for £90,000, a profit of £75,000, a sum which most working people do not see in a lifetime.
  The Government are opening the door to corruption of the worst and most obvious kind. It is bitterly resented and, if it continues, more and more loopholes will be found for that sort of thing. In fact, that will not be necessary because one is provided in the Bill. Enormous profits will be made. But who will pay for them? They will be someone else's losses. The profits made by individual buyers—or individual crooks—will be made at the expense of the community's stock of dwellings. That is one of the most objectionable and hateful parts of
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  an altogether objectionable and hateful Bill.
  The Under-Secretary of State for the Environment (Mr. Geoffrey Finsberg): I am glad that the House heard the speech of the hon. Member for Salford, East (Mr. Allaun), because its theme was the thread that ran through the speeches that were made during about 51 Committee sittings. Because of the procedure of the House an afternoon going through to midnight is counted as one sitting. Therefore, in technical terms there were 48 sittings, but it may have been 58—and it certainly seemed like 158.
  We heard rehearsed at virtually every sitting the Second Reading speeches of Opposition Members. Throughout the discussions they showed their hatred of council tenants. They lost no opportunity to say that the tenants would stoop to abuse and crookedness. They described the benefits that the tenants would receive under the Bill as windfall profits.
  Mr. Straw rose—
  Mr. Finsberg: I shall give way to the hon. Gentleman in a moment. I hope that he will wait until I deal with his remarks, because I propose to encapsulate some of them into my speech. I do not propose to follow the example of a rerun, because the House and the country have decided the principle. The Committee examined the Bill in detail and returned it to the House on Report.
  The hon. Member for Blackburn (Mr. Straw) trotted out his outworn and tasteless description of my right hon. Friend the Secretary of State as a gauleiter.
  Mr. Straw: I must correct the Minister. It was not my outworn and tasteless description, but that of the hon. Member for Buckingham (Mr. Benyon). He used that expression during his speech on Second Reading about five months ago. I am sure that he will be glad to know—as will the members of the Conservative association in Buckingham—that he has been described by the Minister as distasteful. I think that the Minister also used another adjective. That description, apt though it was, was the authorship of a Conservative Member.
  Mr. Finsberg: The hon. Gentleman is admitting to cheap plagiarism. He was happy to do so on more than one

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  occasion in Committee, which was quite at odds with his normally genial nature. I am glad that he has shown us that Blackburn can occasionally provide a Jekyll and Hyde situation. It did so from time to time with his predecessor, now Lady Castle, who could show a smiling face when she was trying to persuade the Government to give her something, but when she did not get what she wanted became rather less pleasant and reverted to type. At least we know that the hon. Gentleman has picked up her mantle.
  The hon. Gentleman said that a council tenant would have every reason to understate his income. He showed yet again the opinion that he holds of his fellow citizens, many of whom he relied upon for his votes when he was elected. I wonder whether he visited his council estates and said "Many of you will indulge in deception to get your biggest possible discount." I am prepared to suggest that he did not do that.
  The hon. Gentleman charged my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) with being asleep when my hon. Friend challenged him about his false assertion, oft-repeated, of windfall profits. I confess that I am content to accept the estimate that the hon. Gentleman made of his own arguments when he said that they at least convinced him. I can only tell him that they did not convince anybody else.
  Mr. Allan Roberts rose—
  Mr. Finsberg: I am dealing with the hon. Member for Blackburn. I shall turn in a moment to the hon. Member for Bootle (Mr. Roberts), who accused us of a vendetta against public sector housing. I suggest that he is pursuing a vendetta against public sector tenants who, quite frankly, can look only to a Conservative Government for genuine assistance.
  Mr. Straw: In Committee we examined in detail the calculations that I made, and the Minister for Housing and Construction said that he would study them with great care. That is on the record. Will the Minister say whether my calculations were wrong, and, if so, in what particular?
  Mr. Finsberg: My hon. Friend may have said that he would study the hon.
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  Gentleman's calculations with great care, but that did not imply that he would do any more than look at them and say whether he agreed that the pocket calculator produced the answer. I have had some calculations made which indicate that a £10,000 house bought outright after five years would produce a value of £10,100 after the Bill discount clawback. An option purchaser two years later—because of the option process—would receive £8,500, and would have to wait two further years before his house was worth £10,900. The house of the person who had bought outright would, by then, have reached a value of £11,700. The calculations are on assumptions of a 40 per cent. discount and a 10 per cent. national house price increase.
  I do not propose to examine the hon. Gentleman's figures, because I have not calculated them. I say that quite frankly. If my hon. Friend said that he would look at them, I am content to believe that he has done so. The fact that he has not decided to say anything means, presumably, that he takes the same view as I do, namely, that those calculations may satisfy the hon. Gentleman, but they do not need to bother the House.
  Mr. Allan Roberts: Will the Minister say whether the assertion that I made is reasonable? I said that if someone takes out an option and decides to exercise it after a two-year period, he will then be buying the house with a 75 per cent. discount, not a 50 per cent. discount.
  Mr. Finsberg: I do not accept that form of arithmetic.
  Mr. Frank Allaun: Why not?
  Mr. Finsberg: If I did, I should be sitting on the Opposition Benches. I prefer a commonsense argument. That is why I am fortunate enough to be on this side of the Chamber.
  Mr. Straw: The Under-Secretary of State is treating Members and the assurances given by his hon. Friend in a contemptible way. After I had offered my calculations in Committee, and after the Minister had had every chance to take, advice from officials in the Committee, he said:
  " I will certainly study the hon. Gentleman's calculations which relate to the narrow question of the discount clawback. I give him

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  an assurance that I will study the figures that he has given."—[Official Report, Standing Committee F, 14 February 1980; c. 392.]
  What is the result of the Minister's study of those figures? I want not the phoney calculations that the Under-Secretary has made, but the result of the study of the figures that I gave. May we be told the conclusion of that study?
  Mr. Finsberg: Quite clearly, the calculations that were studied by my hon. Friend did not warrant any further action We do not propose to change the Bill because of those figures.
  I wish to deal with the hon. Member for Salford, East, who was glad to reaffirm the policy of the Labour Party, namely, that it would withdraw the right to buy. On this occasion, we are not at cross-purposes. Until the Bill is passed, local authorities have the opportunity to sell; tenants do not have the right to buy. I hope that at least this time the hon. Gentleman will not feel that I am misrepresenting him. What he believes the Labour Party will do—the hon. Gentleman speaks with great authority, as he has told us on many occasions, and we have all acknowledged it—is withdraw the right to buy. I understand that that will be in the Labour Party's manifesto. We are at one on that. I am glad that that is on the record.
  I suggest that the hon. Gentleman has drawn a somewhat false analogy over the option situation. Parliament would not be binding its successor. A legal document would have to be honoured. I do not believe that even the Labour Party would wish to dishonour a legal document—which the individual option document would be—between the tenant and his landlord. That is the difference.
  Mr. Frank Allaun rose—
  Mr. Finsberg: In 10 or 15 years, which is the soonest that we are likely to be in opposition, we might be unhappy if the Labour Government—[Interruption.] I said "soonest". I hope that my hon. Friends will give me credit for that. We would be unhappy if the then Labour Government, in 20 or 25 years, said that they were going to repeal the legislation. They would be constitutionally entitled to do that, but we would resist them if they said that they would cancel retrospectively option agreements freely entered
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  into between tenants and local authority landlords. That is the point.
  Mr. Allaun: Does the Minister deny that for two years after the election of a Labour Government, that Government would be bound under this legislation to compel local authorities to sell, even though the contract had not been completed? That is the question.
  Mr. Finsberg: I think that the hon. Gentleman has again slightly misunderstood me. Until legislation repealing this measure was passed local authorities would have to continue issuing option notices to tenants who wished to purchase. Once the legislation was passed, that would cease. I hope that the hon. Gentleman was not saying that option documents already issued would be cancelled. That is the difference between us.
  Mr. Allaun: Does not the Minister think that he is being unfair in permitting this kind of thing to continue into the life of a Government opposed to it? Surely he is binding that Government to do something that they would not want to do.
  Mr. Finsberg: Many Governments have come into power and, until they passed the appropriate legislation, have been saddled with legislation passed by their predecessors. However, I hope that the hon. Gentleman is not saying that he would encourage his Government—I say "his Government", although by then I am not sure whether they would be—to welsh on option agreements legally and freely entered into.
  Mr. Garel-Jones: I am grateful to my hon. Friend for making this important point. May I ask him to clarify, or extract a clarification from the Opposition spokesman on, this matter? If a constituent of mine placed a deposit with the local authority, which entitled him to purchase his council house, and entered into a contractual agreement with the authority giving him the option to buy that house, would it be the intention of the Labour Party to allow the Watford borough council to honour that contract or to renege on it? I think that this is a very important matter.
  Mr. Finsberg: I shall happily give way to the right hon. Member for Manchester, Ardwick (Mr. Kaufman) if he

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  would care to clarify that point now, or, if he is proposing to intervene in the debate, perhaps he could make it clear later. It is occasionally useful to know whether his view coincides with that of the hon. Member for Salford, East on housing matters. One has responsibility in this House. The other has responsibility on the national executive of the Labour Party. We know who runs the Labour Party. It is not the Opposition spokesman in the House. However, it would be useful to know whether their views coincide.
  Mr. Allaun: I suggest that it is deliberately unfair of the Government to grant options in the second half—I would say altogether—of their period of four or five years in office, because they know that they are putting a subsequent Government and local authorities in an invidious position. The question is not as posed by the Minister, but whether the Government should do that kind of thing.
  5.15 pm
  Mr. Finsberg: Any Government should continue to uphold the law passed by Parliament. No Government are entitled to anticipate an event that probably will not happen. Therefore, the Government would be wrong to discourage local authorities, even during the last three months of office prior to an election.
  I should like to make the position perfectly clear. I hope that I understood the hon. Gentleman correctly—if not, he may interrupt me—as having said that he thinks it is unfair that these options should continue to be granted within 18 months or so of a general election. If a Labour Government were elected, would he support legislation to cancel options freely entered into? He prophesied what would be in the Labour Party's election manifesto. Unless the big battalions of the TUC change their mind, or change the mind of the Labour Party conference, the hon. Gentleman could have a major say in the manifesto, overriding any moderate views of the right hon. Member for Birmingham, Spark-brook (Mr. Hattersley). Therefore, we are entitled to ask: does the Labour Party intend to support legislation to dishonour options freely entered into?
  Mr. Allaun: The Labour Party has not considered that question. It has
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  unanimously decided to oppose the view being expressed by the Minister on option mortgages.
  Mr. Finsberg: That is stage one. So the House and the country are entitled to know—one deduces this from what has been said—that the Labour Party will try to renege by legislative methods on options freely entered into. There can only be a "Yes" or a "No" to that. We have not had any clear commitment. Therefore, we are entitled to assume that the unfairness seen by the hon. Gentleman would be translated into legislation. We are also entitled to assume the same answer from the right hon. Member for Ardwick, unless he takes an opportunity during his speech to set the record right.
  The hon. Member for Salford, East spoke about the bitter resentment of many people over the policy of this Government to compel local authorities to sell council houses. I have read the bitter resentment of that Birmingham voter—a life-long Socialist—who, when he went to buy his home, having made inquiries prior to the election was told "No, mate, it is not on any more". I have sympathy for him. It is sad that he did not listen to what we were saying and to the threats being made by the Labour Party. All I can say to him is "Hang on, old chap, we will rescue you, and perhaps you will decide that the party of the people is not the phoneys of the Left, but the Conservatives ".
  Mr. Allaun: I do not know anything about the Birmingham voter, but I know about Conservative Members of Parliament who have had the courage to say that they are opposed to compelling authorities to sell council houses. I know of Conservative-controlled local authority associations which were and still are diametrically opposed to this proposal.
  Mr. Finsberg: That may be. The Government were elected on a manifesto which made it clear that the sale of council houses and flats would be effected in such a way that local authorities could not contract out of the law of the land. We are carrying that through into legislation for the benefit of as many council tenants as wish to exercise that right.
  We also said that those who are not in a position to exercise that right forthwith would be entitled to an option. This would perhaps be an appropriate moment,

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  Mr. Deputy Speaker, to come back to the options provision. You have been generous in allowing us to range wider than the amendments might have indicated It has been useful to nail the Labour Party yet again on its anti-local authority tenant views.
  As I have tried to indicate the provision in clause 15, whereby a tenant who cannot afford to buy straight away may have a two-year option to purchase the dwelling house at the original valuation, is one to which the Government are fully committed. The provision that we have made is tightly drawn. The option procedure will be available only in limited circumstances where a tenant's mortgage entitlement would not enable him to buy immediately. In any event, I think that most people who buy will want to do so at once, so that they can start paying off their mortgage, and so that the five years for discount sharing begins to run as soon as possible. As to the life of the option, it must surely be long enough to fulfil its purpose. The tenant should know in advance the price at which he can buy while he saves the money to do so.
  It is right to remind the House of what my right hon. Friend the Secretary of State said when he referred to this provision in his adoption speech. He said:
  " We shall further offer these tenants the right at a nominal price to an option to buy if they remain tenants, so that they will know that they have a legally binding right for, say, two to three years to buy at a price fixed at the date of the option."
  At that time we were considering whether it should be two or three years. After careful consideration, as the House knows, we concluded that the two-year period was right. I said earlier that the option procedure was an integral part of the right to buy. We believe that a period shorter than two years would be too short to make the option of any benefit, given that some time will have to elapse from a tenant's initial application to the date at which it becomes clear that he may have the option to complete at the fixed price within two years. I am firmly of the opinion that it would be wrong to cut down the period to one year or six months. I hope that the House will join me in that view.
  The amendments are designed to disadvantage
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  the purchaser who buys, having taken advantage of the option to complete at any time within two years that is conferred by clause 15 on a limited number of those who exercise the right to buy. It would do so by compelling them, if they resold their home within five years—we should remember that it is their home—to repay all or part of the discount that would be based not on the price they paid, but on the discount to which they would have been entitled had the house been valued at the date of completion of the sale.
  In support of the Government's opposition to these arguments I cite two more points which I hope will convince the House that the amendments are misconceived, mischievous and positively harmful to council tenants. The first is that purchasers who act with the benefit of the options conferred by clause 15 will be less well off than other purchasers. That is why we believe that they deserve the special help provided by the option provisions to which the Government are clearly committed by their election manifesto. In our view, the question of their being less well off also provides a good reason for not discriminating against them when they have actually bought.
  The second reason is perhaps one of detail rather than principle, but it is important to repeat it. In putting down their amendments the Opposition have demonstrated their bitterness and their wholehearted opposition to the idea of options. They have ignored the disadvantage already experienced by option purchasers—a point made by my hon. Friend the Member for Lichfield and Tamworth. Those purchasers will, in any case, be caught up by the discount sharing provision for a period of five years, beginning up to two years after the service of their initial notice claiming to exercise the right to buy. To that extent they will be penalised in comparison with those who can afford to buy at once. In my view that is entirely fair and reasonable, but to go further would impose a disadvantage on such purchasers, which I do not believe, in equity, could be justified.
  I hope that this moderate speech, drawing on the compassion of the Labour Party for local authority tenants, as one would believe if one were to listen to some of the comments that are made, will

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  persuade the House that it would be in the best interests of the council tenants if the amendment were withdrawn or not pressed to a vote. If, however, the Opposition wish to demonstrate yet again the contempt in which they hold local authority tenants, I suggest that my right hon. and hon. Friend should vote the amendment down.
  Mr. Kaufman: In the Standing Committee, we always appreciated the humour, conscious or unconscious, with which the Under-Secretary of State entertained us. The hon. Gentleman excelled himself today when he talked about the Labour Party's vendetta against, or hatred of, council tenants, and when he claimed that council tenants were looking to the Conservative Government. On 1 May, in a ward in my constituency composed totally of council property, the vote in favour of the Labour Party was six to one. The swing to Labour from last year—there was no swing against Labour in the general election—was 7½ per cent.
  In the constituency of the hon. Member for Manchester, Withington (Mr. Silvester), who was driven out of the Chamber by the tedious repetition of the Minister, a safe Conservative ward containing a large council estate was easily won by Labour because of the votes of the council tenants. If the hon. Member for Withington were to offer himself today for re-election in that constituency, there would be another Labour Member on this side of the House very soon. Similarly, the hon. Member for Watford (Mr. Garel-Jones), who talked of one of his constituents, would be lucky to retain his seat if he were to apply for re-election now. If the hon. Gentleman wants to test my argument, he can apply for the Chiltern Hundreds and we will all come and take part in the by-election.
  The option provision that we are debating is a singular episode in the life of the Government. It is the only price control that the Government have imposed. Inflation under the Government has more than doubled, to almost 22 per cent. The Price Commission has been abolished. Value added tax has been doubled. Prescription charges have been quintupled. Rents are being forced up this year by 28 per cent. for the council tenant and by at least as much for the private tenant. The price of purchasing
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  a house is rising steadily. Of all the prices being forced up under this Government, including gas prices and other fuel prices, the only price—
  Mr. Heddle: Will the right hon. Gentleman give way?
  Mr. Kaufman: No, I shall not give way to the hon. Gentleman. He may, in Committee, have been sleeping, but sometimes we would have been pleased if he had been afflicted with catalepsy. The only price controlled under the Government is the price at which one—
  Mr. Heddle: On a point of order, Mr. Deputy Speaker. The right hon. Mem ber for Manchester, Ardwick (Mr. Kauf man), I believe, misinformed the House, without doubt, unintentionally. He stated that the prices of houses were continuing to rise. I submit that house prices rose 30 per cent. a year under his Government—
  Mr. Deputy Speaker: Order. That is not a point of order. It is a point of argument.
  5.30 pm
  Mr. Kaufman: It is also an inaccurate point of argument, Mr. Deputy Speaker. The hon. Gentleman said that I might have been misleading the House inadvertently. If I mislead the House, it will be deliberately and not inadvertently. [HON. MEMBERS: "Oh."] But, of course, I would do no such thing, because I am dealing with the Government's record on prices, on which the truth is indictment enough.
  This £100 option is seen as particularly unfair when one considers the private house purchaser. What a boon it would be for someone wanting to buy a privately owned house if he were able to pick up the most excellent house that he could find, built to very high standards, because council houses are built to Parker Morris standards whereas the National House-building Council's standards are well below Parker Morris standards, go to the vendor, put down £100—the cost of 100 prescriptions—and keep the option to buy that house for two years, and if he then changed his mind he could get back his £100 as well !
  One has only to state that proposition to see what an extraordinary privilege it would be for the private house purchaser if the Government were to give him that

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  opportunity, and how the Government really would be fulfilling their pledge to help the home owner if they were to do that. But the private house purchasers, who are frequently badly housed and wishing to buy houses because they are badly housed, will themselves, through the taxes and the rates that they pay, be contributing towards paying for this remarkable privilege for people who, by definition, are well housed and who must be well housed because they like the house in which they are living well enough to want to continue living in it and to buy it.
  Mr. Garel-Jones: Will the right hon. Gentleman give way?
  Mr. Kaufman: No. We are under a guillotine, and I think that the House will want to move on to other amendments.
  The Opposition regard this option provision as an unacceptable rip-off of public assets which are being paid for, not by the Government, but by every taxpayer, every ratepayer and every mortgagor in the country.
  Mr. Arthur Lewis: Every man and woman.
  Mr. Kaufman: Yes. Every man and woman in the country will be paying for
  this privilege for a small number of people. That is quite unacceptable.
  Mr. Lewis: Even the sick and the disabled, through paying a high rate of value added tax and general taxation, are paying for it.
  Mr. Kaufman: That is an extremely valid point, because the Social Security (No. 2) Bill helps to impose taxation upon those who are sick and the unemployed. They, together with the home owner buying the house on the market, will be paying for this privilege for a very small number of people. That being so, the Opposition will vote against the Government on this issue, and we invite other parties to do so, too.
  Mr. Geoffrey Finsberg Mr. Geoffrey Finsberg rose—
  Mr. Deputy Speaker: Is this an intervention?
  Mr. Finsberg: I was hoping that the right hon. Gentleman would be giving way.
  Mr. Kaufman: I have finished.
  Question put, That the amendment be made:—
  The House divided: Ayes 237, Noes 294.

  Division No. 314]

  AYES

  [5.34 pm

  Abse, Leo

  Cohen, Stanley

  Field, Frank

  Adams, Allen

  Coleman, Donald

  Fitch, Alan

  Allaun, Frank

  Concannon, Rt Hon J. D.

  Fitt, Gerard

  Alton, David

  Conland, Bernard

  Flannery, Martin

  Anderson, Donald

  Cook, Robin F.

  Fletcher, L. R. (Ilkeston)

  Archer, Rl Hon Peter

  Cowans, Harry

  Fletcher, Ted (Darlington)

  Ashley, Rt Hon Jack

  Craigen, J. M. (Glasgow, Maryhill)

  Foot, Rt Hon Michael

  Ashton, Joe

  Crowther, J. S.

  Ford, Ben

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

  Cunliffe, Lawrence

  Forrester, John

  Bagler, Gordon A. T.

  Cunningham, George (Islington S)

  Fraser, John (Lambeth, Norwood)

  Barnett, Guy (Greenwich)

  Cunningham, Dr John (Whitehaven)

  Freeson, Rt Hon Reginald

  Barnett. Rt Hon Joel (Heywood)

  Dalyell, Tam

  Garrett, John (Norwich S)

  Beith, A. J.

  Davidson, Arthur

  Garrett, W. E. (Wallsend)

  Benn, Rt Hon Anthony Wedgwood

  Davies, Rt Hon Denzil (Llanelli)

  George, Bruce

  Bennett, Andrew (Stockport N)

  Davies, Ifor (Gower)

  Gilbert, Rt Hon Dr John

  Bidwell, Sydney

  Davis, Clinton (Hackney Central)

  Ginsburg, David

  Booth, Rt Hon Albert

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

  Graham, Ted

  Bottomley, Rt Hon Arthur (M'brough)

  Deakins, Eric

  Grant, George (Morpeth)

  Bradley, Tom

  Dempsey, James

  Grant, John (Islington C)

  Bray, Dr Jeremy

  Dewar, Donald

  Grimond, Rt Hon J.

  Brown, Hugh D. (Provan)

  Dobson, Frank

  Hamilton, W. W. (Central Fife)

  Brown, Robert C. (Newcastle W)

  Dormand, Jack

  Hardy, Peter

  Brown, Ronald W. (Hackney S)

  Douglas, Dick

  Harrison, Rt Hon Walter

  Brown, Ron (Edinburgh, Leith)

  Douglas-Mann, Bruce

  Hart, Rt Hon Dame Judith

  Callagnan, Jim (Middleton & P)

  Dubs, Alfred

  Hattersley, Rt Hon Roy

  Campbell, Ian

  Duffy, A. E. P.

  Haynes, Frank

  Campbell-Savours, Dale

  Dunn, James A. (Liverpool, Kirkdale)

  Healey, Rt Hon Denis

  Canavan, Dennis

  Dunwoody, Mrs Gwyneth

  Heffer, Eric S.

  Cant, R. B.

  Ellis, Raymond (NE Derbyshire)

  Hogg, Norman (E Dunbartonshire)

  Carter-Jones, Lewis

  English, Michael

  Holland, Stuart (L'beth, Vauxhall)

  Cartwright, John

  Ennals, Rt Hon David

  Home Robertson, John

  Clark, Dr David (South Shields)

  Evans, loan (Aberdare)

  Homewood, William

  Cocks, Rt Hon Michael (Bristol S)

  Ewing, Harry

  Hooley, Frank

  Horam, John

  Mason, Rt Hon Roy

  Silverman, Julius

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

  Maynard, Miss Joan

  Skinner, Dennis

  Howells, Geraint

  Meacher, Michael

  Smith, Cyril (Rochdale)

  Huckfield, Les

  Mellish, Rt Hon Robert

  Smith, Rt Hon J. (North Lanarkshire)

  Hughes, Mark (Durham)

  Mikardo, Ian

  Snape, Peter

  Hughes, Robert (Aberdeen North)

  Millan, Rt Hon Bruce

  Soley, Clive

  Hughes, Roy (Newport)

  Mitchell, Austin (Grimsby)

  Spearing, Nigel

  Janner, Hon Grevllle

  Molyneaux, James

  Spriggs, Leslie

  Jay, Rt Hon Douglas

  Morris, Rt Hon Alfred (Wylhenshawe)

  Stallard, A. W.

  John, Brynmor

  Morris, Rt Hon Charles (Openshaw)

  Steel, Rt Hon David

  Johnson, Walter (Derby South)

  Morris, Rt Hon John (Aberavon)

  Stoddart, David

  Johnston, Russell (Inverness)

  Morton, George

  Strang, Gavin

  Jones, Rt Hon Alec (Rhondda)

  Moyle, Rt Hon Roland

  Straw, Jack

  Jones, Barry (East Flint)

  Newens, Stanley

  Summersklll, Hon Dr Shirley

  Jones, Dan (Burnley)

  Oakes, Rt Hon Gordon

  Taylor, Mrs Ann (Bolton West)

  Kaufman, Rt Hon Gerald

  O'Halloran, Michael

  Thomas, Dafydd (Merioneth)

  Kerr, Russell

  O'Neill, Martin

  Thomas, Rt Hon George (Cardiff W)

  Kilfedder, James A.

  Orme, Rt Hon Stanley

  Thomas, Dr Roger (Carmarthen)

  Kinnock, Neil

  Owen, Rt Hon Dr David

  Tilley, John

  Lambie, David

  Palmer, Arthur

  Tinn, James

  Lamborn, Harry

  Park, George

  Torney, Tom

  Lamond, James

  Parry, Robert

  Urwin, Rt Hon Tom

  Leighton, Ronald

  Penhaligon, David

  Varley, Rt Hon Eric G.

  Lestor, Miss Joan (Eton S Slough)

  Powell, Rt Hon J. Enoch (S Down)

  Wainwright, Edwin (Dearne Valley)

  Lewis, Arthur (Newham North West)

  Powell, Raymond (Ogmore)

  Wainwright, Richard (Colne Valley)

  Lewis, Ron (Carlisle)

  Prescott, John

  Watkins, David

  Litherfand, Robert

  Price, Christopher (Lewisham West)

  Weetch, Ken

  Lofthouse, Geoflrey

  Race, Reg

  Wellbeloved, James

  Lyon, Alexander (York)

  Radice, Giles

  Welsh, Michael

  Lyons, Edward (Bradford West)

  Richardson, Jo

  White, Frank R. (Bury & Radcliffe)

  Mabon, Rt Hon Dr J. Dickson

  Roberts, Albert (Normanton)

  Whitehead, Phillip

  McCartney, Hugh

  Roberts, Allan (Bootle)

  Whitlock, William

  McCusker, H.

  Roberts, Ernest (Hackney North)

  Wigley, Dafydd

  McDonald, Dr Oonagh

  Rodgers, Rt Hon William

  Willey, Rt Hon Frederick

  McElhone, Frank

  Rooker, J. W.

  Williams, Rt Hon Alan (Swansea W)

  McGuire, Michael (Ince)

  Ross, Ernest (Dundee West)

  Wiliams, Sir Thomas (Warrington)

  McKay, Allen (Penistone)

  Ross, Stephen (Isle of Wight)

  Wilson, Rt Hon Sir Harold (Huyton)

  McKelvey, William

  Ross, Wm. (Londonderry)

  Wilson, William (Coventry SE)

  Mackenzie, Rt Hon Gregor

  Rowlands, Ted

  Winnick, David

  Maclennan, Robert

  Sandelson, Neville

  Woodall, Alec

  McNally, Thomas

  Sever, John

  Woolmer, Kenneth

  McNamara, Kevin

  Sheerman, Barry

  Wrigglesworth, Ian

  McWiliiam, John

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

  Young, David (Bolton East)

  Magee, Bryan

  Shore, Rt Hon Peter Step and Pop)

  Marks, Kenneth

  Short, Mrs Renée

  TELLERS FOR THE AYES:

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

  Silkin, Rt Hon John (Deptford)

  Mr. Joseph Dean and

  Marshall, Dr Edmund (Goole)

  Silkin, Rt Hon S. C. (Dulwich)

  Mr. James Hamilton

  Marshall, Jim (Leicester South)

  NOES

  Adley, Robert

  Bruce-Gardyne. John

  Eden, Rt Hon Sir John

  Altken, Jonathan

  Bryan, Sir Paul

  Edwards, Rt Hon N. (Pembroke)

  Alexander, Richard

  Buchanan-Smith, Hon Alick

  Eggar, Timothy

  Amery, Rt Hon Julian

  Buck, Antony

  Emery, Peter

  Ancram, Michael

  Budgen, Nick

  Falrbairn, Nicholas

  Arnold, Tom

  Bulmer, Esmond

  Fairgrleve, Russell

  Aspinwall, Jack

  Burden, F. A.

  Faith, Mrs Sheila

  Atkinson, David (B' mouth. East)

  Butcher, John

  Farr, John

  Baker, Nicholas (North Dorset)

  Butler, Hon Adam

  Fell, Anthony

  Banks, Robert

  Cadbury, Jocelyn

  Fenner, Mrs Peggy

  Beaumont-Dark, Anthony

  Carlisle, John (Luton West)

  Finsberg, Geoffrey

  Bell, Sir Ronald

  Carlisle, Kenneth (Lincoln)

  Fisher, Sir Nigel

  Bendall, Vivian

  Carlisle, Rt Hon Mark (Runcorn)

  Fletcher, Alexander (Edinburgh N)

  Benyon, Thomas (Abingdon)

  Chalker, Mrs. Lynda

  Fletcher-Cook, Charles

  Benyon, W. (Buckingham)

  Channon, Paul

  Forman, Nigel

  Best, Keith

  Chapman, Sydney

  Fraser, Rt Hon H. (Stafford & St)

  Bevan, David Gllroy

  Churchill. W. S.

  Fraser, Peter (South Angus)

  Bitten, Rt Hon John

  Clark, Sir William (Croydon South)

  Fry, Peter

  Biggs-Davison, John

  Clarke, Kenneth (Rushcllffe)

  Galbraith, Hon T. G. D.

  Blackburn, John

  Cockeram, Eric

  Gardiner, George (Reigate)

  Blaker, Peter

  Colvin, Michael

  Gardner, Edward (South Fylde)

  Body, Richard

  Cope, John

  Garel-Jones, Tristan

  Bonsor, Sir Nicholas

  Corrie, John

  Gilmour, Rt Hon Sir Ian

  Boscawen, Hon Robert

  Costain, A. P.

  Glyn, Dr. Alan

  Bottomley, Peter (Woolwich West)

  Critchley. Julian

  Goodhew, Victor

  Boyson, Dr Rhodes

  Crouch, David

  Gorst, John

  Bralne, Sir Bernard

  Dickens, Geoffrey

  Gow, Ian

  Bright, Graham

  Dorrell, Stephen

  Gower, Sir Raymond

  Brinton, Tim

  Douglas-Hamilton, Lord James

  Grant, Anthony (Harrow C)

  Brocklebank-Fowler, Christopher

  Dover, Denshore

  Gray, Hamish

  Brooke, Hon peter

  du Cann, Rt Hon Edward

  Greenway, Harry

  Brotherton, Michael

  Dunn, Robert (Dartford)

  Grieve, Percy

  Drown, Michael (Brigg & Sc'thorpe)

  Durant, Tony

  Griffiths, Eldon (Bury St Edmunds)

  Browne. John (Winchester)

  Dykes, Hugh

  Griffiths, Peter (Portsmouth N)

  298

  299

  Grist, Ian

  Major, John

  Sainsbury, Hon Timothy

  Grylls, Michael

  Marland, Paul

  Scott, Nicholas

  Glimmer, John Selwyn

  Marlow, Tony

  Shaw, Giles (Pudsey)

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

  Marshall, Michael (Arundel)

  Shaw, Michael (Scarborough)

  Hamilton, Michael (Salisbury)

  Marten, Neil (Banbury)

  Shelton, William (Streatham)

  Hampson, Dr Keith

  Mates, Michael

  Shepherd, Colin (Hereford)

  Harvnam, John

  Mather, Carol

  Shepherd, Richard (Aldridge-Br'hllls)

  Haselhurst, Alan

  Maude, Rt Hon Angus

  Shersby, Michael

  Hastings, Stephen

  Mawby, Ray

  Silvester, Fred

  Havers, Rt Hon Sir Michael

  Mawhinney, Dr Brian

  Sims, Roger

  Hawkins, Paul

  Maxwell-Hyslop, Robin

  Skeet, T. H. H.

  Hawksley, Warren

  Mayhew, Patrick

  Smith, Dudley (War. and Leam'ton)

  Hayhoe, Barney

  Mellor, David

  Speller, Tony

  Meddle, John

  Meyer, Sir Anthony

  Spence, John

  Henderson. Barry

  Miller, Hal (Bromsgrove & Redditch)

  Spicer, Michael (S Worcestershire)

  Heseltine, Rt Hon Michael

  Mills, lain (Menden)

  Sproat, Iain

  Hicks, Robert

  Miscampbell, Norman

  Squire, Robin

  Higgins, Rt Hon Terence L.

  Mitchell, David (Basingstoke)

  Stainton, Keith

  Hill, James

  Moate, Roger

  Stanbrook, Ivor

  Hogg, Hon Douglas (Grantham)

  Montgomery, Fergus

  Stanley, John

  Holland, Fhilip (Carlton)

  Moore, John

  Steen, Anthony

  Hooson, Tom

  Morris, Michael (Northampton, Sth)

  Stevens, Martin

  Hordern, Peter

  Morrison, Hon Charles (Devizes)

  Stewart, Ian (Hitchin)

  Howe, Rt Hon Sir Geoffrey

  Morrison, Hon Peter (City of Chester)

  Stewart, John (East Renfrewshire)

  Howell, Rt Hon David (Guildford)

  Murphy, Christopher

  Stokes, John

  Howell, Flalph (North Norfolk)

  Myles, David

  Tapsell, Peter

  Hunt, David (Wirral)

  Needham, Richard

  Taylor, Teddy (Southend East)

  Hunt, John (Ravensbourne)

  Nelson, Anthony

  Tebbit, Norman

  Hurd, Hon Douglas

  Neubert, Michael

  Temple-Morris, Peter

  Irving, Charles (Cheltenham)

  Nott, Rt Hon John

  Thomas, Rt Hon Peter (Hendon S)

  Jenkin, Rt Hon Patrick

  Onslow, Cranley

  Thompson, Donald

  Jessel, Toby

  Oppenheim, Rt Hon Mrs Sally

  Thorne, Neil (Ilford South)

  Johnson Smith, Geoffrey

  Osborn, John

  Thornton, Malcolm

  Jopling, Rt Hon Michael

  Page, John (Harrow, West)

  Townend, John (Bridlington)

  Joseph, Rt Hon Sir Keith

  Page, Rt Hon Sir R. Graham

  Townsend, Cyril D. (Bexleyheath)

  Kaberry, Sir Donald

  Page, Richard (SW Hertfordshire)

  Trippier, David

  Kimball, Marcus

  Parkinson, Cecil

  Trotter, Neville

  King, Rt Hon Tom

  Parris, Matthew

  van Straubenzee, W. R.

  Kitson, Sir Timothy

  Patten, Christopher (Bath)

  Vaughan, Dr Gerard

  Knight, Mrs. Jill

  Patten, John (Oxford)

  Viggers, Peter

  Knox, David

  Pattie, Geoffrey

  Waddington, David

  Lament. Norman

  Pawsey, James

  Wakeham, John

  Lang, Ian

  Percival, Sir Ian

  Waldegrave, Hon William

  Langford-Holt, Sir John

  Pink, R. Bonner

  Walker, Bill (Perth & E Perthshire)

  Latham, Michael

  Pollock, Alexander

  Walker-Smith, Rt Hon Sir Derek

  Lawrence, Ivan

  Porter, George

  Wall, Patrick

  Lawson, Nigel

  Prentice, Rt Hon Reg

  Waller, Gary

  Lee, John

  Price, David (Eastleigh)

  Walters, Dennis

  Le Marchant, Spencer

  Prior, Rt Hon James

  Ward, John

  Lennox-Doyd, Hon Mark

  Procter, K. Harvey

  Warren, Kenneth

  Lester, Jim (Beeston)

  Raison, Timothy

  Watson, John

  Lewis, Kenneth (Rutland)

  Rathbone, Tim

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

  Lloyd, Ian (Havant & Waterloo)

  Rees, Peter (Dover and Deal)

  Wheeler, John

  Lloyd, Peter (Fareham)

  Rees-Davies, W. R.

  Whitney, Raymond

  Loveridge, John

  Renton, Tim

  Wickenden, Keith

  Luce, Richard

  Rhodes James, Robert

  Wilkinson, John

  Lyell, Nicholas

  Rhys Williams, Sir Brandon

  Williams, Delwyn (Montgomery)

  McCrindle, Robert

  Ridsdale, Julian

  Winterton, Nicholas

  Macfarlane, Nell

  Rifkind, Malcolm

  Wolfson, Mark

  MacGregor, John

  Rippon, Rt Hon Geoffrey

  Young, Sir George (Acton)

  MacKay, John (Argyll)

  Roberts, Michael (Cardiff NW)

  Younger, Rt Hon George

  Macmillan, Rt Hon M. (Farnham)

  Roberts, Wyn (Conway)

  McNair-Wilson, Michael (Newbury)

  Rossi, Hugh

  TELLERS FOR THE NOES:

  McNair-Wilson, Patrick (New Forest)

  Rost, Peter

  Mr. John Stradling-Thomas and

  McQuarrie, Albert

  Royle, Sir Anthony

  Mr. Anthony Berry.

  Madel, David

  Question accordingly negatived.
  Mr. David Alton: I beg to move amendment No. 159, in page 7, line 18, at end add
  ' or
  (c) the grant of a lease or sub-lease for a term of twenty-one years or less with an option to renew or to purchase the freehold or lease as the case may be; '.
  The intention of the amendment is to tighten the clause to avoid purchasers getting round restrictions on resale. I am sure that most hon. Members accept
  300
  that the Government's intention is not to allow the Bill to become a licence for speculation and profiteering. However, it will be possible for it to be used in such a way by the unscrupulous.
  Many people, especially we in the Liberal Party, have no objection to incentives being offered through discount systems. The local authority in my constituency, having considered what is right for the area, has decided to implement the discount opportunities at the earliest possible moment.

  301
  It is that which the Government are trying to do by means of subsection (3) (a) and (b) that leads me to move the amendment. Subsection (3)(a) refers to
  " a further conveyance of the freehold or an assignment "
  as one category of disposal within the subsection. Subsection 3(b) refers to
  " the grant of a lease or sub-lease for a term of more than twenty-one years otherwise than at a rack rent"
  The danger is that the Bill might enable a purchaser to lease or sub-lease a council house which he had bought for up to 21 years without losing his entitlement to a discount. Someone might buy a house for £18,000. He could then claim a discount of £9,000 and lease or sub-lease his home. He could use the money that he had made as a result of the discount to invest, speculate or buy another property. He could maintain the option of selling the property to the lessee 21 years later, or at a time of his choice.
  If the Bill does not contain a clause that will stop speculation and profiteering, some people may use the loopholes to make a quick killing. I understand that the Minister may not be able to give an undertaking that he will accept the amendment. However, I hope that he will agree to consider the implications of the clause. When the Bill is considered in the other place, I hope that he will agree to incorporate the amendment in the Bill. In that spirit, I commend the amendment for the Minister's consideration.
  Mr. Geoffrey Finsberg: As the hon. Member for Liverpool, Edge Hill (Mr. Alton) made clear, the amendment is intended to stop up what at first sight appears to be a loophole in the discount snaring arrangement.
  As clause 8 stands, if a purchaser, under the right to buy, granted a lease and option on his dwelling-house of the type specified in the amendment, it would not trigger off the five-year discount. However, if the new lessee then exercised the option so that there was a consequent disposal of the freehold or long lease within that five-year period, the discount sharing provision would bite on that transaction. It may be feasible to draw up leases and options which would enable a purchaser, under the right to buy, to dispose of his dwelling-house and immediately receive something close to market
  302
  value without triggering the discount sharing provision.
  I am glad that the hon. Gentleman has drawn attention to this problem. We have been considering the scope for such devices, but we should like to consider this one further. If need be, we shall table an appropriate amendment in the other place. On the basis of that assurance, I hope that the hon. Gentleman will seek to withdraw his amendment.
  Mr. Alton: I am grateful to the Minister for his helpful reply. On that understanding, I am happy and beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Amendments made:
  No. 15, in page 7, line 31, after ' him ' insert
  ' by the Housing Corporation or a building society '.
  No. 16, in page 7, line 32, at end insert
  ' or further advanced to him by the Corporation or society '.
  No. 17, in page 7, line 39, at end insert
  ' (7) In this section "building society" means a bulding society within the meaning of the Building Societies Act 1962 or the Building Societies Act (Northern Ireland) 1967 '.—[Mr. Geoffrey Finsberg.]

Clause 9

  RIGHT TO A MORTGAGE—AMOUNT TO BE SECURED
  Amendments made:
  No. 18, in page 8, line 9, after ' tenant's ', insert
  ' available '.
  No. 19, in page 8, line 12, leave out
  'so taken into account ' and insert
  ' taken into account in accordance with the regulations '.
  No. 20, in page 8, line 13 after ' the ', insert
  ' available '.
  No. 21, in page 8, line 18, after ' person's ', insert
  ' available '.
  No. 22 in page 8, line 20, leave out paragraph (a) and insert—
  ' (a) may provide for arriving at a person's available annual income by deducting from

  303
  the sums taken into account as his annual income sums related to his needs and commitments, and may exclude sums from those to be taken into account as a person's annual income; and.'.
  No. 23, in page 8, line 24, leave out ' specify ' and insert
  ' (without prejudice to the generality of section 132(3) of this Act) specify different amounts and '.—[Mr. Stanley.]

Clause 10

  NOTICE OF PURCHASE PRICE AND RIGHT TO A MORTGAGE
  A mendments made:
  No. 24, in page 9, line 4, leave out from beginning to ' and ' in line 5 and insert
  ' (ii) the amount mentioned in section 7(2).'.—[Mr. Stanley.]

Clause 11

  RIGHT OF TENANT TO HAVE VALUE DETERMINED BY DISTRICT VALUER
  Amendments made:
  No. 25, in page 9, line 15, leave out from beginning to end of line 26 and insert—
  ' (1) Any question arising under this Chapter as to the value of a dwelling-house at the relevant time shall be determined by the district valuer in accordance with this section.
  (1A) A tenant may require that value to be determined or, as the case may be, re-determined by a notice in writing served on the landlord not later than three months after the service on him of the notice under section 10; except that—

  (a) if proceedings are then pending between the landlord and the tenant for the determination of any other question arising under this Chapter, the notice may be served at any time within three months of the final determination of the proceedings, and

  (b) if such proceedings are begun after a previous determination under this section the notice may be served within four weeks of the final determination of the proceedings and, whether or not such a notice is served, the landlord may at any time within those four weeks require the district valuer to redetermine the value of the dwelling-house at the relevant time.

  (2) Where the landlord requires a re-determination to be made in pursuance of subsection (1A)(b) above it shall serve on the tenant a notice stating that the requirement is being or has been made.'.
  No. 26, in page 9, line 31, at end insert
  ' or, as the case may be, from the service of the landlord's notice under subsection (2) above.'.—[Mr. Stanley.]
  Mr. Speaker: I am now required to put the Question on any amendment up to the end of schedule 2, to be moved by a member of the Government. The amendments in question are amendments Nos. 27, 28, 30, 35, 37, 39, 40, 41, 42, 43, 44, 45, 46, 47, and 48. Does any hon. Member wish to divide on any of these amendments?

Clause 12

  CLAIM TO A MORTGAGE
  Amendment made:
  No. 27, in page 10, line 1 [Clause 12], leave out from ' Corporation ' to end of line 2 and insert
  ' within the period of three months beginning with the service on the tenant of the relevant notice, or within that period as extended under subsection (1A) below.
  (1A) Where there are reasonable grounds for doing so, the landlord or, as the case may be, the Housing Corporation, shall by notice in writing served on the tenant extend (or further extend) the period within which the tenant's notice claiming to exercise his right to a mortgage must be served; and if it fails to do so the county court may by order extend or further extend that period until such date as may be specified in the order.'.—[Mr. Stanley.]

Clause 13

  CHANGE OF SECURE TENANT AFTER NOTICE CLAIMING RIGHT TO BUY OR RIGHT TO A MORTGAGE
  Amendment made:
  No. 28, in page 10, line 34, leave out from ' within ' to end of line 35 and insert
  ' the period of three months beginning with the date on which he becomes the secure tenant or within that period as extended under subsection (2A) below.
  (2A) Where there are reasonable grounds for doing so the landlord or, as the case may be, the Housing Corporation shall by notice in writing served on the new tenant extend (or further extend) the period within which his notice claiming to exercise the right to a mortgage may be served; and if it fails to do so the county court may by order extend or further extend that period until such date as may be specified in the order.'.—[Mr. Stanley.]

Clause 15

  COMPLETION
  Amendment made:
  No. 30, in page 11, line 39, leave out from second ' the ' to end of line 40 and insert
  ' end of the period within which the notice claiming it could have been served.'—[Mr. Stanley.]

Clause 17

  RIGHT TO A MORTGAGE—TERMS OF MORTGAGE DEED
  Amendment made:
  No. 35, in page 13, line 11, leave out subsection (2).—[Mr. Stanley.]

Clause 18

  DWELLING HOUSES IN NATIONAL PARKS AND AREAS OF OUTSTANDING NATURAL BEAUTY, ETC.
  Amendments made:
  No. 37, in page 14, line 1, after ' authority ', insert ' or the Development Board for Rural Wales '.—[Mr. Stanley.]
  No. 39, in page 14, line 9, after ' authority ', insert ' or Board '.
  No. 40, in page 14, line 15, after ' authority ', insert ' or Board '.
  No. 41, in page 14, line 25, after ' authority ', insert ' or Board '.
  No. 42, in page 14, line 29, after second ' made ' insert ' and '.
  No. 43, in page 15, line 1, leave out from beginning to ' shall ' and insert
  ' Where such a covenant imposes the limitation specified in subsection (2) above, the limitation '.—[Mr. Stanley.']

Clause 22

  SECRETARY OF STATE'S POWER TO INTERVENE
  Amendments made:
  No. 44, in page 16, line 11, leave out from ' that ' to ' he ' in line 16 and insert ' tenants generally, or a tenant or tenants of a particular landlord, or tenants of a description of landlords have or may have difficulty in exercising the right to buy effectively and expeditiously '.
  No. 45, in page 16, line 19, leave out ' 24 ' and insert ' 72 '.
  No. 46, in page 17, line 28, leave out from beginning to ' shall ' in line 30 and insert—
  ' Where the Secretary of State exercises his powers under this section with respect to any secure tenants of a landlord he may calculate, in such manner and on such assumptions as he may determine, the cost incurred by him in doing so and certify a sum as representing those costs; and any sum so certified '.—[Mr. Stanley.]

Clause 26

  INTERPRETATION OF CHAPTER I
  Amendments made:
  No. 47, in page 19, line 25, leave out from ' person ' to ' would ' in line 26.
  No. 48, in page 19, line 27, leave out ' the ' and insert—
  ' (a) an authority not within the definition of "local authority" in section 49(1) shall be deemed to have been a local authority within that definition if it was the predecessor of such an authority; and
  (b) a '.—[Mr. Stanley.]

Clause 27

  SECURE TENANCIES
  Mr. John Tilley: I beg to move amendment No. 49, in page 19, line 35, after ' tenancy ', insert
  ' for any residential occupier of the dwelling as defined in subsection (6) below'.
  Mr. Speaker: With this it will be convenient to take amendment No. 50, in page 20, line 27, at end add—
  ' (6)(a) A person is a residential occupier for the purposes of this Act if he is granted the right to occupy as a residence a dwelling by virtue of any contractual arrangement.
  (b)An arrangement is a contractual arrangement for the purposes of subsection 1 of this section regardless of whether con sideration for the said right to occupy as a residence is by payment of money, provision of goods or performance of services and regardless of whether either the said right to occupy or the consideration afore mentioned is the sole or principal purpose of the said arrangement or only a subsidiary part of the said arrangement or collateral.
  (c)For the purposes of subsection 1 of this section a person shall be considered to occupy a dwelling as a residence if either—

  (i) it is that person's only residence; or

  (ii) it is one of that person's residences; or

  (iii) that person has a genuine intention of resuming residence in that dwelling.

  (d)For the purposes of this section, once the conditions of subsection 1 are fulfilled, a person shall be deemed to fulfil the conditions of subsection 3 unless or until a Court otherwise declares.
  (e)For the purposes of this section a person shall not be prevented from being a residential occupier within the meaning of subsection 1 by reason of the fact that he does not have the right to the exclusive possession of any part of the dwelling occupied by him.'.
  Mr. Tilley: Amendments Nos. 49 and 50 go together. We had difficulty in deciding where amendment No. 49 should go. If the amendment were accepted, several consequential amendments would have to be made to the Bill and to the Rent Act 1977. The two amendments are far-reaching. Their purpose is to close most of the loopholes in the Rent Acts at a stroke. Greedy private landlords have been using those loopholes during the past five years to exploit, harass and oppress their tenants. That is particularly true in large cities and, above all, in London.
  The Department of the Environment reviewed the Rent Acts. The review sparked off many submissions from housing and welfare agencies. They gave evidence that evasions were taking place. The Citizens Advice Bureaux made a survey of 134 of their offices. It discovered that within a period of six months they had received 740 complaints referring to evasions of the Rent Act. The complaints covered many different types of evasion, including phoney holiday lettings, non-exclusive agreements, and licences. My hon. Friends and I provided details of such evasions in Committee. The evasions had one feature in common, namely, that they give maximum profits to the landlord and minimum security to the tenant.
  The amendment would give a new meaning to the protection of tenants under the law. In addition to the 740 complaints received by the Citizens Advice Bureaux, hundreds and thousands of people may not have known that such help was available. Some of those who knew that such help was available may not have dared to ask for it, for fear that they would lose their homes or incur greater rent increases.
  I shall give one example that occurred in my constituency. The example was given by the Lambeth law centre. It states:
  " Mr. E. was a tenant of a landlord, who owns several houses in Lambeth. She specialises in exploiting ' the Rent Act loopholes '. In one house there may be a tenant in ' bed and breakfast ' living on the ground floor, a ' licensee ' living on the middle floor, and someone on ' holiday ' on the top floor. The police have been called in on several occasions by tenants who have returned home to find paint strewn over the furniture. In Mr. E's case, he came home after his ' one year holiday' had just expired to find the front door locked and his belongings in the street The next day
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  the front door was smashed giving the false impression that he had attempted to break back in. An injunction was obtained to restore him to the flat. The landlord refused to comply with the order and it was only when she had been found in contempt of court that she finally let him back in."
  That is an example of the type of thing that is happening.
  In response to our approaches, the Government have said that there is insufficient evidence of such evasions for any change in legislation to be made. However, the Government have ignored the evidence. They have failed in their duty to carry out a deeper investigation. An investigation is necessary if the full evidence is to be brought forward. Such evidence could be found, if only the Government were prepared to look for it
  6 pm
  Two years ago, in a press release of August 1978, the Small Landlords Association, which had its headquarters in Lambeth, said:
  " Increasingly, however, landlords are using licences as means of circumventing the penal provisions of the Rent Acts."
  That was a quite open admission of the way in which tenants' security was being undermined.
  I summarise the legislative position by quoting from a document entitled "The Laws that Leak" compiled by the Garratt Lane law centre, before that body was the victim of Tory cuts in Wandsworth. It said:
  " The maze of statute law created by Parliament during this century has recently been consolidated in two further pieces of legislation—the 1977 Rent Act and the 1977 Protection from Eviction Act. However, this has done little to make the statutory framework more effective: it remains incomprehensible to most tenants and many lawyers and lay advisors, a mystifying accumulation of different legislative regimes, uneasily grafted onto old common law distinctions. It is an uncertain guide to rights and responsibilities on the one hand and a welcome resource for landlords seeking to evade its operation on the other.
  Parallel to this work of Parliament and compounding the confusion is a body of case law resulting from the activities of the judiciary—this case law, rather than merely clarifying the fine points of legislation, has had, in several instances, the broad effect of undermining its intended impact by juggling with the concepts on which it has been built. The result is a system, the complexity of which stems as much from its own inconsistencies as from the variety of situations it is seeking to regulate."

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  It is to meet that situation that I have framed these two amendments. Their purpose is to cut through the legal maze by saying that the legal definition of the tenant who has a right to protection shall be the commonsense definition In other words, the protected tenant should be the person who lives in the dwelling after agreeing to pay a regular amount to the owner of that dwelling for the privilege of living in it. That is the commonsense meaning of "tenant" and that is what I believe its legal meaning should be. Indeed, I use the phrase "residential occupier" to cover that.
  As it stands, the Bill creates new loopholes for landlords to exploit—the short-hold tenancies, the assured tenancies, and so on. I hope that at the eleventh hour the Government will accept the spirit, if not the letter, of the amendment. I hope that by now they realise that by putting this Bill through, particularly in respect of the private sector, they are sowing the seeds of their own destruction at the next general election when the embittered tenants who have suffered as a result of the Bill will express their anger in the ballot box.
  Mr. Geoffrey Finsberg: I confess that I listened to the hon. Member for Lambeth, Central (Mr. Tilley) with some surprise. Nothing in clause 27 has anything to do with the Rent Acts or with private tenants. The whole basis of the hon. Member's speech, ending in his peroration and his appeal to the private tenant, has absolutely nothing to do with secure public sector tenancies. Therefore, he will forgive me if I find it a little difficult to respond to his point. I could repeat the speeches that I made in Committee on holiday lets and so on, but they would not be relevant to his argument.
  The amendment that has been proposed is a major one in that it deals with one of the most basic clauses of the Bill—defining the secure tenant for the purpose of the right to buy. I need not remind the hon. Member that only the secure tenant has that right and therefore it is very important to get that definition correct. We have retained a basic framework of the definition that was in the Labour Government's Housing Act—that an individual tenant who occupies a separate dwelling as his only principal home should be a secure tenant. The amendment seeks
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  to alter fundamentally that definition by importing a totally new concept of "residential occupier" and giving that term a wide definition. The hon. Member will recall the hours of debate in Committee on some of the individual issues that he has raised. I do not propose to discuss them again today, because they are not relevant to this section of the Bill.
  I wonder whether the hon. Member realises that his amendment would, for example, make secure all those who lived in local authority hostel accommodation. I think that even the hon. Member was convinced at the end of my Committee argument that that was not sensible. Security is, in most cases, unnecessary for hostel dwellers and would create enormous problems for the landlords. Similarly the amendment would make secure sharers who may have an individual licence, but share all but a bedroom. Again, it is not appropriate that tenants should be secure in these conditions because the arrangements are temporary and because of the sheer practical difficulties that landlords would experience as a result. How would people succeed in sharing the accommodation in practice? It simply would not work.
  The right to buy would, under the amendment, be extended to all those tenants. I do not believe that the lion. Gentleman intended that, because I cannot see him joining the bandwagon of those who wish to extend the right to buy. However, if he temporarily uses that bandwagon for his amendment, I always welcome a sinner. But I cannot advise the House to accept the amendment. I hope that the hon. Member will understand that his very good speech did not add much because it was not relevant to the clause under discussion.
  Amendment negatived.

Clause 33

  GROUNDS AND ORDERS FOR POSSESSION
  Mr. Alton: I beg to move amendment No. 167, in page 23, line 18, leave out from ' begun ' to end of line 19.
  This is a simple amendment, which I hope the Minister will consider carefully. If he is unable to agree to it now, I hope

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  that he will have another look at it between now and when the Bill is debated in another place. It relates to the provision in clause 33 whereby a local authority which wishes to take possession proceedings against a secure tenant must give notice of the proposed grounds for possession before so doing. As presumably the purpose of serving such a notice is to enable the tenant to remedy any alleged default before proceedings are served, if a local authority can change its ground after service of the notice, there is always the possibility of a tenant being taken by surprise at the hearing when the action is being taken against him. Thus, he will not have the opportunity to put right the new matters about which the complaint is made.
  Possibly one could trust the court to exercise discretion in order to ensure that the tenant is given the opportunity to put matters right, but that is not particularly satisfactory. It goes against every tenet of natural justice that a tenant arriving at the court should find that the landlord has decided to change the reason for taking action against him. The ground should be quite clearly specified before the tenant arrives in the court.
  It does not improve the Bill to leave in the offending words. This is possibly a Draconian measure which could be misused by some local authorities. I hope that that would not occur, but tenants could be placed in the position whereby they did not receive their natural rights of justice when they appeared in court. I urge the Minister to give an undertaking at least to look at this matter between now and the next discussion on the Bill. I might be prepared to seek to withdraw the amendment if I were to receive that undertaking.
  Mr. Geoffrey Finsberg: I cannot be as helpful to the hon. Member for Liverpool, Edge Hill (Mr. Alton) this time. I hope that when I have explained the matter to him he will appreciate why.
  The hon. Gentleman's amendment would remove what the Government believe is a sensible provision that allows a landlord, with the leave of the court, to add to or alter the ground for possession specified in the notice that a landlord seeking possession will have to serve under clause 32. Without that
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  provision the landlord could not do so without going through the process of serving a new notice and possibly being subjected to delay.
  Imagine the situation where leave is sought to add to or alter the ground. A tenant may have been given a notice stating that possession is being sought because his conduct has been a nuisance to neighbours under ground 2 of schedule 4. The tenant may then fall into rent arrears. Clearly it is right that the court should be aware of that and consider those issues together.
  The requirement that the court's leave must be obtained will ensure that a tenant's rights are protected and that he is given sufficient time to prepare his case where a new ground has been added or substituted.
  Mr. Alton: There may be other factors that the court should take into account when considering reasons for possessing property. However, if a tenant is preparing his case on the basis that he has been a nuisance to a neighbour, it is unfair to spring a further reason on him, such as rent arrears, when he arrives at court. I have chaired local authority eviction sub-committees and I know that a tenant is sometimes not aware of rent arrears. He may, for instance, have left his wife to pay the rent, and she may not have told him of financial problems.
  Mr. Finsberg: I repeat that the requirement that the court's leave must be obtained will ensure that a tenant's rights are protected and that he is given sufficient time to prepare his case where a new ground has been added or substituted. The hon. Gentleman may have missed that point when he was trying to intervene.
  The protection is there. It would be wrong to remove that possibility from the Bill, which may then mean two court cases with resulting delay. I do not believe that the hon. Gentleman would want that. The court's involvement in the procedure safeguards the tenant's interest. I therefore hope that the hon. Gentleman will ask leave to withdraw his amendment.
  Amendment negatived.
  Mr. Tilley: I beg to move amendment No. 51, in page 23, line 25, leave out '13' and insert '14'.

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  I am confident that this amendment fits precisely into the Bill at precisely this point.
  We do not lightly suggest new grounds for evicting council tenants. However, local authorities need flexibility and speed to deal with cases of divided families, particularly women with children who have been deserted or have left home because of violence. The Minister said yesterday:
  " the Bill deliberately does not interfere with local authorities' allocation procedures … We believe that it is right that the local basic responsibility for this sort of allocation should be that of the local authority."—[Official Report, 19 May 1980; Vol. 985, c. 132.]
  The Bill interferes with the ability of local authorities to decide their allocation policy in such circumstances. The security of tenure provision means that local authorities cannot take the swift and compassionate decisions that they have been able to in the past. Clause 36 also states that a local authority tenancy can only be assigned under the Matrimonial Causes Act. That is a method of dealing with the problem of a divided family in the medium term, but the process can take months and in some cases years. It does not apply if the couple are not legally married.
  6.15 pm
  Clause 36 and the general security of tenure in the Bill remove flexibility from local authorities and, also ignore the changes in society, such as the increased number of divorces, of people living together who are not married and of women who are not prepared to tolerate violence at home. Women leave their homes, which in many cases are owned by local authorities, for their own sake and the sake of their children. Under the Bill such women will be under considerable pressure to return to a violent home. Alternatively, they will not be provided with suitable local authority accommodation with the speed necessary for the family to succeed in the new circumstances.
  I quote two decisions made by a South London borough—not the borough of Lambeth—which would not be possible under the Bill. In the first case, the husband was a heroin addict, violent towards his wife. She left with the children and went to stay with her mother. She began divorce proceedings in August. In October, well before the divorce was settled,
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  the local authority committee decided that the husband should be asked to leave and the tenancy given to the wife. The second case concerned a husband, wife and two daughters, aged six and seven. The woman left home because of violence, and lived with various friends for a year. She was then admitted to homeless family accommodation. The committee decided to give the sole tenancy to the wife and make and offer of a one bedroomed tower-block flat to the husband. Those decisions were swift and compassionate. Under the Bill the council would not be in a position to regain possession of the family home, even though only one spouse, usually the man, would be there on his own. That family house, of which there is a shortage, would therefore be grossly under-occupied.
  Where the council is willing only to rehouse the spouse and children in the original home, it will be unable to evict the remaining spouse. Even if there were an injunction under the Domestic and Matrimonial Proceedings Act, there would be a long gap between the end of such an injunction, which courts have clearly stated can only be temporary, and settlements under the Matrimonial Homes Act. If the couple were not legally married, there could be no action under the Matrimonial Homes Act.
  A council that cannot get possession of the original home may be reluctant to accept the wife and children as unintentional homeless under the Housing (Homeless Persons) Act. There may be pressure on the family to return to the original home or for the children to be taken into care. That sort of thing is happening at the moment.
  The problem in explaining the consequences of the Bill is that the practices of local authorities in such matters differ considerably. Some councils are much more sympathetic than others. If the new ground is not included, the good authorities will stop taking the beneficial actions that they take at present and the comparatively bad authorities will have an excuse to refuse to meet their obligations under the Housing (Homeless Persons) Act.
  We ask the Government to accept an extra ground for eviction by local authorities, even though we do not like undermining the principle of security of tenure

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  for local authority tenants. If the amendment is not accepted the Bill will take away an important discretion of local authorities—a discretion that, however they exercise it, must tend to be to the benefit of those involved, who are often women and children at a crisis point who need as much help as possible, not only from local authorities, but from all the statutory organisations involved.
  Mr. Michael Shersby: I listened carefully to the hon. Member for Lambeth, Central (Mr. Tilley) and I am a little concerned that his amendment would prejudge the decision of the court. Such cases are difficult, particularly with a couple who live together but are not married. The amendment would give to habitees equal rights with those of a divorcing spouse.
  Mr. Tilley: I am not trying to intro duce changes; I am trying to preserve the present situation in which the majority of local authorities take such decisions either when the custody issue has been resolved or when it is clear which way it will be resolved. I am not suggesting that local authorities should change what they are doing, but that they should be allowed to continue to do what they do at present.
  Mr. Shersby: I take the hon. Gentleman's point, but we are entering a difficult area. Local authorities have a great deal of discretion, but if we add the amendment to the Bill, we shall create a statutory ground for possession for this group of people. The existing arrangements are generally adequate, particularly when the court is involved and can make corrections.
  Mr. Geoffrey Finsberg: We should not lose sight of the point made by my hon. Friend the Member for Uxbridge (Mr. Shersby). There is a progression in these matters and it would be unfortunate, to say the least, if we found that by incorporating the amendment we got a step ahead of the courts. That would be undesirable.
  The hon. Member for Lambeth, Central (Mr. Tilley) made important points about battered wives, violence and injunctions. I am advised that an injunction to allow the wife back into the home is temporary, but it can be repeated until the divorce,
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  when the court can transfer. Part of the hon. Gentleman's fear is covered.
  The hon. Gentleman has tried to convince the House that there are good reasons why public sector landlords should have available a ground for possession that they can use to ensure that the tenancy of the former matrimonial home goes to the "right" party—that, in itself, raises a query—when the marriage or the partnership breaks up or to evict a tenant when the remainder of the family has been rehoused elsewhere.
  The amendment would give those landlords an extraordinary responsibility. It would give them the right to judge, in advance of a court decision about the outcome of a marriage and questions of custody and property, who should be allowed to remain in the matrimonial home.
  I am told that landlords might normally reallocate the home to the spouse who has custody of the children, but who is to know what the final custody arrangements will be? I am not satisfied that local authorities and other landlords would want to be put prematurely in a position of formally ordering the accommodation arrangements of separated families unless the parties agreed voluntarily about the tenancy of the former home—in which case, no special ground for possession would be needed.
  Mr. Tilley: The hon. Gentleman is not recognising the point that I made in an intervention when the hon. Member for Uxbridge (Mr. Shersby) was speaking that we are not talking about giving local authorities extra abilities to decide, but are saying that they should be able to have the existing rights that they have exercised many times.
  The hon. Member for Liverpool, Edge Hill (Mr. Alton) referred to what is called openly the eviction sub-committee in Liverpool. Many housing committees have similar sub-committees, though they are usually called, more diplomatically, housing management sub-committees. I am sure that the Under-Secretary and many of his colleagues have served on such committees and taken exactly the decisions that the hon. Gentleman is saying that local authorities should not be able to take.
  It has been stated clearly by judges that domestic violence injunctions are only

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  temporary and that women cannot be certain of obtaining as many injunctions as they need to span the vast gap of the law's delay in divorce cases. In some cases women will get enough injunctions, but in some cases they will not. It depends on the judge.
  Mr. Finsberg: I am not a lawyer, but my advice is that it is possible that the injunctions can be reissued by the court until the divorce takes place.
  The amendment would provide a new ground for possession. It is not right to say that local authorities already have that power.
  Mr. John Sever: Presumably the Minister agrees that if a local authority is asked to make a decision in advance of a custody decision it need not necessarily do so. My hon. Friend is asking only for the provision of a framework within which a local authority could make that decision; he is not asking that it should necessarily have to do so.
  Mr. Finsberg: I am not sure that I was wise to give way. By the time I finish I may have covered that point. The amendment would require two homes to be provided by a landlord whenever a family splits up. That may frequently be the outcome anyway, but I do not think that it is desirable or practical to impose such an obligation.
  If the landlord chooses to rehouse the party who has left the home, or who, as a result of matrimonial proceedings has been obliged to move out, that is its business. We are not interfering with that. However, it should be a matter for the landlord's judgment—to use the words of the hon. Member for Lambeth, Central—and not for the Bill.
  6.30 pm
  The provisions of certain existing legislation dealing with the matrimonial home are extended to secure tenancies by the Bill. It is possible for one spouse to apply to the court to have the tenancy transferred to the other spouse, who is a tenant, but divorced or legally separated. At that stage, landlords can take the necessary steps on the basis of the relevant court judgment.
  That is the crux of the point that my hon. Friend the Member for Uxbridge
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  (Mr. Shersby) spotted immediately. This, amendment would jump the gun. I still do not believe that that is right. As I said, at that stage landlords can take the necessary steps on the basis of the relevant court judgments. Therefore, I see no case for empowering them to do so in the manner proposed by this amendment. In general, we should not provide a means whereby certain aspects of family break-up and divorce can be anticipated or prejudged.
  I invite the hon. Member for Lambeth, Central to agree, on reflection, that it would be wiser to ask leave to withdraw this amendment rather than to put it to a vote, because at that stage I would have to advise the House to reject it.
  Mr. Tilley: I must put the record
  straight. The Minister says that this amendment would impose on local authorities a decision to rehouse both halves of a broken relationship. It does not impose anything on local authorities. It provides that they may—if they wish—take proceedings in order to move into smaller accommodation the spouse who no longer has the other spouse living with him or her. It gives a discretion to the local authority. It does not add a new power.
  Before the Bill was introduced, local authorities could evict any tenant for any reason. Now there is security of tenure. In this case the Bill is consigning women and children to possible bad housing conditions for long periods, and certainly to distress and uncertainty while they wait for new housing. I hope that the Minister will accept that we are not suggesting that local authorities must rehouse as soon as a family breaks up, but that they should have the option to do so on the merits of individual cases.
  Mr. Finsberg: Having listened again to the hon. Member for Lambeth, Central I find that he has not persuaded me to alter the reasoning that I put to the House earlier. Again, I invite him to ask leave to withdraw his amendment.
  Mr. Shersby: Does the hon. Gentleman agree that in most cases local authorities are not currently in the habit of transferring a tenancy until marital issues—normally the custody of children—have been settled by the courts? The normal custom, according to my experience, is

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  for the tenancy to be transferred to or be left with the spouse who has been given the custody of the children. In most cases that is the wife. That is a sensible and practical procedure, and it should not be disturbed unless the courts decide that it should be disturbed. The present position is satisfactory, because the courts will upset a decision of a local authority or transfer the tenancy to a person who does not have the custody of the children only in exceptional circumstances.
  Mr. Speaker: Before I put the Question, I remind the House that I allowed what amounted to a second speech to the hon. Member for Lambeth, Central (Mr. Tilley) and the hon. Member for Uxbridge (Mr. Shersby). They were long interventions. On Report I have been very generous, as hon. Members will know.
  Amendment negatived.

Clause 34

  SUBLETTING AND LODGERS
  Mr. Alton: I beg to move amendment:
  No. 168, in page 23, line 37, leave out from ' allow ' to end of line 38 and insert
  ' any persons to reside as lodgers in the dwelling-house.'.
  Mr. Speaker: With this we may take the following amendments:
  No. 169, in page 23, line 43, leave out from ' house ' to end of line 45.
  No. 170, in clause 35, page 24, line 16, leave out ' lodger or '.
  Mr. Alton: These amendments would give council tenants unrestricted rights to take in lodgers, instead of the qualified right to take in lodgers with the express consent of the local authority. The restriction on subletting would remain.
  I believe that in this Bill the Government are moving in the right direction by encouraging the use of property and encouraging people to take in lodgers. If the Minister believes that there is some danger without these amendments, and without the right of a local authority to intervene and interfere in a decision on the question whether a tenant takes in a lodger, and if he believes that there may be a danger of overcrowding, I remind
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  him that part IV of the 1957 Act would prevent that in any case. Therefore, I ask the Minister why it is necessary to put a bureaucratic wedge between the tenant and his would-be lodger.
  The Government's intention, as expressed in previous debates, is to try to remove as much bureaucracy as possible. Indeed, the Secretary of State is constantly at pains to point out how he has removed red tape and restrictions. These amendments will give the Government the opportunity to do the same again and to enable people to take in lodgers without the local authority interfering in the tenant's decision.
  Throughout the Bill the Government are trying to put an emphasis on greater responsibility among council tenants. They are suggesting that there should be a series of new rights for council tenants. I commend that, but a tenant should be able to decide whether to take in a lodger without going to a local authority.
  At a time when rents are rising by alarming amounts, when many tenants are finding it increasingly difficult to meet their rent bills, and when rent arrears are running at up to £2 million or £3 million in some of our cities, it is reasonable to try to encourage local authority tenants to find ways of cutting their overheads. Obviously, if council tenants choose to take in lodgers, that is one way of reducing budgets, and ensuring a contribution to the cost of living in those properties. It is also a way of ensuring that local authorities are receiving rents and not having to take recourse to the sort of proceedings that have been referred to in previous debates. Above all, it will ensure that houses, many of which are under-occupied at present, are put into full use.
  All hon. Members can give examples of homes which are under-occupied and where, for instance, elderly people are living in their matrimonial home and have no intention of moving out, whatever encouragements they may be given to move into flats, hostel accommodation or sheltered accommodation. Many of those people are experiencing substantial difficulty in paying the rent. It would save them the problem of having to take recourse to rent and rate rebates, and it would save them having to apply for rent allowances, supplementary benefits and

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  so on, many of which they regard as charity. It would enable them at the same time to use their homes to rather better housing advantage. In that way, many of the single homeless—often the most forgotten groups of people on local authority housing waiting lists—could be assisted by using properties that otherwise would not be used to their full capability.
  The Minister was very helpful earlier in the debate, and I shall ask him once again, if he cannot accept the amendment now, at least to consider my arguments. It is very much in the spirit of the Bill that there should be an extension of local authorities' rights. It is also very much in the spirit of what the Secretary of State has said—that bureaucratic controls should be removed from people and that they should be liberated from the shackles of red tape; that they should not have to go to middlemen for decisions to be made about the places where they live.
  It is in that spirit that I ask the Minister to look at the amendment between now and the discussions which will take place on the Bill in another place. If he will give that undertaking, I shall on that basis be only too pleased to ask leave to withdraw the amendment.
  Mr. Geoffrey Finsberg: In Committee we had a debate on this question which proceeded on rather different lines. It might help if I were to read what I said when responding to a different amendment which dealt with family lodgers. I said:
  " I must set in context the whole purpose of this clause. It is our intention to give an absolute right to tenants to take in family lodgers. That is the whole basis of the provision … We believe that it is right that family members can be lodged without consent."—[Official Report, Standing Committee F; 28 February 1980, c. 731.]
  I have listened to what the hon Member for Liverpool, Edge Hill (Mr. Alton) said and I am glad that he endorses the view we take, that the right to have lodgers is an important one. We have given, as I have just quoted, an absolute right to tenants to take in members of their families as lodgers. We believe that that is very important and the right thing to do.
  We are trying to give tenants a greater measure of freedom. All of us who have served in local government will know that
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  the petty bureaucracy exercised by many housing committees, under all political colours, does not regard the tenant as a particularly important person; he is a statistic. We have tried to take the view in this legislation that the local authority tenant has for the first time to be given certain rights, and one of them is the right to take in a family lodger.
  I believe that there is a difference to be found when we examine the position of lodgers who are not members of the tenant's family. We are not putting an undue restriction on a tenant. All he has to do is to get the landlord's consent, and the landlord cannot withhold it unreasonably. I am certain that it would be forthcoming in the vast majority of cases. But the property is, after all, the landlord's, and if the tenant wants to take in commercially a lodger who is a complete stranger, it is surely reasonable that the landlord should have some say in the matter and be able to object, if he has good reason.
  In the last resort, the need for consent may also be a protection to the potential lodger—if, for example, alterations were planned which would affect the accommodation, or if the lodger would be contributing and start off the chain reaction of overcrowding.
  Mr. Allan Roberts: If the Minister thinks that the property is the landlord's, and that the landlord has some right over what happens to the property, why, in this legislation, is he forcing the landlord to sell against his will? Does not the Minister accept that when sitting tenants have bought, they will have the freedom to take in anyone they want, whether they are members of the family or not? Should not that same right be extended to those tenants who do not wish to buy?
  Mr. Finsberg: We are back to Second Reading speeches on the principle of the right to buy. I do not intend to swallow that fly. All I will say is that the tenant who takes in a lodger will presumably have chosen not to exercise his right to buy.
  I must return to the lucid—but I think wrong—argument put forward by the hon. Member for Edge Hill. I have said that it may be a protection to the potential lodger, for the two reasons that I adduced—that alterations were planned, or that

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  the lodger might start the chain reaction of overcrowding.
  Mr. Alton: How does the Minister square his argument with the status of the private tenant in the private sector who decides to take in a lodger and does not necessarily have to go to the landlord before deciding to do that? In many cases that discretion is given quite easily to private tenants, without any recourse to the landlord. Indeed, in those circumstances, all the arguments that I have applied to the council tenant could be applied to the private tenant.
  6.45 pm
  Mr. Finsberg: There is a great distinction, as we have tried to show, between the public tenant and the private tenant. In a substantial number of cases the private tenant will have a rent book which will have conditions. He may be a monthly, a quarterly or a hold-over tenant enjoying a lease which makes specific reference to sub-letting and to lodgers. I suggest to the hon. Gentleman that we ought not to confuse the issue, because in that sphere the rights exist in different ways. We are trying to balance, in the case of the local authority tenant, the management responsibilities of the local authority with the tenant's rights which we are trying to give him.
  I have spelt out two reasons why I believe the protection is needed. There could be other circumstances where it would be equally reasonable for a landlord to refuse consent—where, for example, the landlord was about to serve notice seeking possession against the tenant himself. I do not think that the lodger would be particularly happy to have come into the home and then found that his sub-landlord was about to have proceedings commenced against him.
  If the local authority has to be consulted and give its consent, not to be unreasonably withheld, that position would not arise. I think that giving an absolute right to take in lodgers who are not members of a tenant's family might not be in the best interests of those concerned. The tenant's freedom has, at every point in the Bill, to be balanced against management considerations. He can go to court if he is not satisfied. We have made that clear. I am certain that, in the case of non-family lodgers, we are
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  right to require landlord consent in the first place.
  I hope that I have convinced the hon. Gentleman and that he will agree to withdraw his amendment.
  Amendment negatived.

Clause 37

  REIMBURSEMENT OF COST OF TENANT'S IMPROVEMENTS
  Amendment made:
  No. 52, in page 25, line 15, leave out from the beginning to end of line 16.—[Mr. Geoffrey Finsberg.]

Clause 38

  RENT NOT TO BE INCREASED ON ACCOUNT OF TENANT'S IMPROVEMENTS
  Amendments made:
  No. 53, in page 25, line 37, after ' is ', insert ' or was '.
  No. 54, in page 25, line 40, leave out from ' determining ' to ' whether ' in line 42 and insert—
  ' (a) at any time whilst he is a secure tenant of that dwelling-house; or
  (b) if he has died and on his death the tenancy vested in his spouse under section 29, at any time whilst his spouse is a secure tenant of that dwelling-house; '.—
  [Mr. Geoffrey Finsberg.]

Clause 45

  CONTRIBUTIONS TOWARDS THE COST OF TRANSFERS AND EXCHANGES
  Mr. Allan Roberts: I beg to move amendment No. 127, in page 31, line 15, at end insert—
  ' (3) No local authority may charge fees or may levy any charges in respect of the costs of facilitating moves to and from houses '.
  The amendment is reasonable and is in the spirit of the tenants' charter, which it seeks to amend. One of the objectives that the Government have claimed for the Bill is to increase mobility within the public rented sector. A general criticism that is made by many people—not least Conservative Members—of the public sector is that there is lack of mobility. The amendment seeks to facilitate mobility and to prevent local authorities

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  from putting a barrier in the way of mobility within the public rented sector. It is particularly important because the Government have failed to include in their tenants' charter those clauses that were in the Labour Government's Housing Bill—which fell because of the general election—that were specifically designed to encourage and develop mobility "n the public rented sector.
  Two features of the Labour Bill have been excluded from this measure. The first would have enabled freer access to local authority housing lists for many categories of people. The other would have required local authorities to make available a certain percentage of accommodation for letting to people moving into the area for employment purposes.
  I repeat that those two clauses of the Labour Bill have been excluded from this measure. That is strange when one recalls that one of the arguments put forward by the Government for the right-to-buy provisions is that they will help to encourage mobility. Measures to help and encourage mobility in the public rented sector among tenants who do not wish to buy have not been developed in the tenants' charter as one would have wished.
  The Government have said that they wish to see better use made of existing housing stock. They wish local authorities to be involved in exchanges and transfers and in allowing people to move freely within their area from one council unit of accommodation to another. It would be difficult to achieve the free movement of tenants between houses within the same local authority area if that authority were to charge fees to those who were allowed a transfer or who had managed to organise a mutual exchange—that is an exchange between one council tenant and another. The amendment would make it illegal to levy such a fee. It would outlaw the charging of fees to people who gain access to a transfer or exchange list or who have been registered with a local authority exchange bureau.
  The Minister may argue that the amendment is unnecessary because many local authorities would not engage in the bad practice of levying charges for transfers or exchanges, but there have been instances in which local authorities have levied such charges. There has recently
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  been speculation in the newspapers that certain local authorities have seen this as a way of trying to raise money in the present difficult economic situation, where the rate support grant and other subsidies have been reduced.
  If the Government believe that that is a bad practice—even if they argue that it does not often happen—they should ensure by statutory means that it cannot be carried out. The Government have agreed that a large part of the tenants' charter gives statutory backing to what is already good practice and usual custom among progressive local authorities. The amendment would outlaw a bad practice, albeit a practice pursued by only a few local authorities.
  Support has been given across the whole political spectrum to the concept of increased mobility. The CBI has written to the Under-Secretary of State for Scotland saying:
  " We are strongly in favour of the easing of residential requirements on the allocation of local authority housing to encourage labour mobility and, to that end, we wholeheartedly support the contents of clause 25 of the Tenants' Rights Etc. (Scotland) Bill ",
  which are not included in this Bill. The CBI also say:
  " No area of public policy operates more insidiously to restrict the labour market than does housing … No single measure of Government policy is more important "
  Mr. Speaker: Order. I am now required under the terms of the guillotine motion to put Government amendment No. 92.

Schedule 3

  TENANCIES WHICH ARE NOT SECURE TENANCIES
  Amendment made:
  No. 92, in page 94, line 10, leave out
  ' period ' and insert
  ' year '.—[Mr Heseltine.]

Clause 51

  PROTECTED SHORTHOLD TENANCIES
  Mr. Tilley: I beg to move amendment No. 55, in page 33, line 39, leave out ' either '.
  Mr. Speaker: With this we may take the following amendments: No. 56. in

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  page 33, line 40, leave out from ' granted ' to end of line 43 and insert
  ' or a certificate of Fair Rent has been issued for the dwelling under section 69 the 1977 Act.'.
  No. 57, in page 33, line 43, at end insert—
  ' (d) The dwelling has been entered on a register of shorthold dwellings maintained by the local authority and made available at its principal office for inspection at all reasonable hours without charge. The Secretary of State shall by order lay down the standards to amenities, repair, &c. which the local authority shall apply in deciding whether to approve the registration of a shorthold property. For the purposes of this section "local authority "means the council of a district, the council of a London borough, the Common Council of the City of London or the council of the Isles of Scilly.'.
  No. 172, in page 33, line 43, at end insert—
  ' (d) the dwelling house possesses at all times throughout the tenancy the amenities prescribed by Schedule 6 to the Housing Act 1974.'.
  No. 58, in page 34, line 4, at end insert
  ' or of any dwelling house owned by the landlord proposing to grant the shorthold, or if it relates to a dwelling which was the subject of a regulated tenancy at the commencement of this Act.'
  No. 59, in clause 52, page 34, line 32, at end add—
  ' (3) If at the expiration of a shorthold of any property the landlord wishes to create a new shorthold for that property and he does not offer the new shorthold to the sitting short-holder the local authority may, on the application of the tenant, remove the dwelling house from the register of shorthold dwellings outlined in section 51(1)(d) above.'.
  Mr. Tilley: I shall speak briefly in opening the debate on the shorthold provisions in the absence of the hon. and learned Member for Thanet, West (Mr. Rees-Davies). However, I am glad to see that the hon. Member for Kensington (Sir B. Rhys Williams) is in his place. I had the dubious honour of being beaten by him in two general elections in 1974. I hope that he will protest against the fact that all the safeguards that he called for in respect of shorthold tenancies in his Private Member's Bills have been thrown out by this Government.
  In this amendment we are asking for a few basic safeguards—not all the desirable safeguards—for shorthold tenants. The first safeguard is that at the beginning
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  of the shorthold tenancy a fair rent should already have been registered so that the landlord cannot charge what he likes until the fair rent is registered. At the beginning of the tenure there should also be a check by a public authority as to the state of the accommodation being offered on shorthold.
  We suggest that that should be done by a local authority keeping a register of shorthold and giving a degree of approval to standards—which we are happy the Secretary of State should lay down—before a property can be let on shorthold. Those are the first safeguards that we would like to see.
  We are particularly disappointed that the Minister, who said that he was considering the possibility of ensuring that a fair rent should be established at the beginning of a shorthold tenancy, has not tabled an amendment to that effect. We are, of course, delighted to offer him the opportunity of accepting our amendment, thus giving him the chance to fulfil his own promise and affording some assurance of reasonable rents at the beginning of shorthold tenure.
  The second major safeguard that we seek is that at the end of his tenure the shorthold tenant should have the first refusal of continuing as a tenant, even if it is only to get another shorthold tenancy of that property if the landlord intends to continue letting the property on a shorthold basis. The reasons for that are obvious. We feel that if landlords are not under any such obligation no shorthold tenant will feel that he has even a chance of semi-permanent accommodation.
  Thirdly, we do not believe that it should be possible to switch to shorthold a currently protected tenant. Such a tenant should not be switched to short-hold by being placed in other accommodation owned by the landlord, whether in the same house, the same street, the same town or even the same country. That should not be allowed, and one of our amendments seeks to meet that contingency. We do not believe that any dwelling currently covered by a protected tenancy should be switched to shorthold.
  If the purpose of the Government really is to bring empty property into use at a fair rent—if that is their aim in introducing shorthold—they should be

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  able to accept all the safeguards that I have listed, since none of them would preclude currently empty properties being brought into use as rented accommodation at a fair rent under the shorthold provisions.
  If, however, the purpose of the Government is to weaken security of tenure for all tenants progressively and to allow much more than a fair rent to be charged on currently occupied property—and we believe that the shorthold provisions will be able by various means to avoid the effect of fair rent registration—they will reject these amendments.
  We are waiting to see the intentions of the Government, who cannot have it both ways. Shorthold is either intended to have the limited application to empty property to be let at fair rent—which the Government claim in their manifesto and their speeches—or the Government see short-hold as the thin end of the wedge for the destruction of security of tenure in the private sector and for ending the fair rent protection for the vast majority of tenants. I speak as a Member for an inner London constituency. In inner London and perhaps central London, in particular, the effect of the shorthold provisions could be disastrous.
  There is already great pressure on private sector housing in London, even though a quarter of all such housing is in London. Because of high property values, the number of visitors and the number of people from other countries who want to live here for a short time, and because businesses are willing to pay high rents for their staffs, not only is housing for single people hard to find; family housing is not available. Old people in particular are under great pressure.
  7 pm
  Yesterday I received a letter from the Greater London branch of Age Concern. It refers to fears about shortholds, and says:
  " As the Bill stands there is a danger that a landlord can over persuade an existing protected tenant to enter into a new shorthold tenancy with limited security of tenure. This could occur … through a move to a new dwelling or room. Some elderly people are particularly vulnerable to such apparently attractive proposals. A protective provision is therefore essential in the Bill to ensure that these tenants do not lose their security."
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  I can give a specific example of what can happen. Yesterday I received a letter from the Paddington Federation of Tenants' and Residents' Associations which gave an example of what can happen. It said:
  " Lady aged 84 living in a basement near Westbourne Grove. Been there 18 years. The landlord keeps asking her to move to ' suitable alternative accommodation along the road.' If he gets a court order because it is found to be ' suitable ', what's to stop her being given a shorthold "—
  and therefore having security for no longer than 12 months?
  Labour Members asked about such examples many times in Committee, but they were given no satisfactory answer. I hope that we shall have a satisfactory answer today. There is no reason why any landlord who is letting on a protected basis, particularly in London, should not, when his tenants leave, put all his tenancies on to shorthold. A landlord who is letting and using the evasions available under the Rent Acts, such as holiday letting, or through licences, will have no incentive to switch to shorthold because if he has to charge fair rents he will at least halve the extortionate rents which he is now allowed to charge.
  The prospect is that in London no permanent homes for let will be on offer. Massive key money will have to be paid for those tenancies that are on offer. A tenant will be keen to have his shorthold renewed, but that will be at the whim of the landlord. A tenant will not dare to ask for repairs or maintenance to be done. Few shortholds will last for longer than a year in London. At the end of a year a tenant will face being evicted or with living on a month-to-month tightrope, not knowing when the landlord might decide to get rid of him. A landlord will have the power to do that and, indeed, an incentive to do it, because once a dwelling is empty he can apply for the registration of a fair rent to be cancelled after two years.
  Mr. Kaufman: My hon. Friend is being charitable to the Government. He assumes that the Government will maintain the two-year registration period. However, under the Bill the Secretary of State has the right to reduce the registration period to a year or less. My hon. Friend is making an admirable case, but he minimises the dangers to the short-hold tenant.
  Mr. Tilley: I accept my right hon. Friend's rebuke. I am painting a picture of what I believe will be the consequence of the Bill as it stands. The Government will tend not to invoke many of their secondary legislation powers. As soon as the Bill begins to bite, the Government's attempts to convince their own Back Benchers that the measure is beneficial will fail, because of the misery and extortion that will be caused by the Bill in general and the shorthold provisions in particular.
  Mr. Vivian Bendall: I declare an interest as an estate agent's surveyor. I am particularly worried about shorthold lettings in the private sector. The Government's keen interest is to ensure that more lettings come into the private sector. They want to provide more homes for people who wish to rent. I do not see how that is likely to result from the proposals.
  I have discussed the matter with members of the professional bodies which represent landlords and others. They think that it is unlikely that many more short-hold lettings will come on tap. The reason is clear. When legislation restricts registration immediately to a fair rent, it is unlikely that many more lettings will be attracted to the market.
  Many widows or widowers who live on their own who would, for instance, be attracted by the prospect of letting to a young couple are unlikely to be attracted if they have to register within 28 days of the letting, particularly since a tremendous amount of form filling is involved. Far more property could have been attracted to the market, but that will not happen. That is where the Bill goes wrong.
  In the large conurbations there is already a six to eight months' wait for rent registration cases to be heard and a four to five months wait in other areas. In Camden it takes seven to eight months and in Redbridge four of five months. The reduction from three to two years will increase the number of registrations. The whole works will be gummed up by the new shortholds.
  The way to tackle the problem is to allow the landlord and tenant to agree a fair rent. That fair rent must be for the duration of the tenancy and the landlord should not be able to increase that rent
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  during the tenancy, whether it is for one year or five years, without reference to the rent officer.
  Under such a system the landlord and tenant would be free to negotiate a fair rent. After that it would be up to the landlord to apply to the rent officer if he wanted a rent increase. That would attract more landlords to let in the private sector. There is a case for many more properties to be let because that will help young couples who wish to save for a mortgage. In my experience in business and as a Member of Parliament, the type of person who will be attracted by short-hold lettings is not the type who will ask for high and increasing rents.
  I ask the Minister to give further consideration to that matter. I feel that current legislation will not produce the amount of property required. Many owners who have been waiting for the new legislation will now sell their empty properties. There has been an enormous amount of empty property in the private sector for some time. The legislation will not produce the desired effect. I ask the Government seriously to consider the matter.
  Mr. Bruce Douglas-Mann: I had hoped that the hon. Member for Kensington (Sir B. Rhys Williams) would speak in the debate. I am sorry that he has not done so. There was much to be commended in the measures that he presented to the House in the past. They could have had a valuable, if marginal, effect on the privately rented sector by helping it to serve a small function, and it would be a small function in any circumstances. The short-hold provisions, as he conceived them, could have served a useful function because they were designed to attract empty property into the privately rented market.
  The Government's measures, far from being likely to attract empty property, will sound the final death knell of the privately rented sector. The Government have wholly misconceived the economic and financial circumstances that prevail in that sector. They have demonstrated clearly that they have never attempted to consider the housing policy Green Paper of 1977. I suggest that, even at this late stage, the Minister should look at the "Technical Volume, Part III" and the chapters dealing with the privately rented

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  sector. The evidence presented in that document shows:
  "The effect of the 1974 Rent Act on the supply of rented accommodation is uncertain. The large amount of unfurnished accommodation being re-let as late as the early nineteen seventies illustrates the dangers of relying on ' what everybody knows ' and concluding from anecdotes that the supply of furnished accommodation to rent has come nearly to a stop. The 1974 Act did not cause the supply of privately rented accommodation to dry up altogether as can be shown from a small survey of married couples (see Table IX.14 below)."
  There is a good deal more evidence in that document, but I shall not trouble the House with it now.
  The reasons why landlords let, or do not let, are dictated principally not by the question of security of tenure, but by the substantially greater economic return that can be achieved through selling rather than letting property. That is a direct consequence of the mortgage interest tax relief, which enables somebody with a given sum to pay virtually 50 per cent. more if he is buying a property than he can afford to pay if he is renting a property. That lies at the root of the collapse of the privately rented sector, and the Rent Acts and the question of security of tenure are peripheral factors.
  7.15 pm
  Notwithstanding the financial incentive, the reason why property continues to be available to rent under the Rent Acts is that, at present, there is a large quantity of property which the owners have no alternative but to let. That was vividly brought out in the minority report of the Francis committee in the early 1970s, when Miss Lyndal Evans pointed out that the overwhelming majority of the property which continues to be let is property that is quite incapable of being sold. That property is incapable of being sold because it is not self-contained and does not meet building society requirements. The property could not have those amenities because it consisted mainly of property in multiple occupation, where the landlord was not able to obtain security of possession of the whole house. He would get an empty room here and an empty room there. He found that it was to his financial advantage to let it rather than to wait until the whole house was empty, when he could convert it to provide much more expensive accommodation for people other
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  than those to whom he was already letting.
  The effect of shorthold will be that, as the landlord gains possession of one or two rooms or a flat in a property, he will be able to let that flat on shorthold. As another tenant moves out, he will be able to let the flat on shorthold. That process will continue until he has the whole building let on shorthold. Then all the tenants will be out as soon as their shorthold tenancies expire. The consequence will be that, far from building up the privately rented sector—as Conservative Members profess to believe—it will be absolutely destroyed.
  In London, accommodation that is let outside the Rent Acts—through loopholes such as holiday and company let-tings—is let at rents that no family on average earnings can afford. Much the same applies in most of our cities. There are very few properties being let on tenancies outside the Rent Acts that an ordinary family can afford.
  The result of the Bill will be that a property will be let for one year at a registered rent and, at the end of that year, the landlord will be able to say—as he did in the days before the 1974 Act, when we had theoretical but inoperable protection for furnished tenants—" I am willing to let you stay on, but, of course, the rent is going up." The rent will rise not by 20 or 50 per cent., but by 120, 150 or 200 per cent. The tenant who has dug himself in and made his arrangements will either have to dig into his pockets and pay such rents or move out and seek accommodation elsewhere. In practice, we know what will happen. He will pay up in order to keep his home.
  The provisions in the Bill for registration of rents—unlike the provisions in the Bill introduced by the hon. Member for Kensington—will make the Rent Acts a dead letter for all future lettings, if the provisions work at all.
  I am surprised that the Government have paid no attention to the criticisms in that radical journal The Times, which in its editorial yesterday, pointed out that under the Bill as it stands:
  " The Government have attached particular importance to providing incentives to the landlord, and have therefore dropped proposals designed to safeguard the tenant's right to a ' fair rent ' and to encourage landlords to

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  renew tenancies unless they really do wish to take the property out of the rental market … the Bill as it stands has substantial weaknesses. There is the risk of the exploitation of tenants, many of whom will inevitably be confused about their rights. What matters still more is that reservations are so widely felt that the scheme has little chance of survival under a Labour Government."
  How right that is. It was something that the Minister could have avoided if he had accepted the recommendations put forward in Committee when attempts were made to amend the Bill. He still has the chance to do that if he deals with the matter as he should in another place. Many Labour Members would be prepared to see a proper shorthold measure that would bring property back to the market. The Minister is killing the market.
  Will there be chances for landlords to exploit tenants? Yes, there will be such chances. Last weekend I visited four elderly ladies, all of whom had been living in a property for between 30 and 40 years. They lived in four out of about 22 rooms in the premises that had been let. One lady was 84, and two of the others were more than 70. Their landlord would like them to leave. He is proposing to shuffle them around so that their rooms will be on one floor. That is a sensible arrangement. They would all have better accommodation. However, when I suggested to him that he should do that before the Bill became law, he immediately lost interest. I strongly suspect that what he had in mind was to shuffle them around so that they had their new tenancies shortly after the Bill became law. They would be nice shorthold tenancies with one of the nice new agreements that the Bill makes possible—and no security of tenure.
  The amendments are the absolute minimum required. I do not know whether they are adequate. I accept that there is a demand and a need for privately rented accommodation which can in some respects be more flexible than other forms of tenure, particularly for young people. The majority of private rent-controlled tenants must now be elderly people. The Bill will undermine their security. It will create the virtual certainty that many of them will be exploited in future. It will ensure
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  that such accommodation as is now coming on to the market under Rent Act tenancies will in future be let free of control to people who probably have less need for the accommodation than those to whom it would have been let were the law to remain as it is.
  I urge the Minister to think again—he still has time—and to ensure that the measure that comes back to the House from another place more closely accords with the measure presented by the hon. Member for Kensington, who I hope will speak in the debate.
  Mr. Shersby: The proposal for short-hold tenancies represents one of the most important innovations that could be made to help to solve our housing problems. Having listened to the interesting and sincere speeches made by the hon. Members for Lambeth, Central (Mr. Tilley) and Mitcham and Morden (Mr. Douglas-Mann), I regret the mistrust and suspicion that exist between two great political parties in trying to deal with this innovation.
  I respect what was said by the hon. Member for Mitcham and Morden. I know the area that he represents. Many of the problems that he experiences in his constituency are similar to those found in the centres of many large cities. I suggest that not all the problems to which he referred are necessarily to be found in outer areas of London—for example, in the London borough of Hillingdon or in Uxbridge.
  I appeal to Members of all parties to try to find a modus vivendi for this type of legislation. Let us try to reach an agreement that will enable the shorthold tenancy to be introduced into Great Britain. If it is introduced with appropriate safeguards, for both tenants and landlords, I believe that it will make a major contribution towards solving some of the housing difficulties, particularly of young people, as the hon. Member for Mitcham and Morden said.
  In Uxbridge there is Brunei university, with a large number of students requiring accommodation in the area for short periods of time. Also, large numbers of houses are under-occupied. For example, a widow living in a three- or four-bed-roomed house with surplus accommodation has until now been unwilling to let that accommodation because of the

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  security of tenure provisions and the general feeling that, once a tenant is in, he or she is there for good and there is no way in which the owner can gain repossession. The introduction of short-hold could radically change that situation and make possible the letting of desirable accommodation for young people, many of whom are students desperately requiring quiet rooms in decent homes in which to pursue their studies. It is for that reason, and many others, that I am a strong supporter of the Bill.
  I should like to refer to the reservations expressed by the hon. Member for Lambeth, Central. He called for the registration of a fair rent at the beginning of the shorthold. Undoubtedly there are problems. One problem was mentioned by my hon. Friend the Member for Ilford, North (Mr. Bendall), namely, the considerable clogging up of the system, let alone the position that will obtain when these provisions become law.
  The hon. Member for Lambeth, Central rightly asks for a decent standard of accommodation to be available for short-hold lettings. I support the view that accommodation should be of a decent standard. My only concern is whether the way in which it is proposed to go about it—a register of shorthold lettings, the involvement of local authorities and the inevitable administrative action that will be necessary—will slow down the process and thus delay the time when this additional accommodation will become available.
  Mr. Straw: I take it from what the hon. Gentleman has said that he is dissatisfied with the absence of any proper conditions about the standard of dwellings. Is he aware that, although they may be a little cumbersome, the proposals for the register were included in the Housing (Shorthold Tenancies) Bill introduced by the hon. Member for Kensington (Sir B. Rhys Williams)? We have simply lifted them lock, stock and barrel and incorporated them into our amendments.
  Mr. Shersby: I am aware of that situation. The reason for my awareness—the hon. Gentleman may not know this—is that I am one of those who, together with my hon. Friend the Member for Kensington (Sir B. Rhys Williams), have sponsored the Housing (Shorthold
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  Tenancies) Bill on every occasion on which it has been introduced since my hon. Friend first took this initiative.
  Mr. Allan Roberts: Will the hon. Gentleman explain why he has changed his mind since he acted as a sponsor? The Under-Secretary of State, the hon. Member for Hampstead (Mr. Finsberg), said that he changed his mind because of the weight of office. Having become a member of the Government, he realised the error of his ways because of the administrative problems that had been pointed out to him by civil servants. Will the hon. Gentleman tell us why he has had a conversion on the road to government?
  Mr. Shersby: I did not say that I had had a conversion on the road to government. I was appealing for a bipartisan spirit in the House to try to reach agreement on this innovation. When my hon. Friend replies to the debate, no doubt he will wish to assure me and others of my hon. Friends who supported my hon. Friend the Member for Kensington that the proposals in the Bill are adequate. I shall listen carefully to what my hon. Friend has to say before I decide on my position.
  I should like to return to this cross-Bench appeal for support of the short-hold concept. Let us consider the position if the House of Commons finds it impossible to reach agreement on the conditions that should surround this type of tenancy. I suggest that the outcome will be that many young people—indeed, many single people—will be deprived of accommodation which we all know exists in the centres of big cities, in suburban areas and even in the countryside. It is to that end that I direct my remarks. I want to try to get some cross-Bench co-operation to enact this provision, which I believe is vital.
  Mr. Tilley: The hon. Gentleman seems to be making the point that was made on Second Reading by the Secretary of State and by many others asking for consensus on this issue. In Committee we put down many amendments on shorthold. None of them was a wrecking amendment in any sense. Whatever hon. Members who served on the Committee may have thought about some of the amendments, the vast majority were taken chapter and verse from the Bill sponsored

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  by the hon. Gentleman. We hoped that, perhaps not all, but possibly some, even one or two, of those safeguards would be accepted by the Government, but they rejected every one.
  The way to put pressure on the Government to make the slightest concession, which would have made a consensus possible, was for the sponsors of that Private Member's Bill to say to the Government and to the public as soon as this Bill was published "We shall not vote for it unless some of the safeguards that we think essential are included". If that had happened, it would have been a real contribution towards achieving a negotiated consensus, instead of the vapid remarks that the hon. Gentleman is now making. He knows perfectly well that entrenched positions have been taken up.
  7.30 pm
  Mr. Shersby: I am sorry that the hon. Gentleman takes the view that my remarks are vapid. They are intended to be a sincere contribution to the debate. I have been a Member of this House for seven years—for a little longer than the hon. Gentleman. Like him, I have considerable experience of local government. Also like him, and like every hon. Member of the House, I spend every Friday evening talking to my constituents, many of whom require accommodation that would be made available by shorthold.
  My remarks are directed to the hon. Gentleman and his colleagues, and also to my hon. Friend the Minister for Housing and Construction. I stand in my place in an attempt, once again, to see whether the House can reach agreement on what I believe to be the greatest innovation in housing. I accept that Opposition Members have reservations. Hon. Members on the Conservative Benches also have reservations. I appeal for the opportunity, possibly tonight, or perhaps following further consideration, and perhaps including amendments in another place, to find a way to put this proposal on to the statute book with all-party agreement so that it will stick and provide protection for tenants and landlords. My object and the purpose of my remarks is to unlock this accommodation.
  Mr. Kaufman: The hon. Gentleman makes his appeal across the Floor of the House and, incidentally, to his hon. Friend
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  the Minister for Housing and Construction. I suggest that he should make his appeal primarily to the Minister. We on this side are ready to re-assess our position, provided that the Government will move on matters which we regard as fundamental to the protection of these tenants. I shall make that clear when I speak in the debate. The Government have shown no sign of moving.
  Hundreds of amendments have been put down by the Government. If they had had a mind to achieve cross-party agreement on this issue, they could have put down amendments which we would find acceptable. We would have reassessed our position. That remains our approach. I advise the hon. Gentleman to make his appeal to the Minister. Only movement by the Minister, away from the Bill as it stands, can change the Opposition's position.
  Mr. Shersby: I hear what the right hon. Gentleman says. I have no doubt that my hon. Friend the Minister has heard it, and I hope that he will take serious account of those views. I trust that the Government will regard it as a matter of the highest possible priority that agreement should be reached. There is not an hon. Member of the House, I believe, who would not agree that it is worth giving shorthold a go. It is
  possible that Parliament will not get the issue right first time. Some of the fears that have been expressed may or may not be justified. If that is the case, I have no doubt that the Government, or Parliament, will take the necessary corrective action. My appeal, both to my hon. Friend the Minister and to Opposition Members, is for us to get together, to put aside any preconceived notions about this innovation and to see whether we can turn the key to accommodation that is available and should be occupied by people in desperate need of a home.
  Many hundreds, perhaps thousands, of young people, and those who are not so young, need short-term accommodation. They include couples without families who do not require the typical type of local authority accommodation or accommodation in the private sector, but who would find the proposal that we are discussing acceptable. Many elderly widows need a supplement to their income to make their lives more tolerable and would appreciate the company that the

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  advent of a young couple, or a young man or a young woman studying in their home, would provide. We have the opportunity, I believe, to make a large contribution to solving the problem of loneliness that exists among the increasing number of elderly people in the community. Those are the reasons in my mind as I speak in this debate. That is why I appeal for co-operation.
  Mr. Douglas-Mann: The hon. Gentleman refers to loneliness and the provision of accommodation. This matter is covered by the Labour Government's 1974 Rent Act. Under section 12 of the 1974 Act a resident landlord can sublet part of his house without fear of being landed with someone he finds uncongenial. That aspect of the Act has been inadequately publicised. People can let parts of their homes without fear of someone living there with whom they are unable to get along. In that respect, shorthold is completely irrelevant. I do not think it is suggested that shorthold is needed to cater for lettings by resident landlords.
  Mr. Shersby: I agree with the hon. Gentleman that the provisions of the Act to which he refers have not been sufficiently widely publicised. It may be partly due to the fact, as well as for other reasons, that the belief exists—it is deep seated—that once one has a tenant in one's home, one cannot get that tenant out. No amount of persuasion by hon. Members or by anyone else will change people's view that that is the case. Every hon. Member has come into contact with constituents who hold that view. It is difficult to try to change their minds. I do not think that shorthold is irrelevant. I believe, on the contrary, that it is very relevant.
  Mr. A. P. Costain: Does my hon. Friend appreciate that control by the resident landlord over the tenant exists in theory, but that, in fact, to get that tenant out the resident landlord has to go to court? A dear old lady may have to live for three or four months with a most objectionable tenant.
  Mr. Shersby: I agree with my hon. Friend. It is those reasons—the need to go to court and the entrenched belief that even if one goes to court one cannot get the tenant out—that make shorthold relevant. It introduces a new concept. It
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  enables people to address their minds to a new type of letting carrying completely different conditions from lettings that have been available in the past. In my judgment, people will be far. more willing to address their minds to the new situation despite the changes, to which the hon. Member for Mitcham and Morden referred, that occurred under the previous Act. It is not only the details of the legislation that we are attempting to put on the statute book that matter. It is the creation of an entirely new climate among owners of accommodation that we are trying to achieve.
  I listened carefully to what the hon. Member for Mitcham and Morden said about the four old ladies. I have the greatest sympathy with some of the points that he expressed. There must be proper protection for tenants, particularly elderly tenants. I trust that this can be achieved in the Bill or through amendments to it. I appeal only for a chance to get the whole innovation off the ground. It would redound enormously to the credit of the House of Commons if we could introduce this new provision, putting aside hon. Members' hang ups about accommodation in the privately rented sector, or other reservations.
  Some of those reservations are longstanding and attributable to political beliefs, upbringing or constituency pressure. We should try to rise above those reservations in order to create an opportunity to release the large amount of accommodation that I am certain exists not only in central London but in areas such as that which I represent. We should give young people a chance to have somewhere decent to live. Not to give them that chance will mean that we have failed miserably in our duty.
  Mr. Allan Roberts: On the question of shorthold and how it applies to the private rented sector, I should like to deal with one or two myths, rather than hang-ups, as described by the hon. Member for Uxbridge (Mr. Shersby).
  I should like first to deal with the myth that has been put forward regularly in Committee by Conservative Members in suggesting that tenants can freely enter into a shorthold agreement, and will do so, and that, therefore, because such an agreement is freely entered into by tenant and landlord, it is fair that at the

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  end of the period for which the agreement runs the landlord should be able to bring it to an end. That is a myth, because tenants will not be free to decide whether they enter into the shorthold agreement. They will be faced with a choice of accepting the landlord's conditions for the shorthold tenancy or of having nowhere to live—Hobson's choice. If they do not accept the conditions they will be homeless.
  In Committee we have often tried to get accepted amendments that would safeguard the position of tenants who now have security of tenure and who move from one flat to another within the same dwelling house to try to make sure that the security remains and that they are not forced to be bargaining with the landlord about a shorthold tenancy, and the Government have refused such amendments.
  We have tried to obtain safeguards for tenants when a shorthold tenancy comes to an end by amendments that would mean that the first offer of renewal, a new shorthold, was made to the sitting tenant. We have tried time and again to get the Government to make the position such that the tenant had some freedom of decision. Many charitable organisations, such as Shelter and the Campaign for the Homeless and Rootless, have said clearly that, as the Bill is drafted, homelessness will increase as a result of the destruction of security, because landlords will be able to end a tenancy agreement at the end of the shorthold without the tenant having any choice.
  Mr. Bendall: I cannot understand what destruction of security the hon. Gentleman is talking about. He certainly cannot be talking about destruction of security that exists for tenants now. He can be talking only about destruction of security on new shortholds, which is something that the Government are bringing in and which hitherto would not have existed, so I cannot see how it will create homelessness. It will help people.
  Mr. Roberts: That is another myth. If the hon. Member had read the Committee proceedings and our amendments he would have been well aware that we have tried to safeguard the position of existing tenants—tenants protected under the Rent Acts. If the Government would
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  accept that shortholds should apply only to new lets—of which Conservative Members claim there will be plenty because there are plenty of properties which, they claim, will be brought into use—and should not apply to property that is now let to sitting tenants, there would not be the great divide between the Opposition and the Government.
  Mr. Kaufman: I am sure that my hon. Friend will recall the statement made by the Under-Secretary, which gave away the whole game. In reply to a speech by my hon. Friend the Member for Birmingham, Ladywood (Mr. Sever), he said:
  " The hon. Member for Ladywood starts oft under a misapprehension. He talked throughout of the tenant's option. There is no option."—[Official Report, Standing Committee F, 13 March 1980; c. 1136.]
  Mr. Roberts: What Conservative Members must realise is that what is being brought into existence is a form of tenure that runs for a limited period, at the end of which the landlord has the right to bring the tenancy to an end and to seek eviction. The tenant has only 14 days in which to find alternative accommodation or to declare himself homeless. The justification for bringing in this kind of tenure is that it is said that there are many thousands of empty properties that landlords will not let because if they do so they might in future want to gain vacant possession but will not be able to do so, and that is a deterrent against landlords letting their property.
  No justification has been put forward by the Government why, therefore, we should not restrict shortholds to new lets of properties that have not previously been let or are not now let. Until the Government can see that, they are not being rational or logical in their arguments.
  7.45 pm
  I should like to deal with another myth—empty property. Conservative Members seem to believe that there are hundreds of thousands of empty properties owned by private owners who are potential private landlords, in London and everywhere else, waiting for the introduction of the short-hold provisions before being let. If they really believe that, they will be sadly disappointed when this shorthold provision reaches the statute book. There is

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  empty property in the ownership of private individuals that is not being let. It is being kept empty for all sorts of purposes.
  The idea that if one gets rid of the Rent Acts and tenants' security there will suddenly be thousands of properties available for letting in the private rented sector is a myth. If there is any truth in what the Government claim about this vast bank of private empty property, why have they not yet published the empty property survey that the Deparment of the Environment has caried out? When are we to see it? When will the Government make available the evidence that they claim exists?
  The other thing with which I should like to deal is the myth put forward by Conservative Members that the private rented sector has declined because of wicked Labour Government Rent Acts which have provided too much security of tenure to tenants and have prevented landlords from charging economic rents and getting a fair return on their capital. That is what Tories argue.
  Mr. Costain: Does the hon. Gentleman realise that they are also preventing trade union pension funds from being used to buy houses for investment? Instead of doing that, they are being used to buy antiques. Explain that away. [Interruption.]
  Mr. Roberts: I am being tempted to pass remarks that would cause me to be brought to order.
  That is what Tory Members argue. They say that all that we need to do is to get rid of the wicked Rent Acts, which are unfair to landlords, allow landlords to charge higher and economic rents and to get a better return on their capital, and enable landlords more easily to get rid of tenants, especially bad tenants, and suddenly the provision of private rented accommodation will increase and the decline will stop. That is absolute nonsense.
  In 1957 the then Conservative Government passed a similar piece of legislation destroying security. What occurred was a greater decline in the private rented sector, because when landlords can get rid of tenants, they do so in order to sell at vacant possession prices. When this Bill becomes an Act and when security
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  in the private rented sector is slowly eroded as a result of the shorthold provisions, we shall see a further decline in the private rented sector.
  Mr. Bendall: Does the hon. Gentleman agree that one of the reasons why, after the 1957 Act, landlords decided to sell was that the then Opposition made absolutely clear that they would bring that Act to an end, as the Opposition are now suggesting again?
  Mr. Roberts: We are indeed suggesting that, and the Government have been unwilling to protect tenants to the extent that we think is necessary for us not to make that kind of statement. Certainly one of the reasons why the 1957 Act resulted in a decline was that many landlords wanted vacant possession and wanted to make a profit on the property by selling it. The idea that the private rented sector has declined as a result of the Rent Acts is nonsense. The worst of the private rented sector, especially in inner city areas, has been bulldozed away and replaced, to a great extent, by public housing.
  Mr. Bendall: It has been compulsorily acquired, often with sitting tenants, at low rents. Therefore, the councils have paid a low price.
  Mr. Roberts: The interventions are proving the arguments that I am making more effectively than my remarks. I hope that they will continue.
  The figures indicate that the private rented sector declined as a result of a housing policy that bulldozed away many of the unfit portfolios and estates of inadequate private rented accommodation. These were replaced in part by public sector housing. However, much of the old private sector rented housing that disappeared because of the development of progressive housing policies was replaced by owner-occupied housing.
  The growth of owner-occupation has been dramatic and great. The reason why it has grown and replaced the private landlord lies in the financial advantages that successive Governments have provided to owner-occupiers by income tax relief on mortgages.
  In 1951, 52 per cent, of accommodation was in the private rented sector. That amounted to 6·4 million units.

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  Owner-occupation represented 31 per cent.—namely, 3·9 million units. Public sector accommodation was 17 per cent., 2·2 million units. By 1976 the private rented sector had declined to only 15 per cent, of the units of accommodation, namely, 2·6 million.
  Mr. John Major: The hon. Gentleman is about to embark on an explanation of the decline of the private rented sector. One of the objectives in the Government's mind in introducing shorthold is to arrest the decline and, if possible, to provide more accommodation. I hope that the hon. Gentleman will bear that in mind as he continues.
  Mr. Roberts: I am saying that Conservative Members' diagnosis of the decline of the private rented sector is fallacious. I shall complete the statistics that I was presenting. The private rented sector's share of accommodation had declined to 15 per cent. by 1976. The public sector share had increased to 30 per cent.—5·5 million units. The greatest increase, which I would have thought Conservative Members would welcome, was the replacement of the private rented sector by owner-occupation, which moved from 31 per cent. to 55 per cent.—from 3·9 million units in 1951 to 10 million in 1976.
  A great deal of the additional owner-occupation was created by the best of the private rented sector accommodation being sold into owner-occupation. If the Conservative Party claims credit for the increase in owner-occupation from 1951 to 1976, it must welcome as a consequence of that the decline in the private rented sector. That sector would continue to decline if we abolished every piece of protection in every Labour Rent Act. The private rented sector will always be a dearer alternative to owner-occupation, council letting or housing association letting until it is subsidised.
  No one in his right mind—perhaps some Conservative Members are exceptions—would seek the dearer alternative if he could gain access to the cheaper alternative. It is part of the Government's policy to restrict access to the other sectors—to make it impossible to get a council house by cutting council house building, to make council housing more
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  expensive by forcing councils to sell the best of their housing, and to make it difficult to gain access to owner-occupation by high interest rates and a mortgage famine.
  It is only in that climate of scarcity that the private rented sector can flourish. Only in scarcity will anyone be silly enough to go to the private landlord to pay a higher price. It is part of the Government's package to attack the other sectors to try to prove that by introducing shorthold, which will destroy security of tenure, they will revitalise the private rented sector.
  Mr. Stephen Ross: How is shorthold destroying existing security of tenure?
  Mr. Roberts: I am pleased to explain a fundamental issue that we tried to explain to Conservative Members in Committee. We tried to do so throughout the Committee proceedings, but they were unable or unwilling to listen. If shortholds are restricted to properties that are not now let to private tenants—in other words, to new properties coming on to the market—we shall be creating a new tenure in an attempt to get properties into use that are not now let to tenants.
  The Bill allows existing accommodation which is let by private landlords to tenants to be transferred into shorthold when certain situations arise. That will apply, for instance, when the tenant leaves and the landlord wants to relet the same property. He will relet it on short-hold. When a tenant moves from one flat to another in the same building he loses his security and the landlord can offer shorthold. We shall have what Labour spokesmen have described over the years as creeping decontrol.
  When we hear the arguments of Conservative Members, we are given to understand that the tenants of private landlords never die and never hand in their rent books, and that accommodation now let by landlords to tenants with full security will not be let on shorthold when it becomes available for reletting. Of course it will be let on shorthold. Over four or five years a great inroad will be made into the present private rented sector.
  Mr. Ross: Surely there is a converse to the argument. I live in a secure-tenant flat. Half of the block has been

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  sold off on long leaseholds. If I were to leave, the present landlords would not relet; they would sell the flat with a 99-or 125-year lease. Surely that is happening to an increasing extent. Surely it would be better if it could be retained for letting.
  Mr. Roberts: I am grateful to the lion. Member for proving my argument. He suggests that when property becomes vacant it is sold and not relet, or that if it is relet it will be on shorthold. No landlord would do anything other than relet on shorthold. To suggest that landlords do not relet accommodation to secure tenants under the Rent Acts when it becomes available is not true. They relet in those circumstances.
  Mr. Major: Very rarely.
  Mr. Roberts: There are many landlords who would relet.
  I describe shorthold as creeping decontrol as outlined in the Bill. The Bill is part of the Government's total housing strategy. The Secretary of State for the Environment has described it as a social revolution. Indeed, it is. For the first time since 1945 the Government, unlike all previous Conservative Governments, are to hang their housing policy upon a dependence on provision by the private sector without local authority intervention or Government intervention for a major provision of housing to rent. That is contrary to what previous Conservative Governments have done.
  The Government, as with all their other policies, including economic and industrial policies, are contracting out. The consequences will be horrendous for the homeless, for those in housing need, and for housing generally. The U-turn will be inevitable, just as it will be for the Government's industrial and economic policies.
  8 pm
  Mr. Heddle: I declare three interests. First, I am a shorthold tenant with a three-year lease. The property is let at a fair rent. I hope to renew the lease, because there is an excellent relationship between the landlord and his tenant. Secondly, I am a consultant surveyor and trustee of an estate that owns a few properties that might well take up the shorthold provisions. Thirdly, I am a very small shareholder in a public property
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  company. It is one of the most reputable property companies, and for many years it has owned a number of rent-controlled and regulated properties in East London. I refer to the Bradford Property Trust Ltd.
  I seek to make the debate more relevant and to take it away from the foothills of dogma.
  Mr. Selwyn Gummer: From the mountains.
  Mr. Heddle: With great respect to my hon. Friend the Member for Eye (Mr. Gummer), I am not sure that we were in the mountains. The standard of debate and argument was so low that it remained in the foothills. Perhaps I can part the mists of irrelevance and restore some relevance.
  There is no suggestion in the Bill that regulated tenancies will be converted to shorthold tenancies. As drafted, that could not occur. The Government have gone a long way towards meeting the Opposition's negative and sterile attitude. That will be demonstrated when we consider amendment No. 117.
  Mr. Douglas-Mann rose—
  Mr. Heddle: I should like to get into the main thrust of my argument before giving way to the hon. Member for Mitcham and Morden (Mr. Douglas-Mann). He made a valuable contribution to the debate. He concentrated on the problems of London. As he is known to be an assiduous Member of Parliament for an outer London constituency, he is entitled to do that. The House should not consider only those problems that affect inner London. Inner London faces a particular problem of supply and demand. The House should consider the wider problems of homelessness and of ever-lengthening housing queues.
  I have regard for the views of the hon. Member for Mitcham and Morden and also for those of my hon. Friend the Member for Kensington (Sir B. Rhys Williams) and his friends. However, the argument should not be concentrated on London. London may deserve a separate Bill and perhaps the Greater London Bill will incorporate enabling powers.
  Mr. Douglas-Mann: The hon. Gentleman has said that no one will lose security

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  of tenure. I do not wish to lecture landlords on how to use the Bill to winkle out their tenants, but a great many ideas have occurred to me as a result of my experience as a solicitor. I have experience not only of London but of many other parts of the country. Will an application for possession on the ground of the provision of alternative accommodation under Schedule 15 be satisfied by the provision of alternative accommodation that is let on a shorthold tenancy? My interpretation of part IV, paragraph 4 of the schedule, is that it would. Perhaps neither the Minister nor the hon. Gentleman is in a position to give an immediate answer. However, the Minister may receive advice before he replies. Many hon. Members would welcome his assurance.
  Mr. Heddle: I am grateful to the hon. Gentleman for his intervention. As he knows, the landlord would have to serve a schedule of conditions relating to the new tenancy. As a practising solicitor, the hon. Gentleman will know that winkling is illegal. Furthermore, no existing regulated tenancy will be converted to a shorthold tenancy. I am sure that my hon. Friend the Minister will confirm that categorically.
  It is a long time since we heard the constructive words of my hon. Friend the Member for Uxbridge (Mr. Shersby). I shall re-emphasise what he said by quoting from the editorial of The Times of two days ago. It reads:
  " It is clear that there are hundreds of thousands of dwellings which are kept empty, or sold for owner-occupation once vacant, because the owner finds no incentive to let under present law. Equally clearly, there are many people seeking homes—students, transient workers, young families not yet ready to settle down permanently—whose needs are not efficiently met either by the private market or by council housing, cumbersome as it is in its allocation procedures. That much can be accepted by all but the most hidebound opponents of private renting … Both sides … look charitably on the efforts of their opponents to do the same."
  I regret that the Opposition cannot look charitably on the bold and brave initiatives that the Government have taken in order to bring a breath of fresh air into the housing market. Over a period, the Government anticipate that the housing crisis will be eliminated. In January the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley)
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  gave an interview to the Local Government Chronicle. He categorically stated that if and when the Labour Party returned to power it would—without any hesitation or doubt—repeal the shorthold provisions. The right hon. Gentleman will live to regret that undertaking. In four years, barely the period of one short-hold, many of the electorate will suggest that if they cast their votes in favour of the Labour Party they may become homeless overnight—I regret that Opposition Members are laughing. Homelessness is no laughing matter.
  Mr. Major: Although the Opposition find it amusing, homelessness is no laughing matter. Perhaps my hon. Friend would care to speculate as to why the right hon. Member for Manchester, Ardwick (Mr. Kaufman) suggested in Committee that he would prefer to see properties empty than to see them let under shorthold provisions.
  Mr. Heddle: I am grateful to my hon. Friend the Member for Huntingdonshire (Mr. Major) for that intervention. His words speak for themselves.
  Mr. Kaufman: Perhaps the hon. Gentleman will forbear from commenting on what I said. However, knowing his penchant for voicing opinions of great interest, I doubt whether he will. If he forbears, I shall undertake to comment on what I said later, if I catch Mr. Speaker's eye.
  Mr. Heddle: When I introduced to the Committee the quotation from the Local Government Chronicle of 15 January, the right hon. Member for Ardwick and his hon. Friends knew nothing about the commitment that their colleague had given.
  Mr. Shersby: Did my hon. Friend hear the right hon. Member for Manchester, Ardwick (Mr. Kaufman) say earlier that the Labour Party had not closed its mind to reaching agreement on the question of shorthold? He indicated that the Labour Party was still prepared—if further proceedings allow—to reach agreement. Perhaps my hon. Friend will inquire of the right hon. Gentleman whether the Labour Party has changed its view—I hope that it has—since the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) spoke on the

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  radio. His reaction might have been off the cuff.
  Mr. Heddle: I would gladly put that question to the right hon. Member for Ardwick if I thought that it would elicit an honest response. I shall leave it to him to decide whether he will dwell on that point.
  Earlier this afternoon, my hon. Friend the Under-Secretary referred to another clause. We heard two different answers to the point relating to the option to the right to buy. We heard the answer of the hon. Member for Salford, East (Mr. Allaun), the chairman of the national executive committee of the Labour Party. We also heard the deafening silence from the right hon. Member for Ardwick, which clearly indicated his dissent.
  I find the Opposition's lack of appreciation of a bipartisan approach to this debate sad, negative and depressing. I find it sad because shortholds will provide the key to unlocking our wooden and static society.
  Last night, my hon. Friend the Member for Southampton, Test (Mr. Hill) said that every Friday and Saturday in his advice bureau he hears from his constituents, particularly young people, who wish to rent a house, a flat or a bungalow. They do not mind whether it is a council house, flat or bungalow. All they want is the right to rent something somewhere. I believe that the Opposition's opposition to shorthold provisions generally is sad, because it means that some landlords will still prefer to sell their property when they obtain vacant possession on the expiry of the present tenancy, and thus that property and that landlord will be lost to the private rented sector for ever.
  It is sad that Labour opposition to these provisions is negative. The Opposition have not—on Second Reading, or in the 140 hours of debate in Committee, or on Report—come forward with any constructive suggestions as to how those poor people doomed to remain on an ever lengthening council housing waiting list will ever enjoy the right to rent.
  I find the Opposition's atittude to private landlords depressing. Many such landlords are highly reputable private property companies, such as the Bradford Property Trust. Some are charities and some are private trusts. Others are
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  individuals whose life savings have been sunk in providing homes for others. The Opposition seem to find these landlords the subject of disdain and dogmatic dislike.
  Despite, or possibly because of, successive Rent Acts and Housing Acts enacted by successive Governments of both political persuasions, the private rented sector has declined. Unless short-hold provisions are given a chance to succeed, it will continue to decline. It is only right to remind the House that in each year of the Labour Government between 1974 and 1979 the private rented sector diminished by 125,000 homes a year. It will continue to diminish unless the Opposition tonight give the shorthold provisions a chance to succeed.
  It is despite, or possibly because of, the Housing (Homeless Persons) Act 1977 that homelessness has increased since that year. In 1977 there were 34,000 homeless households in the country. In 1978 there were 52,000, and in 1979, based on the half-yearly figure of 28,000, there were 56,000. It is just these poor people who have increased the numbers of homelessness since the passing of that Act who would benefit from the shorthold provisions which can give them the promise of a right to rent. It is just these people of whom the Opposition spoke, when in Government, in drafting their Green Paper of June 1977, whom the shorthold provisions would assist.
  I quote from chapter 8.05 of the Green Paper:
  "—Elderly people, often now with low incomes, who are regulated or controlled tenants of unfurnished accommodation. They may have lived in their present houses for many years. Similar people in younger age groups would normally become public sector tenants or home owners. When these tenants leave, the houses are often not re-let but sold for home ownership, bought by local authorities or demolished.—Older single people and couples without children who cannot afford home ownership. If not accepted for public sector tenancies they will need to rent privately on a long term basis."
  It is these people for whom the short-hold provisions will exist.
  "—Newly married couples, or young single people setting up home for the first time. Most of these will be private tenants for a short time only."

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  it is just these people for whom the shorthold provisions will exist.
  "—People who move from one place to another … This group includes immigrants from overseas."
  It is just these people for whom the shorthold provisions will exist.
  "—Members of families who split up as a result of domestic difficulties often need quick access to furnished rented accommodation, which may only be available in the private sector."
  It is for these people that the short-hold provisions will exist.
  8.15 pm
  I remind the Opposition that that same housing policy document said that the needs of many of those people I have mentioned would only be satisfied by renting, and under present arrangements most would not have a very high priority on the public sector waiting list. It is just for these people that the shorthold provisions will exist.
  The policy document goes on to say:
  " If the decline continued unabated and no action were taken to compensate for the loss of accommodation from the sector, many people—particularly new or mobile households—might not be able to find the housing they need. It might be argued—though the evidence is tenuous—that this is already beginning to happen in a number of areas. To guard against this, we need to consider what action can be taken to stimulate the supply of let-tings within the private sector."
  It is just for these people and their aspirations that the shorthold provisions will exist.
  Amendment No. 55 is irrelevant and illogical. There is no need for the local authority to maintain a register of short-hold tenancies because any hon. Member who has read the Bill thoroughly knows that a shorthold tenant has his rent registered with the rent officer, and the rent officer himself will have a register of shorthold tenancies.
  Mr. David Winnick: The hon. Member for Lichfield and Tamworth (Mr. Heddle) spoke as a fervent supporter of the shorthold tenancy. It was interesting to note that he had no reservations at all. However, there are some Conservative Members who have reservations, and we have not heard them today. I understand that their reservations were expressed in Committee and in the newspapers and I would have thought that their viewpoint should
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  be reflected on the Floor of the House at Report stage.
  I wish to take up the remarks made by the hon. Member for Uxbridge (Mr. Shersby), who made a strong appeal for a bipartisan approach. He said, in effect, that shorthold tenancies were not likely to work if the Labour Party was committed to its present policy. However, there can be no consensus on this issue as long as there is such insecurity connected with shorthold tenancies.
  When Conservatives talk about helping the homeless and finding accommodation for people in need, they do not understand that such people require security. The majority of people seeking accommodation do not want a shorthold tenancy without knowing what will happen to them at the end of the year. Most of these agreements will be for 12 months only. People with families do not want the constant worry and insecurity of wondering what will happen at the end of 12 months. This is why there is such a difference between the two sides.
  I do not doubt the sincerity of Conservative Members, but they should not doubt our sincerity. To say that we laugh at the homeless, when our views are that no one should be homeless in this country, is stupid to say the least. We want to provide decent, adequate and secure accommodation for people. That is why last night we gave our views about the need for far more council dwellings. Therefore, the possibility of reaching agreement between the two sides is minimal.
  The hon. Member for Uxbridge said that it was not too late. But it is. If the Government were willing to make the sort of concession that we are seeking, they should have done so rather earlier than on Report—and they are not doing so now.
  Mr. Shersby: I believe that it is never too late to fall in love or to find a way to reach agreement on legislation. I am prepared to accept that the hon. Gentleman's remarks are entirely sincere. I respect his concern about the need for a sense of security for people in rented accommodation. However, many people, such as university students, do not need long periods of security. Equally, many others would be happy to enjoy accommodation for one, two, three or four years, during

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  which time they would have the opportunity to save to purchase a home in the private sector.
  Mr. Winnick: In the main, the period of the agreement would be 12 months and not longer, at least initially. The House is concerned with many groups and not only students.
  Once again a Tory Government are undermining security for tenants.
  Mr. Major: That is not so.
  Mr. Winnick: They are undermining provisions that have been made over the past few years to provide accommodation and security. Many of the arguments that are produced now were used to justify the 1957 Rent Act. We were told that that Act would release a great deal of accommodation and do much good. After all the scandal associated with that Act, such as Rachmanism, the Tory Opposition in the 1964 Parliament did not have sufficient confidence in the Act to vote against the Labour Government when they repealed it. That Act was much discredited during its operation.
  As my hon. Friend the Member for Bootle (Mr. Roberts) said, the 1957 Rent Act did not release more accommodation for renting. When accommodation became empty, it was quickly sold off. More rented properties were sold off during the operation of that Act than in later periods. We cannot ignore that.
  There is a danger to existing regulated tenancies. Although certain measures may be illegal, that will not worry unscrupulous landlords. As my hon. Friend the Member for Mitcham and Morden (Mr. Douglas-Mann) pointed out, those tenants who have protection and security may be induced to move to another house or other rooms, and they will not have the same protection. They may find themselves in difficulty.
  Mr. Bendall: Does the hon. Gentleman agree that the same thing can happen at present? Controlled tenants in properties that were not decontrolled under the 1957 Act can be moved into regulated tenancies. That legislation was laid down by the hon. Gentleman's Government.
  Mr. Winnick: That could happen, although controlled tenancies will be abolished under the Bill. However, if
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  a tenant moves from a controlled to a regulated tenancy, he will retain security of tenure. That is important. Under regulated tenancies, security of tenure exists.
  New clause 58, which I do not believe the Government are keen on, would at least give some protection. If the Government want our support—and I do not suggest that that will come easily—they should be willing to look sympathetically at our amendments and new clauses. However, they wish the Bill to remain in almost its original state, and they can hardly expect our support.
  When the hon. Member for Kensington (Sir B. Rhys Williams) first put forward the idea of shorthold tenancies, I believe that he suggested that the existing tenant should be given first refusal. There is no such provision in the Bill, although there are amendments to that effect. Surely that is the way to persuade us that our fears are not justified. However, the Government offer nothing to strengthen the position of shorthold tenants.
  Mr. Major: Why should we set the Opposition's fears at rest, in view of the precise and detailed statement made by the right hon. Member for Manchester, Arclwick (Mr. Kaufman) in Standing Committee F on 18 March, with which, doubtless, the hon. Gentleman is familiar?
  Mr. Winnick: Clearly, my right hon. Friend anticipated the Government's refusal to budge.
  Mr. Allan Roberts: The statement by my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) was made after the Government refused every amendment tabled by us in Committee. At the beginning of the Committee debate on shorthold tenancies my right hon. Friend made it clear that we expected concessions and would make up our minds in the light of the Government's attitude. At the end of those proceedings they had not conceded one iota of change.
  Mr. Winnick: I am grateful to my hon. Friend. I repeat that I am reluctant to support new tenancies that do not give a tenant security and protection. I made my position clear on Second Reading.

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  Rent is important. While agreement can be made for the first period, which will probably be 12 months, from then on there is no effective control over the rent that a shorthold tenant would pay. When accommodation is scarce, there is no equality between tenant and landlord.
  Mr. Stanley: The hon. Gentleman is incorrect. The rent fixed under a short-hold agreement is the normal fair registered rent, and the same statutory provisions apply for continuance as for other regulated rents.
  Mr. Winnick: I understand that the Secretary of State will take such powers.
  Mr. Stanley: No.
  Mr. Winnick: What I am saying is that where accommodation is scarce, as is the case now, there is no equality between tenant and landlord. Because the tenant realises the danger of not having the agreement renewed, he could be willing to pay a higher rent, whatever the provisions in the Act.
  Mr. Heddle: I remind the hon. Gentleman that the Labour Government's Rent Act, which devised the fair rent regulated system and set up the fair rent procedure, gave the rent officer stricter terms of reference, which drew attention to the scarcity factor. Therefore, when a rent is negotiated by a rent officer, between the landlord and the tenant, the scarcity factor is taken fully into account.
  Mr. Winnick: But the important difference is that a regulated tenant has security and knows that, regardless of the pressures put on him by a landlord, he cannot be forced out. Shorthold tenants will have no such security. We shall deceive ourselves if we believe that there will not be pressure on shorthold tenants to agree to unacceptable rents.
  We believe that the shorthold provisions are unacceptable. Much has been made of the fact that my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) has given a pledge to repeal shorthold tenancies. That view is held by all those who are active in the Labour Party and the Labour movement. We should have been disappointed if my right hon. Friend had not made such a pledge.
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  We believe, as a fundamental point of principle, that there must be protection and security for the tenant. We see no reason for apologising for the fact that we find nothing acceptable in shorthold tenancies.
  8.30 pm
  Mr. Gummer: Will the hon. Gentleman explain to my constituents who cannot get a home, but who see homes being left empty because they may be needed in future for an agricultural worker, and homes being let to Americans rather than to British people because there are no shorthold tenancies, how that position improves the equality between the landlord and the tenant? How can he say that to homeless people and believe it?
  Mr. Winnick: Such words are hypocritical in the mouth of a supporter of a Government who seem determined to stop council house building and to make it more difficult for people to buy their own homes, because of property price inflation and the 15 per cent. mortgage interest rate.
  Mr. Bendall: Will the hon. Gentleman give way?
  Mr. Winnick: No, I have given way several times.
  Mr. Major: Will the hon. Gentleman give way?
  Mr. Winnick: Other hon. Members wish to speak, and I do not think that I should give way again. We know who is responsible for guillotining discussion on the Bill.
  Mr. Bob Cryer: Conservative Members are so eager to represent the landlords. They are the landlords' friends.
  Mr. Winnick: As matters stand, the Bill is a charter for rogues and racketeers in the property business. If Rachman were alive he would be encouraged by what is being put forward by the Government. When the Bill becomes an Act, our words will be proved right, just as they were after the 1957 Act. When abuses come to light we shall remind the Conservative Members of our warnings and why we believe that it is necessary to introduce the safeguards proposed in the amendments.
  Sir Brandon Rhys Williams: I feel rather nervous about taking part in the debate because I did not have the good fortune to catch Mr. Speaker's eye on Second Reading and my application to the Committee of Selection to be included on the Standing Committee fell on deaf ears. So many hon. Members on both sides have studied the shorthold idea in such depth lately that I have to approach the subject as an outsider.
  It will be best if I confine my remarks to what I know from facts and observation in my constituency. When I set out in 1973 on my campaign to introduce a new form of tenure it seemed that there was a need for such a new form of tenure but that it should not be regarded as a cure-all for the housing problem.
  Many people, certainly in Kensington and, I believe, to a greater or lesser degree all over the country, do not want absolute, lifelong security of tenure, but want to know where they stand for a year, or two or three years, in decent property where they are paying a reasonable rent and can afford to decorate, lay carpets or make curtains without feeling that the money will be wasted because they will not be in the property long enough to justify making it a decent place for themselves.
  We have seen the demand for holiday lettings, many of which are, I am sure, using a loophole to create shorthold tenancies because the law does not provide the necessary facilities. We owe it to tenants who need short-term accommodation, as much as we owe it to people who have accommodation that they wish to let, to provide a reasonable framework of law in which property can be let without exploitation or abuse. I do not think that it is beyond the wit of hon. Members on both sides of the House to get this legislation right, and we must be close to it now.
  As the hon. Member for Mitcham and Morden (Mr. Douglas-Mann) pointed out, owner-occupiers can let under the 1974 Act, and can regain possession relatively easily under that Act. But they cannot convert part of their property and make a self-contained dwelling, and then let it and relet it on fixed terms. That was a lacuna in the 1974 Act, and he, as
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  an honest man, will I am sure agree. It should be corrected.
  What is happening now to secure properties which become vacant? I am not sure of the number of such properties, what proportion are sold and what proportion are relet, but I am sure that the majority are sold, and that is probably something that cannot be changed in the short term. My guess is that those properties that are relet are not marketable because they are either so squalid as to be very disagreeable properties, or highly specialised or luxurious, and nothing that we do about shorthold will alter their position.
  There is still much empty property in Kensington, certainly in inner London, and I believe throughout the country, which could be let if we provided a proper vehicle. But we are looking only at properties which are now vacant and which could be let as they stand, which could be let after some expense, or which could be let after great expense.
  Mr. Kaufman: I do not wish to prevent the hon. Gentleman from developing his argument, but when he says that we are looking only at property which is now vacant, is he saying that shorthold should apply only to properties that are now vacant rather than to conversions or properties with regulated tenancies? Does he seek to use the shorthold provision as a means of bringing empty properties on to the market?
  Sir B. Rhys Williams: From the start, my object was to bring empty property on to the market, and that is still the primary aim of the Government. Labour Members have tortured themselves with the idea that property that would now be relet if there was not a change in the law would be let unsuitably to families who are longing for life-long security simply because they are desperate for somewhere to live. I do not see that danger, and if there is any such danger it will not be difficult to avoid.
  I looked up some of my original notes of 1973 on shorthold. My main objective then—it still is my main objective—was to get landlords to let. I recognise that it is equally important to foresee and prevent abuse in the stress areas. But there are many areas where there is now no housing stress, and the tenants there

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  will be well able to look after themselves if they are offered properties which they do not like, or for which the rents are unreasonable. In Kensington and in other areas in our great cities there is still a shortage of accommodation, and we need to find a way to protect tenants from exploitation or abuse.
  Let us consider the snags. Labour Members are concerned about what happens at the end of the fixed period. But in our debate on these amendments we are not dealing with Government amendment No. 117, which will be discussed next. Labour Members are being ungenerous in criticising the Government for not moving in their direction when amendment No. 117 provides the concession which they requested in Committee. I do not foresee a tremendous amount of misery developing at the end of the fixed period, particularly if we arrive at the position in which, if people do not get the chance of renewing the tenure of the shorthold they are in, they can easily move to one of the many others being advertised at the time when their lease comes to an end.
  My hon. and learned Friend the Member for Thanet, West (Mr. Rees-Davies) would have suggested that the rent control element should be removed. I do not agree with that in respect of the part of London that I represent, because I am sure that it would be opening the door far too quickly to decontrol, and I would not support that. But I am prepared to believe that there are parts of the country where it is not necessary to apply control. That is something that we could learn about in due course. If the Secretary of State has discretion under the Bill to deal with different regions by separate orders, it might be possible to allow decontrol of rents in shortholds where there is no tendency upwards in the level of rents. Experience would show.
  Mr. Douglas-Mann: I have listened with great sympathy and interest to what the hon. Gentleman has said. When the sort of squalid property that he has described in North Kensington, which he and I have both represented, becomes vacant, what does he think will happen to it? I suggest that, first, it will be let on shorthold. Does he seriously imagine that after the 12-month period has come to an end the landlord will refrain from
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  collecting from his tenants a rent well above the registered rent? Does he not recall what happened in that very area before the Rent Act 1974 came into operation? The rent regulation for furnished tenants was a complete dead letter. There was absolutely no security for any furnished tenant. Such tenants did not dare go to the rent tribunal.
  Sir B. Rhys Williams: The hon. Gentleman's experience of Kensington is very extensive. He remembers a very bad time. But I do not see why there should be special pressure on the tenant of a shorthold in regard to the matter of renewal, any more than at the moment there is pressure on ignorant or foreign people who do not understand our law under the existing very complex housing legislation. I am not convinced that there is this danger, which is being used as something of a scare. If there were to be breaches in the law and abuse in one or two areas, the existing provisions of other laws would enable the Government to overtake them.
  One of the features of the Bill that I introduced each year was that the accommodation to be let on shorthold should be of a relatively high quality such as would qualify for a discretionary improvement grant. Therefore, I did not envisage it being possible to let really squalid or rotten properties on shorthold, because they would not come up to the necessary standard, and the rent officer would not let them through. My Bill would have allowed only a rather limited beginning to the idea.
  If we include no stipulation as to the quality of the premises, the properties let on shorthold will not be any worse than they are now. Shorthold will not lead to the property deteriorating. If the property on one day is disagreeable and the following day it is let on shorthold, it will not make it any worse. I wonder whether hon. Members are suggesting that because it is let on shorthold it will deteriorate. I cannot follow that argument. I do not see any reason why that should happen.
  There is a strong case, however, for a particular kind of discretionary improvement grant aimed at the type of property which would be let in small units. This might apply just in local authority areas where there is a strong

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  demand for bachelor accommodation, or for very small units of accommodation for students and others who are looking for the type of thing that we think would be suitable for a shorthold letting. A grant is really a loan, because it comes back to the local authority in rates over a period, and it would be money very well spent if it were to rescue properties which are deteriorating, and which sooner or later will go out of use for accommodation altogether.
  With regard to the balance of supply and demand, the only way in which we shall get a really satisfactory relationship between landlord and tenant is when the tenant can afford to move out easily because there are other properties of the same sort available and vacant to move into.
  I remember inner London as it was before the war, when there was not a single street without a sign saying "Flat to let ". We could work our way back to that position quite quickly if we made the necessary changes in the law, because of the thousands of unlet properties which ought to be brought back on to the market. We must try to encourage the landlords to let. This is an appeal which I want particularly to aim at Labour Members. If they are as familiar as I am with the problems of young people looking for accommodation and unable to understand why they cannot get property offered to them which they know is vacant in their own neighbourhood, the Opposition will not do anything to sabotage the shorthold concept.
  8.45 pm
  I can well understand that the Opposition may feel that the form in which the Government are presenting shorthold is not ideal or that it does not meet their particular conceptions or constituency circumstances. But just as the 1974 Act was a good measure that contained certain provisions which subsequent experience has shown needed to be changed, so this Bill is likely to show, in time, that there are provisions in it that will, in the light of experience, need to be changed.
  I am not trying to take from Opposition Members the right to criticise or amend, but I implore them to say now that they will accept the shorthold idea in principle and that they will change
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  it only if experience shows that certain changes are needed. I ask them not to damage the concept so that landlords are afraid to let. We do not want landlords to feel that there is a political risk in letting to a tenant on a new form of tenure. There will be nervousness anyway about a new form of tenure, but if the Labour Party makes shorthold impossible because it intends to enfranchise tenants retrospectively or change the nature of the law so as to damage landlords who have entered into these leases, it will deprive people of decent accommodation which should be offered to them and which could so easily be offered to them.
  When the Opposition spokesman deals with this issue, I hope that he will say plainly what the Labour Party would wish to change and will say categorically that there is no question of the Labour Party retrospectively altering the law on shorthold so as to catch landlords who have let. Let the Opposition by all means change the law on future letting following a change of Government in due course but I urge them, at this point, not to damn the whole idea and keep people out of homes which they desperately wish to move into.
  Mr. Stanley: All my hon. Friends will have appreciated what was said by my hon. Friend the Member for Kensington (Sir B. Rhys Williams), to whom the credit for this part of the Bill is really due. If it had not been for the enterprise and creative skill shown by my hon. Friend when we were in opposition and his tenacity in introducing a Private Member's Bill year after year, we might not have these important provisions in the Bill.
  I also think that the whole House will have noted what my hon. Friend said. Those of us who have been in Standing Committee F for three months or more have listened to many hours of debate on the shorthold proposals. The Opposition view was that had my hon. Friend been on that Committee and heard our shorthold proposals he would have rejected them root and branch. The speech that my hon. Friend has just made demonstrates that that is by no means his position.
  My hon. Friend has, quite rightly, indicated that our provisions are in

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  accordance with his own concept of shorthold. He has also said that it is now incumbent upon the Opposition—our having introduced those safeguards, which I shall speak of shortly—not to wreck shorthold but to give it a fair wind. We are grateful to my hon. Friend for making that clear.
  Throughout the passage of this Bill we have recognised that if we could achieve a bipartisan approach to the issue of shorthold it would be in the national housing interest. For that reason I wholly endorse what was said by my hon. Friend the Member for Uxbridge (Mr. Shersby). We have certainly tried to do all that we can to further that objective by trying to reach an accommodation that is consistent with creating a statutory framework in which shorthold can get off the ground.
  Unhappily, in Committee it became apparent that though the Opposition talked about safeguards in almost every other breath they were less concerned with safeguards than with trying to prevent shorthold getting off the ground at all. The Opposition amendments have been characterised by an attempt to create a succession of obstacles to those who wish to make accommodation available for shorthold purposes. The Opposition attitude has also been characterised by an important new amendment, which was not part of the Bill of my hon. Friend the Member for Kensington. It has been characterised by moves that try to restrict the numbers of dwellings that might be made available for shorthold purposes.
  The Opposition suggest that we introduced shorthold on the basis that it is shorn of safeguards. That is nonsense. Some people outside the House and perhaps some hon. Members, such as my hon. Friend the Member for Ilford, North (Mr. Bendall), feel that the safeguards are such that they will have a considerable effect on the number of dwellings available for shorthold purposes.
  My hon. Friend the Member for Uxbridge was right to ask me to set out clearly the safeguards in the Bill as it stands and in an amendment that we hope to have time to discuss.
  The safeguards cover the salient features that affect shorthold tenants. First, we have made it a legal impossibility to convert
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  an existing regulated tenancy to a shorthold. That safeguard was not in the Bill introduced by my hon. Friend the Member for Kensington, and I know that he welcomes the additional safeguards.
  Secondly, we have introduced compulsory rent registration for shortholds. That has never appeared in any Labour Rent Act. It is a new safeguard for tenants.
  Mr. Douglas-Mann: Will the Minister therefore move an amendment to case 19 to prevent a court granting an order for possession if the landlord has been collecting more than the registered rent? As with furnished tenancies, landlords often collect rents that are way in excess of the registered rent because the tenant does not dare to take action. There is nothing to prevent a landlord from gaining possession when he has collected two or three times the registered rent.
  Mr. Stanley: If a landlord fails to comply with the obligation to register a rent within 28 days he incurs the serious penalty of finding that the tenant is a fully protected Rent Act tenant with two successions. Nothing could be a stronger deterrent than that. The hon. Gentleman refers to a landlord who registers a rent and in a backhand way collects additional funds. One of the other important safeguards in the Bill is that the shorthold tenant is a protected tenant in the same way as a tenant under the 1977 Rent Act. Exactly the same protection is accorded to the shorthold tenant in such circumstances as to any other Rent Act tenant when a rent is registered and the landlord tries to abuse the amount of rent secured.
  Mr. Douglas-Mann: I accept that such a tenant will be able to recover up to one year's rent, but he will not have security of tenure. At the end of 12 months of letting under a shorthold the landlord can say to the tenant "I shall let you stay on, but I want twice or three times the rent." If the tenant agrees and pays the landlord much more rent, the tenant will be a shorthold tenant thereafter, with no security of tenure and paying an unregistered rent. Can the Minister assure the House that that is not correct, because that is what the Bill appears to provide?
  Mr. Stanley: The Rent Act 1977 will apply equally to shorthold tenants. If

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  a shorthold tenant continues in a short-hold letting by agreement or because no decision is made by the landlord to obtain vacant possession, the same provisions will apply. However, I shall examine the matter. I shall write to the hon. Gentleman and make my reply available to the House.
  Mr. Douglas-Mann: My understanding of the provisions in the Rent Act 1977 is that a shorthold tenancy is regarded as a suitable alternative tenancy. That will enable a large number of landlords to get their tenants out of regulated tenancies and into shorthold tenancies. I should welcome an assurance on that.
  Mr. Stanley: I shall be glad to deal with that point also. We have introduced compulsory rent registration, which has not been a feature of any previous Rent Act legislation. That is an important point of perspective in respect of that safeguard. During the currency of a shorthold, tenants will have the same statutory protection as other Rent Act protected tenants. That relates to the points raised by the hon. Member for Mitcham and Morden (Mr. Douglas-Mann). It confers greater safeguards on the question of over-payment than those contained in the Bill introduced by my hon. Friend the Member for Kensington.
  We are about to introduce another important safeguard, in the shape of amendment No. 117, which will provide a further minimum period of one year's security if a landlord does not exercise his right of repossession at the end of the first shorthold term.
  Mr. Tony Durant: I thank my hon. Friend for tabling that amendment, for which my hon. Friends and I have pressed. Will he lay out the three alternatives that face a tenant at the end of the shorthold, so that the position is made absolutely clear? There has been rumour and counter-rumour, and anxiety has been expressed outside the House.
  Mr. Stanley: I shall be glad to do so, but briefly, because I am conscious that the right hon. Member for Manchester, Ardwick (Mr. Kaufman) wishes to reply.
  The position at the end of a shorthold is that either the landlord exercises his rieht to gain possession under case 19—
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  the new shorthold mandatory repossession case under the Rent Act—or does nothing. In that case, amendment No. 117 will ensure that the tenant has full Rent Act security for a further year, and the landlord will not be able to apply to the court under case 19 to regain possession until one year after the expiry of the shorthold term. Alternatively, the landlord may have given the tenant a new agreement. In those circumstances the landlord would not be able to use case 19 to regain possession until a year after the end of the original shorthold term, or, if the agreement is for a period longer than one year, until the end of that period. I hope that that is helpful to my hon. Friend.
  I turn to the points raised by the hon. Member for Lambeth, Central (Mr. Tilley). He referred to the registration of rent at the outset of a shorthold. That question was raised in Committee, when I said that I would consider the matter. It has proved difficult to devise a way to achieve the automatic registration of a fair rent at the outset of a shorthold without making shorthold excessively complicated. That is clearly not in the interests of either landlords or tenants. We have not yet been able to devise a satisfactory amendment. I am still considering that problem, and I hope to introduce an amendment in another place.
  The Opposition have clearly found equal difficulty, and their amendment does not solve the problem either. It does not achieve the results that they intended, namely, to ensure that no more than the fair rent is paid at the outset of shorthold. There is no requirement in section 69 of the Rent Act 1977 that a landlord who has been issued with a certificate of fair rent is restricted to that fair rent when and if he lets the property. Obviously, both sides of the House are in some difficulty on that matter. I shall continue to study the problem and introduce an amendment at a later stage.
  Mr. Stephen Ross: The Times leader is misleading on that point. It says that the Government have abandoned the idea of fair rents. That is wrong.
  Mr. Stanley: I am grateful to the hon. Gentleman for that intervention. There are one or two aspects of The Times leader that are wrong, and that is one of them. The fair rent system applies

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  for initial lettings where no rent has been registered—if a rent has been registered only that rent can be applied—and where, under the Bill, the landlord has to apply within 28 days. We are concerned about the gap between the application and the registration of the rent.
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  I turn now to the other Opposition amendments. The Opposition have asked for a register of all shortholds. As the amendment is drafted, no one will be able to let on shorthold until the property is on a register. It would mean that local authorities would have to compile registers of shortholds; it would presumably involve inspecting all the properties that might become available for shorthold; and it would certainly take months, possibly years, before that happened. I think that that would be a serious impediment to getting the shorthold scheme under way.
  As for standards, the amendment tabled in the name of the hon. Member for Liverpool, Edge Hill (Mr. Alton), which he did not move, relates to what was in the Bill introduced by my hon. Friend the Member for Kensington. It is suggested that there should be a special standard for shorthold properties before they can become available. If the standard for shorthold dwellings in accordance with the amendments were applied, 300,000 publicly rented dwellings would not be available for renting and 600,000 privately rented dwellings would fall outside the standard. It does not seem sensible when people want short-term accommodation, to apply a standard that does not apply to long-term rented accommodation in either the public or the private sector.
  Finally, I come to amendment No. 58, to which the Opposition attach the greatest significance. That is the amendment that says that no dwelling shall be made available for shorthold if it was a regulated tenancy at the coming into operation of the Bill.
  We have heard a great deal about the safeguards proposed by my hon. Friend the Member for Kensington. This safeguard at no time features in the Bills that he brought forward. This so-called safeguard
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  is proposed by the right hon. Members for Birmingham, Sparkbrook (Mr. Hattersley) and Manchester, Ardwick (Mr. Kaufman). Let us make no mistake about it: this is the Labour Opposition's requirement for shorthold. The effect, as the House will be aware, would be to take out of potential availability for shorthold a large number of dwellings—the total number of dwellings with regulated tenancies at the commencement of this measure. We see no case for that. At the moment, if a dwelling is regulated there is no way in which it can be converted into a shorthold, for the reasons that I have explained. It is a legal impossibility.
  The effect of what the Opposition are asking for by incorporating the amendment will be that if a regulated tenancy becomes vacant, rather than helping the interests of those who want rented accommodation, we shall make them worse. We shall be denying the owner of that property the ability to let it on a short-term basis. He will have a direct incentive—an even greater incentive than he has now—to sell that property. The effect of the amendment would be to diminish the available rented stock even more rapidly than it is going now. If ever there were clear evidence that the motivation of the Opposition is to reduce the available numbers of shortholds to the smallest possible, it lies in amendment No. 58.
  It is a great sadness that, in terms of housing policy nationally, we have not so far been able to establish a bipartisan approach to shortholds. The Government have bent over backwards to include all reasonable safeguards on the short-hold scheme. In amendment No. 117 we have brought forward a further safeguard. We have now moved our position still further. I think that it now lies firmly with the Opposition to move their position and to make clear whether they are out to wreck shorthold or are genuinely prepared to see whether we can get a new source of short-term accommodation in the private sector for those who desperately need it.
  Mr. Kaufman: On Second Reading the Opposition deliberately made no statement about their attitude to short-hold, other than a holding statement by my right hon. Friend the Member for

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  Birmingham, Sparkbrook (Mr. Hatters-ley), in which he said:
  " If the Minister wants the co-operation of both sides of the House, and if he wants shortholds to be given a fair wind, as he describes it, the safeguards which have previously been included in shorthold Bills must be included in this Bill, and certainly his power to de-register shorthold tenancies must be removed. If he feels unable to do that, short-hold landlords should not enter into agreements in the belief that a future Labour Government would continue with this policy."—[Official Report, 15 January 1980; Vol. 976, c. 1475.]
  Those were my right hon. Friend's remarks at the outset of Parliament's consideration of the Bill, and when the Standing Committee began consideration of the shorthold provisions on 11 March I repeated clearly the attitude of the Opposition. I said:
  " Our position at the end of clause 54 will depend on the Government's reaction to our amendments. I make that clear."—[Official Report, Standing Committee F, 11 March 1980; c. 974.]
  In Committee, we debated shorthold for 11 hours, over five sittings. The official Opposition moved a series of amendments to provide what we regarded as the minimum safeguards for shorthold tenants. Many of those amendments were word-for-word passages from Bills introduced by the hon. Member for Kensington (Sir B. Rhys Williams). Every one of those amendments was defeated by Government Members in the Committee. All the safeguards that we sought to insert, many of them word-for-word safeguards endorsed by the hon. Members for Uxbridge (Mr. Shersby) and for Hampstead (Mr. Finsberg) when they put their support to those policies, were obediently voted down by Conservative Members.
  The shorthold tenancy emerged from those 11 hours of debate in Committee as a serious menace to private tenants. We hoped, even so, that the Government would bring in safeguard amendments to improve the position of shorthold tenants. We made it clear that if that were possible we might be in a position to reassess the attitude that I had stated on behalf of the Opposition. I have to say that the Government have hardly moved at all. They moved one amendment in Committee, which prevented the worst kind of winkling, though, as I shall demonstrate, other forms of winkling remain possible. They have put down one amendment on Report to safeguard the
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  shorthold tenant in only one situation of vulnerability. All the other situations of vulnerability, to which I shall refer shortly, remain. The position, therefore, is almost as bad as ever.
  That is the opinion not only of the official Opposition. Westminster city council, controlled by the Conservative Party and administering an area with particular problems related to private tenancy, held a special meeting on Monday last week and passed an emergency resolution dealing with shorthold. The resolution stated the council's misgivings about shorthold as it emerged from the Standing Committee. The council's principal objection—I shall come to this again—was that only empty properties should be eligible after a certain date—for example, the operative date of the Act—for the granting of shorthold tenancies. That was stated in a resolution moved at a special emergency meeting of the Conservative-controlled Westminster city council, which faces precisely the problems which the hon. Member for Kensington discussed when he advocated short-hold tenancy, and he repeated that advocacy in his remarks today.
  The shorthold concept as it exists in the Bill is not the concept that was to be found in the Bills introduced by the hon. Gentleman. It now falls into place as part of the Government's attack on private tenants. Shorthold tenancies, as they emerge from this Bill, will be nasty, brutish and short.
  There will be no genuine security for the shorthold tenant. After one year of tenancy it will be possible for the landlord to remove the shorthold tenant at three months's notice. After one year's tenancy the shorthold tenant will have three months' tenancy if that is what the landlord decides he should have.
  The tenant will have theoretical rent rights under the Rent Acts. The Minister made much of the tenant having what he described as Rent Act protection, but that protection will only be theoretical, because when the shorthold tenant comes to the end of his tenancy and moves on to what we describe as the shorthold successor tenancy, he will have the choice of agreeing—although that word is peculiar in the circumstances—with his landlord on the rent that the landlord seeks to impose upon him, or agreeing

  375
  to being evicted. That is why the Under-Secretary was perfectly right when he said that the shorthold tenant would have no option.
  Mr. Stanley: I am sure that the right hon. Gentleman would not wish to mislead the House. Would he care to acknowledge that it would be illegal for a landlord to seek to raise the rent above the registered rent level?
  Mr. Kaufman: The hon. Gentleman knows very well, however, that the requirement for a registered rent can be removed by the Secretary of State by an order, without reference to this House. Therefore, the protection of registration will not exist for the tenant for any longer than the Secretary of State wishes it to survive. Following that, instead of the compulsion for registration, there will be only the right to registration. Any tenant faced with eviction after three months will not avail himself of that right to registration. Everyone knows that.
  Mr. Bendall: Will the right hon. Gentleman give way?
  Mr. Kaufman: No. I have only a little time, and I have an important statement to make on behalf of the Opposition.
  As I have pointed out, the situation is that compulsory registration of rents, about which the Minister boasted in his speech, can be removed by the Secretary of State at his will by an order which the House does not have to approve.
  Conservative Members, including the hon. Member for Kensington, have asked what the Opposition's requirements are for reassessing our attitude to shorthold. I shall tell the House. First, we should like registration of the fair rent at the beginning of the tenancy. That is something that the Minister says is not possible. If it is not possible, I would say that it is better not have a shorthold tenancy without it.
  Mr. Stanley: I did not say that it was impossible. I said that it had not been possible to devise a satisfactory amendment so far and that we were continuing to work on the matter with a view to seeing whether we could produce such an amendment in the other place.
  Mr. Kaufman: I am delighted about that, but during the course of the Bill so far the Minister has tabled about 300 amendments which he has found possible. This must be a particularly difficult amendment to table. That being so, this is a serious flaw in the whole shorthold context.
  Secondly, we ask for a right of first refusal of renewal of the shorthold tenancy. Thirdly, we ask for a written agreement of shorthold tenancy to be deposited with the rent officer. Fourthly, we ask for statutory protection for the evicted shorthold tenant under the homeless persons legislation. Fifthly, we ask for the prevention of winkling—that means the prevention of a situation in which a landlord can persuade a protected regulated tenant to move into another property which he owns under a shorthold tenancy.
  We moved amendments to that effect, and the Government rejected them. We asked for proper amenities of the sort that the hon. Member for Kensington was talking about. We asked also that the provision should apply only to empty properties. That is a demand that is made also by the Conservative-controlled Westminster council.
  9.15 pm
  We advanced all these arguments in Committee during 11 hours of debate. After those proceedings we waited to see what the Government would do. The hon. Member for Uxbridge made an appeal to the Opposition. We responded to the sentiments of that appeal even before he made it. When we were asked by the Secretary of State for the Environment to enter into talks with him to ascertain whether a way could be found to achieve agreement, my right hon. Friend the Member for Sparkbrook and I agreed to do so. We met the right hon. Gentleman and the Minister and had talks with them.
  The Government would not budge from the position that they had taken in Committee. The Minister said this evening that the Government did all that they could to secure an agreement. They did all that they could except change their position. We cannot agree to the short-hold tenancy as it exists in the Bill.
  When pressed in Committee, the Minister said that shortholds would come for

  377
  three sorts of property. The first of these was new build. The Minister said that there might be developers who would build new properties for letting under shorthold. We doubt that. Secondly, the Minister said that he believed that empty properties not previously let would come forward for shorthold. That is very much the point that the hon. Member for Kensington made. Thirdly, he said that properties which were currently regulated would fall vacant and would be turned by the landlord into shorthold tenancies.
  It requires some imagination to believe that property speculators will build new property to let under shorthold. As for the letting of currently empty properties, the Small Landlords Association said that
  "the shorthold concept would not achieve the aim of increasing the supply of rented accommodation."
  The Centre for Policy Studies, which I believe has some réclame and support in the Conservative Party, has stated:
  " Proposals for shorthold tenancies are naive in the extreme. It is extremely unlikely that many lettings will result from these provisions."
  I turn to the third form of property—tenancies which are currently regulated, which are fully protected under the Rent Acts and which will be converted by the landlord into shorthold when they fall vacant. That is what we believe will happen.
  We were cautious about the original concept of shorthold as a means of bringing currently empty properties on to the market. The hon. Member for Kensington has told the House that he was excluded by the Government from the Committee that considered the Bill.
  Sir Brandon Rhys Williams: By the Selection Committee.
  Mr. Kaufman: The hon. Gentleman knows that it is the Government who decide which Conservative Members sit in Committee. The hon. Gentleman told us, in what I thought was a rather sad speech, that his main object was to get landlords to let. That is very different from what the shorthold provision is turning into. It is developing into a means of converting fully protected properties into properties that will have all protection removed from them. The Government's scheme steals the name of short-hold for another purpose entirely. It is a
  378
  deliberate device to end security of tenure and rent control for all private tenancies. The tenant will be at the mercy of the landlord. He will be able to tell the tenant to pay up or get out. In addition, he will be able to say "Pay up, and then get out ". All private tenants should know that the shorthold proposal will make them the target of the Tory Government's attack on private tenants.
  The Bill is not only a landlord's charter, but is a sharks' charter. The provision represents the most dangerous attack on private tenants that has been made for 60 years.
  Mr. Bendall rose—
  Mr. Kaufman: I shall repeat the pledge that I made on behalf of the Labour Party. At the outset of these debates, the Labour Party had considerable misgivings about the shorthold provisions. However, we felt that our most constructive course of action would be to propose amendments that would provide safeguards. The Government rejected all of those amendments. They have ruthlessly used their majority to vote against them.
  Even worse, admissions have been forced out of Ministers during the debate. Those admissions reveal that the dangers in the shorthold provisions are more serious than we had thought. While most—but not all—existing regulated tenants need to have no fears about their security of tenure under the Rent Acts, the same cannot be said for any new tenants who accept shorthold tenancies.
  We share the scepticism of such bodies as the Small Landlords Association, and even the Centre for Policy Studies. The latter doubts whether shorthold provisions will create more than a few completely new tenancies. The danger is that winkling may occur where landlords own adjacent properties. Danger also lies in the conversion of regulated tenancies to shorthold tenancies when existing tenancies expire. We have therefore come to the conclusion that the new tenancies represent one of the most dangerous legislative developments to affect tenants of private landlords in the past 60 years. They mark the beginning of the end of genuine security of tenure.
  The Labour Party wishes to make it clear that the next Labour Government will take an early opportunity to repeal

  379
  the shorthold tenancy clauses in the Bill. Those landlords who consider using shorthold tenancies should bear in mind that the next Labour Government will give all shorthold tenants and shorthold successor tenants full security of tenure and protection under the Rent Act. That will not affect the existing rights to repossession that are conferred by the Rent Act 1974, which was enacted by the previous Labour Government, on resident landlords, on those who let their homes while working abroad, and, on those who wish to return home for retirement.
  We warn prospective shorthold tenants that they should not involve themselves
  in such tenancies. Those who accept them might well become victims of a 1980 form of Rachmanism. The Government are acting as if they were the official sponsors of a revival of Rachmanism. They are the enemy of the private tenant, just as they are the enemy of the council tenant and of the would-be home owner, who has been priced out of the market by 15 per cent. mortgages. I therefore call upon my hon. Friends to vote in favour of the amendment.
  Question put, That the amendment be made:—
  The House divided: Ayes 230, Noes 299.

  Division No. 315]

  AYES

  [9.24 p.m.

  Abse, Leo

  Dunn, James A. (Liverpool, Kirkdale)

  Kilfedder, James A.

  Adams, Allen

  Dunnett, Jack

  Kilroy-Sllk, Robert

  Allaun, Frank

  Dunwoody, Mrs Gwyneth

  Kinnock, Neil

  Alton, David

  Eastham, Ken

  Lamble, David

  Anderson, Donald

  Ellis, Raymond (NE Derbyshire)

  Lamborn, Harry

  Archer, Rt Hon Peter

  English, Michael

  Lamond, James

  Ashley, Rt Hon Jack

  Ennals, Rt Hon David

  Leadbitter, Ted

  Ashton, Joe

  Evans, loan (Abordare)

  Leighton, Ronald

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

  Ewing, Harry

  Lestor, Miss Joan (Eton a Slough)

  Bagler, Gordon A. T.

  Faulds, Andrew

  Lewis, Arthur (Newham North West)

  Barnett, Guy (Greenwich)

  Field, Frank

  Lewis, Ron (Carlisle)

  Beith, A. J.

  Fitch, Alan

  Litherland, Robert

  Benn, Rt Hon Anthony Wedgwood

  Fitt, Gerard

  Lofthouse, Geoffrey

  Bennett, Andrew (Stockport N)

  Flannery, Martin

  Lyon, Alexander (York)

  Bidwell, Sydney

  Fletcher, L. R. (Ilkeston)

  Lyons, Edward (Bradford West)

  Booth, Rt Hon Albert

  Fletcher, Ted (Darlington)

  McCartney, Hugh

  Bottomley, Rt Hon Arthur (M'brough)

  Ford, Ben

  McDonald, Dr Oonagh

  Bray, Dr Jeremy

  Forrester, John

  McElhone, Frank

  Brown, Hugh D. (Provan)

  Fraser, John (Lambeth, Norwood)

  McGuIre, Michael (Ince)

  Brown, Robert C. (Newcastle W)

  Freeson, Rt Hon Reginald

  McKay, Allen (Penlstone)

  Brown, Ronald W. (Hackney S)

  Garrett, John (Norwich S)

  McKelvey, William

  Brown, Ron (Edinburgh, Leith)

  Garrett, W. E. (Wallsend)

  Maclennan, Robert

  Buchan, Norman

  George, Bruce

  McNally, Thomas

  Callaghan, Jim (Middleton & P)

  Gilbert, Rt Hon Dr John

  McNamara, Kevin

  Campbell, Ian

  Ginsburg, David

  McWilliam, John

  Campbell-Savours, Dale

  Grant, George (Morpeth)

  Magee, Bryan

  Canavan, Dennis

  Grant, John (Islington C)

  Marks, Kenneth

  Cant, R. B.

  Grtmond, Rt Hon J.

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

  Cartwright, John

  Hamilton, James (Bothwell)

  Marshall, Dr Edmund (Goole)

  Clark, Dr David (South Shields)

  Hamilton), W. W. (Central Fife)

  Marshall, Jim (Leicester South)

  Cocks, Rt Hon Michael (Bristol S)

  Hardy, Peter

  Maynard, Miss Joan

  Cohen, Stanley

  Harrison, Rt Hon Walter

  Meacher, Michael

  Concannon, Rt Hon J. D.

  Hart, Rt Hon Dame Judith

  Mellish, Rt Hon Robert

  Conland, Bernard

  Hattersley, Rt Hon Roy

  Mikardo, Ian

  Cook, Robin F.

  Haynes, Frank

  Millan, Rt Hon Bruce

  Cowans, Harry

  Heffer, Eric S.

  Miller, Dr M. S. (East Kilbride)

  Craigen, J. M. (Glasgow, Maryhill)

  Hogg, Norman (E Dunbartonshire)

  Mitchell, Austin (Grimsby)

  Crowther, J. S.

  Holland, Stuart (L'beth, Vauxhall)

  Mitchell, R. C. (Soton, Itchen)

  Cryer, Bob

  Home Robertson, John

  Morris, Rt Hon Alfred (Wythenshawe)

  Cunliffe, Lawrence

  Homewood, William

  Morris, Rt Hon Charles (Openshaw)

  Cunningham, George (Islington S)

  Hooley, Frank

  Morris, Rt Hon John (Aberavon)

  Cunningham, Dr John (Whitehaven)

  Horam, John

  Morton, George

  Dalyell, Tarn

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

  Moyle, Rt Hon Roland

  Davidson, Arthur

  Howells, Geraint

  Newens, Stanley

  Davies, Rt Hon Denzil (Llanelli)

  Huckfield, Les

  Oakes, Rt Hon Gordon

  Davies, Ifor (Gower)

  Hudson, Davies Gwilym Ednyfed

  Ogden, Eric

  Davis, Clinton (Hackney Central)

  Hughes, Mark (Durham)

  O'Hatloran, Michael

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

  Hughe", Robert (Aberdeen North)

  O'Neill, Martin

  Deakins, Eric

  Hughes, Roy (Newport)

  Orme, Rt Hon Stanley

  Dean, Joseph (Leeds West)

  Janner, Hon Grevltle

  Palmer, Arthur

  Dempsey, James

  Jay, Rt Hon Douglas

  Park, George

  Dewar, Donald

  John, Brynmor

  Parry, Robert

  Dobson, Frank

  Johnson, Walter (Derby South)

  Penhaligon, David

  Dormand, Jack

  Jones, Rt Hon Alec (Rhondda)

  Powell, Raymond (Ogmore)

  Douglas, Dick

  Jones, Barry (East Flint)

  Prescott, John

  Douglas-Mann, Bruce

  Jones, Dan (Burnley)

  Price, Christopher (Lewisham West)

  Dubs, Alfred

  Kaufman, Rt Hon Gerald

  Race, Reg

  Duffy, A. E. P.

  Kerr, Russell

  Radice, Giles

  Richardson, Jo

  Soley, Clive

  Wellbeloved, James

  Roberts, Albort (Normanton)

  Spearing, Nigel

  Welsh, Michael

  Roberts, Allan (Boolle)

  Spriggs, Leslie

  White, Frank R. (Bury & Radcliffe)

  Roberts, Ernest (Hackney North)

  Stallard, A. W.

  Whitehead, Phillip

  Roberts, Gwllym (Cannock)

  Stoddart, David

  Whitlock, William

  Rooker, J. W.

  Strang, Gavin

  Wigley, Dafydd

  Ross, Ernest (Dundee West)

  Straw, Jack

  Williams, Rt Hon Alan (Swansea W)

  Rowlands, Ted

  Summersklll, Hon Dr Shirley

  Wiliams, Sir Thomas (Warrington)

  Ryman, John

  Taylor, Mrs Ann (Bolton West)

  Wilson, Rt Hon Sir Harold (Huyton)

  Sandelson, Neville

  Thomas, Dafydd (Merioneth)

  Wilson, William (Coventry SE)

  Sever, John

  Thomas, Jeffrey (Abertillery)

  Winnick, David

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

  Thomas, Dr Roger (Carmarthen)

  Woodall, Alec

  Short, Mrs Renée

  Tilley, John

  Woolmer, Kenneth

  Sllkln, Rt Hon John (Deptford)

  Tlnn, James

  Wrlgglesworth, Ian

  Silkin, Rt Hon S. C. (Dulwich)

  Torney, Tom

  Wright, Sheila

  Silverman, Julius

  Urwin, Rt Hon Tom

  Young, David (Bolton East)

  Skinner, Dennis

  Varley, Rt Hon Eric G.

  Smith, Cyril (Rochdale)

  Wainwright, Edwin (Dearne Valley)

  TELLERS FOR THE AYES:

  Smith, Rt Hon J. (North Lanarkshire)

  Watkins, David

  Mr. Ted Graham and

  Snape, Peter

  Weetch, Ken

  Mr. Donald Coleman.

  NOES

  Adley, Robert

  Crouch, David

  Hill, James

  Altken, Jonathan

  Dickens, Geoffrey

  Hogg, Hon Douglas (Grantham)

  Alexander, Richard

  Dorrell, Stephen

  Hooson, Tom

  Alison, Michael

  Douglas-Hamilton, Lord James

  Hordem, Peter

  Amery, Rt Hon Julian

  Dover, Denshore

  Howell, Ralph (North Norfolk)

  Ancram, Michael

  du Cann, Rt Hon Edward

  Hunt, David (Wirral)

  Arnold, Tom

  Dunlop, John

  Hunt, John (Ravensbourne)

  Aspinwall, Jack

  Dunn, Robert (Darlford)

  Irving, Charles (Cheltenham)

  Atkins, Robert (Preston North)

  Durant, Tony

  Jenkin, Rt Hon Patrick

  Atkinson, David (B'mouth, East)

  Dykes, Hugh

  Jessel, Toby

  Baker, Nicholas (North Dorset)

  Eden, Rt Hon Sir John

  Johnson Smith, Geoffrey

  Banks, Robert

  Eggar, Timothy

  Jopling, Rt Hon Michael

  Beaumont-Dark, Anthony

  Emery, Peter

  Kaberry, Sir Donald

  Bell, Sir Ronald

  Falrbalrn, Nicholas

  Kellett-Bowman, Mrs Elaine

  Bendall, Vivian

  Falrgrleve, Russell

  Kimball, Marcus

  Benyon, Thomas (Abingdon)

  Faith, Mrs Sheila

  King, Rt Hon Tom

  Benyon, W. (Buckingham)

  Farr, John

  Kitson, Sir Timothy

  Best, Keith

  Fell, Anthony

  Knight, Mrs. Jill

  Bevan, David Gilroy

  Fenner, Mrs Peggy

  Knox, David

  Bitten, Rt Hon John

  Finsberg, Geoffrey

  Lament, Norman

  Biggs-Davison, John

  Fisher, Sir Nigel

  Lang, Ian

  Blackburn, John

  Fletcher, Alexander (Edinburgh N)

  Langford-Holt, Sir John

  Blaker, Peter

  Fletcher-Cooke, Charles

  Latham, Michael

  Body, Richard

  Forman, Nigel

  Lawrence, Ivan

  Bonsor, Sir Nicholas

  Fox, Marcus

  Lawson, Nigel

  Boscawen, Hon Robert

  Fraser, Rt Hon H. (Stafford & St)

  Lee, John

  Bottomley, Peter (Woolwich West)

  Fraser, Peter (South Angus)

  Lennox-Boyd, Hon Mark

  Boyson, Dr Rhodes

  Fry, Peter

  Lester, Jim (Beeston)

  Bralne, Sir Bernard

  Galbraith, Hon T. G. D.

  Lewis, Kenneth (Rutland)

  Bright, Graham

  Gardiner, George (Relgate)

  Lloyd, Ian (Havant a Waterloo)

  Brinton, Tim

  Gardner, Edward (South Fylde)

  Lloyd, Peter (Fareham)

  Brocklebank-Fowler, Christopher

  Garel-Jones, Tristan

  Loveridge, John

  Brooke, Hon Peter

  Gilmour, Rt Hon Sir Ian

  Lyell, Nicholas

  Brotherton, Michael

  Glyn, Dr. Alan

  McCrindle, Robert

  Brown, Michael (Brlgg & Sc'ttiorpe)

  Goodhew, Victor

  Macfarlane, Nell

  Browne, John (Winchester)

  Goodlad, Alastalr

  MacGregor, John

  Bruce-Gardyne, John

  Gow, Ian

  Mackay, John (Argyll)

  Bryan, Sir Paul

  Gower, Sir Raymond

  Macmillan, Rt Hon M. (Farnham)

  Buchanan-Smith, Hon Alick

  Grant, Anthony (Harrow C)

  McNair-Wilson, Michael (Newbury)

  Buck, Antony

  Gray, Hamish

  McNair-Wilson, Patrick (New Forest)

  Budgen, Nick

  Greenway, Harry

  McQuarrie, Albert

  Bulmer, Esmond

  Grieve, Percy

  Madel, David

  Burden, F. A.

  Griffiths, Eldon (Bury St Edmunds)

  Major, John

  Butcher, John

  Griffiths, Peter (Portsmouth N)

  Marland, Paul

  Butler, Hon Adam

  Grist, Ian

  Marlow, Tony

  Cadbury, Jocelyn

  Grylls, Michael

  Marshall, Michael (Arundel)

  Carlisle, John (Luton West)

  Gummer, John Selwyn

  Mates, Michael

  Carlisle, Kenneth (Lincoln)

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

  Mather, Carol

  Chalker. Mrs. Lynda

  Hamilton, Michael (Salisbury)

  Mawby, flay

  Channel, Paul

  Hampson, Dr Keith

  Mawhinney, Dr Brian

  Chapman, Sydney

  Hannam, John

  Maxwell-Hyslop, Robin

  Churchill, W. S.

  Haselhurst, Alan

  Mayhew, Patrick

  Clark, Hon Alan (Plymouth, Sutton)

  Hastings, Stephen

  Mellor, David

  Clark, Sir William (Croydon South)

  Havers, Rt Hon Sir Michael

  Meyer, Sir Anthony

  Clarke, Kenneth (Rusbcllffe)

  Hawkins, Paul

  Miller, Hal (Bromsgrove S Redditch)

  Clegg, Sir Walter

  Hawksley, Warren

  Mills, lain (Meriden)

  Cockeram, Eric

  Hayhoe, Barney

  Miscampbell, Norman

  Colvin, Michael

  Heddle, John

  Mitchell, David (Basingstoke)

  Cope, John

  Henderson, Barry

  Moate, Roger

  Carrie, John

  Heseltine, Rt Hon Michael

  Molyneaux, James

  Costain, A. P.

  Hicks, Robert

  Montgomery, Fergus

  Critchley, Julian

  Higgins, Rt Hon Terence L.

  Moore, John

  382

  383

  Morgan, Geraint

  Rippon, Rt Hon Geoffrey

  Thomas, Rt Hon Peter (Hendon S)

  Morris, Michael (Northampton, Sth)

  Roberts, Michael (Cardiff NW)

  Thompson, Donald

  Morrison, Hon Charles (Devizes)

  Roberts, Wyn (Conway)

  Thorne, Nell (Ilford South)

  Morrison, Hon Peter (City of Chester)

  Ross, Stephen (Isle of Wight)

  Thornton, Malcolm

  Mudd, David

  Ross, Wm. (Londonderry)

  Townend, John (Bridlington)

  Murphy, Christopher

  Rossi, Hugh

  Townsend, Cyril D. (Bexleyheath)

  Myles, David

  Rost, Peter

  Trippler, David

  Needham, Richard

  Royle, Sir Anthony

  Trotter, Neville

  Nelson, Anthony

  Sainsbury, Hon Timothy

  van Straubenzee, W. R.

  Neubert, Michael

  Shaw, Giles (Pudsey)

  Vaughan, Dr Gerard

  Nott, Rt Hon John

  Shaw, Michael (Scarborough)

  Viggers, Peter

  Onslow, Cranley

  Shelton, William (Streatham)

  Waddington, David

  Oppenheim, Rt Hon Mrs Sally

  Shepherd, Colin (Hereford)

  Wakeham, John

  Osborn, John

  Shepherd, Richard (Aldridge-Br'hllls)

  Waldegrave, Hon William

  Page, John (Harrow, West)

  Shersby, Michael

  Walker, Rt Hon Peter (Worcester)

  Page, Rt Hon Sir R. Graham

  Silvester, Fred

  Walker, Bill (Perth & E Perthshire)

  Page, Richard (SW Hertfordshire)

  Sims, Roger

  Walker-Smith, Rt Hon Sir Derek

  Parris, Matthew

  Skeet, T. H. H.

  Wall, Patrick

  Patten, Christopher (Bath)

  Smith, Dudley (War. and Leam'ton)

  Waller, Gary

  Patten, John (Oxford)

  Speller, Tony

  Walters, Dennis

  Pattle, Geoffrey

  Spence, John

  Ward, John

  Pawsey, James

  Spicer, Jim (West Dorset)

  Warren, Kenneth

  Percival, Sir Ian

  Spicer, Michael (S Worcestershire)

  Watson, John

  Peyton, Rt Hon John

  Sproat, lain

  Wells, John (Maidstone)

  Pink, R. Bonner

  Squire, Robin

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

  Pollock, Alexander

  Stainton, Keith

  Wheeler, John

  Porter, George

  Stanbrook, Ivor

  Whitney, Raymond

  Prentice, Rt Hon Reg

  Stanley, John

  Wickenden, Keith

  Price, David (Eastleigh)

  Steen, Anthony

  Wiggin, Jerry

  Proctor, K. Harvey

  Stevens, Martin

  Wilkinson, John

  Raison, Timothy

  Stewart, Ian (Hitchln)

  Williams, Delwyn (Montgomery)

  Rathbone, Tim

  Stewart, John (East Renfrewshire)

  Winterton, Nicholas

  Rees, Peter (Dover and Deal)

  Stokes, John

  Wolfson, Mark

  Rees-Davies, W. R.

  Stradllng Thomas, J.

  Young, Sir George (Acton)

  Renton, Tim

  Tapsell, Peter

  Younger, Rt Hon George

  Rhodes James, Robert

  Taylor, Robert (Croydon NW)

  Rhys Williams, Sir Brandon

  Taylor, Teddy (Southend East)

  TELLERS FOR THE NOES:

  Ridsdale, Julian

  Tebbit, Norman

  Mr. Spencer Le Marchant and

  Rifkind, Malcolm

  Temple-Morris, Peter

  Mr. Anthony Berry.

  Amendment accordingly negatived.
  Mr. Speaker: Under the guillotine motion, I must now put Government amendments Nos. 117 and 64.

Clause 54

  ORDERS FOR POSSESSION
  Amendment made: No. 117, in page 35, line 35, leave out ' and ' and insert—
  ' ( ) it is served—
  (a) in the period of three months immediately preceeding the date in which the protected shorthold tenancy comes to an end; or
  (b) if that date has passed, in the period of three months immediately preceding any anniversary of that date; and '.—[Mr. Stanley.]

Clause 75
  MEANING OF "PREMIUM" IN PART IX OF RENT ACT 1977
  Amendment made: No. 64, in page 51, line 34 leave out ' under the tenancy '.—[Mr. Stanley.]
Clause 78

  PROVISIONS AS TO CONSENTS REQUIRED BY SECTION 77
  Mr. Bendall: I beg to move amendment No. 222, in page 53, line 26, at end insert—
  384
  ' (d) to effect the external appearance of the dwelling house.'.
  The amendment is aimed at clearing up this area and I see no reason why the Government should not give serious consideration to my suggestion, which concerns the question of the external appearance of a property being changed by a tenant.
  Many landlords, while encouraging tenants to carry out repairs and renovations, will be concerned that there could be a large structural alteration to the exterior of a property which could, in the long term, affect its market value. The amendment would make a small improvement and would tidy up the clause.
  The Under-Secretary of State for Wales (Mr. Wyn Roberts): My hon. Friend the Member for Ilford, North (Mr. Bendall) has pointed to the need for landlords to be able to restrict improvements that materially affect the external appearance of a dwelling. I assure my hon. Friend that I take his point, but I do not believe that it would be helpful to include an extra factor that the court should have to take into account when deciding on the reasonableness of a refusal to consent to an improvement.

  385
  A landlord has the power to withhold consent if it is reasonable to do so. That is his safeguard. The tenant has the right to challenge the refusal in court. That is an important safeguard for the tenant. The factors listed in clause 78(1) are a guide to the court but not an exclusive list.
  My hon. Friend referred to value. The point about the value of the property is already covered within the three matters which it is recommended that a court should take into consideration.
  If the landlord has a genuine and good reason for refusing consent, a court may uphold his refusal if it is challenged, whether or not there is an appropriate reference in clause 78. In other words, a court has to take an overall view of reasonableness. Planning consent may be needed for improvements materially affecting the external appearance of a dwelling. Looking at that problem from the tenant's viewpoint, we do not wish to place undue difficulties in the way of a tenant exercising his right. The purpose of part III of the Bill is to give a tenant a range of new freedoms.
  I hope that my hon. Friend accepts that the Bill adequately safeguards the landlord's position, and that he will withdraw his amendment.
  Mr. Bendall: I beg to ask leave to withdraw the amendment.
  Amendment, by leave, withdrawn.
  Mr. Wyn Roberts: I beg to move amendment No. 65, in page 53, line 36, leave out from ' time ' to ' the ' in line 37.
  Mr. Speaker: With this, we may take Government amendments Nos. 66 and 68.
  Mr. Roberts: These are drafting amendments to protect the position of tenants whose landlords may seek to impose an unreasonable condition in consenting to an improvement. They complement the Government's acceptance of an Opposition amendment in Committee which added what is now subsection (4) to clause 78, making it clear that it is for a landlord to show that a condition he imposes is reasonable.
  Amendment No. 65 removes words which are now superfluous. Amendment No. 66 provides that any consent given
  386
  subject to an unreasonable condition shall be held to have been unreasonably withheld. That is significant, because clause 77 (3) provides that any consent that is unreasonably withheld shall be treated as given. Amendment No. 68 will extend the power of the county court to issue a declaration on the question whether a declaration has been withheld or unreasonably withheld. That would encompass questions about whether the conditions were or were not reasonable because of the equation of unreasonable conditions with unreasonable refusal of consent. In Committee we undertook to bring forward such an amendment.
  Amendment agreed to.
  Amendment made: No. 66, in page 53, line 38, at end insert:
  ' and if the landlord gives the consent but subject to an unreasonable condition, the consent shall be taken to have been unreasonably withheld '.—[Mr. Stanley.]

Clause 82

  JURISDICTION OF COUNTY COURT AND RULES OF PROCEDURE
  Amendments made: No. 67, in page 54, line 18, at beginning insert:
  ' Subject to section 11 of this Act '.
  No. 68, in page 54, line 26, after ' was ', insert ' withheld or '.—[Mr. Stanley.]

Clause 86
  POWER OF LOCAL AUTHORITIES TO DISPOSE OF LAND HELD FOR PURPOSES OF PART V OF HOUSING ACT 1957
  Amendment made: No. 145, in page 58, line 7, after '105', insert '(1), (2) and (5) '.—[Mr. Wyn Roberts.]
Clause 90

  NEW HOUSING SUBSIDY TO REPLACE CERTAIN EXISTING SUBSIDIES AND CONTRIBUTIONS
  Amendments made: No. 119, in page 62, line 9, after ' in ' insert ' Part I of '.
  No. 120, in page 62, line 9, at end insert:
  'and
  (c) no payment shall be made under any of the enactments listed in Part II of

  387
  Schedule 9 to this Act in respect of dwellings within a local authority's Housing Revenue Account or a new town corporation's housing account '.—[Mr. Stanley.]

Clause 92

  THE BASE AMOUNT
  Amendment made: No. 121, in page 62, line 40, at end insert:
  ' which is payable in respect of any dwelling within the authority's Housing Revenue Account ".—[Mr. Stanley.]

Clause 95
  HOUSING SUBSIDY FOR OTHER BODIES
  Amendment made: No. 122, in page 64, line 39, after ' sections ', insert ' 92 '—[Mr. Stanley.]
Clause 101

  HOUSES ACQUIRED FOR DISPOSAL AFTER REPAIR, IMPROVEMENT OR CONVERSION
  9.45 pm
  Mr. Wyn Roberts: I beg to move amendment No. 69, in page 67, line 32, leave out
  ' acquiring and disposing of houses '
  and insert
  ' disposing of dwellings '.
  Mr. Speaker: With this we may take Government amendments Nos. 70 and 76.
  Mr. Roberts: In Committee we undertook to introduce amendments to incorporate into the improvement-for-sale scheme dwellings already in the ownership of local authorities.
  The clause at present covers only houses acquired after enactment, but the amendments will make it possible for Exchequer contribution to be paid when local authorities improve and sell houses that they already own. This will offer a real opportunity for local authorities that have unoccupied and unimproved houses that they have already acquired from the private sector to get on with the necessary improvement work and to bring such houses back into use. I am sure that the Opposition will welcome this extension of the scheme.
  The second of these amendments will remove the reference in lines 40 and 41 to the amount received on sale being less than the cost of acquisition and works.
  388
  This part of the amendment is being made for technical reasons and not with any intention of changing the underlying concept of the improvement-for-sale scheme.
  Where an improved dwelling is sold outright with a mortgage provided by, for example, a building society, the actual amount received by the local authority is the appropriate figure to be used in determining the net cost to the local authority. But if the sale takes place on shared ownership terms, for example, or if the local authority itself provides the mortgage finance, using its powers under section 104 of the 1957 Act, the amount received will not be a true basis for calculating the net cost for the purposes of Exchequer contribution and the scheme will need to provide for net costs to be arrived at by reference to the value of the improved dwelling.
  The effect will be no different in principle, but because of the number of different circumstances that will have to be covered it is more appropriate for this issue to be dealt with within the scheme itself rather than by extensive provision on the face of the Bill.
  The second of the amendments will also enable contributions to be paid when two houses have been combined to form one dwelling. I do not expect that there will be many such cases, but sometimes individual houses or flats are too small to be viable after improvement, and it would be wrong to rule out the possibility of turning them into satisfactory houses.
  The amendment to clause 119 will make parallel changes in the improvement for sale arrangements for housing associations.
  Mr. Kaufman: I wish only to thank the Government for the amendment.
  Amendment agreed to.
  Amendment made: No. 70, in page 67, line 34, leave out subsection (2) and insert—
  ' (2) Those cases are where an authority—

  (a) disposes of a house as one dwelling;

  (b) divides a house into two or more separate dwellings and disposes of them; or

  (c) combines two houses to form one dwelling and disposes of it,

  after carrying out works of repair, improvement or conversion.'—[Mr Wyn Roberts.]

Clause 103

  LOCAL AUTHORITY MORTGAGE INTEREST RATES
  Mr. Alton: I beg to move amendment No. 189, in page 69, line 27, at end insert
  ' save that this subsection shall not apply where a local authority lends money on mortgage for the purchase of a dwelling-house under a scheme of low-start mortgages, index-linked mortgages or equity-sharing mortgages, under such a scheme the payments over the term shall be substantially equal to the total of payments which would have been made under the standard rates in force during the term.'.
  Mr. Speaker: With this it will be convenient to take the following amendments:
  No. 190, in page 69, line 35, leave out ' not
  exceeding six months and.'.
  No. 191, in page 69, line 37, leave out ' of six months and '.
  No. 192, in page 69, line 44, leave out '¼ ' and insert ' 1 '.
  No. 193, in page 70, line 6, leave out ' ¼ ' and insert ' 1 '.
  Mr. Alton: Following discussions with other right hon. and hon. Members, and in an effort to try to facilitate debate, I have nothing to add.
  Amendment negatived.
  Amendment made: No. 71, in page 71, line 10, at end insert—
  '(11A) This section does not apply to loans made by local authorities to housing associations under section 119 of the 1957 Act.'—[Mr. Stanley.]

Clause 104

  LOCAL AUTHORITY AND HOUSING CORPORATION INDEMNITIES FOR BUILDING SOCIETIES
  Amendment made: No. 71, in page 71, line 16, leave out from 'lending' to whereby ' in line 18 and insert
  ' on the security of house property '.
  No. 73, in page 71, line 25, at end insert—
  '(1A) In subsection (1) above "house property" means any property which is a house for the purposes of the Housing (Financial Provisions) Act 1958'.—[Mr. Wyn Roberts.]

Clause 111

  RENT REBATES ETC. AND SUPPLEMENTARY BENEFITS
  Mr. Stanley: I beg to move amendment No. 194, in page 77, line 8, at end insert—
  ' (6) In section 22 of the 1972 Act (permitted totals of rent rebates and allowances) after subsection (1) there are inserted the following subsections—
  "(1A)The Secretary of State may, on application by an authority, direct that the authority's permitted total of rebates or allowances for such period as may be specified in the direction shall be such proportion of their standard amount of rent rebates or, as the case may be, standard amount of rent allowances, greater than 110 per cent., as may be specified in the direction.
  (1B) Any direction given under subsection (1A) above may be made conditional upon compliance by the authority concerned with such conditions as may be specified in the direction.".
  The purpose of the amendment is to provide a means of ensuring that no tenant need face a reduction in rent rebate or allowance as a result of the operation of clause 111. When councils are relieved by the clause of the obligation to reimburse the DHSS for rebates and allowances paid through supplementary benefit, the amount reimbursed will cease to be part of the standard amount of rebates and allowances paid by authorities.
  Since councils are permitted to make discretionary additions of up to 10 per cent. of standard amounts, the side effect of the clause, unamended, would be to reduce their scope for such a discretion. The majority of councils will not be affected, but in a few cases—I believe probably only 10 or 12—councils would have to reduce their discretionary payments in order to stay within the 10 per cent.
  I, therefore, think it right to provide a power to increase the permitted discretion in such cases. It would be the intention to use the power if, when the clause comes into force, tenants would otherwise face a reduction in rebate or allowance below their entitlement under local authority schemes as these now exist. This will, I hope, satisfactorily solve a problem that has been put to me on behalf of certain councils, and I hope that the House will accept the amendment.
  Amendment agreed to.

Clause 112

  BORROWING POWERS OF HOUSING CORPORATION.
  Mr. Stanley: I beg to move amendment No. 75, in page 77, line 16, at end add—
  ' (2) In ascertaining the limit imposed by that section any interest payable under section 7(6) of that Act on a loan made by the Secretary of State to the Housing Corporation which, with the approval of the Treasury, is deferred and treated as part of the loan, shall, so far as outstanding, be treated as outstanding by way of principal, whether the loan was made before or is made after the commencement of this section.'.
  The need for the amendment arises from doubts that have been expressed about the interpretation of the Housing Corporation's borrowing limit under section 7 of the Housing Act 1974. The corporation receives annuity loans from the National Loans Fund. Since it is not normally possible for housing associations, to which funds are on-lent by the corporation, to make repayments until the construction of a scheme is completed, and housing association grant paid, interest on the corporation's borrowings from the National Loans Fund is accordingly deferred for three years, after which the corporation can choose to pay the accumulated interest or capitalise it. If it is capitalised, the sum in question is added to the original sum borrowed and the interest becomes payable on it.
  Under the 1974 Act, it has been the practice to count against the borrowing limit only the advances made to the corporation but not the capitalised interest This has been of some concern to the Public Accounts Committee, which raised this question at its hearing on 16 April this year and expressed the view that in future capitalised interest should score against the borrowing limit. We had already appreciated that there was some doubt about how capitalised interest should be treated under the 1974 Act and had decided that the position should be made clear in the Bill.
  I ask the House, therefore, to accept the amendment, which puts the treatment of capitalised interest beyond doubt and secures better control of the Housing Corporation's borrowing when it is treated in this way.
  Mr. Costain: May I draw the attention of my hon. Friend to the misspelling of
  392
  the word "outstanding" in the amendment? I trust that it will be put right in the Bill.
  Mr. Stanley: I have not identified the spelling mistake, but I shall be delighted to ensure that the Bill as reprinted for the Lords is correct in spelling and every other way.
  Amendment agreed to.

Clause 119

  HOUSING ASSOCIATION GRANT
  Amendments made: No. 76, in page 80, line 18, leave out from 'where the association ' to the end of the subsection and insert—
  ' (a) disposes of a house as one dwelling;
  (b) divides a house into two or more separate dwellings and disposes of them; or
  (c) combines two houses to form one dwelling and disposes of it;
  after carrying out works of repair, improvement or conversion.'.
  No. 77, in page 80, line 30, leave out from beginning to end of line 31.—[Mr. Geoffrey Finsberg.]

Clause 123

  WORKING BALANCE IN HOUSING REVENUE ACCOUNT
  Mr. Stanley: I beg to move amendment No. 78, in page 82, line 29, at end add—
  ' (2) Any authority which keeps a Housing Revenue Account may from time to time carry to the credit of its general rate fund (or, as the case may be, the general fund or the general rate) the whole or part of any balance in its Housing Revenue Account.'.
  In our consultation paper which we issued on 25 October 1979 we made public our intention to end the so-called no-profit rule under section 1(3) of the Housing Rents and Subsidies Act 1975. We also made it clear that we would bring forward separate proposals to deal with the resulting credit balances. The Bill as introduced incorporated the abolition of the no-profit rule and this has received an overwhelmingly favourable response from local authorities.
  On 2 April, we issued a consultative paper on the use of credit balances proposing that this should be wholly at the discretion of local authorities. Both the

  393
  AMA and the ADC have welcomed our proposal. However, the ADC has asked that credit balances should be allowed to augment the HIP allocations of local authorities.
  Amendment No. 78 gives effect to our proposal. When credit balances rise local authorities will be able to decide whether any part of that balance should be transferred to the general rate fund. The entire balance can, of course, be applied for housing purposes. Should authorities wish to apply the balance to maintenance and repairs there is no limitation on their doing so, or on the amount of balance that can be spent in that way.
  The provisions of clause 124, which enable local authorities to operate a housing repairs account and to transfer funds to it from a housing revenue account, should facilitate the application of balances to repairs. Should they wish to apply balances to finance capital spending, whether on new building or improvements, they will be able to do so, as now, within their overall HIP allocation.
  We have considered with care whether authorities' HIP allocation should be increased by the amount of any credit balance arising on their housing revenue account. Our conclusion is that such a step would be inequitable, because the total HIP allocation is set for the country as a whole. Increasing individual allocations within that total for some authorities can only reduce them for others. The presumption must be that the authorities with the greatest claim on available expenditure are probably those least likely to be able to increase their allocations by creating credit balances. Therefore, I cannot agree to the proposal made by the ADC, since it would work to the disadvantage of the stress area authorities.
  We considered the possibility of the Exchequer clawing back a proportion of any credit balance, as was done in the 1972 Act We decided against that. That was welcomed by the local authorities. Our conclusion is that local authorities should be responsible both for the creation and the use of any credit balances. The result will be to mirror the arrangements under which authorities are, and will remain, entirely free to make such rate fund contributions to the housing revenue account as they choose. Our proposals will enable them to transfer in the reverse direction. In both cases
  394
  they will be accountable for their decisions to their electorates.
  We consider that this is a proper extension of local authority responsibility. It has been warmly welcomed by the authorities.
  Mr. Kaufman: If the hon. Member for Folkestone and Hythe (Mr. Costain) had been Chairman of our Standing Committee we should have been deprived of the presence of my hon. Friend the Member for West Bromwich, West (Miss Booth-royd) and the hon. Member for Plymouth, Drake (Miss Fookes), but he would have ensured that the only thing wrong with the Bill was the spelling mistakes. I only wish that that was all that was wrong with the Bill. The Minister is being disingenuous in a way that we do not expect of him if he really believes that it is a non-controversial and innocuous proposal. The proposal is deeply objectionable and we shall vote against it.
  The proposal ends the no-profits rule in the Housing Rents and Subsidies Act 1975, under which local authorities are prevented from making a profit from rents. Under the Bill, local authorities will be able to make a profit out of rent. Since the Government's policy is to force up council rents, the prospect of profits becomes great. In their advice to local authorities the Government say that they wish average council house rents this year to rise by £1·80—a 28 per cent, increase on the average council house rent. The implication of the subsidy provision in the Bill and of the public expenditure White Paper cuts in housing expenditure is not only that council house building will sink almost to nil in many areas, but that rents will be forced up to a very high level.
  10 pm
  The Government are providing for and permitting that by removing the no-profit rule in the Bill. That is bad enough, and we find it both objectionable and odious. But now we have an addendum—namely, what the Government will allow to be done with the profits that they are inducing, and in many cases requiring, local authorities to make. The Government are saying to local authorities "Force your council house tenants to pay high rents. Although your tenants are poorer than the generality of your ratepayers, although the average household income of

  395
  council tenants is only 76 per cent. of that of other households in the community, and although your council house tenants are poorer than the rest of the community, the profits that you are making by forcing them to pay unnecessarily high rents shall be used to relieve and to reduce the rate burden on the better-off members of the community."
  That is a peculiar reverse action of the Marxist slogan
  " From each according to his abilities."
  People will be taxed by a Government increase beyond their ability to pay. The proceeds of that tax will be used to
  396
  relieve taxation on the more affluent ratepayers.
  Council tenants in the poorer inner areas of Manchester will be made to pay high rents, which will be used to relieve the rates paid by the better-off living in the outer areas of Manchester. That will happen in every great city. That is why we find the proposal objectionable. It is a reversion to something in the Housing Finance Act 1972 that we also found objectionable and repealed when we returned to office.
  Because we regard it as morally wrong that the poor should be taxed to help the rich, we ask the House to vote against the amendment.
  Mr. Gummer: I rise to speak on this matter because, once again, we are seeing a monochrome attitude by Opposition Members—as though the whole country were exactly the same as the constituency of the right hon. Member for Manchester, Ardwick (Mr. Kaufman). Many of us represent constituencies where the problems are very different from those that he has outlined. Many of the poorest people in my constituency live, not in council houses, but in private properties, often in the depths of the country, which they bought cheaply many years ago. As they have become older they have been less and less able to maintain them, because the rate burden has increased year by year.
  In local authorities, such as the Mid-Suffolk district council or the Suffolk coastal district council, there is a proper rent rebate system, which enables the local authority to help the poorest council tenants in the amount of rent that they pay. It is more difficult for them to do something similar with the rates in general.
  We have already had one terrible blow to our area this evening. The right hon. Member for Ardwick made the most disgraceful statement that I have heard in the House for a long time. Once again, the right hon. Gentleman is talking simply because he finds it difficult to listen to the truth. We know that the numbers of homeless will rise again because of what has been said in the debate. The right hon. Gentleman suggested that we should not agree to the amendment, but it will provide one of the small ways in which a local authority will have more control over how best to deal with its local problems.
  That is the trouble with the whole of the debates in the House on this sort of subject. We have begun to believe that Westminster alone understands every scintilla of what happens in the country as a whole.
  We are supposed to be not only omnipresent, but omniscient. Evidently we are able to draw up the most minute details and to tell every council in the country that to make a profit on its housing revenue account is totally evil in all circumstances. I am sure that many hon.
  398
  Members on both sides of the House in their heart of hearts believe that local authorities often make better decisions on how best to arrange their finances in the interests of their areas than we can possibly make here.
  Why are we so afraid of local democracy? The answer to the right hon. Member for Ardwick is simple. If the Manchester councils behave in the way that he suggested, they must have their political complexion or membership changed at the elections. If they do not behave in the way that he suggested, no doubt whoever is making those decisions will get brownie points with the electorate. To suggest that we in this House have to guard every section of the community, every kind of constituency, against the decisions of locally elected councils is very worrying.
  I hope that the House will support this proposal. It will mean that, for example, my local authority will have the kind of flexibility which it has sought for a long time and without which it will not be able to aim at the people most in need the subsidy and help that it gets. To talk of the public as though they can be categorised easily into council and non-council tenants—that council tenants are poor and that non-council tenants are rich—is not only nonsense but something that the right hon. Member for Ardwick can prove to himself to be wrong any time he cares to take a walk outside this House. The fact is that the local authority is more likely to make sensible decisions within the local context than this House is ever likely to make, particularly if it takes the advice of the right hon. Gentleman.
  Mr. Gwilym Roberts: I strongly support my right hon. Friend the Member for Manchester, Ardwick (Mr. Kaufman) in objecting to the amendment. I do not think that he put the argument strongly enough. Irrespective of what was said by the hon. Member for Eye (Mr. Gummer), statistics prove that council tenants are, on the whole, the poorer section of the community.
  My right hon. Friend under-estimated the statistics when he said that the average income of council tenants was about 76 per cent. of that of the community as a whole. I believe that the figure is slightly

  399
  lower—about 70 per cent. Therefore, on the whole, council tenants are the lower income group in the community.
  The proposal is particularly obnoxious because it amounts to a transfer of resources from the poorer to the richer section of the community. My right hon. Friend did not put the argument strongly
  enough. This is a question not of taxing people in the general sense but of directly taxing the poorer section of the community.
  Question put, That the amendment be made:—
  The House divided: Ayes 287, Noes 231.

  Division No. 316]

  AYES

  [10.08 pm

  Adley, Robert

  Fairgrieve, Russell

  Knox, David

  Alexander, Richard

  Faith, Mrs sheila

  Lamont, Norman

  Alison, Michael

  Farr, John

  Lang, Ian

  Amery, Rt Hon Julian

  Fell, Anthony

  Langford-Holt, Sir John

  Ancram, Michael

  Former, Mrs Peggy

  Latham, Michael

  Arnold, Tom

  Finsberg, Geotlrey

  Lawrence, Ivan

  Aspinwall, Jack

  Fisher, Sir Nigel

  Lawson, Nigel

  Atkins, Robert (Preston North)

  Fletcher, Alexander (Edinburgh N)

  Lee, John

  Atkinson, David (B'mouth, East)

  Fletcher-Cook, Charles

  Lennox-Boyd, Hon Mark

  Baker, Nicholas (North Dorset)

  Forman, Nigel

  Lester, Jim (Beeston)

  Banks, Robert

  Fox, Marcus

  Lewis, Kenneth (Rutland)

  Beaumont-Dark, Anthony

  Fraser, Rt Hon H. (Stafford & St)

  Lloyd, Ian (Havant & Waterloo)

  Bell, Sir Ronald

  Fraser, Peter (South Angus)

  Lloyd, Peter (Fareham)

  Bendall, Vivian

  Fry, Peter

  Loveridge, john

  Benyon, Thomas (Abingdon)

  Galbraith, Hon T. G. D.

  Lyell, Nicholas

  Benyon, W. (Buckingham)

  Gardiner, George (Reigate)

  McGrindle Robert

  Best, Keith

  Gardner, Edward (South Fylde)

  Macfarlane, Neil

  Bevan, David Gilroy

  Garel-Jones, Tristan

  MacGregor John

  Biffen, Rt Hon John

  Ramour Rt. Hon Sirlan

  MacKay, John (Argyll)

  Biggs-Davison, John

  Goodhew, Victor

  McNair-Wilson, Michael (Newbury)

  Blaker, Peter

  Goodlad, Alastair

  McNair-Wilson, Patrick (New Forest)

  Body, Richard

  Gorst, John

  McQuarrie Albert

  Bonsor, Sir Nicholas

  Gow, Ian

  Madel, David

  Boscawen, Hon Robert

  Gower, Sir Raymond

  Major John

  Bottomley, Peter (Woolwich West)

  Grant, Anthony (Harrow C)

  Marland, Paul

  Boyson, Dr Rhodes

  Gray, Hamish

  Marlow, Tony

  Braine, Sir Bernard

  Greenway, Hairy

  Marshall Mirhaol (Arundel)

  Bright, Graham

  Grieve, Percy

  Mates, Michael

  Brinton, Tim

  Griffiths, Eldon (Bury St Edmunds)

  Mathor Carel

  Brocklebank-Fowler, Christopher

  Griffiths, Peter (Portsmouth N)

  Mawby, Ray

  Brooke, Hon Peter

  Grist, Ian

  Mawhinney, Dr Brian

  Brotherton, Michael

  Grylls, Michael

  Maxwell-Hyslop, Robin

  Brown, Michael (Brlgg & Sc'thorpe)

  Gummer, John Selwyn

  Mellor, David

  Browne, John (Winchester)

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

  Meyer, Sir Anthony

  Bruce-Gardyne, John

  Hamilton, Michael (Salisbury)

  mills, lain (Menoen)

  Bryan, Sir Paul

  Hampson, Dr Keith

  Miscampbell, Norman

  Buchanan-Smith, Hon Alick

  Hannam, John

  Moate, Roger

  Buck, Antony

  Haselhurst, Alan

  Molyneaux, James

  Budgen, Nick

  Hastings, Stephen

  Montgomery, Fergus

  Bulmer, Esmond

  Havers, Rt Hon Sir Michael

  Moore, John

  Burden, F.A.

  Hawkins, Paul

  Morgan, Geraint

  Butcher, John

  Hawksley, Warren

  Morris, Michael (Northampton, Sth)

  Butler, Hot Adam

  Hayhoe, Barney

  Morrison, Hon Charles (Devizes)

  Cadbury, Jocelyn

  Heddle, John

  Morrison, Hon Peter (City of Chester)

  Carlisle, John (Luton West)

  Henderson, Barry

  Mudd, David

  Carlisle, Kenneth (Lincoln)

  Heseltine, Rt Hon Michael

  Murphy, Christopher

  Channon. Paul

  Hicks, Robert

  Myles, David

  Chapman, Sydney

  Higgins, Rt Hon Terence L.

  Needham, Richard

  Clark, Hon Alan (Plymouth, Sutton)

  Hill, James

  Nelson, Anthony

  Clark, Sir William (Croydon South)

  Hogg, Hon Douglas (Grantham)

  Neubert, Michael

  Clarke, Kenneth (Rushcllffe)

  Holland, Philip (Carlton)

  Nott, Rt Hon John

  Clegg, Sir Walter

  Hooson, Tom

  Onslow, Cranley

  Cockeram, Eric

  Hordern, Peter

  oppenhpeim Rt Hnn Mrs Sally

  Cope, John

  Howell, Rt Hon David (Guildford)

  Osborn, John

  Corrle, John

  Howell, Ralph (North Norfolk)

  Page" John (Harrow, West)

  Costain A. P.

  Hunt, David (Wirral)

  Page, Rt Hon Sir R. Graham

  Critchley, Julian

  Hunt, John (Ravensbourne)

  rage, Richard (Sw Henfordshire)

  Dickens, Geoffrey

  Irving, Charles (Cheltenham)

  Parris Matthew

  Dorrell, Stephen

  Jenkin, Rt Hon Patrick

  Patten, Christopher (Bath)

  Douglas-Hamilton, Lord James

  Jessel, Toby

  Patten, John (Oxford)

  Dover, Denshore

  Johnson Smith, Geoffrey

  Patten, Geoffrey

  Dunn, Robert (Dartlord)

  Jopling, Rt Hon Michael

  Pawsey, James

  Durant, Tony

  Kaberry, Sir Donald

  Percival, Sir Ian

  Dykes, Hugh

  Keliett-Bowman, Mrs Elaine

  Peyton, Rt Hon John

  Eden, Rt Hon Sir John

  Kimball, Marcus

  Pink, R. Bonner

  Eggar, Timothy

  King, Rt Hon Tom

  Pollock, Alexander

  Emery, Peter

  Kitson, Sir Timothy

  Porter, George

  Fairbairn, Nicholas

  Knight, Mrs. Jill

  Powell, Rt Hon J. Enoch (S Down)

  Prentice, Rt Hon Reg

  Smith, Dudley (War. and Leam'ton)

  van Straubenzee, W. R.

  Price, David (Eastleigh)

  Speller, Tony

  Vaughan, Dr Gerard

  Proctor, K. Harvey

  Spence, John

  Viggers, Peter

  Raison, Timothy

  Spicer, Jim (West Dorset)

  Waddington, David

  Rathbone, Tim

  Spicer, Michael (S Worcestershire)

  Wakeham, John

  Rees, Peter (Dover and Deal)

  Sproat, lain

  Waldegrave, Hon William

  Rees-Davies, W. R.

  Squire, Robin

  Walker, Rt Hon Peter (Worcester)

  Renton, Tim

  Stainton, Keith

  Walker, Bill (Perth & E Perthshire)

  Rhodes James, Robert

  Stanbrook, Ivor

  Walker-Smith, Rt Hon Sir Derek

  Rhys Williams, Sir Brandon

  Stanley, John

  Wall, Patrick

  Ridsdale, Julian

  Steen, Anthony

  Waller, Gary

  Rifkind, Malcolm

  Stevens, Martin

  Walters, Dennis

  Roberts, Michael (Cardiff NW)

  Stewart, Ian (Hitchin)

  Ward, John

  Roberts, Wyn (Conway)

  Stewart, John (East Renfrewshire)

  Watson, John

  Ross, Wm. (Londonderry)

  Stokes, John

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

  Rossi, Hugh

  Stradling Thomas, J.

  Wheeler, John

  Rost, Peter

  Tapsell, Peter

  Whitney, Raymond

  Royle, Sir Anthony

  Taylor, Teddy (Southend East)

  Wickenden, Keith

  Sainsbury, Hon Timothy

  Tebbit, Norman

  Wfggin, Jerry

  Scott, Nicholas

  Temple-Morris, Peter

  Wilkinson, John

  Shaw, Giles (Pudsey)

  Thomas, Rt Hon Peter (Hendon S)

  Williams, Delwyn (Montgomery)

  Shaw, Michael (Scarborough)

  Thompson, Donald

  Winterton, Nicholas

  Shelton, William (Streatham)

  Thome, Nell (Ilford South)

  Wolfson, Mark

  Shepherd, Colin (Hereford)

  Thornton, Malcolm

  Young, Sir George (Acton)

  Shepherd, Richard (Aldridge-Br'hills)

  Townend, John (Bridlington)

  Shersby, Michael

  Townsend, Cyril D. (Bexleyheath)

  TELLERS FOR THE AYES:

  Sims, Roger

  Trippier, David

  Mr. Spencer Le Marchant and

  Skeet, T. H. H.

  Trotter, Neville

  Mr. Anthony Berry

  NOES

  Abse, Leo

  Dobson, Frank

  Janner, Hon Greville

  Adams, Allen

  Dormand, Jack

  Jay, Rt Hon Douglas

  Allaun. Frank

  Douglas, Dick

  John, Brynmor

  Alton, David

  Douglas-Mann, Bruce

  Johnson, Walter (Derby South)

  Anderson, Donald

  Dubs, Alfred

  Jones, Rt Hon Alec (Rhondda)

  Archer, Rt Hon Peter

  Duffy, A. E. P.

  Jones, Barry (East Flint)

  Ashley, Rt Hon Jack

  Dunn, James A. (Liverpool, Kirkdale)

  Jones, Dan (Burnley)

  Ashton, Joe

  Dunnett, Jack

  Kaufman, Rt Hon Gerald

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

  Dunwoody, Mrs Gwyneth

  Kerr, Russell

  Bagler, Gordon A. T.

  Eastham, Ken

  Kilfedder, James A.

  Barnett, Guy (Greenwich)

  Ellis, Raymond (NE Derbyshire)

  Kilroy-Silk, Robert

  Beith, A. J.

  English, Michael

  Kinnock, Neil

  Benn, Rt Hon Anthony Wedgwood

  Evans, loan (Aberdare)

  Lambie, David

  Bennett, Andrew (Stockport N)

  Ewing, Harry

  Lamborn, Harry

  Bidwell, Sydney

  Faulds, Andrew

  Lamond, James

  Booth, Rt Hon Albert

  Field, Frank

  Leadbitter, Ted

  Bottomley, Rt Hon Arthur (M'brough)

  Fitch, Alan

  Leighton, Ronald

  Bray, Dr Jeremy

  Flannery, Martin

  Lewis, Arthur (Newham North West)

  Brown, Hugh D. (Provan)

  Fletcher, Ted (Darlington)

  Lewis, Ron (Carlisle)

  Brown Robert C. (Newcastle W)

  Ford, Ben

  Litherland, Robert

  Brown, Ronald W. (Hackney S)

  Forrester, John

  Lofthouse, Geoffrey

  Brown, Ron (Edinburgh, Leith)

  Freeson, Rt Hon Reginald

  Lyons, Edward (Bradford West)

  Callaghan, Jim (Mlddleton & P)

  Garrett, John (Norwich S)

  Mabon, Rt Hon Dr J. Dickson

  Campbell, Ian

  Garrett, W. E. (Wallsend)

  McCartney, Hugh

  Campbell-Savours, Dale

  George, Bruce

  McDonald, Dr Oonagh

  Canavan, Dennis

  Gilbert, Rt Hon Dr John

  McElhone, Frank

  Cant, R. B.

  Ginsburg, David

  McGuire, Michael (Ince)

  Carter-Jones, Lewis

  Grant, George (Morpeth)

  McKay, Allen (Penlstone)

  Cartwright, John

  Grant, John (Islington C)

  McKelvey, William

  Clark, Dr David (South Shields)

  Grimond, Rt Hon J.

  Maclennan, Robert

  Cocks, Rt Hon Michael (Bristol S)

  Hamilton, James (Bothwell)

  McNally, Thomas

  Cohen, Stanley

  Hamilton, W. W. (Central Fife)

  McNamara, Kevin

  Concannon, Rt Hon J. D.

  Hardy, Peter

  McWilllam, John

  Conlan, Bernard

  Harrison, Rt Hon Walter

  Magee, Bryan

  Cook, Robin F.

  Hart, Rt Hon Dame Judith

  Marks, Kenneth

  Cowans, Harry

  Haynes, Frank

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

  Craigen, J. M. (Glasgow, Maryhill)

  Healey, Rt Hon Denis

  Marshall, Dr Edmund (Goole)

  Crowther, J. S.

  Heffer, Eric S.

  Marshall, Jim (Leicester South)

  Cryer, Bob

  Hogg, Norman (E Dunbartonshire)

  Maynard, Miss Joan

  Cunliffe, Lawrence

  Holland, Stuart (L'beth, Vauxhall)

  Meacher, Michael

  Cunningham, George (Islington S)

  Home Robertson, John

  Mellish, Rt Hon Robert

  Cunningham, Dr John (Whitehaven)

  Homewood, William

  Mikardo, Ian

  Dalyell, Tarn

  Hooley, Frank

  Millan, Rt Hon Bruce

  Davidson, Arthur

  Healey, Rt Hon Denis

  Miller, Dr M. S. (East Kilbride)

  Davies, Rt Hon Denzll (Llanelli)

  Horam, John

  Mitchell, Austin (Grimsby)

  Davies, Ifor (Gower)

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

  Mitchell, R. C. (Soton, lichen)

  Davis, Clinton (Hackney Central)

  Howells, Geraint

  Morris, Rt Hon Alfred (Wythenshawe)

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

  Huckfield, Les

  Morris, Rt Hon Charles (Openehaw)

  Deakins, Eric

  Hudson, Davies, Gwllym Ednyfed

  Morris, Rt Hon John (Aberavon)

  Dean, Joseph (Leeds West)

  Hughes, Mark (Durham)

  Moyle, Rt Hon Roland

  Dempsey, James

  Hughes, Robert (Aberdeen North)

  Newens, Stanley

  Dewar, Donald

  Hushes, Roy (Newport)

  Oakes, Rt Hon Gordon

  402

  403

  Ogden, Eric

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

  Varley, Rt Hon Eric G.

  O'Halloran, Michael

  Short, Mrs Renée

  Wainwright, Edwin (Dearne Valley)

  O'Neill, Martin

  Silkin, Rt Hon John (Deptford)

  Wainwright, Richard (Colne Valley)

  Orme, Rt Hon Stanley

  Silkin, Rt Hon S. C. (Dulwich)

  Watkins, David

  Palmer, Arthur

  Silverman, Julius

  Weetch, Ken

  Park, George

  Skinner, Dennis

  Wellbeloved, James

  Parry, Robert

  Smith, Cyril (Rochdale)

  Welsh, Michael

  Penhaligon, David

  Smith, Rt Hon J. (North Lanarkshire)

  White, Frank R. (Bury & Radcliffe)

  Powell, Raymond (Ogmore)

  Snape, Peter

  Whitehead, Phillip

  Prescott, John

  Soley, Clive

  Whitlock, William

  Price, Christopher (Lewisham West)

  Spearing, Nigel

  Wigley, Dafydd

  Race, Reg

  Spriggs, Leslie

  Williams, Rt Hon Alan (Swansea W)

  Radice, Giles

  Stallard, A. W.

  Williams, Sir Thomas (Warrington)

  Richardson, Jo

  Stoddart, David

  Wilson, Rt Hon Sir Harold (Huyton)

  Roberts, Albert (Normanton)

  Strang, Gavin

  Wilson, William (Coventry SE)

  Roberts, Allan (Bootle)

  Straw, Jack

  Winnick, David

  Roberts, Ernest (Hackney North)

  Summerskill, Hon Dr Shirley

  Woodall, Alec

  Roberts, Gwilym (Cannock)

  Taylor, Mrs Ann (Bolton West)

  Woolmer, Kenneth

  Robinson, Geoffrey (Coventry NW)

  Thomas, Dafydd (Merioneth)

  Wrlgglesworth, Ian

  Rooker, J. W.

  Thomas, Jeffrey (Abertillery)

  Wright, Sheila

  Ross, Ernest (Dundee West)

  Thomas, Dr Roger (Carmarthen)

  Young, David (Bolton East)

  Rowlands, Ted

  Tilley, John

  Ryman, John

  Tlnn, James

  TELLERS FOR THE NOES

  Sandelson, Neville

  Torney, Tom

  Mr. George Morton and

  Sever, John

  Urwin, Rt Hon Tom

  Mr. Ted Graham.

  Question accordingly agreed to.

Clause 124

  HOUSING REPAIRS ACCOUNT
  Amendments made:
  No. 80, in page 83, line 6, leave out '(5) or'.
  No. 81, in page 83, line 15, leave out from ' balance ' to end of line 24.
  No. 82, in page 83, line 27, leave out
  "with the Secretary of State's approval ".
  No. 83, in page 83, line 30, leave out from beginning to end of line 32 and insert
  " If an authority which has opened a Housing Repairs Account ceases to ".
  No. 84, in page 84, line 7, leave out ' or (4)(b)'.—[Mr. Stanley.]

Schedule 9
  SUPERSEDED ENACTMENTS RELATING TO SUBSIDIES, GRANTS AND CONTRIBUTIONS TO HOUSING AUTHORITIES
  Amendment made: No. 123, in page 105, leave out line 8.—[Mr. Stanley]
Schedule 10

  AMENDMENTS OF HOUSING ACT 1974 (c.44), PART VII (LOCAL AUTHORITY GRANTS)
  Amendment proposed: No. 197, in page 106, line 49, at end insert—
  '6A. In Section 64(3)(a) for "£2,000" substitute" £7,000 "and for" £2,400 "substitute" £8,000 "and at the end of the subsection add" orders under this subsection may specify different amounts for different cases and descriptions of case.".'.—[Mr. Alton.]
  Question put, That the amendment be made:—
  The House divided: Ayes 160, Noes 290.

  Division No. 317]

  AYES

  [10.23 p.m.

  Abse, Leo

  Concannon, Rt Hon J. D.

  Dunnett, Jack

  Allaun, Frank

  Cook, Robin F.

  Dunwoody, Mrs Gwyneth

  Alton, David

  Craigen, J. M. (Glasgow, Maryhill)

  English, Michael

  Anderson, Donald

  Oyer, Bob

  Ennals, Rt Hon David

  Archer, Rt Hon Peter

  Cunliffe, Lawrence

  Evans, loan (Abordare)

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

  Cunningham, Dr John (Whitehaven)

  Faulds, Andrew

  Barnett, Rt Hon Joel (Heywood)

  Dalyell, Tarn

  Field, Frank

  Benn, Rt Hon Anthony Wedgwood

  Davidson, Arthur

  Fitch, Alan

  Booth, Rt Hon Albert

  Davies, Rt Hon Denzll (Llanelli)

  Fitt, Gerard

  Brown, Hugh D. (Provan)

  Davies, lfor (Gower)

  Fraser, John (Lambeth, Norwood)

  Brown, Robert C. (Newcastle W)

  Davis, Clinton (Hackney Central)

  Freeson, Rt Hon Reginald

  Brown Ronald W. (Hackney S)

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

  Garrett, John (Norwich S)

  Buchan, Norman

  Deakins, Eric

  George, Bruce

  Callaghan, Jim (Mlddleton & P)

  Dean, Joseph (Leeds West)

  Ginsburg, David

  Campbell-Savours, Dale

  Dempsey, James

  Graham, Ted

  Cant, R. B.

  Dobson, Frank

  Grant, George (Morpeth)

  Cartwright John

  Dormand, Jack

  Grant, John (Islington C)

  Clark, Dr David (South Shield*)

  Douglas, Dick

  Grimond, Rt Hon J.

  Cocks, Rt Hon Michael (Bristol S)

  Douglas-Mann, Bruce

  Hamilton, James (Bothwell)

  Cohen, Stanley

  Dubs, Alfred

  Harrison, Rt Hon Walter

  Coleman, Donald

  Dunn, James A. (Liverpool, Kirkdale)

  Hattersley, Rt Hon Roy

  Haynes, Frank

  Magee, Bryan

  Soley, Clive

  Heffer, Eric S.

  Marks, Kenneth

  Stallard, A. W.

  Hogg, Norman (E Dunbartonshire)

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

  Stoddart, David

  Homewood, William

  Marshall, Dr Edmund (Goole)

  Strang, Gavin

  Horam, John

  Mason, Rt Hon Roy

  Straw, Jack

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

  Meacher, Michael

  Summersklll, Hon Dr Shirley

  Howells, Geraint

  Mitchell, Austin (Grimsby)

  Taylor, Mrs Ann (Bolton West)

  Hudson, Davies, Gwllym Ednyfed

  Mitchell, R. C. (Soton, Itchen)

  Thomas, Dafydd (Merioneth)

  Hughes, Robert (Aberdeen North)

  Morris, Rt Hon John (Aberavon)

  Thomas, Jeffrey (Abertillery)

  Hughes, Roy (Newport)

  Morton, George

  Thomas, Dr Roger (Carmarthen)

  Janner, Hon Greville

  Moyle, Rt Hon Roland

  Tilley, John

  John, Brynmor

  Newens, Stanley

  Tinn, James

  Johnson, Walter (Derby South)

  Oakes, Rt Hon Gordon

  Varley, Rt Hon Eric Q.

  Jones, Rt Hon Alec (Rhondda)

  Ogden, Eric

  Wainwright, Richard (Colne Valley)

  Jones, Barry (East Flint)

  O'Halloran, Michael

  Watkins, David

  Jones, Dan (Burnley)

  O'Neill, Martin

  Weetch, Ken

  Kaufman, Rt Hon Gerald

  Park, George

  Wellbeloved, James

  Kerr, Russell

  Parry, Robert

  White, Frank R. (Bury & Radcliffe)

  Kilfedder, James A.

  Penhaligon, David

  Whitlock, William

  Lamble, David

  Prescott, John

  Wigley, Dafydd

  Lamborn, Harry

  Roberts, Allan (Bootle)

  Williams, Rt Hon Alan (Swansea W)

  Lamond, James

  Roberts, Gwllym (Cannock)

  Williams, Sir Thomas (Warrington)

  Lestor, Miss Joan (Eton & Slough)

  Rooker, J. W.

  Wilson, Rt Hon Sir Harold (Huyton)

  Lewis, Arthur (Newham North West)

  Ross, Ernest (Dundee West)

  Wilson, William (Coventry SE)

  Lewis, Ron (Carlisle)

  Rowlands, Ted

  Winnlck, David

  Litherland, Robert

  Ryman, John

  Woodall, Alec

  Lyon, Alexander (York)

  Sandelson, Neville

  Wrigglesworth. Ian

  Lyons, Edward (Bradford West)

  Sever, John

  Wright, Sheila

  McElhone, Frank

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

  Young, David (Bolton East)

  McGuire, Michael (Ince)

  Short, Mrs Renée

  McKay, Allen (Penistone)

  Silkin, Rt Hon S. C. (Oulwlch)

  TELLERS FOR THE AYES:

  McKelvey, William

  Silverman, Julius

  Mr. A. J. Beith and

  Maclennan, Robert

  Skinner, Dermis

  Mr. Cyril Smith.

  McNamara, Kevin

  Smith, Rt Hon J. (North Lanarkshire)

  NOES

  Adley, Robert

  Chalker, Mrs. Lynoa

  Gower, Sir Raymond

  Aitken, Jonathan

  Channon Paul

  Grant, Anthony (Harrow C)

  Alexander, Richard

  Chapman, Sydney

  Gray, Hamish

  Alison, Michael

  Churchill, W. S.

  Greenway, Harry

  Amery, Rt Hon Julian

  Clark, Hon Alan (Plymouth, Sutton)

  Grieve, Percy

  Ancram, Michael

  Clark, Sir William (Croydon South)

  Griffiths, Eldon (Bury St Edmunds)

  Arnold, Tom

  Clarke, Kenneth (Rushcllffe)

  Griffiths, Peter (Portsmouth N)

  Aspinwall, Jack

  Clegg, Sir Walter

  Grist, Ian

  Atkins, Robert (Preston North)

  Cockeram, Eric

  Grylls, Michael

  Atkinson, David (B'mouth, East)

  Cope, John

  Gummer, John Selwyn

  Baker, Nicholas (North Dorset)

  Corrie, John

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

  Banks, Robert

  Costoin, A. P.

  Hamilton, Michael (Salisbury)

  Beaumont-Dark, Anthony

  Critchley, Julian

  Hampson, Dr Keith

  Bell, Sir Ronald

  Crouch, David

  Hannnm, John

  Bendall, Vivian

  Dickens, Geoffrey

  Haselhurst, Alan

  Benyon, Thomas (Abingdon)

  Dorrell, Stephen

  Hastings, Stephen

  Benyon, W. (Buckingham)

  Douglas-Hamilton, Lord James

  Havers, Rt Hon Sir Michael

  Berry, Hon Anthony

  Dover, Denshore

  Hawkins, Paul

  Best, Keith

  du Carm, Rt Hon Edward

  Hawksley, Warren

  Bevan, David Gilroy

  Dunn, Robert (Dartford)

  Hayhoe, Barney

  Biffen, Rt Hon John

  Durant, Tony

  Heddle, John

  Biggs-Davison, John

  Dykes, Hugh

  Henderson, Barry

  Blackburn, John

  Eden, Rt Hon Sir John

  HeseHine, Rt Hon Michael

  Blaker, Peter

  Edwards, Rt Hon N. (Pembroke)

  Hicks, Robert

  Body, Richard

  Eggar, Timothy

  Higgins, Rt Hon Terence L.

  Bonsor, Sir Nicholas

  Emery, Peter

  Hill, James

  Bottomley, Peter (Woolwich West)

  Fairbalrn, Nichola.

  Hogg, Hon Douglas (Grantham)

  Boyson, Dr Rhodes

  Fairgrieve, Russell

  Holland, Philip (Carlton)

  Braine, Sir Bernard

  Faith, Mrs Sheila

  Hooson, Tom

  Bright, Graham

  Fell, Anthony

  Hordern, Peter

  Brinton, Tim

  Fenner, Mrs Peggy

  Howell, Ralph (North Norfolk)

  Brooke, Hon Peter

  Finsberg, Geoffrey

  Hunt, David (Wirral)

  Brotherton, Michael

  Fisher, Sir Nigel

  Hunt, John (Ravensbourne)

  Brown, Michael (Brigg ft Sc'thorpe)

  Fletcher, Alexander (Edinburgh N)

  Irving, Charles (Cheltenham)

  Browne, John (Winchester)

  Fletcher-Cooke, Charles

  Jenkin, Rt Hon Patrick

  Bruce-Gaidyne, John

  Forman, Nigel

  Jessel, Toby

  Bryan, Sir Paul

  Fox, Marcus

  Johnson Smith, Geoffrey

  Buchanan-Smith, Hon Alick

  Fraser, Peter (South Angus)

  Jopling, Rt Hon Michael

  Buck, Antony

  Fry, Peter

  Joseph, Rt Hon Sir Keith

  Budgen, Nick

  Gardiner, George (Refgate)

  Kaberry, Sir Donald

  Bulmer, Esmond

  Gardner, Edward (South Fyide)

  Kellett-Bowman, Mrs Elaine

  Burden, F. A.

  Garel Jones, Tristan

  Kimball, Marcus

  Butcher, John

  Gilmour, Rt Hon Sir Ian

  King, Rt Hon Tom

  Butler, Hon Adam

  Glyn, Dr. Alan

  Kitson, Sir Timothy

  Cadbury, Jocelyn

  Goodhew, Victor

  Knight, Mrs. Jill

  Carlisle, John (Luton West)

  Goodlad, Alastair

  Knox, David

  Carlisle, Kenneth (Lincoln)

  Gorst, John

  Lamont, Norman

  Carlisle, Rt Hon Mark (Runcorn)

  Gow, Ian

  Lang, Ian

  406

  407

  Langford-Holt, Sir John

  Onslow, Cranley

  Stainton, Keith

  Latham, Michael

  Oppenheim, Rt Hon Mrs Sally

  Stanbrook, Ivor

  Lawrence, Ivan

  Osborn, John

  Stanley, John

  Lawson, Nigel

  Page, John (Harrow, West)

  Steen, Anthony

  Lee, John

  Page, Rt Hon Sir R. Graham

  Stevens, Martin

  Le Marchant, Spencer

  Page, Richard (SW Hertfordshire)

  Stewart, Ian (Hitchin)

  Lennox-Boyd, Hon Mark

  Parris, Matthew

  Stewart, John (East Renfrewshire)

  Lester, Jim (Beeston)

  Patten, Christopher (Bath)

  Stokes, John

  Lewis, Kenneth (Rutland)

  Patten, John (Oxford)

  Stradling Thomas, J.

  Lloyd, Ian (Havant & Waterloo)

  Pattle, Geoffrey

  Tapsell, Peter

  Lloyd, Peter (Fareham)

  Pawsey, James

  Taylor, Robert (Croydon NW)

  Loveridge, John

  Percival, Sir Ian

  Taylor, Teddy (Southend East)

  Lyell, Nicholas

  Peyton, Rt Hon John

  Tebbit, Norman

  McCrindle, Robert

  Pink, R. Bonner

  Temple-Morris, Peter

  Macfarlane, Neil

  Pollock, Alexander

  Thomas, Rt Hon Peter (Hendon S)

  MacKay, John (Argyll)

  Porter, George

  Thompson, Donald

  Macmillan, Rt Hon M. (Farnham)

  Prentice, Rt Hon Reg

  Thorne, Neil (Ilford South)

  McNair-Wilson, Michael (Newbury)

  Price, David (Eastleigh)

  Thornton, Malcolm

  McNair-Wilson, Patrick (New Forest)

  Proctor, K. Harvey

  Townend, John (Bridlington)

  McQuarrie, Albert

  Raison, Timothy

  Townsend, Cyril D. (Bexleyheath)

  Madel, David

  Rathbone, Tim

  Trippier, David

  Major, John

  Rees, Peter (Dover and Deal)

  Trotter, Neville

  Marland, Paul

  Rees-Davies, W. R.

  van Straubenzee, W. R.

  Marlow, Tony

  Renton, Tim

  Vaughan, Dr Gerard

  Marshall, Michael (Arundel)

  Rhys Williams, Sir Brandon

  Viggers, Peter

  Mates, Michael

  Ridsdale, Julian

  Waddington, David

  Mather, Carol

  Rifkind, Malcolm

  Wakeham, John

  Mawby, Ray

  Roberts, Michael (Cardiff NW)

  Waldegrave, Hon William

  Mawhinney, Dr Brian

  Roberts, Wyn (Conway)

  Walker, Bill (Perth & E Perthshire)

  Maxwell-Hyslop, Robin

  Rossi, Hugh

  Walker-Smith, Rt Hon Sir Derek

  Mellor, David

  Rost, Peter

  Wall, Patrick

  Meyer, Sir Anthony

  Royle, Sir Anthony

  Waller, Gary

  Miller, Hal (Bromsgrove & Redditch)

  Sainsbury, Hon Timothy

  Walters, Dennis

  Mills, lain (Meriden)

  Scott, Nicholas

  Ward, John

  Miscampbell, Norman

  Shaw, Giles (Pudsey)

  Warren, Kenneth

  Mitchell, David (Basingstoke)

  Shaw, Michael (Scarborough)

  Wells, John (Maidstone)

  Moate, Roger

  Shelton, William (Streatham)

  Wheeler, John

  Montgomery, Fergus

  Shepherd, Colin (Hereford)

  Whitney, Raymond

  Moore, John

  Shepherd, Richard (Aldridge-Br'hllls)

  Wickenden, Keith

  Morgan, Geraint

  Shersby, Michael

  Wiggin, Jerry

  Morris, Michael (Northampton, Sth)

  Silvester, Fred

  Wilkinson, John

  Morrison, Hon Charles (Devizes)

  Sims, Roger

  Williams, Delwyn (Montgomery)

  Morrison, Hon Peter (City of Chester)

  Skeet, T. H. H.

  Winterton, Nicholas

  Mudd, David

  Smith, Dudley (War. and Leam'ton)

  Wolfson, Mark

  Murphy, Christopher

  Speller, Tony

  Young, Sir George (Acton)

  Myles, David

  Spence, John

  Younger, Rt Hon George

  Needham, Richard

  Spicer, Jim (West Dorset)

  Nelson, Anthony

  Spicer, Michael (S Worcestershire)

  TELLERS FOR THE NOES:

  Neubert, Michael

  Sproat, lain

  Mr. John MacGregor and

  Nott, Rt Hon John

  Squire, Robin

  Mr. Robert Boscawen.

  Question accordingly negatived.
  It being after twenty-four minutes past Ten o'clock, Mr. SPEAKER proceeded, pursuant to the Order [16 April] and the Resolution yesterday, to put forthwith the Questions necessary for the disposal of the business to be concluded at twenty-four minutes past Ten o'clock.

Schedule 15

  AMENDMENT AND EXTENSION OF SECTIONS 19 AND 20 OF HOUSING ACT 1974 (c.44)
  Amendment made: No. 128, in page 125, line 25, at end insert—
  ' Appointment of persons to conduct inquiries
  In section 19, in subsection (1), the words "(who may or may not be a member of the Corporation's staff)" are hereby repealed; and after subsection (1) there is inserted the following subsection—
  "(1A) No person who is, or at any time has been, a member of the Corporation's staff shall be appointed to conduct an inquiry under subsection (1) above.".'.—[Mr. Hesel-tine.]

Schedule 16

  AMENDMENTS OF HOUSING ACT 1974 (c.44) PART III
  Amendments made: No. 130, in page 127, line 26, at end insert—
  ' 1A. In section 29, after subsection (6) there is inserted the following subsection—
  " (6A) In determining the net cost of a housing project under subsection (6) above the Secretary of State may adopt the assessment of the body forwarding the application under subsection (3) above."
  Approved development programmes
  1B. After section 29 there is inserted the following section—
  29A.—(1) In this section "approved development programme "means any programme for the development of housing by registered housing associations prepared by the Housing Corporation or—

  (a) in England and Wales, by a council which has power under section 119 of the Housing Act 1957 to make loans to registered housing associations; or

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  (b) in Scotland, by a local authority; and approved for the time being by the Secretary of State for the purposes of this section.

  (2) Where a registered housing association undertake a housing project which falls within an approved development programme, housing association grant may be paid under section 29 in respect of that project notwithstanding that it has not been approved by the Secretary of State under section 29(1).".'.
  No. 95, in page 127, line 33, at end insert—
  '2A. For subsection (3) of section 30 there are substituted the following subsections—
  " (3) If, after the making of a housing association grant to a registered housing association—

  (a) any land to which the grant relates has been disposed of by the association in any manner;

  (b) any condition imposed under subsection (2) above has not been complied with; or

  (c) the Secretary of State is satisfied that any land to which the grant relates has ceased to be used, or to be available for use, for the purpose for which at the time the project concerned was approved,

  it was intended that it should be used; the Secretary of State may reduce the amount of, or of any payment in respect of the grant or suspend or discontinue any instalment of it or, where any payment has been made to the association in respect of the grant, direct the association to pay to him an amount equal to the whole, or such proportion as he may determine, of the amount so paid to the association.
  (A3) Any amount which a registered housing association is directed to repay to the Secretary of State under subsection (3) above shall be recoverable as a simple contract debt, or in Scotland as a debt due under a contract, in any court of competent jurisdiction.".
  2B. Subsection (5) of section 30 is hereby repealed.'.
  No. 131, in page 127, line 33, at end insert—
  ' 2A. After subsection (2) of section 30 there is inserted the following subsection—
  "(2A) In any case where, by virtue of section 29A above, a housing project has not required the approval of the Secretary of State under section 29(1), the Secretary of State may impose such conditions as are mentioned in subsection (2) above before first making payment of housing association grant in respect of that project.".'.—[Mr. Heseltine.]

Clause 125

  SERVICE CHARGES
  Mr. Nicholas Scott: I beg to move amendment No. 116, in page 84, line 27, at end insert—
  '(3) After Section 71 of the Rent Act 1977 there shall be inserted the following section:—
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  " 71A.—(1) This section applies where the landlord and/or the tenant request the Rent Officer, or as the case may be, the Rent Assessment Committee to register or re-register a rent which includes an amount in respect of the provision of services by the landlord.
  (2) The landlord shall supply the tenant with a written summary of the costs incurred or amounts defrayed in respect of the provision of the said services in the relevant period defined in subsection (5) below, not later than 14 days before the date fixed for the consultation by the Rent Officer or, as the case may be, the hearing before the Rent Assessment Committee.
  (3) The summary shall set out those costs or amounts and the way in which they reflect the provision of services to the tenant, and, if there are more than four flats in the building or the relevant cost or amounts relate to another building also it must;

  (a) be certified by a qualified accountant as being sufficiently supported by accounts, receipts and other documents which have been produced to him; and

  (b) contain such information as the Secretary of State may from time to time prescribe by Order.

  (4) Where a tenant has obtained such a summary as is referred to in subsection (2), if, before the date fixed for the said consultation, or as the case may be, hearing, he requires the landlord in writing to afford him reasonable facilities for inspecting the accounts, receipts, and other documents supporting the summary and for taking copies or extracts from them, the landlord shall then make such facilities available to the tenant and the Rent Officer, or as the case may be, the Rent Assessment Committee shall postpone the said consultation or the said hearing until a date not earlier than 14 days after the date appointed by the landlord for such inspection.
  (5) The relevant period mentioned in subsection (2) above is:

  (a) that specified in Schedule 17, paragraph 7(4)(a) to the Housing Act 1980;

  (b) that specified in Schedule 17, paragraph 7(4)(b) to the Housing Act 1980.

  (6) If the landlord shall fail to perform any duty imposed on him by subsections (2) or (4) above, the Rent Officer, or as the case may be, the Rent Assessment Committee, shall postpone the consultation or hearing until not earlier than 14 days after the landlord shall have performed such duties.
  (7)(i) Costs incurred in the provision of services by the landlord should only be taken into account by the Rent Officer, or as the case may be, the Rent Assesment Committee, to the extent that:

  (a) the costs have been incurred in the provision of chargeable items to a reasonable standard; and

  (b) the costs incurred in respect of the chargeable items, were reasonable,

  (ii) The costs of carrying out works of improvements are to be deemed, by the Rent Officer, or as the case may be, the Rent Assessment Committee, to be reasonable only to the extent that they were undertaken:

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  (a) to comply with any of the provisions of the Housing Acts 1957 to 1969; or

  (b) with the prior written consent of the recognised Tenants' Association or, if no such body exists, or it is not truly independent, of the tenant provided that, in the case of the tenant, such consent is not unreasonably withheld.

  (iii) If the tenant is entitled to the benefit of the implied covenant provided by section 32 of the Housing Act 1961 in respect of his dwelling, no part of the costs incurred by the landlord or the carrying out of prescribed works to the rest of the building of which the tenants' dwelling forms a part or to any other buildings, shall be taken into account.
  The prescribed works for the purposes of this subsection shall be defined as works carried out:

  (a) to keep in repair the structure and the exterior of the building (including drains, gutters and external pipes); and

  (b) to keep in repair and proper working order the installations in the building—

  (i) for the supply of gas, water and electricity and for sanitation (including basins, sinks, baths and sanitary conveniences but not, except as aforesaid, fixtures fittings and appliances for making use of the supply of gas, water and electricity); and

  (ii) for space heating or heating water; and

  (iii) for the provision of services which the landlord provides or is obliged to provide whether by statute or contract.

  (8) A request under paragraph 7 above shall be deemed to be duly served on a landlord if it is served on any agent of the landlord named as such in the rent book or similar document, or on the person who receives the rent on behalf of the landlord; and a person on whom a request is so served shall forward it as soon as may be to the landlord.
  (9) (i) If any person without reasonable excuse fails to perform any duty imposed on him by the Schedule he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £1,000.
  (ii) Where an offence under this Schedule which has been committeed by a body corporate is proved to have been committed with the consent of connivance of, or to be attributable to any neglect on the part of, a director, manager, secretary or other similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate, shall be guilty of an offence and be liable to be proceeded against and punished accordingly.
  (iii) Where the affairs of a body corporate are managed by its members, subsection (2) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
  (10) For the purposes of this Section a qualified accountant shall be defined as set out in paragraph 17 of Schedule 15 to the Housing Act 1980 ".'.
  Mr. Speaker: With this it will be convenient to take the following:
  Amendment No. 94, in page 129, line 25, leave out Schedule 17 and insert—
  'Service charge and relevant costs
  1.—(1) For the purposes of this Schedule, a charge is an amount payable by the tenant of a flat of or in addition to the rent—

  (a) which is payable, directly or indirectly, for services, repairs, maintenance or insurance or the landlord's cost of management; and

  (b) the whole or part of which varies or may vary according to the relevant costs;

  and the relevant costs are the costs or estimated costs (including overheads) incurred or to be incurred in any period (whether the period for which the service charge is payable or an earlier or late period) by or on behalf of the landlord or a superior landlord in connection with the matters for which the service charge is payable.
  (2) Other expressions used in this Schedule are to be construed in accordance with paragraphs 24 to 31 below.
  Limitation of service charge
  2. The extent to which relevant costs are taken into account in determining the amount of a service charge payable for any period shall be limited in accordance with the following paragraphs, and the amount payable shall be limited accordingly; and where the service charge is payable before the relevant costs are incurred, any necessary adjustments shall be made by repayment, reduction of subsequent charges or otherwise.
  (3)—(1) Costs incurred are to be taken into account only to the extent that they are reasonably incurred and costs incurred in the provision of services or the carrying out of works only to the extent that the services have been provided or the works carried out to a reasonable standard.
  (2) The limitations imposed by this Schedule shall not apply to estimated costs representing a reasonable provision for future expenses of a non-annual nature, or a reasonable contribution towards a reserve fund in respect of future expenses until such time as the expenditure is incurred.
  (3) The test of reasonableness is to be applied after the audited accounts are produced and actual costs incurred for the service charge year are known.
  4.—(1) Where the costs to be incurred are for building repair or decoration works or the replacement of plant or machinery, fixtures or fittings, and are likely to exceed the amount prescribed by or under this paragraph, the procedure under paragraphs 5 and 6 below shall be complied with unless dispensed with under paragraph 8.
  (2) The prescribed amount is £25 multiplied by the number of flats in the building or £500. whichever is the greater, but the Secretary of State may by order substitute a different amount for £25 or £500 or both, and such substitution may contain different amounts for different areas or regions.
  (3) If the procedure under paragraphs 5 or 6 is not complied with any costs incurred beyond the prescribed amount shall not be taken into account unless relief is granted under paragraph 8.
  5.—(1) The following procedure shall be observed where no recognised tenants' association exists.
  (2) At least two estimates shall be obtained, one of them from a person wholly unconnected with the landlord.
  (3) The landlord shall notify each tenant as registered in the landlord's records of the proposed works, the persons estimating, the amount of each estimate and the recommendation of the landlord. The landlord shall effect such notification by leaving at each flat a letter addressed to the tenant containing the requisite information, and such letter shall be sufficiently addressed if it is addressed to "the Tenant" generally and does not give the tenant's name. Each such letter shall contain a statement that the tenant has 14 days from the date of service either to approve the landlord's recommendation or to raise objections in writing and that if less than 50 per cent. of the tenants object, the works will be proceeded with and the cost of such works will be considered as reasonable.
  (4) The landlord shall record the response to the letter and if less than 50 per cent of the tenants record objections he may order the works 21 days after the day of service.
  (5) Where a building comprises some flats which have not been let on a long lease the landlord may record one vote for each unlet flat as if he were the tenant.
  (6) If more than 50 per cent. of the tenants raise objections in writing the landlord shall, within 28 days of serving the letter, convene a meeting with the tenants to discuss the landlord's recommendation and/or any alternatives suggested by the tenants.
  (7) If at such meeting more than 50 per cent. of the tenants accept the landlord's recommendation or any suggested alternative, the landlord may proceed with the work on the basis of his recommendation or the agreed alternative and the cost of such work shall be considered reasonable.
  (8) In default of such agreement, the landlord may apply to the county court for directions, and the cost of such proceedings shall be allowed as relevant costs unless the court shall direct otherwise having regard to all the circumstances of the case and the conduct of the parties.
  (9) This procedure shall not apply where the works are of an emergency nature or are required to be carried out under a statutory notice which has been served upon the landlord. In such instances the landlord shall advise each tenant in writing of the nature of the works, the estimated costs and the grounds upon which exemption from the full requirements are based.
  6.—(1) The following shall be observed where a recognised tenants' association exists.
  (2) The landlord shall advise the secretary of the tenants' association of the proposals for the work and the names of at least two
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  persons who are to be approached to submit an estimate.
  (3) The secretary of the tenants' association may within seven days of receipt of such advice inform the landlord of any other persons (not exceeding two) whom the tenants' association wish to be requested to submit an estimate or of any deletions required to the landlord's list
  (4) The landlord shall obtain estimates for the work from the persons agreed with the tenants" association under sub-paragraph (3) above.
  (5) Copies of estimates when received shall be served on the secretary of the tenants' association by hand or by post together with a letter setting out the landlord's recommendations and containing a statement that the association may within 14 days from the day of service accept the landlords recommendations lodge an objection or require a meeting to discuss the recommendations and that in default of doing so the tenants shall be deemed to have accepted the landlord's recommendations and the cost of such works shall be considered as reasonable.
  (6) The association shall be under a duty to consult with the tenants in the building and to convey to the landlord the wishes of the tenants. If the association do not reply within the said period of 14 days the tenants shall be deemed to have accepted the landlord's recommendations and the costs incurred in carrying out the proposed works shall be considered reasonable.
  (7) If a meeting is required by the tenants' association such meeting shall take place within 28 days of the landlord serving the estimates and letter, or such other period as may be agreed between the landlord and the secretary of the tenants' association.
  (8) When the tenants' association object to the landlord's recommendations a meeting must be held within 28 days of the date of the objection to discuss alternative proposals. Failing agreement on such alternative proposals the landlord may apply to the county court for directions, the cost of such proceedings shall be relevant costs unless the Court shall direct otherwise having regard to all the circumstances of the case and the conduct of the parties.
  (9) This procedure shall not apply where the works are of an emergency nature or are required to be carried out under a statutory notice which has been served upon the landlord. In such instances the landlord shall inform the secretary of the tenants' association in writing of the nature of the works, the estimated costs and the grounds upon which exemption from the full requirements are based.
  7. For the purpose of paragraphs 5 and 6 above the landlord shall also mean his duly appointed agent, if any.
  8. In any proceedings relating to a service charge the court may dispense with all or any of the requirements if it appears to the court that the landlord could not reasonably have been expected to comply with them or the court is of the opinion that notwithstanding that all or any of the requirements have not been complies with it is just and equitable to do so.
  Estimation of Relevant Costs
  9. —(1) The relevant costs shall be estimated annually in advance by or on behalf of the landlord such estimate to be certified by an approved person or body and adjusted to reflect the actual costs incurred after the end of the service charge year as reflected in the audited service charge accounts.
  (2) The estimate shall form the basis of demands for payments in advance by the tenant and where appropriate, the landlord, on such periodic basis as shall be agreed by the parties or as is provided in the lease or underlease, such periods to be no less than quarterly.
  (3) The audited account shall form the basis of demands or credits between the estimated costs and the actual costs.
  (4) Where the existing lease provides for the payment of service charges in arrear such provisions shall cease to take effect at the commencement of the next service charge year after the commencement of this Schedule providing that any charges for former years not yet demanded shall be phased equally over a period of five years from the commencement of the next service charge year.
  10.—(1) The estimate of service costs for the service charge year shall be produced by the landlord or his agent two months prior to the commencement of the service charge year and shall show by means of itemised headings the estimated costs for the year based upon previous expenditure for the item and adjusted for price rises, additions or deletions to services and any other relevant factors.
  (2) The estimate shall include an amount to be set aside as a reserve fund and such amount shall be substantiated by means of a reserve fund calculation showing how the figure has been arrived at and when the works covered are likely to be carried out.
  (3) The estimate shall be agreed by the following procedure:

  (a) Where no recognised tenants' association exists it shall be approved by an independent trustee and the landlord or his agent shall submit to the trustee such information as may be required to enable the trustee to certify approval. The trustees may require amendment to all or any of the figures before certifying the estimate. The estimate when circulated to the tenants shall have a certificate attached thereto which indicates the trustees approval;

  (b) where a recognised tenants' association exists it shall be consulted on the content of the estimate within one month of the estimate being produced. The tenants' association and the landlord or his agent shall use their best endeavours to agree the estimate and failing agreement on any point the matter shall be referred to an independent trustee jointly agreed by the parties for determination. A certificate shall be attached to the estimate when circulated to the tenants indicating either that the estimate has been approved by the tenants' association or by the trustee if so referred; and

  (c) failing agreement by the parties on the appointment of the independent trustee, the matter shall be referred to the President of
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  the Chartered Institute of Arbitrators for him to appoint the independent trustee.

  (4) The procedure shall be completed and the estimate circulated to tenants within one month of the commencement of the service charge year unless an extension is agreed between the landlord and tenants or the recognised tenants' association.
  (5) In this paragraph an independent trustee shall mean a person or body who is either a member of a recognised professional body whose members undertake the management of flats or who is a specialist in the administration and management of blocks of flats. He shall not be an officer employee or agent of the landlord. Such trustee shall be entitled to a fee not exceeding 1 per cent. of the certified estimate and such fee shall be allowed as relevant costs.
  (6) Where the services to the building are already administered by a Maintenance Trustee who has no legal title in the building but who is a landlord by virtue of the definition of landlord in this Schedule, such Maintenance Trustee shall be regarded as the independent trustee for the purposes of this paragraph notwithstanding the provisions of sub-paragraph (5) but he shall not he entitled to the 1 per cent. fee if a fee is already being paid for his services.
  Treatment of Reserve Funds
  11.—(1) The reserve fund provision contained within the service charges shall be paid by the landlord or his agent to the trustee within one month of the landlord or his agent receiving payment from the tenant and shall be held by the trustee in trust for the tenants until required to be expended and shall in the meantime be placed on deposit or invested at interest in the manner provided below.
  (2) The trustee may invest the reserve fund in the following manner:

  (a) fixed date Government securities redeemable at par;

  (b) deposit accounts with Clearing Banks; and

  (c) loans to local authorities.

  (3) All interest received shall be credited to the reserve fund.
  (4) Any commissions received by the trustee shall be credited to the reserve fund.
  (5) Withdrawals from the fund shall only be made against the certificate of the landlord's surveyor and the trustee shall satisfy himself that such withdrawals are to be expended on the purposes of the fund except that temporary withdrawals may be made in accordance with paragraph 18 of this Schedule.
  (6) The trustee may amalgamate several such reserve funds for investment purposes provided that accurate records are kept for each individual fund.
  (7) The trustee shall provide the service charge auditors with such information as they deem necessary in order to satisfy them that the reserve fund is properly accounted for.
  (8) The trustee shall be entitled to a reasonable fee for his services which shall be allowed as relevant costs and may be deducted from the reserve fund held by him.
  (9) In this paragraph the trustee shall mean a joint stock bank or insurance company or a public company which is a trust corporation as defined in the Trustee Act 1925 and who is independent of the landlord except for arrangements similar to those described in this paragraph or paragraph 10 in this Schedule except that where the landlord is already a maintenance trustee who has no title in the property or is a joint stock bank or insurance company, it may act as the trustee for the purposes of this paragraph but shall be entitled to no additional fee other than that already prescribed by the lease.
  Information as to relevant costs
  12. The landlord or his agent shall produce a detailed account showing the expenditure during the service charge year under suitable headings and a statement of the reserve fund showing additions, expenditure and interest received. Such account shall be audited by an approved person, and the account and auditor's report shall be circulated to each tenant within eight months of the end of the service charge year.
  13.—(1) The tenant shall be entitled to view the vouchers which support the audited account by giving notice to the landlord or his agent not later than six weeks after the audited account has been circulated, except that where a recognised tenants' association exists this entitlement shall be exercised by an officer of the association on behalf of all the tenants.
  (2) The landlord shall make available at his office or at the office of his agent all the vouchers for a period of two months following receipt of a notice under sub-paragraph (1) above.
  (3) If any of the vouchers are held by any superior landlord, the landlord shall forward a copy of the tenant's or tenants' association's notice to the superior landlord. Upon receipt of such copy notice the superior landlord shall similarly make the vouchers available at his office or the office of his agent.
  (4) Where the office of the landlord or superior landlord or their respective agent is outside a radius of 25 miles of the building, the vouchers or copies thereof shall be supplied by post if so requested by the tenant or tenants' association, and the reasonable cost of such copies shall be paid for the person serving the notice.
  Effect of assignment
  14. The assignment of a tenancy shall not affect the validity of a notice served under paragraph 13 above before the assignment but a person shall not be obliged to make facilities available more than once for the same flat and for the same period.
  Determination of reasonableness
  15. Any agreement made by a tenant of a flat, other than an arbitration agreement within the meaning of section 32 of the Arbitration Act 1950, shall be void insofar as it purports to provide for a determination in a particular manner or on particular evidence of any question whether costs for services, repairs, maintenance, insurance or management were reasonably incurred or whether services or works for
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  which costs are incurred are of a reasonable standard except as provided for in this Schedule.
  16. The County Court, on the application of the landlord or tenant of a flat, may by order, in relation to any chargeable items specified in the order, declare:

  (a) that they have or have not been provided to a reasonable standard;

  (b) that the amount alleged to be payable
  in respect of them is or is not reasonable; and may direct the amount to be paid by the tenant in consequence of the declaration; or, in respect of services or works not yet provided or carried out; and

  (c) that the steps which the landlord intends to take in order to comply with any of the requirements of this Schedule are or are not reasonable in the circumstances.

  Overseas landlords
  17.—(1) An overseas landlord is a person or body whose place of business or whose registered offices are not within the United Kingdom.
  (2) Where the landlord of a block of flats is an overseas landlord he shall by the 1st January 1981 appoint by deed a person or body whose place of business is or whose registered offices are within the United Kingdom to act in his place in all matters relating to service charges and consultation as contained within this Schedule and at all times thereafter maintain such an appointment.
  (3) The landlord shall forthwith notify the tenants or the recognised tenants' association of such appointment.
  Covenants and conditions to be implied in leases
  18.—(1) By virtue of this Schedule the following covenants shall be implied by the landlord:

  (a) That the service charge payments received from each tenant shall be paid into a bank account with a joint stock bank, such account to be operated solely for service charges and to be separate from the landlord's own moneys;

  (b) that if more than one building's service charges are paid into the account, sufficient records shall be kept to identify the individual balances for each building;

  (c) that the landlord shall pay into the said bank account service charges for any flats which are not let on a long lease by paying such a sum as will amount to the difference between the aggregate service charges payable in respect of the flats let on long lease and 100 per cent. of the relevant costs. Such payment is to be made at the agreed periodic dates as defined in paragraph 9(2) of this Schedule; and

  (d) where there is a deficiency in such bank account due to arrears of service charges or to actual expenditure exceeding the estimate, the landlord shall apply to the trustee for a temporary loan from the reserve fund, and shall repay such loan immediately when the deficiency has been made good.

  (2) It shall be an implied condition of any tenancy to which this Schedule applies that any interest charged on an overdraft in such bank account shall form part of the relevant costs provided such interest was not incurred by the landlord's failure to pay his contribution or to apply to the trustee for a loan in which case the interest shall be a charge on the landlord and shall not be allowed as relevant costs.
  Insurance
  19.—(1) Where a lease provides that the fire and other insurance for the building are to be placed through the landlord's nominated insurance company or through any particular insurance company or through the landlord's agency such provisions shall be of no effect.
  (2) The landlord shall place the insurance with an insurance company of repute who normally undertake the insurance of buildings or at Lloyds and in placing the said insurance he shall have regard to the terms being offered and the premium being charged by the aforesaid.
  (3) At least once in every five years the landlord shall obtain quotations from at least two insurance companies of repute who transact building insurance. A quotation from Lloyds shall be regarded as a quotation from one insurance company for the purposes of this sub-paragraph.
  (4) Nothing contained within this paragraph shall prevent the landlord from entering into a long term agreement with an insurance company for a period not exceeding five years providing such agreement produces a reduction in premium.
  (5) Such insurance may incorporate excess provisions of a usual nature.
  (6) In whatever terms the insurance cover to be provided in respect of fire and other risks is expressed the landlord shall insure the building in the full cost of rebuilding together with agents and surveyors fees and costs of demolition and making due allowance for inflation during the rebuilding period.
  Offenees
  20.—(1) If any person without reasonable excuse fails to perform any duty imposed on him by this Schedule he shall be guilty of an offence and liable on summary conviction to a fine not exceeding £1,000.
  (2) Where an offence under this Schedule which has been committed by a body corporate is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of a director, manager, secretary or similar officer of the body corporate, or any person who was purporting to act in any such capacity, he, as well as the body corporate shall be guilty of an offence and be liable to be proceeded against and
  punished accordingly.
  (3) Where the affairs of a body corporate are managed by its members, sub-paragraph (2) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
  Exceptions
  21. This Schedule does not apply to service charges payable by the tenant of a flat the rent of which is registered under Part IV of the 1977 Act.
  22. This Schedule does not apply where the service charges payable by the tenant for any service charge year are less than £75 in Greater London and £50 elsewhere, or where the building consists of four or less flats.
  23. Only paragraphs 10 and 11 shall apply to service charges payable to an association or company the membership of which is wholly or mainly restricted to persons who are tenants in the same block of flats.
  Definitions
  24. A flat is a separate set of premises, whether or not on the same floor, which—

  (a) forms part of a building;

  (b) is divided horizontally from some other part of that building; and

  (c) is constructed or adapted for use for the purposes of a dwelling and is occupied wholly or mainly as a private dwelling.

  25.—(1) A qualified accountant is a person qualified for the purposes of paragraph 3(2) of Schedule 14, but subject to sub-paragraph (2) below.
  (2) None of the following is a qualified accountant—

  (a) a body corporate, except a Scottish firm;

  (b) an officer or employee of the landlord or, where the landlord is a company, of a company which is the landlord's holding company or subsidiary (within the meaning of section 154 of the Companies Act 1948) or a subsidiary of the landlord's holding company; and

  (c) a person who is a partner or employee of any such officer or employee.

  26. "Landlord" includes any person who has a right to enforce payment of a service charge and, in relation to a flat occupied by a tenant under a right conferred by an enactment, also includes the person who, apart from that right, would be entitled to possession of the flat.
  27. "Tenant" includes a person occupying a flat under a right conferred by an enactment, and, where the whole or any part of the flat is sublet shall except for the purpose of paragraphs 5 and 6 where appropriate include also the sub-tenant.
  28. Service charge year is the period defined within the lease or failing such a definition shall be the period 1st January to 31st December in every year.
  29. A "long lease" is a tenancy granted for a term of years certain exceeding twenty one years, whether or not the tenancy is (or may become) terminable before the end of that term by notice given by or to the tenant or by re-entry forfeiture or otherwise.
  30.—(1) A recognised tenants' association is an association of tenants of flats in a building where not less than 50 per cent. of the flats have been let on long leases and where at

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  least 60 per cent, of the tenants of such let flats are members of the association.
  (2)If an association does not meet the requirements of sub-paragraph (1) they can be a recognised tenants' association if the landlord agrees in writing to treat them as such.
  (3) Where an association satisfies the requirements of sub-paragraph (1) above, the secretary shall give written notice to the landlord together with a list of members. Annually there after the secretary shall supply the landlord with a current list of members to prove that the association continues to satisfy the requirements.
  31. The county court or the Secretary of State may issue a certificate to the landlord certifying that a tenants' association shall be recognised notwithstanding that it does not meet the requirements of paragraph 28 and such certificate shall remain valid until upon an application made by the landlord or the association or any tenant the county court or the Secretary of State shall cancel the same.'.
  Government amendments 96 to 105.
  Mr. Scott: These amendments concern the privately rented sector, which has been in substantial decline since the turn of the century. I recognise the efforts that my right hon. and hon. Friends are making to revive it. I draw their attention to the largest block of flats in Europe, just down the river from this House—Dolphin Square. About 10 years ago it was bought by the Westminster city council, by the then chairman of the finance committee, who is now a Government Whip. Since then it has been run in the interests of the tenants on a nonprofit-making basis. It is exemplary in demonstrating how rented accommodation can be provided, with good facilities, at reasonable rent and wholly managed in the interests of the tenants. In London we should manage all our rented property as much in line with the management of Dolphin Square as we can. That may not be possible to achieve at once. Our amendments which were designed to achieve it have not been selected. We may have to pursue the narrower aim in this amendment and the Government amendments, and deal at this time only with service charges.
  Service charges are a growing problem for those who live in central London. People here are more acutely aware of the problem than in other parts of the country. They are in competition with diplomats, business men, tourists and other short-stay visitors. However, all who live in rented accommodation face the problem in differing degrees.
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  Certainly I find in my constituency—and I know that my hon. Friends the Members for Kensington (Sir B. Rhys Williams), City of London and Westminster, South (Mr. Brooks), Paddington (Mr. Wheeler) and Fulham (Mr. Stevens) find it, too—that service charges are increasingly becoming a subject of abuse and exploitation and arouse fear and trepidation in those who are subject to them.
  Government amendment No. 96 seeks to provide some comfort to those who are subject to service charges. I accept that it sets out terms which good landlords will follow. It provides a set of rules for good practice. But most of the good landlords in my constituency and elsewhere in inner London will already be following those rules of practice and will be trying to meet the aims and wishes of their tenants and the bad landlords will be able to follow the letter of the Government amendment and yet ignore all the wishes of their tenants. Those landlords will be able to tell their tenants that they intend to incur certain expenditure and they will be able to ignore any objections by tenants and go ahead with the work. There will be nothing that the law can do to prevent that. We must go further.
  In order to persuade the House of my argument, I should explain how the service charge system is being exploited. In the regulated rented sector, services charges are non-variable and claims are made for services that are not provided. It is difficult for tenants to challenge that. In the first place, once a service charge has been fixed for services that are not provided, tenants cannot go back to the rent officer and challenge the charge without fear that he may alter the rent as well as the service charge. Tenants choose to sit quietly and accept that porters or central heating are not provided or lifts are not in action rather than go back to the rent officer and face another battle with the landlord who may say that the services are out of action temporarily, but in any case he wants an increased rent.
  In the leasehold sector, the area of the market where long leases have been sold to tenants who have spent a substantial capital sum—perhaps their retirement savings—so that they may

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  live in central London for a long time, service charges are increased substantially.
  Once landlords have sold long leases, they receive a small ground rent, but have no other substantial financial interest in the block. In my experience, one of two things happens. Either the landlord neglects the block and it runs down and deteriorates, or he spends the tenants' money in tarting up the block and sells it to someone else at a profit, using the money that tenants have been compelled to pay. Tenants in my constituency are paying a service charge, but at the end of the year are asked to pay £2,000 or £3,000 on demand for expenditure that the landlord has incurred and which they have no right to challenge.
  There are some landlords, both in the rented and the leasehold sector, who have behaved illegally and are fiddling service charges. I am not dealing with them, because if they behave illegally it ought to be possible to catch them. But even those who operate within the law are able to manipulate service charges in order to increase the profitability of their blocks, which is outside the original purpose of service charges.
  Mr. Roger Moate: At some stage, will my hon. Friend relate the Government amendments to the situation he has described? I understand that it would be possible under the Government amendments for those charges to be challenged in court if they were thought to be unreasonable. Presumably there would be a statutory right of consultation before the work was done. Will he explain why the Government amendments would not deal satisfactorily with the situation he has described? It is a matter of great importance to many hon. Members.
  10.45 pm
  Mr. Scott: The difference between my amendments and the Government's amendments is precisely on that point. It is a question whether it is possible to challenge expenditure before it takes place, or whether it is accepted that the expenditure takes place and that once the money has been spent by the landlord a person can go to the county court and say that it is not reasonable. The burden
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  of proof changes once the money has been spent. A tenant, or a tenant on behalf of a residents' association, then has to go to court and say that that expenditure was not reasonably incurred, whereas if there had to be some consultation beforehand the balance would be more in favour of the tenant. Anyone who knows what is happening in central London at present will know that the balance should be redressed in favour of the tenant.
  Mr. Martin Stevens: Does my hon. Friend agree that the problem to which he refers, and about which I give him complete support, arises no less harshly for the weekly tenant when the majority of the flats in a block have been purchased by a tenant co-operative, leaving those tenants with long leases, and perhaps half a dozen tenants who prefer to remain as weekly tenants? They then find that their neighbours put up service charges to increase the value of the property, without spending the money on improving the flats of the weekly tenants. In due course, the weekly tenants are forced out and their neighbours gain a profit in the same way as would have been the case had all the costs been incurred by a 100 per cent. share landlord.
  Mr. Scott: That is another aspect of the tangle into which we have fallen, and the Government amendments do little to extricate us from it.
  There is a point at which landlords in these blocks who are able to increase service charges without any real constraints are able to persuade some people to vacate their flats, create voids, and thus increase the saleable value of the property and increase their profitability.
  Amendment No. 116 relates to those flats within the regulated rent sector. In this amendment we ask that when a rent officer requests a hearing over a rent and an associated non-variable service charge, the tenants who live in the property should have two weeks' notice of the figures of expenditure that the landlord wants to incorporate into the service charge. At present they go to a hearing and are presented with figures. There is no period during which they can prepare their defence against the claims that are made by the landlord. A fornight's notice

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  of claims should be a minimum requirement so that tenants can contest the landlord's claims for service charges which he says he wishes to claim, and the service that he says he has provided and will provide in the coming months and year.
  I turn now to the question of flats that have been sold off on long leases. In ascending order of importance, amendment No. 94 asks four things. First, it asks that the insurance of these blocks should be subject every five years to competitive quotation. A number of the blocks in central London have built into the lease a rule that the insurance of the block should be placed through some sort of agent of the landlord, and that is not subject to competitive quotation. There is a very large block in my constituency whose tenants have themselves obtained competitive quotes from reputable Lloyds brokers, and they are less than 50 per cent of the price they are having to pay under the terms of their lease in order to insure the block. To ask that once every five years competitive quotes should have to be obtained is a minimal protection for those people against exploitation.
  Secondly, the amendment asks that where the ownership of a block of flats is vested in a company outside the United Kingdom—and increasingly the blocks in my constituency and elsewhere in central London are being sold off to companies which have their bases in Liechtenstein. Monte Carlo, Saudi Arabia, and so on, and are able to avoid their responsibility for fulfilling the landlord's side of the covenant between landlord and tenant—that company should have to appoint by deed a company operating under United Kingdom law which would have to fulfil the landlord's covenant and be responsible under our laws to do so.
  Thirdly, where landlords are able—and this Bill will make it easier for them to do so—to collect sinking or reserve funds against major expenditure to be incurred in the future on such things as the replacement of the lifts or the repair of the boilers, that money should be paid to a trustee independent of the landlord or the tenant. We should not have the sort of position that arose recently in a block of flats in Marylebone, where the tenants were asked to pay for substantial capital expenditure of that sort, the block was then sold, the funds they had subscribed
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  were mysteriously whisked away to some foreign part, and they were then asked to pay that money again. They were able to contest the matter successfully in the court, but they should not have been placed in that position in the first place. The money should have been protected, and so should the position of tenants who are asked to pay in advance for repairs and who either die or move out of the block. That money ought to be paid and protected on a trustee basis.
  But the essential element in amendment No. 94 is that, when substantial expenditure in a block of flats is to be incurred, it is not good enough to say that the tenants can challenge that after the expenditure has taken place and plead in the county court that it was not reasonable. Why on earth should they not be able to be consulted before the expenditure takes place? I know that there are difficult tenants. There is also an increasing number of difficult landlords in central London who exploit these situations. Why should it not be possible to have a system of simple arbitration—to have someone appointed by the Institute of Arbitrators or any other body that the Government wish to appoint? I do not mind as long as it happens quickly, cleanly and simply.
  If one cannot get the landlord and the tenant to agree on a major item of expenditure, there should be a case for arbitration. Tenants would quickly realise that the arbitrators would confirm any expenditure that was reasonable, and would quickly cease to challenge items of expenditure that had to be carried out in order to maintain the condition and quality of the block. It would stop the position that we have in several blocks in central London, where expenditure on the boilers, the lifts and the central plant of the block is ignored while the landlord spends money on tarting up the block and putting in pile carpets and mirrors round the reception area so that vacant flats can be sold at much higher prices. That is the sort of abuse that we are trying to stop, and I cannot imagine why the Government should not be seeking to support us in these proposals.
  Mr, Douglas-Mann: I have been listening with great interest and very great sympathy to the hon. Gentleman's

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  speech, but there is one point that I cannot find in his amendment which I thought might have been provided. I refer to some limitation on the level of managing agents' charges, which are frequently set by landlords at 10, 15 or 20 per cent. above the level of expenditure. Have I missed that in the hon. Gentleman's amendments, or is there any provision to prevent managing agents from charging sums vastly in excess of an appropriate rate?
  Mr. Scott: Only the fact that the tenants' association should have some say in who is appointed as the managing agent. That seems to me to be an important advance.
  Whatever these amendments may achieve, I do not believe that we will reach a satisfactory solution to the question of the large blocks in central London until there is a right to buy along the lines suggested by my hon. Friend the Member for Kensington (Sir B. Rhys Williams) or some other formula that will achieve the Dolphin Square solution. But, in the absence of such a scheme, our amendment will achieve a substantial improvement in the lot of private tenants.
  Of course there are technical difficulties and improvements could be made to the amendments in another place if the Government accept in principle that they want to achieve the sort of advance that I have spoken about. On behalf of my constituents and on behalf of other private tenants in central London, I beg the Government to accept these amendments as representing a substantial improvement in the situation of those tenants.
  When Mr. Herbert Morrison was chairman of the London Labour Party he threatened to build the Conservative Party out of London by building council houses. To an extent, he achieved that and I am profoundly worried that, unless something is done to protect the position of private tenants in central London, the policies of my right hon. and hon. Friends in the Government may do more to build the Conservative Party out of central London than Herbert Morrison ever did.
  Mr. Tilley: The warning given by the hon. Member for Chelsea (Mr. Scott) to the Government is that, by this Bill, they may be evicting the Conservative voters
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  out of central London. I hope that they do not do what was done in response to the electoral effect of the council house building of Herbert Morrison and his successors which was merely to alter the boundaries so that the old LCC boundaries became the GLC boundaries and gave the Conservatives a chance of gaining control in County Hall.
  I do not think that any hon. Member would suggest that service charges are not an important part of the payments that have to be made by flat dwellers, particularly in inner London, or that any of us is an expert on service charges unless we happen to be lawyers who were involved in such matters day to day before becoming Members of the House.
  It is no surprise to me, nor do I believe it to be a surprise to the House, that the two major amendments tabled by the "Gang of Five ", the alleged inner London Tory rebels, were written by other organisations. That is no discredit to those hon. Members, and indeed I was only too happy to add my name to amendment No. 116, which, as hon. Members will be aware, was composed and put forward to many hon. Members by the Campaign for Private Tenants' Rights.
  Before coming to that matter, I wish to speak briefly to the slightly more controversial amendment No. 94 which was, I am sure, drafted by Holding and Man agement Ltd which is a maintainee trustee company for a large number of flats in London and other parts of England. The amendment is pages long. We should have been glad for an amendment of such length in Committee to enable us to discuss these matters in the required detail. The amendment contains more words than the report prepared by the hon. Member for St. Marylebone (Mr. Baker) for destroying the Inner London Education Authority—the only other great document to which the hon. Member has attached his name recently.
  11pm
  In some ways the amendment is an improvement. However, the House should be uneasy about it if only because it is drafted by a maintenance trustee company which clearly has an interest. Parts of the amendment are deliberately aimed at extending the influence of such companies. It states that where there is a

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  maintenance trustee it must be appointed as an arbitrator. Legislation which is designed to extend the business of a type of company might be undesirable. In the view of some solicitors representing private tenants, the company errs on the side of landlords and a director of the company has acquired the freehold of a block.
  We must ensure that the obligations enshrined in the amendment are included in the Bill, but there are doubts about whether a company of that type should be imposed on the tenants. There is no reason why tenants should not create a maintenance company if they wish. Their interests could be better served by having a direct relationship with the landlord.
  I hope that the House will be cautious about accepting amendments drafted by people who have a clear interest. With that caveat, I believe that amendment No. 94 represents an improvement.
  Because only five Conservative rebels attached their names to amendment No. 116, I was able to add mine as its sixth supporter. The amendment was drafted not by hon. Members but by the Campaign for Private Tenants' Rights. That organisation, which is London based, has done an immense amount of good in the last few weeks by alerting private tenants to the problems created by the Bill. The actions of the campaign have not met with complete approval by the Government Front Bench. I warn Government Back Benchers who support the amendment about the views of their ministerial guides and mentors on the organisation which they so bravely support.
  In Committee, the Under-Secretary of State for the Environment said:
  " I hope that the Johnny-come-lately organisation that is exploiting the fears of tenants—the Campaign for Private Tenants' Rights—can be put in its proper context, because it took no interest in this matter until it decided to take a political view on the Bill. "
  I presume that nobody here is being accused of taking a political view. The Under-Secretary went on to say:
  " It began most of its activities on shortholds and then, by the way, suddenly found—rather like the Poujadistes—that it could perhaps get monetary support and applause on service charges."
  He continued:
  " I was somewhat irritated about the Campaign for Private Tenants' Rights only because I have received letters from old ladies in my
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  constituency who are scared to death by the lying propaganda of that organisation. I shall not forgive anybody "—
  he did not in that remark exclude even his right hon. and hon. Friends—
  " for scaring my constituents with total lies. It is time that organisation learnt that if it makes a point reasonably, sensibly and honestly, people will take note of it."—[Official Report. Standing Committee F, 29 April 1980; cc. 2509–14.]
  Those were the remarks of a junior Minister about that organisation. It is stretching the imagination of the House to see the hon. Member for Chelsea and his colleagues in rebellion as Poujadistes. We could think of no way in which they would resemble populist French shopkeepers. But the point is made, and the warning is there.
  I wish to make it clear that, while we accept most of amendment No. 94 because it improves the Bill, we are not in any way convinced that it is an improvement on the present position. We fully support amendment No. 116 because we were convinced long before Conservative Members that the Campaign for Private Tenants' Rights had the matter right. [Interruption.] I am not trying to make a party political point. It is important to put the matter in context.
  We have been treated in the press to reports of the great rebellion. The Sunday Times said:
  " Tory backbenchers rebel at raw deal for tenants."
  The Financial Times said:
  " Backbenchers make move to amend Housing Bill."
  The Sunday Times article referred to the hon. Member for Chelsea by name not even by the title of "Mister", which may be a breach of privilege in the House—when it said:
  " Scott lists points which will make the life of the private tenant more difficult. The review period for fair rents is being reduced from three years to two, so that rents will rise more rapidly."
  I am sure that hon. Members will remember how the issues of fair rent phasing, which could have been raised earlier tonight under the guillotine, were so hotly contested by the inner London Tory rebels.
  An article in the Financial Times by Elinor Goodman reads:
  " Five Tory MPs for London constituencies are making a last-minute bid today to persuade the Government to amend the Housing Bill.

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  They want the particular problems of inner urban areas to be taken into account.
  At the end of a campaign to change the Bill more radically, the deputation is likely to concentrate today on the more limited aim of improving control private tenants and leaseholders have over their service charges."
  How right was that report about the limited aim at the end of a campaign of which the five Members and their tenants and constituents have not seen the beginning.
  The Under-Secretary of State, the hon. Member for Hampstead (Mr. Finsberg), rightly described the alleged Poujadistes as "Johnny-come-latelys". There is no doubt in the mind of anyone who is aware of the problems that the Bill will create for tenants in inner London that, important though service charges may be—and no one would detract from that—they pale into insignificance beside the two issues of security of tenure and rent levels.
  If the "Gang of Five" of inner London rebels did not make a single—
  Mr. Douglas Hogg: More clichés.
  Mr. Tilley: It is not more clichés; it is the same one.
  Mr. Hogg: That does not make it any better.
  Mr. Tilley: If they did not raise a peep on those issues, they cannot claim in any way to be representing the problems that their constituents, who are private tenants, will have to face. They say fine words in the constituencies.
  I am ready to speak from the local press. The Paddington Mercury quotes the hon. Member for Paddington (Mr. Wheeler). We have not heard it here. All I am asking is that what is said at meetings should be repeated here, but we have not heard a word of it. The hon. Member for Paddington is quoted as saying that
  " he found himself in a ' state of rebellion ' against the Government over certain aspects of the Bill."
  So far it has been a very quiet rebellion.
  " ' Over the years I have heard nobody who has anything to say in favour ' "—
  Mr. John Wheeler: If the hon. Gentleman will sit down, I will commence the state of rebellion from this side of the House.
  Mr. Tilley: I was hoping that the hon. Gentleman would rise to the provocation. He clearly has. The quotation goes on:
  " ' Over the years I have heard nobody who has anything to say in favour of keeping the private rented sector at all ', he said ' It is dying and the sooner it goes the better '."
  Will the hon. Gentleman tell the House whether that is a misquotation? I realise that being misquoted is the lowest form of hindsight, but it is sometimes necessary. Will he say whether that is what he believes and whether he will vote on the basis of that statement not only on this amendment, but on the Bill as a whole? Otherwise he will stand accused of saying one thing to his constituents and to the local press and another in this House and of voting in another way.
  I am still on the matter of service charges, although I admit that I have had to broaden the issue somewhat to make my point. There used to be another "Gang of Five". In January 1979 the West London Observer, under the heading
  " Charter wanted for private tenants ",
  reported:
  " Five local Tory MPs have launched a campaign to obtain a charter for private tenants. It suggests setting up landlord-tenant courts, giving tenants' associations the right to buy ".
  I know that the hon. Member for Chelsea complained that his "Dolphin Square" amendment was not called. The article goes on to list seven points:

  " 1. Landlord-Tenant Courts: …

  2. Recognition of Tenants' Associations: …

  3. Right of Purchase by Tenants' Associations: …

  4. Extension of Security of Tenure: …

  5. Shortholds: …

  6. Tax incentives on lettings: …

  7. Tax Credit Scheme ".

  The membership has changed slightly. The inner core—the hon. Members for St. Marylebone, Kensington (Sir B. Rhys Williams) and Chelsea—is still there. They have been added to in the new group by the hon. Members for Paddington and Fulham (Mr. Stevens). The two who have left are the hon. Member for the City of London and Westminster, South (Mr. Brooke), who is now a Whip—I am not asking him to leap to the defence of himself or the other members—and the hon. Member for Hampstead.
  Of those seven items, which they called a charter for private tenants in order to get publicity, only one—shorthold—which

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  we believe will be harmful to private tenants, has been put into practice by the Department of the Environment in which the hon. Member for Hampstead is a Minister. The other six items have been forgotten.
  Mr. Toby Jessel: On a point of order, Mr. Deputy Speaker. Is it in order for an hon. Member, being one of six main signatories to an amendment being debated, to devote the major part of his speech to attacking the other five signatories?
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): The content of an hon. Member's speech is not a matter for the Chair as long as it is in order.
  Mr. Tilley: It may bring some comfort to the hon. Member for Twickenham (Mr. Jessel) if I say that I am coming to the end of my remarks. I did not speak at great length on amendment No. 116 because it was explained so well by the hon. Member for Chelsea. I shall be delighted, like my hon. Friends, to support the amendment on that basis.
  11.15 pm
  I was giving the House some indication of the background to the situation and putting in context the alleged rebellion by Conservative Back Benchers in support of private tenants' rights. I should like to repeat, for the benefit of the hon. Member for Grantham (Mr. Hogg), the point I have already made, that issues affecting private tenants in inner London are security and rents. On those issues there has not been a pipsqueak of rebellion by Conservative Members. We are grateful for some small sign of dissatisfaction on service charges. That will have our support in the Lobbies as soon as the opportunity arises.
  Mr. Wheeler: I am glad to return to the amendment so ably moved by my hon. Friend the Member for Chelsea (Mr. Scott). He presented the case for the amendment very well. I entirely support it. I believe that several of my hon. Friends will also support it.
  I shall be perfectly frank. Some aspects of the Bill cause a great deal of worry to the residents of inner London in particular. It is no exaggeration to say that many tenants, especially the elderly, in inner London are in a state of
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  fear. It behoves my right hon. Friends and hon. Friends on the Front Bench to say what they think will happen to the tenants of inner London—a truly unique place in the private rented sector.
  The tenant in inner London competes for his home with companies that wish to rent property, with foreign nationals and with people who possess substantial sums of money to pay the ever increasing rents. Many aspects of the Bill are worrying. I wish that we could deal with them in the House, but that is not possible. I disapprove of the reduction of the rent reviews from three years to two years. That may be appropriate in some parts of the country, but it is not in London.
  Rents in London are rising. The rent on the average flat in my constituency is between £2,000 and £2,500 a year. On top of that figure, there will be rates of £600 or £700 and water rates of about £100. Additionally, there is the problem of the service charge, which may amount to between £1,000 and £1,500. How can ordinary British people live and work in the heart of their capital and belong to it when these are the charges and costs that devolve upon them?
  The amendment is intended to bring back a sense of fairness to people living in the capital. I refer, in particular, to a new addition—the provisions for landlords to produce an estimate or expenditure summary and to consult on the estimate. That is the key to the amendment. Nothing can be more important to those living in the great mansion blocks of inner London. In my constituency, I can point to an instance of landlords proposing to spend £2 million without any consultation with the tenants of the block. One can imagine the fear that prevails among the elderly residents of that block.
  The amendment improves substantially the Government's own schedule. Those of us who believe in it urge the Government to accept the amendment in the names of Members for inner London constituencies.
  We live with this problem on a daily basis. We know the fear and concern that exist in the community. We fear greatly that unless there is recognition of this problem and its uniqueness, the British who live in inner London will be driven out of inner London.

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  I could go on about other aspects of this matter, but I shall not do so because other hon. Members wish to contribute to the debate in its closing moments. I simply say that in the near future, if there is to be any honest recognition of the problems of the private rented sector in inner London, that recognition must come through special legislation tailor-made for the inner London tenant. It is long overdue. That is the answer.
  In addition, we must recognise that most people now wish to own their home, in one of the many forms available to them. Perhaps the co-operative is the answer. We have heard the illustration of that in Dolphin Square. That was a co-operative created by the Westminster city council. That council expresses its concern about what will happen to its residents arising from the Bill.
  But that is for the future—for the near future, one hopes. Tonight this House is asked to support a new schedule. I commend that schedule to the House. I believe it will be a significant contribution to the well-being of the tenants of inner London. I hope that the Government Front Bench will accept it.
  Mr. Douglas-Mann: I listened with sympathy to what the hon. Member for Paddington (Mr. Wheeler) said, but I find it a little difficult to reconcile it with his support for the other shorthold measures in the Bill.
  Until 1957, I was a rent-controlled tenant of a flat in Marylebone, just adjoining the hon. Gentleman's constituency, until I was driven out by the Rent Act 1957. The flat was subsequently sold. When I last heard about it, it had changed hands for about £60,000. That was a consequence of the Rent Act 1957. However, I shall refrain from pursuing that element of the issue. I want to concentrate on the two new schedules.
  I support both of the new schedules. I support amendment No. 116 most enthusiastically, because, from trying to assist tenants before rent officers and rent assessment committees, I know how easy it is for the landlord to contend that services have been or will be provided, or will be provided to a better standard, and how difficult it is for the tenant, with the very limited support of the legal aid that is available under the green form
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  scheme, to challenge the assessments presented by the landlord.
  I know how inadequate is the protection now provided for tenants when a service charge is presented by alleged professionals before a rent officer or rent assessment committee. The tenant has a very inadequate opportunity to test the validity of the estimates or to ensure that the services continue to be provided. It is very difficult to get a mandatory injunction under section 32 of the Housing Act 1961 and to ensure that landlords continue to maintain the premises in accordance with the standards which they have said they would maintain. Before the rent officer, it is virtually impossible.
  I dissent from the views of my hon. Friend the Member for Lambeth, Central (Mr. Tilley) in that I support quite enthusiastically amendment No. 94. When I intervened during the speech of the hon. Member for Chelsea (Mr. Scott), I was unaware of the point which my hon. Friend has made about the origins of the drafting of the amendment. As a lawyer it surprised me that there was no provision in it to restrict the amount that could be charged by a managing agent to a certain percentage of the level of costs incurred. That is a serious omission. However, the proposed schedule is a great improvement when compared with the provisions in the Bill. It could be further improved.
  I was not a member of the Committee that considered the Bill and I have not carried out a detailed textual comparison of the provisions of schedule 17 with section 124 and schedule 12 of the Housing Act 1974. Those provisions in the 1974 Act have been a tremendous advantage to the tenants of residential flats in London. The Under-Secretary of State, the hon. Member for Hampstead (Mr. Finsberg), was responsible for initiating amendments to that legislation. My hon. Friends the Members for Salford, East (Mr. Allaun) and Islington, South and Finsbury (Mr. Cunningham) and I supported him, and the amendments were carried despite the opposition of the Government of the day. The hon. Gentleman seems to have resiled slightly from the enthusiasm for reform of those days.
  I know from the experience of my professional colleagues, my partners, the extent to which the tenants of private

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  residential flats in London, especially those who have bought their leases, are finding that their landlords are carrying out improvements to the property at their expense with a view to selling the flats at much higher prices.
  I am aware of many abuses, to some of which the hon. Member for Chelsea referred—for example, the appropriation of interest on reserve funds, the lack of control over the manner in which these funds are invested and the lack of means of ensuring that the funds are kept secure.
  One of the features of the schedule that interests me is the section on covenants and conditions to be implied in leases. If the amendment is not carried—I hope that it is, and I shall be supporting it—I hope that in the near future we shall have a Bill—preferably a Government measure, but failing that an all-party Private Member's Bill—to provide for standard covenants and conditions to be implied in leases.
  The drafting of many of the leases on flats in London and elsewhere has improved over the years in the interests of the landlords. In many instances, bad drafting was a great disadvantage to the tenant. In many instances, there is no way in which a tenant who leases a a flat in a block can effectively compel the undertaking of repairing obligations if the landlord disappears, goes into liquidation or fails to comply. In those circumstances, the only people against whom the obligations can be enforced are other lessees.
  It is important in the interests of any lessee in a block of flats that he should in the last resort be able to compel the performance of repairing obligations by other lessees. That can be done only by statute. Well-drafted leases have been coming into force only in recent years. That is something that needs to be provided for in future, and the schedule deals with it in a somewhat preliminary form. It is however, a good start
  I strongly support the hon. Member for Chelsea in his plea for a greater statutory obligation to consult. I hope that the Government find it possible to accept that obligations of the sort contained in the schedule should be enforceable by statute, and that they can go much further than the existing provisions
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  in the Bill. I refer especially to the passage about offences. As I understand it, there were no provisions for penalties in the 1974 Act. The introduction of penalties in schedule 17 is welcome. However, the penalty of £200 is trifling in comparison with the profit to be gained by ignoring the provisions. I think that the Minister will accept that the penalties are inadequate, and that they should be increased.
  As my hon. Friend the Member for Lambeth, Central pointed out, the amendment was drafted in a manner that was not wholly disinterested. That may account for some of the omissions. However, I welcome the amendment. It improves the Bill. I hope that hon. Members of all parties will support both amendments.
  11.30 pm
  Sir B. Rhys Williams: I warmly support my hon. Friend the Member for Chelsea (Mr. Scott), and I congratulate him on the amendments. It is some time since Members of Parliament for inner London constituencies drew the attention of the House to the problem of service charges and the House made an attempt to deal with the issue some years ago. However, great distrust still exists between tenants and landlords. The law clearly needs to be strengthened in favour of the tenants.
  An acute social problem is developing not only in inner London but in Greater London. Hundreds of mansion blocks, many of them at least 40 years old, and others that are up to 100 years old, are falling into decay. In some cases, the decay is quite rapid. In the centre of London—particularly in Kensington—the problem is different. Overseas speculators are trying to acquire the freeholds of such blocks, with the intention of completely changing their characters. They wish to turn them over to luxury service lettings and so on. In such blocks, the relationship between the landlord and the tenant is in need of urgent attention.
  A social problem affects the whole of our society. Blocks are becoming run down. A great deal of money will be needed if they are to remain habitable: we cannot allow London to become lined with mansion slums. The money could come from the landlord. However, in 99 cases out of 100, the landlord is sickened

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  by years of rent control. He does not have the wherewithal to carry out the necessary maintenance. The money could be obtained from ratepayers or taxpayers. However, that solution is unlikely to commend itself to hon. Members on either side of the House. Therefore, the money will have to come from the tenants. But they will not pay the necessary sums of money if we continue to treat them as we do.
  It is important that tenants should have the right to challenge proposals affecting the block in which they live, particularly if large items of capital expenditure are involved. They should have the right to investigate the landlord's policy, and to satisfy themselves that they are getting a fair deal. Many landlords are completely out of touch with their tenants. Some deal with their tenants through an agent; consequently there is a very bad relationship. Even if the landlord makes a reasonable proposal, the tenants do not believe that it is fair. The landlord may be openly accused of paying a builder too much money in order to get kick-backs from him at the tenant's expense. There may sometimes be truth in such allegations. However, the tenants have no means of resassuring themselves as to the facts of the matter.
  The tenants may believe that the landlord is deliberately following a policy of improving the appearance of the block at the expense of his sitting tenants. When vacancies arise he can then get a higher price for the flats. He might be aiming to deceive people into believing that the general character of the block is better than it is. I could give other examples, but I shall not do so as other hon. Members wish to speak.
  We must tackle the intense distrust that exists between tenant and landlord. Such distrust cannot be put right by encouraging the parties to go to court. That would appear to be the intention behind the Government's amendments. I know that my right hon. and hon. Friends recognise the existence of this problem, but I do not believe that the proposals they have made in the Bill go nearly far enough. Of course, allowing the tenants' association to purchase the block is by far the most satisfactory outcome, and this is what we must aim for in the end.
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  But for the present at least the tenants must be assured of receiving a fair deal.
  The Minister will probably say that my hon. Friend's amendments are defective in certain respects, and indeed that may be so. But their intention is right, and something must be done. Therefore, I hope that we shall get a forthcoming response from the Minister. However, if my hon. Friend the Member for Chelsea thinks it necessary to divide the House, I shall certainly support him.
  Mr. Arthur Lewis: I had not intended to speak until I heard the speech of the hon. Member for Kensington (Sir. B. Rhys Williams). He said that some of the landlords cannot afford to stop mansions from deteriorating. My mind goes back over the years to the Freshwater group, and Mr. Stern who went broke to the tune of £380 million. He then passed over his house, worth about £250,000, to his wife. He also passed over his four cars. Now he is living in the lap of luxury.
  That is just one case. Dare I mention the late Sir Eric Miller, who had hon. Members from both sides of the House as directors of his company? They were all doing very nicely, thank you. This sort of thing has been going on for years. Both sides of the House have been involved, and they have allowed it to continue. Those whom I have mentioned have been given knighthoods, peerages, and have become great men.
  I have been a Member of this House long enough to know that the Tory Party believes that if someone makes a lot of profit he is very good and very successful. It does not matter how one makes that profit, just as long as one makes it. Only last week we heard that the banks were making hundreds of millions of pounds in profits. Today we heard that one of the oil companies has made £750 million. What does the Tory Party want? [HON. MEMBERS: "Get to the point."] I am coming to the point.
  These landlords obviously want to make a big profit, and they are not concerned if they rook the tenants. They have been rooking them for years. The only difference is that, whereas it used to be tenants in the East End of London and the poorer areas who were rooked, it is now becoming prevalent for tenants

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  in Chelsea and Kensington to be rooked, and the well-to-do are finding it difficult to pay their £40 a week, with £20 on top of that. Some of the workers in my area would like to see a salary of £60 a week, let alone paying it in rent and service charges.
  The hon. Member for Kensington mentioned the number of foreigners coming here. That is true. Plenty of Arabs come and they are allowed to buy up anything and everything. Governments of both parties have allowed that.
  The establishment of phoney companies in places such as Liechtenstein has been mentioned. But was it not this Government who allowed export of capital? Of course the Arabs find it very profitable to come in and make money at the expense of these tenants.
  I therefore support these amendments. It is a pity that such proposals did not come sooner. However, I do not believe that the Government will accept the amendment of the hon. Member for Chelsea for reasons real or imaginary. I hope that my right hon. and hon. Friends will vote in favour of the amendment, but I doubt it. I believe that both Front Benches will renege. There are guilty consciences on both Front Benches. I hope that the hon. Gentleman will press his amendment to a Division, and that some of my hon. Friends will join us in the Lobby.
  Mr. Stevens: I heartily support the amendment moved by my hon. Friend the Member for Chelsea (Mr. Scott).
  I am entranced if not mystified by the speeches in support of the amendment, particularly those by the hon. Members for Lambeth, Central (Mr. Tilley) and Newham, North-West (Mr. Lewis). It was difficult to tell whether their support for our amendment was greater than their chagrin that it was our amendment and not theirs.
  The part of the speech of the hon. Member for Lambeth, Central that I liked best was when I believe that he included me in his description of a "Gang of Five". It gave me a spurious feeling of self-importance. I do not know whether "gang" is the appropriate word. Perhaps had the hon. Gentleman said "a West End club of five "it would have been more appropriate, but that would not have enabled him to say what rotten
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  rebels we were. We are quite good rebels when the time is appropriate. However, with every word from the Opposition Benches my blood cools a little. No doubt I shall be able to work myself up to take the apropriate action when we have heard the speech of my hon. Friend the Minister.
  I wish to pursue only one point, which was touched on by my hon. Friend the Member for Kensington (Sir B. Rhys Williams). All of us who represent inner London seats have come to recognise—and we have put this privately to Ministers—that the housing problems in inner London are quite different from and much more acute than those that affect other parts of the country. We argue that my right hon. Friend should consider legislation in a general way peculiar to inner London. I recognise that that is extremely difficult. It may seem to penalise others and give favoured treatment to a small number of boroughs. Although we claim that our problems are unique, hon. Members from other constituencies may well feel that they are not and that their constituencies have the same or worse difficulties. However, I ask that in the whole range of housing legislation my right hon. Friend should consider taking further powers. In a given local authority area, if certain criteria that he would lay down applied, he would be empowered to make regulations that enabled him to impose the provisions that we are arguing for. If those criteria were found to apply not only to the half a dozen inner London constituencies but in other parts of the country, those areas would also benefit from the provisions.
  I do not want to get off the subject of the amendments, but there are many provisions in the Bill that, admirable and well intentioned though they may be, run the risk of causing damage by accident. The more that London Members study the Bill and the problems that will arise from it, the more that we find ourselves at odds with hon. Members on both sides, because they do not have the same problems in their constituencies that we face in London.
  The Government will solve the overall housing problem in central London only if they accept that special legislation is necessary. I suggest that we should approach it by way of regulations so

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  that London does not appear to be specially favoured or specially penalised.
  11.45 pm
  Mr. Geoffrey Finsberg: It would be churlish of me not to try to lower the blood pressure of my hon. Friend the Member for Fulham (Mr. Stevens) and it may help the House if I explain the situation as the Government see it.
  I shall try to pick up some of the points that have been made, and I assure my hon. Friend the Member for Chelsea (Mr. Scott), who moved the amendment in a caring way, that I have tried to arrange my thoughts in a fairly set pattern in order to assist him by explaining how the Government see the situation.
  Before coming to the main case, there are two other points that I should deal with. First, I do not withdraw any words that I have used about the Campaign for Private Tenants' Rights, which has deliberately scared constituents in all parts of London by the lies that it has told about shorthold and service charges and by claiming that tenants will lose security of tenure. I pay no heed to that organisation.
  Secondly, my hon. Friend the Member for Paddington (Mr. Wheeler) spoke about the fear of elderly tenants. He will agree that there is nothing in the legislation that is designed to harm the interests of private tenants. We are at one in our belief that the problems of a city such as London can be aided only by an increase in the number of private tenants and not by a continued rundown. One example of our determination in this matter, even in difficult times, was the announcement by my hon. Friend the Minister for Housing and Construction a few weeks ago of substantial increases in the rent allowances available for private tenants in inner London.
  It would be right for me to start my response to my hon. Friends by reminding the House of the extent of the Government's proposals. Little has been said about them. I take first what is in schedule 17. Where a tenant or a long leaseholder pays a variable service charge in respect of services or works for which he is contractually liable to pay and which the landlord is required to provide under the terms of the lease, the
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  basic protection that schedule 17 gives him is that he cannot be made to pay for what is not reasonable.
  If a landlord has spent money and can be challenged on the reasonableness of that in the county court, his money will be at stake. He will have to satisfy the court that he had expended the money reasonably. The tenants' money will not be at risk, because the landlord will have spent his own money and if the court holds the expenditure to have been unreasonable, the landlord will not be able to reclaim it.
  I assure my hon. Friend that two of the points that he raised are covered in the provisions that we are making. He spoke about the monstrous charges of up to 40 per cent, that are being made in some parts of London by so-called reputable managing agents. They would fall to be held to be reasonable by the county court. I cannot believe that any county court would hold a 40 per cent. management charge as reasonable. Equally, insurance premiums of the style that my hon. Friend has mentioned will also be held—
  Mr. Douglas Hogg: I understand that the landlord goes to the county court to recover his service charges. Is it for him to show that the service charges were reasonably levied; or is it for the tenant to show that they were unreasonable in extent? Where does the onus of proof lie?
  Sir Derek Walker-Smith: Before my hon. Friend answers that question, will he tell the House if there is any guidance in the Bill—I cannot see any—for the county court as to the criterion of reasonableness? I know that the concept of reasonableness is very familiar to the common law, but there should be some guidelines written into the Bill for the county courts
  Mr. Douglas-Mann rose—
  Mr. Finsberg: With respect. I cannot give way. These are interventions on interventions, and I should like to answer the various points as I go along.
  This is an important issue, and I shall deal with the points made by my hon, Friend the Member for Grantham (Mr. Hogg) and my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) because they are germane to what is being discussed
  Mr. Douglas-Mann rose—
  Mr. Finsberg: With respect, I wish to give the House a reasoned case as to why I believe that what the Government are doing is helpful to private tenants.
  It is for the court to decide what is reasonable. If the court decided that a particular item had been provided to a very low standard, it could further decide that the landlord could not recover the full costs, or possibly any costs, in respect of that item. If the court decided that the work had been carried out to an unreasonably high standard—we all know that such cases exist—the court could limit the cost to be borne by the tenant to what was reasonable.
  If the tenant is to consider challenging costs on these grounds, he must have access to information about the costs. We have considerably increased the rights of tenants to obtain information. We have removed the present limit of £80 a year below which a tenant does not have a right to a summary of costs. That is because a tenant might pay less than £80 one year, and more than £80 another, so he might not be able to get all the information he needs. We must remember that costs that are relevant to a service charge will not usually all be incurred in the year of the service charge. We have drafted our provisions with particular care to ensure that a tenant will always be able to obtain whatever information he needs.
  We are examining matters to see whether there is more that we can do. We are considering whether we can legislate to require landlords to give 14 days notice, before rent officer consultations or rent assessment hearings, of the service charge expenditure on which their service charge is based. I have reason to hope that we shall be able to move an appropriate amendment to cover that point when the Bill gets to another place.
  But it is fair to say that the summary of costs might turn out not to be sufficiently detailed, so we have provided a new right for the tenant to inspect the accounts and the receipts on which they were based. In addition to the overall limitation of costs to what is reasonable, there are now new and much stronger requirements for consultation on proposed works.
  Mr. Scott: I am getting confused, because my hon. Friend interjected a remark which seemed to apply to the regulated rent sector, while his general themes seem to apply to the long leasehold service charges and the judgment as to what is reasonable. Will he clear that up, and in particular establish the point that my right hon. and learned Friend the Member for Hertfordshire, East (Sir D. Walker-Smith) raised about reasonableness? From whose point of view is the expenditure in the long leasehold case judged to be reasonable? The tenants want the block to be maintained in a reasonable condition for them to enjoy their tenancy. The landlord may very well say that he wants it to be maintained or developed in a reasonable way so that he can sell it all at a profit. From whose point of view is this judgment to be taken? Some sort of guidance must be given.
  Mr. Finsberg: I shall cover later the points that my hon. Friend has made. I had already, from conversations I had with him, anticipated a couple of the points that he has mentioned.
  I said that I thought the provisions had been misunderstood. I should like to point out that we have provided a new sanction for non-compliance. This is a very important sanction. There will be a prescribed sum for any block of flats, which will be either £25 for every flat in the block, or £500, whichever is the larger. If the landlord carries out works costing more than that amount without first consulting those who have to pay—unless there was an emergency—he will not be able to recover more than that amount, even if the actual cost was, in the event, reasonable. Whichever way one looks at it, I suggest to the House that this is a very effective weapon to place in the tenants' hands. If they are not consulted on major works, they will not have to pay the full cost. This is an entirely new provision.
  Those are the basic provisions already in the Bill. The amendments that we have tabled will do two things. Amendments Nos. 96 to 98 clarify the requirements for consultation by making them explicit. At present, they are implicit, but I suggest that they have not been properly understood, particularly in the press. I promised in Committee that we would

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  come back to this. The landlord will have to provide two estimates and a notice describing the works to be carried out, and inviting observations on the works and the estimates. The notice must give the name and address in the United Kingdom of the persons to whom the observations must be sent, and must state the date by which they are to be received, allowing at least one month. This will be a very specific invitation to comment. The landlord must then have regard to any observations received from the tenants or a recognised tenants' association. There is nothing to prevent tenants from independently obtaining other estimates for the work and giving them to the landlord as part of their observations. If a landlord then chose to disregard the tenants' observations or any lower estimate that they had obtained, he would not be entitled to recover the costs unless he could show the court that he had acted reasonably in doing so. The landlord would therefore, I suggest, have to be very sure of his ground before committing himself to what might well be unjustified expenditure.
  The second set of Government amendments gives greater rights to a recognised tenants' association by extending the right to obtain a summary of costs and inspect accounts to the secretary of the association, who might or might not be a tenant in the block, thus enabling him to act on behalf of other individual tenants.
  We intend to table three further amendments in another place. The first will increase the maximum penalty for failure to provide a summary or permit inspection from the present £200 to £500.
  The hon. Member for Mitcham and Morden (Mr. Douglas-Mann) will perhaps recall that one of the reasons why the service charge provisions in the 1974 Act were defective was that his own Government were not prepared to cooperate in making them effective. He knows that as a fact, and that is why he voted with me in Committee.
  While we are about it, we are making similar increases in the penalties in sections 121 and 122 of the 1974 Act. These are those provisions which require the managing agent or the person collecting the rents to disclose the landlord's identity. This has been a source of
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  worry. Section 122 requires a new landlord to inform the tenants of his name and address.
  Secondly, we wish to avoid a possible loophole in the legislation which at present would enable a landlord to set up a tenants' management company which was not democratically controlled with the object of evading the provisions of the schedule altogether.
  Thirdly, we propose to give rights to Rent Act tenants on non-variable registered rents to obtain information about the landlord's costs. They do not have such a right under the existing legislation nor under the Bill as drafted. This would put them in a stronger position to argue their case to the rent officer when the rent was being re-registered.
  12 midnight
  While these provisions add up to what, I suggest to the House, is a substantial package of rights for tenants and long leaseholders—which will apply regardless of the wide variety of terms which leases contain in practice—there are other points which my hon. Friend the Member for Chelsea has mentioned that need further consideration.
  He specifically mentioned overseas landlords who are a growing menace. He also specifically mentioned the insurance cartels and though I hope that I have partially satisfied him on that point that does not prevent us from having a further look at it. We shall look at advance payments and I shall have more to say on that in a moment. We shall also have a further look at the question of consultations in advance of fixing service charges. Again, there is more I wish to say about that.
  What we have not tried to do in our schedule is to impose rigid requirements into every existing lease of a flat and I would like just to look at the effects of my hon. Friend's amendments. They would go much further by providing a set of rules for consultation, advance payments and sinking funds which would have to be followed in every block with more than four flats regardless of the circumstances or the terms of the leases.
  Let me demonstrate to the House how this might operate from the point of view of a tenant. We start two months before the service charge year begins when the landlord must give me and every other

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  tenant of the block an itemised estimate based on last year's costs suitably adjusted. The estimate must—I repeat "must" because that is what the amendment says—include a contribution to a sinking fund for future works.
  Many leases provide for sinking funds as a means of spreading costs of major works over a long period. That may well be sensible in many cases, but to oblige every long leaseholder to contribute to a sinking fund even where the lease does not provide for it would, I suggest, be unjustified. If there were no recognised tenants' association, in my block, the estimate must first have been approved by an independent trustee—let us call him Trustee A.
  He is defined as a member of a professional body who is a specialist in the management of flats. He must be independent of the landlord but he would have been appointed by the landlord. That is where our first so-called trustee enters into it. He will be entitled to a I per cent. fee based upon the estimate and that fee would be paid for by the tenants.
  If we have a recognised association the estimate would not have to be approved by the trustee, but the association must be consulted within one month. The association and the landlord pursue their best endeavours to agree the estimate. If they cannot reach agreement, the estimate must be referred to an independent trustee. He must be jointly agreed and if agreement cannot be reached the president of the Institute of Arbitrators is asked to appoint him.
  Whether there is an association or not, all this has to be completed within one month of the beginning of the service charge year unless an extension is agreed. If an extension is not agreed, what happens? In the meantime, how much is to be paid in service charges?
  Our proposals have been criticised because they do not prevent the landlord from obtaining advance payments. I should mention the recent High Court decision which has been much in the news, Frobisher versus Kiloran Trust, which ruled that under the existing legislation advance payments are not recoverable. That was not, however, the intention. We have drafted our proposals to make it clear that such payments are recoverable, but this will be the case only to the extent
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  that the lease makes specific provision for it. I still have to say, as I did in Committee, that we want to see evidence of leases which entitle landlords to demand vast advance payments with little or no justification. It is going too far the other way to provide that advance payments be obligatory in all cases. I am sure that landlords would welcome that, but I am not certain that my hon. Friends want that and I am pretty certain that tenants do not.
  We have examined estimates for the year. What about the estimates for works? I have sympathy with my hon. Friend the Member for Chelsea because tenants can sometimes be landed with a situation without being consulted. We do not believe that my hon. Friend has the answer, nor do we believe that we have, yet.
  Consultation will be needed for estimates for works, particularly where the cost exceeds the prescribed amount that we have provided in the Bill. If there is no association the landlord will have to provide me, as a tenant, and every tenant with two estimates for the work, together with his recommendation, giving 14 days to approve or object in writing to his recommendation. If fewer than 50 per cent. of us object, the work will be begun and the cost will be considered reasonable.
  I said "us" but that might not be correct. The people who are being consulted are the long leaseholders. In the amended schedule the landlords have a vote for every flat that has not been sold on a long lease. Consequently, if fewer than half of the flats in my block have been sold, even if we all object to the estimate, the landlords will settle the matter and the cost will be considered reasonable.
  I do not know whether that will be the end of the matter or if it is still intended that the court could rule after the work has been done that the work or the cost is not reasonable. This is a legal nightmare through which we must find a layman's way. We are still looking for that way.
  What happens if I live in a block where most of the flats have been sold and more than 50 per cent. of us object to the proposal? The landlord will call us to a meeting within 28 days to discuss his

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  recommendations and alternative proposals. A hall might not be available, but we shall cope. However, someone must pay the hiring cost of the hall. In order to find a framework which is satisfactory in every detail, we must impose upon a substantial number of landlords and tenants who do not want the imposition a detailed provision which will be of less help than my hon. Friends want.
  If we proceed for four weeks and then another month, the estimate will already be out of date. Estimates are not often held for more than a month. By the time one gets a fresh estimate the costs will have risen and the tenants will have to meet more of the cost. That is not the way which is of most help to the tenants.
  Let us assume that the landlord has gone through the process and that the tenants have expressed their views. We must still take into account the views of individual tenants and those conveyed through an association. We must be aware that an association does not necessarily speak for all the tenants. We had a battle in Committee on the public sector tenants. It is wrong to say that only an association can speak for tenants in the private sector.
  Then there is a compulsory sinking fund. That will be held in trust by a trustee—an independent body such as a bank or insurance company—and a charge will be made for services to be met by the tenants. Blocks of flats have arrangements agreed by all concerned. An independent maintenance trustee is a party to the arrangement.
  I am not criticising, as the hon. Member for Lambeth, Central (Mr. Tilley) did rather cheaply, the fact that the organisation that prepared the amendment is wicked because it hopes that it might receive fees. He mentioned that one of its directors was connected with a property company. [Interruption.] Those were his words, and he does not deny that. It was not a helpful remark. I am entirely in favour of people entering into sensible, practical arrangements. I do not think that schemes that are bound to be extremely complicated should be imposed wholesale by statute. That is why I suggest to my hon. Friends that their proposals are not necessarily the best way
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  forward to achieve either what they want or what the Government want.
  There are five major objections that I hope my hon. Friends will consider. The schedule would override all leases, however reasonable. It would be imposed on all blocks with more than four flats. It would make advance payments and sinking funds obligatory in all cases. It could prevent landlords from carrying out their contractual obligations. My hon. Friend the Member for Chelsea and I share many things, one of which is that neither of us is a lawyer. It would certainly provide a lawyers' paradise.
  I received a letter today from a tenant in Portland Place, specifically drawing attention to three provisions in the schedule that the lady, as an ex-chairman of a tenants' association, feels would not be helpful. I am sure that those points have not occurred to my hon. Friend, as they are put so explicitly in the letter, making the position as problematical as I thought it might be. First, the landlords could be given a casting vote in situations where their interests seriously conflict with those of the tenants; secondly, the schedule restricts the right to scrutinise the accounts to an officer of the association, and therefore deprives long leaseholders who do not belong to the association of their rights; thirdly, it would perpetuate the life of incompetent and ill-qualified associations, which would readily become the tools of the landlord.
  There would be no service charge legislation on the statute book if I had not battled for it in 1972. That is my first point, and it is a fact that is recognised by a substantial number of tenants in London. The one party from which I will take absolutely no stick is the Opposition party, who battled for years to deny private tenants any service charge rights—and it knows that that is true. I believe that, through our proposals and the proposals that will be introduced in another place, we are getting nearer to the best position for private tenants. I accept that we do not go as far as my hon. Friends would wish. [Interruption.] I am sorry if I am battling through long conversations of Opposition Members who are listening. We have gone a long way. I hope that my hon. Friends will accept that we shall consider further the points raised. If we can possibly find a

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  way to meet their points by the time the Bill reaches another place, we shall do so. I cannot promise them that we will be able to do so because it is not as easy as they would like or as I would like. We are very anxious to meet my hon. Friend's points.
  12.15 am
  Mr. Scott: If in introducing the amendment I had been able to quote to my hon. Friend the letter that I have had from my constituents and others in London critical of the Bill, I could have done better than the one letter that he has quoted with some criticisms of the schedule that Back-Benchers have tabled.
  On amendment No. 94, when the Bill gets to another place will my hon. Friend ensure that there is consultation in advance? I appreciate the specific commitment that he has given on amendment No. 116, but the essence of amendment No. 94, the heart of the matter, is that there will be not an informing of the tenants and then, if necessary, an ignoring of their point of view, but a giving of the right of real challenge and a sort of arbitration or referee before the landlord can continue with that expenditure. That seems to me to be the essence of the amendment.
  Mr. Finsberg: I had hoped that I had said to my hon. Friend that we would give not only that point but the other points that he made the utmost care and consideration. We do not differ from my hon. Friend on the principle. I shall continue to have meetings with him and his colleagues to see whether we can find a way round this issue that will not only stand up in law, but will be satisfactory and will operate to the benefit of the only people in whom we are interested—the private tenants. I hope that my hon. Friend will understand that I cannot say that we will legislate. I cannot say to him something about which I am not certain. All I can say is that the best possible will is there. We shall continue to see what we can do to assist him. I cannot say more than that.
  I hope that, in view of the series of points that I have made, which we shall examine afresh with my hon. Friend and his colleagues, he will not wish to press the amendment on this occasion.
  Mr. Scott: On a point of order, Mr. Deputy Speaker. With the leave of the House, and in the light of the undertaking
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  given on the regulated sector, I beg to ask leave to withdraw amendment No. 116 on the understanding that I might have a Division on amendment No. 94.
  Mr. Tilley: Further to that point of order, Mr. Deputy Speaker. As one of the signatories to amendment No. 116, I insist that we have a Division on it.
  Mr. Kaufman: I should like to intervene for a moment. In doing so, I declare an interest. I am a leaseholder as a payer of service charges in central London and the honourary president of the Charlbert Court leaseholders' association in the constituency of the hon. Member for St. Marylebone (Mr. Baker) to whom I look for assistance in these matters and who I am pleased to see has signed amendment No. 116 without my having to lobby him. I do not vote against the hon. Gentleman, because I vote in my own constituency for an even better candidate, but the hon. Gentleman is elected to Parliament without my vote against him.
  I do not want to intervene in any way in the merits of the argument; nor do I wish to attempt to drive any wedges between hon. Members on the Government's Back Benches and their Front Bench. What they will do will be for them to decide. I hope that the Secretary of State and the Minister will not get irritable in the circumstances.
  Mr. Scott: I should like to make clear what the right hon. Gentleman and his lion. Friends are doing. They are preventing us from accepting a specific and clear undertaking from the Government Front Bench on service charges in the regulated rent sector and having a Division on service charges in the long leasehold sector. That is the effect of the right hon. Gentleman speaking at this time.
  Mr Kaufman: I assure the hon. Gentleman that is not my intention. Nothing that I say can prevent a Division. I understand parliamentary procedure as well as he does. I also know that many of my hon. Friends will not be here in another five minutes. The hon. Gentleman should know that if he is interested in a Division.
  The hon. Gentleman has put down his amendments, but the House is custodian of the amendments as well as the hon. Gentleman. I do not wish to

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  prevent a Division, but the hon. Gentleman cannot have two Divisions. When the Opposition tabled amendments in Committee on service charges, we received assurances from the Government that have not been fufilled on the Floor of the House. I am, therefore, not too trusting of assurances of what will happen in a matter of weeks when an inconvenient amendment has been disposed of and the Government are no longer concerned about what may happen in a Division on the Floor of the House.
  The best way of ensuring that a Government fulfil their commitment to reconsider, as I found as a Minister, is through one's hon. Friends inserting an amendment into a Bill which, if found not to be entirely satisfactory, the Government have to replace with something better rather than leave the Bill in its present position. That was done to me. I found it salutary. I learnt the lesson.
  The Secretary of State for the Environment (Mr. Michael Heseltine): Will the right hon. Gentleman give way?
  Mr. Kaufman: No. I will not give way to the right hon. Gentleman. I am attempting to make a point that is in no way polemical about what happened to me when I tried to disregard what my hon. Friends were pressing upon me by offering an assurance which they regarded as going some way towards the objective but which was nevertheless unsatisfactory. My hon. Friends decided that the best way of making sure that the Front Bench fulfilled the commitment was by carrying the amendment and compelling the Government to accept an amendment and insert it into a Bill instead of the Government getting away
  from the House into the freedom of the Department. I do not regard the assurances that the Under-Secretary of State has given as assurances that can be relied upon. Once this Bill gets away to the other place, it is outside our control. All that will remain is a guillotined hour on Lords amendments when the measure returns to this House.
  Without attempting to intervene on the merits, except to declare my interest, I merely wish to state that if hon. Members on both sides of the House want something genuine done about service charges—as someone who pays those charges, I want something done—the best way is to write an amendment, even if it is technically defective, into the Bill. In that way, one will compel the Government to act and to fulfil their assurances.
  Mr. Neil Thorne: As a chartered surveyor and a property owner on a modest scale, I must declare an interest. I should like to congratulate my Friends the Members for Chelsea (Mr. Scott), for Paddington (Mr. Wheeler), for Kensington (Sir B. Rhys Williams) and for Fulham (Mr. Stevens) on the able manner in which they presented the amendment.
  It being twenty-jour minutes past Twelve o'clock, Mr. DEPUTY SPEAKER proceeded, pursuant to the Order [16 April] and the Resolution [yesterday], to put forthwith the Question already proposed from the Chair.
  Question put, That the amendment be made:—
  The House divided: Ayes 227, Noes 288.

  Division No. 3181

  AYES

  [12.24 pm

  Adams, Allen

  Brown, Robert C. (Newcastle W)

  Cunliffe, Lawrence

  Allaun, Frank

  Brown, Ronald W. (Hackney S)

  Cunningham, George (Islington S)

  Alton, David

  Brown, Ron (Edinburgh, Leith)

  Cunningham, Dr John (Whitehaven)

  Anderson, Donald

  Buchan, Norman

  Dalyell, Tarn

  Archer, Rt Hon Peter

  Callaghan, Jim (Middleton & P)

  Davidson, Arthur

  Ashley, Rt Hon Jack

  Campbell, Ian

  Davies, Rt Hon Denzil (Llanelli)

  Ashton, Joe

  Campbell-Savours, Dale

  Davies, Ifor (Gower)

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

  Canavan, Dennis

  Davis, Clinton (Hackney Central)

  Bagier, Gordon A. T

  Cant, R. B.

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

  Barnett, Guy (Greenwich)

  Carter-Jones, Lewis

  Deakins, Eric

  Barnett, Rt Hon Joel (Heywood)

  Cartwright, John

  Dean, Joseph (Leeds West)

  Beith, A. J

  Clark, Dr David (South Shields)

  Dempsey, James

  Benn, Rt Hon Anthony Wedgwood

  Cocks, Rt Hon Michael (Bristol S)

  Dewar, Donald

  Bennett, Andrew (Stockport N)

  Cohen, Stanley

  Dobson, Frank

  Bidwell, Sydney

  Coleman, Donald

  Dormand, Jack

  Booth, Rt Hon Albert

  Conlan, Bernard

  Douglas, Dick

  Bradley, Tom

  Cook, Robin F.

  Douglas-Mann, Bruce

  Bray, Dr Jeremy

  Cowans, Harry

  Dubs, Alfred

  Brown, Hugh D. (Provan)

  Cryer, Bob

  Duffy, A. E. P.

  Dunn, James A. (Liverpool, Kirkdale)

  Lambie, David

  Rooker, J. W.

  Dunnett, Jack

  Lamborn, Harry

  Ross, Ernest (Dundee West)

  Dunwoody, Mrs Gwyneth

  Lamond, James

  Ross, Wm. (Londonderry)

  Eastham, Ken

  Leadbitter, Ted

  Rowlands, Ted

  Ellis, Raymond (NE Derbyshire)

  Leighton, Ronald

  Ryman, John

  English, Michael

  Lestor, Miss Joan (Eton & Slough)

  Sandelson, Neville

  Ennals, Rt Hon David

  Lewis, Arthur (Newham North West)

  Sever, John

  Evans, loan (Aberdare)

  Lewis, Ron (Carlisle)

  Sheerman, Barry

  Ewing, Harry

  Lltherland, Robert

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

  Faulds, Andrew

  Lofthouse, Geoffrey

  Shore, Rt Hon Peter (Step and Pop)

  Field, Frank

  Lyon, Alexander (York)

  Silkin, Rt Hon John (Deptford)

  Flannery, Martin

  Lyons, Edward (Bradford West)

  Silkin, Rt Hon S. C. (Dulwich)

  Fletcher, Ted (Darlington)

  Mabon, Rt Hon Dr J Dickson

  Silverman, Julius

  Foot, Rt Hon Michael

  McCusker, H.

  Skinner, Dennis

  Ford, Ben

  McDonald, Dr Oonagh

  Smith, Cyril (Rochdale)

  Forrester, John

  McElhone, Frank

  Smith, Rt Hon J. (North Lanarkshire)

  Fraser, John (Lambeth, Norwood)

  McGuIre, Michael (Ince)

  Snape, Peter

  Freeson, Rt Hon Reginald

  McKay, Allen (Penistone)

  Soley, Clive

  Freud, Clement

  McKelvey, William

  Spearing, Nigel

  Garrett, John (Norwich S)

  Maclennan, Robert

  Spriggs, Leslie

  Garrett, W. E. (Wallsend)

  McNamara, Kevin

  Siallard, A. W.

  George, Bruce

  McWilliam, John

  Steel, Rt Hon David

  Gilbert, Rt Hon Dr John

  Magee, Bryan

  Stoddart, David

  Ginsburg, David

  Marks, Kenneth

  Strang, Gavin

  Graham, Ted

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

  Straw, Jack

  Grant, George (Morpeth)

  Marshall, Dr Edmund (Goole)

  Summerskill, Hon Dr Shirley

  Grant, John (Islington C)

  Marshall, Jim (Leicester South)

  Taylor, Mrs Ann (Bolton West)

  Hamilton, James (Bothwell)

  Mason, Rt Hon Roy

  Thomas, Dafydd (Merioneth)

  Hamilton, W. W. (Central Fife)

  Meacher, Michael

  Thomas, Jeffrey (Abertlllery)

  Hardy, Peter

  Millan, Rt Hon Bruce

  Thomas, Dr Roger (Carmarthen)

  Harrison, Rt Hon Walter

  Miller, Dr M. S. (East Kilbride)

  Tilley, John

  Hart, Rt Hon Dame Judith

  Mitchell, Austin (Grimsby)

  Tinn, James

  Hattersley, Rt Hon Roy

  Mitchell, R. C. (Solon, Itchen)

  Torney, Tom

  Haynes, Frank

  Morris, Rt Hon Alfred (Wythenshawe)

  Urwin, Rt Hon Tom

  Heifer, Eric S.

  Morris, Rt Hon Charles (Openshaw)

  Varley, Rt Hon Eric G.

  Hogg, Norman (E Dunbartonshire)

  Morris, Rt Hon John (Aberavon)

  Wainwright, Edwin (Dearne Valley)

  Holland, Stuart (L'beth, Vauxhall)

  Moyle, Rt Hon Roland

  Wainwright, Richard (Colne Valley)

  Home Robertson, John

  Newens, Stanley

  Watkins, David

  Homewood, William

  Oakes, Rt Hon Gordon

  Weetch, Ken

  Hooley, Frank

  Ogden, Eric

  Wellbeloved, James

  Horam, John

  O'Halloran, Michael

  Welsh, Michael

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

  O'Neill, Martin

  White, Frank R. (Bury & Radcliffe)

  Howells, Geraint

  Orme, Rt Hon Stanley

  Whitehead, Phillip

  Huckfield, Les

  Owen, Rt Hon Dr David

  Whillock, William

  Hudson, Davies, Gwilym Ednyfed

  Palmer, Arthur

  Wigley, Dafydd

  Hughes, Mark (Durham)

  Park, George

  Williams, Rt Hon Alan (Swansea W)

  Hughes, Robert (Aberdeen North)

  Parry, Robert

  Williams, Sir Thomas (Warrington)

  Hughes, Roy (Newport)

  Penhaligon, David

  Wilson, Rt Hon Sir Harold (Huyton)

  Janner, Hon Greville

  Powell, Raymond (Ogmore)

  Wilson, William (Coventry SE)

  Jay, Rt Hon Douglas

  Prescott, John

  Winnick, David

  John, Brynmor

  Price, Christopher (Lewisham West)

  Woodall, Alec

  Jones, Rt Hon Alec (Rhondda)

  Race, Reg

  Woolmer, Kenneth

  Jones, Barry (East Flint)

  Richardson, Jo

  Wrigglesworth, Ian

  Jones, Dan (Burnley)

  Roberts, Albert (Normanton)

  Young, David (Bolton East)

  Kaufman, Rt Hon Gerald

  Roberts, Allan (Bootle)

  Kerr, Russell

  Roberts, Ernest (Hackney North)

  TELLERS FOR THE AYES:

  Kilroy-Sllk, Robert

  Roberts, Gwilym (Cannock)

  Mr. Hugh McCartney and

  Kinnock, Neil

  Rodgers, Rt Hon William

  Mr. George Morton.

  NOES

  Adley, Robert

  Boscawen, Hon Robert

  Chalker, Mrs Lynda

  Aitken, Jonathan

  Bottomley, Peter (Woolwich West)

  Channon, Paul

  Alexander, Richard

  Boyson, Dr Rhodes

  Chapman, Sydney

  Alison, Michael

  Braine, Sir Bernard

  Churchill, W. S.

  Amery, Rt Hon Julian

  Bright, Graham

  Clark, Hon Alan (Plymouth, Sutton)

  Ancram, Michael

  Brinton, Tim

  Clark, Sir William (Croydon South)

  Arnold, Tom

  Brocklebank-Fowier, Christopher

  Clarke, Kenneth (Rushcliffe)

  Aspinwall, Jack

  Brooke, Hon Peter

  Clegg, Sir Walter

  Atkins, Robert (Preston North)

  Brotherton, Michael

  Cockeram, Eric

  Atkinson, David (B'mouth, East)

  Brown, Michael (Brlgg & Sc'thorpe)

  Colvin, Michael

  Baker, Nicholas (North Dorset)

  Browne, John (Winchester)

  Cope, John

  Banks, Robert

  Bruce-Gardyne, John

  Come, John

  Beaumont-Dark, Anthony

  Bryan, Sir Paul

  Costain, A. P.

  Bell, Sir Ronald

  Buchanan-Smith, Hon Alick

  Critchley, Julian

  Bendall, Vivian

  Buck, Antony

  Crouch, David

  Benyon, Thomas (Abingdon)

  Budgen, Nick

  Dickens, Geoffrey

  Benyon, W. (Buckingham)

  Bulmer, Esmond

  Dorrell, Stephen

  Best, Keith

  Burder, F. A.

  Douglas-Hamilton, Lord James

  Bitten, Rt Hon John

  Butcher, John

  Dover, Denshore

  Biggs-Davison, John

  Butler, Hon Adam

  du Cann, Rt Hon Edward

  Blackburn, John

  Cadbury, Jocelyn

  Dunn, Robert (Dartford)

  Blaker, Peter

  Carlisle, John (Luton West)

  Durant, Tony

  Body, Richard

  Carlisle, Kenneth (Lincoln)

  Eden, Rt Hon Sir John

  Bonsor, Sir Nicholas

  Carlisle, Rt Hon Mark (Runcorn)

  Edwards, Rt Hon N. (Pembroke)

  458

  459

  Eggar, Timothy

  Lawson, Nigel

  Ridsdale, Julian

  Emery, Peter

  Lee, John

  Rifkind, Malcolm

  Fairbalrn, Nicholas

  Lennox-Boyd, Hon Mark

  Roberts, Michael (Cardiff NW)

  Fairgrieve, Russell

  Lester, Jim (Beeston)

  Roberts, Wyn (Conway)

  Faith, Mrs Sheila

  Lewis, Kenneth (Rutland)

  Rossi, Hugh

  Farr, John

  Lloyd, Ian (Havant&Waterloo)

  Rost. Peter

  Fell, Anthony

  Lloyd, Peter (Fareham)

  Royle, Sir Anthony

  Fenner, Mrs Peggy

  Loveridge, John

  Sainsbury, Hon Timothy

  Finsberg, Geoffrey

  Luce, Richard

  Shaw, Giles (Pudsey)

  Fisher, Sir Nigel

  Lyell, Nicholas

  Shaw, Michael (Scarborough)

  Fletcher, Alexander (Edinburgh N)

  McCrindle, Robert

  Shelton, William (Streatham)

  Fletcher-Cooke, Charles

  Macfarlane, Neil

  Shepherd, Colin (Hereford)

  Forman, Nigel

  MacGregor, John

  Shepherd, Richard(Aldrldge-Br'hills)

  Fowler, Rt Hon Norman

  MacKay, John (Argyll)

  Shersby, Michael

  Fox, Marcus

  Macmillan, Rt Hon M. (Farnham)

  Silvester, Fred

  Fraser, Peter (South Angus)

  McNair-Wilson, Michael (Newbury)

  Sims, Roger

  Fry, Peter

  McNair-Wilson, Patrick (New Forest)

  Skeet, T. H. H.

  Galbraith, Hon T. G. D.

  McQuarrie, Albert

  Smith, Dudley (War. and Leam'ton)

  Gardiner, George (Reigate)

  Madel, David

  Speed, Keith

  Gardner, Edward (South Fylde)

  Major, John

  Speller, Tony

  Garel-Jones, Tristan

  Marland, Paul

  Spence, John

  Gilmour, Rt Hon Sir Ian

  Marlow, Tony

  Spicer, Jim (West Dorset)

  Glyn, Or Alan

  Marshall, Michael (Arundel)

  Spicer, Michael (S Worcestershire)

  Goodhew, Victor

  Marten, Neil (Banbury)

  Sproat, lain

  Goodlad, Alastair

  Mates, Michael

  Stainton, Keith

  Gow, Ian

  Mather, Carol

  Stanbrook, Ivor

  Gower, Sir Raymond

  Maude, Rt Hon Angus

  Stanley, John

  Grant, Anthony (Harrow C)

  Mawby, Ray

  Stewart, Ian (HItchIn)

  Gray, Hamiah

  Mawhinney, Dr Brian

  Stewart, John (East Renfrewshire)

  Greenway, Harry

  Maxwell-Hyslop, Robin

  Stokes, John

  Grieve, Percy

  Mayhew, Patrick

  Stradling Thomas, J.

  Griffiths, Eldon (Bury St Edmunds)

  Mellor, David

  Tapsell, Peter

  Griffiths, Peter (Portsmouth N)

  Meyer, Sir Anthony

  Taylor, Robert (Croydon NW)

  Grist, Ian

  Miller, Hal (Bromsgrove&Reddltch)

  Taylor, Teddy (Southend East)

  Grylls, Michael

  Mills, lain (Meriden)

  Tebbit, Norman

  Gummer, John Selwyn

  Miscampbell, Norman

  Temple-Morris, Peter

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

  Mitchell, David (Basingstoke)

  Thomas, Rt Hon Peter (Hendon S)

  Hamilton, Michael (Salisbury)

  Monro, Hector

  Thompson, Donald

  Hampson, Or Keith

  Montgomery, Fergus

  Thorne, Neil (Ilford South)

  Hannam, John

  Moore, John

  Thornton, Malcolm

  Haselhurst, Alan

  Morris, Michael (Northampton, Sth)

  Townend, John (Bridlington)

  Hastings, Stephen

  Morrison, Hon Charles (Devizes)

  Townsend, Cyril D. (Bexleyhealh)

  Havers, Rt Hon Sir Michael

  Morrison, Hon Peter (City of Chester)

  Trippier, David

  Hawkins, Paul

  Mudd, David

  Trotter, Neville

  Hawksley, Warren

  Murphy, Christopher

  van Straubenzee, W. R.

  Hayhoe, Barney

  Myles, David

  Vaughan, Dr Gerard

  Heddle, John

  Needham, Richard

  Viggers, Peter

  Henderson, Barry Heseltine, Rt Hon Michael

  Nelson, Anthony Neubert, Michael

  Waddinglon, David Wakeham, John

  Hicks, Robert

  Newton, Tony

  Waldegrave, Hon William

  Higgins, Rt Hon Terence L.

  Nott, Rt Hon John

  Walker, Rt Hon Peter (Worcester)

  Hill, James

  Onslow, Cranley

  Walker, Bill (Perth&E Perthshire)

  Hogg, Hon Douglas (Grantham)

  Oppenheim, Rt Hon Mrs Sally

  Walker-Smith, Rt Hon Sir Derek

  Holland, Philip (Carlton)

  Page, John (Harrow West)

  Wall, Patrick

  Hooson, Tom

  Page, Rt Hon Sir R. Graham

  Waller, Gary

  Hordern, Peter

  Page, Richard (SW Hertfordshire)

  Walters, Dennis

  Howell, Ralph (North Norfolk)

  Parris, Matthew

  Ward, John

  Hunt, David (Wirral)

  Patten, Christopher (Bath)

  Warren, Kenneth

  Kurd, Hon Douglas

  Patten, John (Oxford)

  Watson, John

  Irving, Charles (Cheltenham)

  Pawsey, James

  Wells, John (Maidstone)

  Jenkin, Rt Hon Patrick

  Percival, Sir Ian

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

  Johnson Smith, Geoffrey

  Pink, R. Bonner

  Whitney, Raymond

  Jopling, Rt Hon Michael

  Pollock Alexander

  Wickenden, Keith

  Kellett-Bowman, Mrs Elaine

  Porter, George

  Wiggin, Jerry

  Kimball, Marcus

  Price, David (Eastleigh)

  Wilkinson, John

  King, Rt Hon Tom

  Prior, Rt Hon James

  Williams, Dclwyn (Montgomery)

  Kitson, Sir Timothy

  Proctor, K. Harvey

  Winterton, Nicholas

  Knight, Mrs Jill

  Raison, Timothy

  Young, Sir George (Acton)

  Knox, David

  Rathbone, Tim

  Younger, Rt Hon George

  Lamont, Norman

  Rathbone, Tim

  Lang, Ian

  Rees, Peter (Dover and Deal)

  Langford-Holt, Sir John

  Rees-Davies, W. R.

  TELLERS FOR THE NOES:

  Latham, Michael

  Renton, Tim

  Mr. Spencer Le Marchant and

  Lawrence, Ivan

  Rhodes James, Robert

  Mr. Anthony Berry.

  Question accordingly negatived.
  Mr. DEPUTY SPEAKER Mr. DEPUTY SPEAKER then proceeded to put forthwith the Questions necessary for the disposal of the business to be concluded at twenty-four minutes past Twelve o'clock.
  Mr. Deputy Speaker: Would it be for the convenience of the House if I put amendment Nos. 96 to 105 together formally?
  Amendments made:
  No. 96, in page 130, leave out lines 22 to 31 and insert—
  ' (3) A notice accompanied by a copy of the estimates shall be given to each of the tenants concerned or shall be displayed in the building so as to be likely to come to the notice of all those tenants and, if there is a recognised tenants' association for the building, the notice and copy of the estimates shall also be given to the secretary of the association.
  (4) The notice shall describe the works to be carried out and invite observations on them and on the estimates and shall state the name and the address in the United Kingdom of the person to whom the observations may be sent and the date by which they are to be received.
  (5) The date stated in the notice shall not be earlier than one month after the date on which it is given or displayed as required by subparagraph (3) above.
  (6) The landlord shall have regard to any observations received in pursuance of the notice and, unless the works are urgently required, they shall not be begun earlier than the date specified in the notice.
  (7) For the purposes of this paragraph the tenants concerned are all the landlord's tenants of flats in the building by whom a service charge is payable to which the costs of the proposed works are relevant."
  No. 97, in page 130, line 32, after "court" insert—
  " if satisfied that the landlord acted reasonably."
  No. 98, in page 130, line 33, leave out from ' requirements ' to end of line 35.
  No. 99, in page 130, line 37, leave out ' the tenant ' and insert
  ' a tenant, or if there is a recognised tenants' association for the building, either its secretary or the tenant'.
  No. 100, in page 130, line 40, after second ' payable ' insert ' by the tenant '.
  No. 101, in page 131, line 1, after ' tenant ', insert ' or the secretary '.
  No. 102, in page 131, line 7, after ' tenant ', insert ' or secretary '.
  No. 103, in page 131, line 26, after ' tenant's ', insert ' or secretary's '.
  No. 104, in page 131, line 34, after ' tenant ', insert ' or secretary '.
  No. 105, in page 133, line 20, leave out ' 3(2) ' and insert ' 3 '.—[Mr. Stanley.]
  It being after twenty-four minutes past Twelve o'clock, further consideration of the Bill stood adjourned, pursuant to Order [16 April].
  Bill, as amended (in the Standing Committee), to be further considered this day.

  LAND USE (LEISURE PLOTS)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Copt.]
  12.36 am
  Mr. John Heddle: I am most grateful to you, Mr. Deputy Speaker, for giving me this opportunity to raise the subject of land speculation and the sale of leisure plots. I wish to draw the attention of the House to a situation which some might describe as scandalous. A few years ago that situation was confined largely to Kent, Surrey Sussex, Essex and the Home Counties in general. However, the problem has spread to the Midlands and has become of national concern. I know of places in Scotland, Cornwall and Yorkshire where such land speculation is prevalent.
  The problem will multiply unless some positive planning solution is found. I am pleased that my hon. Friend the Member for Maldon (Mr. Wakeham) is in the Chamber. I am not sure which hat he is wearing. Perhaps he is wearing the hat that he usually wears in the Chamber, namely, that of a Government Whip. However, he may be wearing the hat of a Member of Parliament for a constituency that is affected by this type of land speculation. My hon. Friend the Under-Secretary of State for Defence for the Royal Navy first raised this issue in the House on 19 November 1975. He gave particular examples of the activities of leisure plot speculators who were then operating in Kent. I am also glad that my hon. Friends the Members for Faver-sham (Mr. Moate), for Gravesend (Mr. Brinton) and for Sevenoaks (Mr. Wolf-son) are in the Chamber. They all have similar examples of this obnoxious form of land speculation in their constituencies.
  I am advised that even in the plushest pastures of West Sussex and in the constituency of my hon. Friend the Member for Chichester (Mr. Nelson)—which he represents so assiduously—such speculation occurs. Since my hon. Friend the Member for Ashford (Mr. Speed)—now the Under-Secretary of State for Defence for the Royal Navy—raised this issue in 1975, no constructive solutions have been found either by the previous Administration or by the present Government. As

  463
  the Government are reaching the end of the Committee stage of the Local Government, Planning and Land (No. 2) Bill—part of which seeks to make planning procedures more positive and efficient, and to stamp out anomalies—the time would seem ripe to examine the problem again.
  Land speculators buy up parcels of agricultural land. The land is usually grazing land that is deep in the heart of the countryside. It is usually of poor quality and is invariably in the green belt. They buy the land at almost knock-down agricultural prices. Depending on the area, they buy the land for between £500 and £2,000 an acre. In the guise of £100 companies that are controlled by nominee directors and that have £2 shares, the speculators parcel up the land into separate plots. The plots usually measure about 100ft by 40ft. In rare cases they may measure half an acre and in still rarer cases, an acre. They then advertise the plots in the "land for sale" columns of the popular weekly press at anything from £150 per plot to £1,000 a plot. Their profit margins are not too difficult to calculate, even at this rather late hour. At the minimum they are usually £3,000 an acre.
  The poor buyer, usually a town dweller, to whom the prospect of a plot of land in the country is a chance of a lifetime, is left with a piece of land which, he is assured by carefully-worded advertisements and ambiguously-worded sales particulars, can be used only for gardening, leisure and related purposes, but which in reality is absolutely worthless and valueless. Because of planning restrictions, the land has no access by road and no sewerage or running water, and, because of its obscurity, the new owner is not even allowed to erect a fence to delineate his boundary.
  The sales particulars read something like this:
  " Cheap land (freehold). Your own leisure garden. Beat the falling pound and inflation. Invest in land for growing and leisure, from £195 full price. Plot sizes approximately 40ft. by 100ft. Larger plots, some with future building potential—"
  Whatever that may mean
  " also available on easy terms."
  Another set of particulars from which I shall quote, reads:
  464
  " The investment for everyone. If you are interested in securing your future with minimum trouble and maximum results, you should consider the case for land. Most of us save in a variety of ways ranging from the piggy bank via savings banks and unit trusts, silver and paintings, to the land and property investments of the big companies.
  In these times of inflation, which are here to stay, the piggy bank is a poor loser, and the land the outright winner. The effect of inflation is continually to erode the value of money; anything of enduring value therefore becomes more expensive. Land values increase at substantially more than the inflation rate because of the additional effects of expanding population and subsequent pressure for demand for land. It was first said last century—"
  in fact I believe that it was said by Mark Twain—
  " ' Put your money into land—they don't make it any more.' "
  The sales particulars imply that possible future planning potential exists in this land.
  The particulars go on to say, under the heading of "Speculation":
  " It is not possible to see what the long-term possibilities for development are for any specific area of land. It is certain that large areas must be released for development soon, in order to overcome the housing shortage. … When permission for any type of development is given on any land, the value increases enormously. For example, a small building plot for one house … is at present (1973) worth about £5,000, depending on location. The same size plot without planning consent can be obtained … for about £300. Even without out development, however, the value still continues to increase as always.
  Then, under the heading of "Growing for Profit", the pamphlet says:
  " The land may be used for any form of agriculture or forestry—fir trees, fruit or decorative trees, shrubs, vines, market produce, such as your own fresh, chemical-free salads. Christmas trees, for example, require very little attention (a yearly visit with a small rotary cutter should suffice to clear between rows), can be planted at a density of 3,000 to 4,000 trees per acre and reach a saleable size in three to five years. Some varieties of strawberries have yielded about two tons per acre—very profitable, but they do need some attention."
  One can see how the poor buyer can easily be short-changed by the activities of these speculators using the English language in its most elastic and persuasive form. But it is not simply the poor buyers who suffer. The local authorities and local residents suffer too. In view of the approaches to most of these sites, there are often problems, especially at weekends when the plots are visited by large numbers of owners with their

  465
  individual forms of transport. Furthermore, the sales of these plots of land generate a rash of small-scale development under article 3 of the Town and Country Planning General Development Order 1973, and, even where planning control is involved, there is always difficulty in exercising it and in taking timely enforcement action.
  When the land is split up for recreational purposes, the permitted rights still persist. They are often abused. The site becomes an area of sporadic picnic sites, caravans, camps and other forms of buildings, which ruin the natural state of the area to the detriment of the local environment and the landscape.
  Furthermore, the use of the land for leisure is often contrary to the policies of the development plan. The sites are usually in areas where it is intended that the uses for agriculture and forestry should not be disturbed. In many instances there is a loss of effective farming and productive agriculture land. Where the land is woodland, there is a threat to its preservation and management in accordance with the principles of good forestry. There is also a substantial fire risk through picnickers lighting fires and not being able to control them. I ask my hon. Friend to consider also refuse collection and the disposal of sewage, and the practical and environmental problems that they present. Those uses also cause injury to wildlife. Where the area is of special scientific interest, the specific fauna and flora may be seriously damaged.
  I ask my hon. Friend to agree that the normal planning control measures are inadequate to deal with those problems, the primary cause of which is the physical division of the land into plots. Planning powers at present have no relevance to land ownership. I am advised that to use land in one's ownership for personal enjoyment such as picnics, camping, relaxation or cultivation does not constitute development within the meaning of section 22 of the Town and Country Planning Act 1971. Furthermore, there is no planning control to deal with the consequent loss of effective farming and productive agricultural land or the threat to forestry caused through fragmentation of the land.
  466
  Will my hon. Friend also consider the problems of fire risk and the practical and economic difficulties of refuse collection and sewage disposal, which also cannot be dealt with by planning control. Neither planning nor highway and road traffic legislation can deal with the problem of increasing traffic using narrow approach roads that are public highways, particularly at weekends. Furthermore, I am advised that there is no planning method to prevent injury to wildlife and the flora that supports it.
  Lastly, I come to a point that my hon. Friend the Under-Secretary dwelt on in 1975. Article 4 directions are not wholly effective. They have to be made and approved by the Secretary of State before the permitted development takes place. The delay involved often lessens their effectiveness or even renders such directions useless. For the reasons that I have mentioned, and in regard to the uses that I have mentioned, such as picnics, camping, relaxation or cultivation, which do not constitute development, article 4 directions have no effect. They merely prevent development ancillary to the use. Furthermore, the liability for compensation in such cases seems an unfair burden on the local authority. The imposition of article 4 directions by the local planning authority does not protect the poor purchaser who has parted with his life savings, and does not help to control the development of the land. They are effective only after the land has been developed and the speculator has made off with his ill-gotten gains.
  Even where article 4 directions have been made, the taking of enforcement action places a great burden on the local planning authority. The sites are often remote, and the plots are well hidden. Therefore, to detect and deal with contraventions and maintain control requires a large staff, involving considerable expenditure of time and money. At a time when we are endeavouring to identify waste and discover where economies can be made in local administration that must be questionable. I submit that the whole procedure of article 4 directions is not in accord with the Government's wishes to maintain a positive planning role. The planning enforcement procedures are too cumbersome to deal with the large numbers of small individual contraventions which, taken

  467
  together, constitute a serious injury to the environment.
  I believe that the Association of County Councils, the Association of District Councils, the National Farmers Union and other representative bodies share my view that positive steps should be taken to stop this undesirable practice spreading.
  I believe that the Government should pursue the question of control under the Fair Trading Act 1973, and consider reinstating the sale of land under the Trade Descriptions Acts of 1968 and 1972. Most important, I commend to my hon. Friend that the Government should also adopt the suggestion put forward by Mr. George Dobry, QC, that a change of use from agricultural or forestry to leisure use is a material change of use—positively requiring planning permission, and in this respect I remind the House of what Mr. Dobry said in his report "Review of the Development Control System":
  " I would like to make one specific recommendation. I have evidence of a recent practice of selling leisure plots on the assumption that planning permission is not required. This naturally leads to serious objection from the public, as in practical terms a weekend invasion results, and substantial intense cultivation of the use of land takes place. Clearly this should be made the subject of planning control. Section 22(3) of the 1971 Act should be amended to provide (for the avoidance of doubt) that a change in the use of a separate plot of land from agriculture to ' leisure use ' would constitute development. "
  Furthermore, in order to assist the Fair Trading Act, I believe that the Town and Country Planning Act should be amended to require planning permission to be obtained for the sub-division of land, as well as for development, except possibly for the sub-division of land for agricultural purposes, purely and simply, as opposed to agricultural purposes involving leisure, horticulture or some other use. To strengthen this, the definition of agriculture should be that used in the Agriculture Act 1947—that is, agriculture pursued as a trade or business—and not that used in the Town and Country Planning Act—where it is only an activity which could merely be carried out on a profit and pleasure basis as a hobby. It might be better to specify sub-division of ownership of land as requiring planning permission, rather than to include it in the definition of ' development '.
  468
  I am grateful to my hon. Friend for attending the House at this late hour—though it is not as late as it might have been—and trust that he will consider that now is the time to take positive steps to control the abuse which fosters speculation of the most undesirable kind, leaves purchasers penniless, causes the loss of productive land and the disruption of viable agricultural units, and so allows some dubious people to drive a coach-and-four through our planning Acts.
  12.53 am
  The Under-Secretary of State for the Environment (Mr. Marcus Fox): I am grateful to my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) for raising this subject. He had here to listen to him my hon. Friends the Members for Maldon (Mr. Wakeham), for Ashford (Mr. Speed), for Faversham (Mr. Moate), for Gravesend (Mr. Brinton), for Chichester (Mr. Nelson) and for Seven-oaks (Mr. Wolfson).
  It is a subject which has concerned my hon. Friend for a long time and on which his knowledge is extensive. My Department has been grateful to him for the research that he has done on leisure plots and for providing a detailed dossier on leisure plot development.
  I can well appreciate the reasons for my hon. Friend's concern. He illustrated graphically the situation of many people who have been misled—that is not too strong a wor\d—in this area. Leisure plot developments have caused anxiety to many who care about rural development, the amenity of unspoilt areas and the preservation of agricultural land. They have also caused great disappointment to many who have parted with money for something that proved not to be what they had hoped for.
  In their farming policies, the Government are strongly committed to protecting the rural environment and safeguarding agricultural land from unnecessary development of whatever sort.
  The increasing demand that we have seen for many years for leisure facilities in the countryside has added to the legitimate competing demands on scarce rural land. It is clear to us that my hon. Friend is right in saying that uncontrolled leisure plot development can have a destructive effect on the countryside.

  469
  That is clearly something which our planning system, designed as it is to ensure a proper use of land, should be controlling. Yet it has not been easy to control. My hon. Friend asked me to do something about that, and I assure him that I shall certainly look carefully at the matter.
  There has always been the risk that planning would come on the scene only after the damage had been done. My hon. Friend has made it quite plain that he does not think that the present system of planning control is a satisfactory method of preventing speculators from taking advantage of ordinary people who simply want to acquire a small plot of land in the countryside where they can spend some of their leisure time. My hon. Friend has raised this matter at Question Time, and I hope I have reassured him that my concern, like his, is for the people who are outwitted in this respect. The person who has disposed of the land escapes scot-free, and the buyer who has parted with his money is left with so little. I do not pretend that the present system is ideal in this respect, but I suggest to my hon. Friend that he underestimates what planning authorities can already achieve if they are sufficiently vigilant about the possible development of leisure plots.
  I should like to draw my hon. Friend's attention to the significance of the decisions taken by the previous Secretary of State in March last year on enforcement appeals involving leisure plots on land at the Blackwater Estuary Estate, near Maldon in Essex. My hon. Friend has expressed concern about the inadequacy of article IV directions for controlling that kind of development. The Black-water Estuary decisions showed that the article IV direction is strictly irrelevant to the question whether the creation of a leisure plot from former agricultural land is development within the meaning of the Town and Country Planning Act 1971, and whether it is, therefore, subject to planning control.
  The Secretary of State found on those appeals that the creation of those particular plots was a material change of use of the land from agriculture to leisure plots, and it amounted to development requiring planning permission. That does not mean that every leisure plot development will necessarily need planning permission
  470
  because, as the House knows, every planning decision is given on the basis of the facts of the individual case. But at least it shows that there are some circumstances in which the creation of leisure plots has to be regarded as development and, therefore, requires planning permission before it can take place.
  I am bound to add that there has been a challenge in the High Court to the previous Secretary of State's decision, and we may have to look again at this question when we eventually receive the court's judgment. But, for the time being at least, that is our view on the matter.
  I know that there is still particular concern amongst planning authorities in the Home Counties about leisure plots, and nowhere has that concern been expresed more strongly than by Kent county council. I understand why the council has decided to include in its Bill, which is now in another place, a clause which is intended to control the use of land as leisure plots by means of a licensing system which would be operated by the district councils. When that clause is considered by the Committee, we shall explain fully why we have serious doubts as to whether this is the appropriate way in which to deal with what is admittedly a very difficult problem of planning control. I accept that my hon. Friend the Member for Faversham probably sees this as the answer. But there are many problems involved, particularly when one considers what the Government are trying to do in the introduction of the Local Government, Planning and Land (No. 2) Bill which is now reaching its final stages in Committee. But, as I said, we shall return to the matter.
  I shall not, therefore, try to anticipate now the consideration that will have to take place elsewhere. But I should like to point out that Kent county council's approach to this problem, however well-meaning, is bound to result in a system of control operating in parallel to planning control under the Town and Country Planning Act 1971 and the general development order. It is bound to produce a great confusion for all concerned, not least for a prospective purchaser of leisure plots, who would find it very difficult indeed, even with good legal advice, to decide how these two systems in practice affected the land that he was interested in acquiring. There may well

  471
  be occasions when land should be made available for this purpose.
  In terms of what we are debating tonight, I accept the anxieties, but I make clear that in terms of leisure and the very desirable purpose for which some of these plots are bought, we must be very careful not to rule out altogether reasonable and responsible development. Hon. Members must not be led astray by the abuses which are being drawn to my attention tonight. I do not think that the approach that Kent county council has adopted is the right one in the circumstances, and I wonder whether it has properly considered the administrative consequences of its proposals, which seem to me to be little short of a bureaucratic nightmare, which none of my hon. Friends would really want.
  What I have said so far will not provide great comfort to those who have paid for leisure plots on the basis of advertisements which have misled them. It seems to me comparatively rare now for advertisements to say directly that there is a possibility of planning permission for development, and hence a very large capital gain. But people are certainly led to assume that they will be able to fence off their patch of land and perhaps to park a caravan on it and use it for normal recreation purposes. Advertising for land is not subject to the Trade Descriptions Act. Reference was made to this by my hon. Friend. I do not want to stray into this subject, which is one for my right hon. Friend the Secretary of State for Trade.
  But in raising this debate, and in his other activities in this field, my hon. Friend performs the valuable service of calling public attention to the issue. By doing so he is increasing the public awareness of the risks of parting with money for these plots without proper awareness of the planning controls governing them. Equally, there is much to be gained from a wider awareness of the controls available to a planning authority if it is alive to developments in its area and reacts quickly.
  My hon. Friend was right to draw attention to George Dobry's observations on this matter' in particular. We have been very grateful in Government for Mr. Dobry's advice on many other
  472
  matters in the planning field, and in the Bill that is before Parliament at this stage we have, taken considerable note of what he has had to say.
  Equally, I believe that by drawing people's attention to this we can avoid the damaging effects of the worst leisure plot developments that have taken place. I understand my hon. Friend's concern about all this, but I have to tell him that the solutions are not quite as easy to find. That does not mean to say that we are not looking for them, and I hope he will accept from me that all the remarks he has made to me tonight, plus the attendance of his hon Friends, impresses upon us that there is a need to do something. I hope that he will accept that in the spirit in which it is intended.
  1.4 am
  Mr. Roger Moate: May I take advantage of these two minutes, left either deliberately, for which I thank the Minister, or inadvertently by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle), to say a few words on this very important subject?
  I congratulate my hon. Friend on his initiative in raising the debate. It is a very helpful move to get the subject aired once again in the House. It is very frustrating that after many years still no solution has been found to it. It seems that there is a lack of desire by the officials in the Minister's Department to find a solution to this very real problem. Of course, one recognises that there are difficulties in legislation to deal with the problem, but one would have thought a solution could be found. He paid tribute to Mr. George Dobry for his work. Mr. Dobry in his report conclusively urged that there should be legislation to deal with the problem.
  I was disappointed by the reply of my hon. Friend the Under-Secretary which seemed to suggest, again, that the Government's response is "We understand the dilemma and we want to curb the problem but we are afraid that this particular solution put forward by Kent county council is not the answer and therefore the Government will oppose it". That was the essence of what my hon. Friend had to say.

  473
  I ask my hon. Friend to look again at the proposal from Kent county council and at the answer given by his officials to see whether there is not some solution in the method proposed by Kent.
  I do not think that my hon. Friend's answers were convincing. He seemed to suggest, first, that he wants to protect a certain number of leisure plots. He seemed to think that there were some good leisure plots and that the buyers of those plots needed protection. It may be that somewhere there are some good, desirable leisure plots, but all I can say to my hon. Friend is that we have not experienced them in Kent and I have not heard of anyone in other areas saying that they were desirable developments.
  474
  Yet that seemed to be what my hon. Friend was saying. In almost every area where we have experienced them, in areas of outstanding natural beauty, in woodlands, coastal sites or agricultural land, they are a bad development and should be controlled.
  I think that my hon. Friend's argument that somehow the Kent proposals would impose a licensing and bureaucratic system—
  The Question having been proposed after Ten o'clock on Tuesday evening and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at six minutes past One o'clock.

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

FISHERY PROTECTION
The Earl of KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they consider that the British Fishing Protection Service has adequate resources to police British waters against the plunder of our fish stocks.
The MINISTER of STATE, MINISTRY of AGRICULTURE, FISHERIES and FOOD (Earl Ferrers): My Lords, we maintain a substantial, and we believe adequate, fishery protection effort within our fishery limits. Our fishery protection resources enable us normally to have at least nine surface vessels on fishery protection duties at any one time. Aerial surveillance is also provided by RAF Nimrods and other aircraft.
The Earl of KINNOULL: My Lords, I thank my noble friend for that reply. Is he aware of the general concern felt by the industry as to the effective policing of our fisheries and as to whether it is tight enough? Is he aware that within the limits of the six-mile and the 200-mile area it is felt that the other industries within the Community blatantly disregard some of the regulations, and so diminish our fish stocks? Finally, can he advise the House to what extent the fishery protection service now patrol the waters?
Earl FERRERS: My Lords, I am aware that many people are concerned as to the protection which is given by the fishery protection vessels, but I would let my noble friend know that during 1979 there were no fewer than 1, 808 boardings at sea to inspect the vessels which were there, and as a result of that 18 foreign vessels
724
were prosecuted and 59 United Kingdom vessels also were prosecuted. The resources available are five Royal Naval Island Class vessels which do the offshore protection; eight to 10 minesweepers of the Ton Class which do the inshore protection; two Department of Agriculture and Fisheries for Scotland offshore vessels; and two Department of Agriculture and Fisheries for Scotland inshore vessels. Therefore, there are some 18 vessels allocated to fishery protection at all times of which at any one time nine are on duty.
Lord BOOTHBY: My Lords, may I ask the noble Earl whether Her Majesty's Government find the recent increase in the number of foreign vessels caught fishing illegally in British territorial waters is disturbing, or whether he thinks it is not too bad?
Earl FERRERS: My Lords, any kind of illegal fishing is disturbing. All I can tell the noble Lord, Lord Boothby, is that our fishery protection vessels are vigilant and they have, during the course of the current year, prosecuted 11 foreign vessels. Of course, there are some vessels of other countries which may invade our waters and deposit their catch elsewhere, in which case that is the responsibility for the other countries provided that we look after our own territorial waters, which I have explained that we have tried to do.
Lord CLIFFORD of CHUDLEIGH: My Lords, would the noble Earl and the Government bear in mind that the livelihood of the inshore fishermen off the coasts of Devon and Cornwall is not only threatened by foreign vessels?
Earl FERRERS: My Lords, I realise the apprehension to which the noble Lord refers.
Lord LEATHERLAND: My Lords, can the noble Minister tell us whether these fishery protection vessels, in addition to protecting our fishing rights, also do anything to protect, defend, or safeguard our oil rigs in the North Sea?
Earl FERRERS: Yes, my Lords, they do. The five Royal Naval Island Class vessels to which I referred are built for offshore protection, which refers to both fish and oil.
Lord BALFOUR of INCHRYE: My Lords, would the Government re-examine once again the possibility of using dirigibles for coastal protection work? They are of long endurance, are economic, and are beautifully slow as compared to aircraft.
Earl FERRERS: My Lords, we use a number of different machines. I do not think we use the ones to which my noble friend has referred, but I shall certainly take note of his suggestion.

JURIES: COMPREHENSION OF COURT PROCEEDINGS
2.43 p.m.
Baroness MACLEOD of BORVE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what steps are taken to ensure that members of a jury dan read and also understand the language of the court.
The LORD CHANCELLOR (Lord Hailsham of Saint Marylebone): My Lords, the summons for jury service clearly states that a person may be excused from jury service if his understanding of English is insufficient. If it appears to the officer of the court that a person reporting for jury service has language difficulties, the judge will be informed and has power to discharge him if, on account of his insufficient understanding of English, there is doubt of his capacity to act effectively as a juror. The Juries Act 1974 does not provide that jurors must be able to read and no test of literacy is imposed. In a case where it is essential to be able to understand documentary evidence and it appears that a potential juror may be unable to do so, the judge may exercise his discretion to stand him down or either party may challenge him.
Baroness MACLEOD of BORVE: My Lords, while thanking my noble and learned friend for that very helpful reply, may I ask whether he would think it right that a man who was completely
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illiterate and therefore could not understand the plan which was put before him in, for example, a murder trial, should be sitting next to a man who came originally from another country and could not understand a word that the judge, any of the witnesses or the defendants said? Would my noble and learned friend consider that to be in the best interests of British justice?
The LORD CHANCELLOR: My Lords, I do not know whether my noble friend has a particular case in mind. If so, if she will write to me I will look into it. As for somebody who is unable to understand English, I should have thought it quite inappropriate that such a person should sit on an English-speaking jury, either in this country or anywhere else where the witnesses were talking English. Illiteracy is a slightly different matter, but normally one would doubt whether a person who was unable to read, whether a plan or a document, should not disclose the fact or it should not be the subject of a challenge.
Lord JANNER: My Lords, is it not possible to devise some system by which, when a juryman is actually called, such frailties, if I may so describe them, do not exist? Is it not a fact that otherwise the system entails the man coming before a judge before a decision is arrived at, which means that he may, in doing that, waste the judge's time?
The LORD CHANCELLOR: As a matter of fact, my Lords, this was considered rather carefully in 1965 by a departmental committee under the late Lord Morris of Borth-y-Gest, and I think it will answer the noble Lord's question if I quote what that committee said in paragraph 79 of their report:
" If the unfortunate summoning officer is not to be left with the invidious task of telling large numbers of people that they have failed to pass whatever test might be devised, the test itself would have to be of such a simple character as to be practically useless ".
Lord WIGODER: My Lords, would the noble and learned Lord look again at the situation by which jurors' names get on to the panel in the first place? Would he consider it right that those who are manifestly unfit to serve, for the reasons he has indicated, or indeed who

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are disqualified from service because of recent previous convictions, nevertheless find their names without any restriction on the jury panel? If that situation could be avoided, would it not remove much of the controversy out of the whole issue of jury-vetting?
The LORD CHANCELLOR: My Lords, jury-vetting is a very different problem and perhaps I had better not embark upon that stormy sea in reply to this Question. A recent disqualification, if it is known, stops the juror coming on to the panel. As the noble Lord will be aware, my officers are under an obligation under the Juries Act of taking, apart from disqualifications, jurors names at random off the voters' list, and I do not think therefore that I have any power to exclude jurors who may be inadequately equipped to try a particular case. I think one has to leave that to the parties. As I say, I think vetting had better be left out of this Question, unless there is something more directly relevant to it that the noble Lord has in mind.
Lord WYNNE-JONES: My Lords, does the noble and learned Lord consider that the language of the court, as referred to in the Question and as given in The Times legal reports, is always such as can be understood even by those who consider they have a good knowledge of the English language?
The LORD CHANCELLOR: My Lords, I think that, except in Wales, where the situation is somewhat different, the language of the court is intelligible English, known as the Queen's English.
Lord ELWYN-JONES: My Lords, perhaps that is the explanation of the fact that it is falsely alleged that Welsh juries are against crime but are not dogmatic about it!
The LORD CHANCELLOR: That is the whole value of the jury system, my Lords.
Baroness MACLEOD of BORVE: My Lords, may I ask my noble and learned friend to consider whether members of the jury should take the oath in public and individually? It could then be seen
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whether they do understand the language of the court.
The LORD CHANCELLOR: My Lords, if members of a jury showed difficulty in reading when they came to be sworn, it was always my practice to challenge, and I always found that that worked.
Viscount BARRINGTON: My Lords, may I ask the noble and learned Lord whether the test of reading applies only to English, and not to Welsh?
The LORD CHANCELLOR: My Lords, in Wales the Welsh language has equivalent validity to English. There are four court centres in Wales where simultaneous translation is available. I could give the noble Viscount further detail if I were to look up the matter, but I should rather not go further than that at the moment.

TORTURE: ALLEGATION AGAINST THE UK
2.51 p.m.
Lord GARDINER: 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 United Kingdom was convicted or acquitted of torture by the European Court of Human Rights.
The LORD CHANCELLOR: My Lords, before I answer this Question, I should explain that I am taking the part of my noble and versatile friend Lord Trefgarne, who has been summoned away. Her Majesty's Government have at no time been found guilty of torture by the European Court of Human Rights.
Lord GARDINER: My Lords, I thank the noble and learned Lord for that reply. With reference to the statement made by the Government on 23rd April in this House, as reported at column 811 of the Official Report, that—
" this country has been found guilty of practising torture",
are we to understand from the noble and learned Lord's reply that the Government

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now withdraw that allegation, so that it is not damaging to the good reputation of our country?
The LORD CHANCELLOR: My Lords, I was unaware of the statement to which the noble and learned Lord refers, but I think that the noble and learned Lord will remember that what I said in my Answer is in fact the case. The noble and learned Lord may remember that in December 1971, or early 1972, he was very intimately concerned in the Parker Committee. I am sure that he will remember that his minority report was accepted immediately by the Government of the day, long before the Human Rights Commission reported on the particular matters. In that particular case— which is the only one of which I have personal or individual knowledge— the commission certainly did not find us guilty of torture.
Lord GARDINER: My Lords, while I fully accept everything that the noble and learned Lord has said, may I again ask whether that means that the Government are now withdrawing their previous statement that we had been convicted of torture?
The LORD CHANCELLOR: My Lords, I was unaware of the previous statement; otherwise, I would be able to answer more unequivocally. However, my answer that we have never been found guilty of torture is I believe the correct answer in the case. It is the answer that I have been given, and I believe it to be true.
Lord AVEBURY: My Lords, is the noble and learned Lord aware that the statement in question was made during the debate on defence sales by the Minister who was speaking from the Front Bench opposite, and that he made the statement in order to deflect a question that I put to him concerning the Government's policy on the sale of arms to regimes which practised torture, and to Argentina in particular? The noble Lord then on the Front Bench opposite said that it all depends on what you mean by torture, and that, for instance, this country had been convicted of torture in the European Court of Human Rights. Therefore is it not vitally important that this misstatement by the Minister should be
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properly corrected by the person who made it so that there cannot be any confusion between the practices which were followed in Northern Ireland— reprehensible though they may be— and the appalling atrocities inflicted on the citizens of Argentina by the regime which they are unfortunate enough to have in that country?
The LORD CHANCELLOR: My Lords, as I have no previous knowledge of this particular matter and no notice of it, I do not think that I can go further than I have gone. My original Answer is the correct one.
Lord LEONARD: My Lords, does the noble and learned Lord agree that in view of the talks that are to take place between Mr. Haughey and the Prime Minister, we should leave matters of this nature in abeyance for the moment?
The LORD CHANCELLOR: My Lords, I was grateful to the noble and learned Lord, Lord Gardiner, for putting the Question so that I could give an unequivocal reply. I am sure that that was a very valuable contribution to the House. As a matter of fact I was not briefed on the other matters that have been raised by way of supplementary questions, and I can only apologise to the House for not knowing more about this matter.

GOVERNMENT PROPERTY: REDECORATION AND SURPLUS FURNISHINGS
2.55 p.m.
Lord GISBOROUGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their policy with regard to the repapering of walls and the replacement of carpets and furniture in the Palace of Westminster and in ministerial houses.
Lord MOWBRAY and STOURTON: My Lords, the policy is to decorate and furnish these buildings at the least expense consistent with their particular style and quality, taking account, in the case of the

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Palace, of the views of the appropriate committees of both Houses.
Lord GISBOROUGH: My Lords, I thank the noble Lord for that Answer. With regard to surplus carpets and furniture, can the noble Lord say where these are auctioned, what prior publicity there is, and what advertising is arranged?
Lord MOWBRAY and STOURTON: Yes, my Lords; carpets and some furniture are auctioned at public auction rooms in Wembley. I understand that these auctions take place about once a month. They are advertised in both the local and the national press. Furniture is generally re-used elsewhere, if possible, but electrical goods are generally discarded on the grounds that by the time they are replaced they are often virtually useless. But everything is looked at and, if the items can be auctioned, they are.
Lord LEATHERLAND: My Lords, will the Minister bear in mind that when chairs become surplus to requirements and are to be sent for sale by auction, it would be a nice idea if Members of this noble House were themselves invited to tender for some of them? I believe that many of us would like to have a House of Lords chair in our own homes so that we could sit in it occasionally when our years are farther advanced.
Lord MOWBRAY and STOURTON: My Lords, that is a lovely idea. One has seen in the homes of noble friends Coronation chairs which their parents have bought following Coronations, but I think that if we were to apply that idea to this House we might find that we were adding to the cost of inflation, because noble Lords would want to buy in the chairs cheaply, while the public services replacement department would have to buy them back more expensively, I suspect.
Lord AVEBURY: My Lords, is the noble Lord aware that the noble Lord, Lord Gisborough, was not alone in feeling some anxiety that proper steps should be taken to recover the value of surplus carpets disposed of, and that I drew this matter to the attention of the Comptroller and Auditor General, who recommended some minor changes in procedure to
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ensure that no waste occurred in the disposal of these materials?
Lord MOWBRAY and STOURTON: My Lords, I do not really know to what the noble Lord, Lord Avebury, is referring. With regard to carpets, in the Department of the Environment we have a suspicion that noble Lords may not be aware of the extreme efficiency of the department. All the carpets in the main Committee Room corridor were taken up, cleaned and thoroughly refurbished— which I believe is the appropriate term— and put back again. Many Peers thought that they were new carpets, but they were the same ones as before. We have new carpets in the Library, but three of the four carpets had been down for over 30 years. One carpet was in such bad condition that it had to be replaced in 1965. We put four new ones down. The one which was laid in 1965 is being used elsewhere, and the others have been sold.
Lord ORR-EWING: My Lords, can the noble Lord give us rather more information about the advertising of these auction sales in the national press? To my knowledge— and I believe that of my friends— I have never seen these advertisements widely distributed in news- papers. Many of us should like to follow up the suggestion to purchase some of these items. Can we be told— or can the information be given in a written report— the price per square metre or per square yard for the carpets and possibly the price for the chairs that has been attained by this very efficient department?
Lord MOWBRAY and STOURTON: My Lords, I have a feeling that somewhere in my brief I have details of the figure per square metre that was obtained, but I do not believe that I can find the information at the moment. These items are advertised in the national press— I can assure the noble Lord about that. I cannot speak for the noble Lord, but speaking for myself, I look at the advertisements in general, but I do not begin to read one hundred thousandth part of them.
Baroness BIRK: My Lords, while the noble Lord is perhaps taking the opportunity to cast back his mind, or find the information about the disposal of goods,

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may I ask whether he is aware that one thing that concerned me when I was a Minister at the Department of the Environment was achieving the right balance between the need for replacement of furniture and carpets, as well as redecoration, and at the same time not allowing the people concerned to "free-lance off" (if I may put it that way) and do things to an over-elaborate extent? Will the noble Lord reassure us that an eye will be kept on the practice that I found of perhaps over-gilding the lily?— and by that I mean the amount of regilding that went on.
Lord MOWBRAY and STOURTON: My Lords, with the exception of the Royal Gallery, I cannot think of much regilding that has been done in the last 15 years.
This House and the other place owe an enormous debt of gratitude to our two committees. In our House the noble Viscount, Lord Hood— I do not know whether he is here— has headed a Committee to which I think we owe enormous gratitude. In the other place, the ex- Member of Parliament Sir Robin Cooke, who is now adviser to the Secretary of State for the Environment and the Chancellor of the Duchy of Lancaster, helped enormously. They have the idea that, when things have to be replaced, they should be replaced in the right way. This Palace is a Victorian building, and we should try to get it right. Extravagance is out. The Auditor-General and the expense accounts department watch like hawks, and there is no undue extravagance; but when you are going to redecorate, it does not cost very much more to do it correctly than to do it cheaply. I am happy to tell noble Lords that in the coming year the budget for new furnishings in this Palace will be half that for the past year.
Lord ELWYN-JONES: My Lords, is not a tribute also due to the excellent craftsmen who have served the Houses of Parliament so loyally over the decades?
Lord MOWBRAY and STOURTON: My Lords, I am very grateful to the noble and learned Lord. It certainly is. I watched some craftsmen doing the Royal Gallery— the Arms, and so forth. They were doing them freelance. They were
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artists. It is not easy to do heraldry. They were not doing it to patterns, as you see done on motor-cars. They were working with artistic skill, and we have no idea of their skill. These people are dedicated craftsmen.
Lord DERWENT: My Lords, I do not want to prolong this discussion, but there is something I have wanted to know for a long time. Why has the department cleaned the stonework round the windows on the Government side (whoever is in Government), where the work has been done for many years, whereas on the other side of the House, the Opposition side, it has never cleaned the stonework at all?
Lord MOWBRAY and STOURTON: My Lords, I am not quite sure I understand which is the Government side of the House and which is the other side. I think it is purely accidental. The sun shines in on one side and probably dirties it more than the other.
Baroness MACLEOD of BORVE: My Lords, after his very helpful replies, may I point out that the Question also asked what happened to the furniture and carpets in ministerial and, presumably, official houses. I wonder whether the Minister could help us on that.
Lord MOWBRAY and STOURTON: My Lords, the same principle applies exactly. I think there are only six ministerial houses occupied by Ministers. Exactly the same policy applies.
Lord GISBOROUGH: My Lords, following that up, can the noble Lord say what is the average life of white goods— that is to say, articles such as washing machines— in ministerial houses? Is he aware that in one ministerial house it was specifically requested that a certain washing machine should not be changed, that in fact it was, and that that was a complete waste of money?
Lord MOWBRAY and STOURTON: My Lords, I in fact chased this up as my noble friend gave me private information, and I found that in point of fact it was a dishwasher. Although it looked new from the outside and the aluminium white was all perfect, I am told that it was in fact over 10 years old and the rubber parts

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and the valuable washing parts were worn out. The person concerned did not use it in the end, but the dish-washing machine was at the end of its tether.
The LORD PRESIDENT of the COUNCIL (Lord Soames): My Lords, now that my noble friend has given such a demonstration of his detailed knowledge of his job, and we know that the dishwashing machine was found to be at the end of its tether, I wonder whether we in this House are not approaching the same sort of situation and whether we should not move on to other business.

IRAN: SANCTIONS
Lord GORONWY-ROBERTS: My Lords, I beg to ask Her Majesty's Government the Question of which I have given private notice. The Question is as follows:
" To ask Her Majesty's Government whether they will now make a further statement on sanctions against Iran ".
Lord DENHAM: My Lords, with the leave of the House, at a convenient moment after 3.30 my noble friend the Foreign Secretary will answer this Question in the form of a Statement.

EMPLOYMENT BILL
3.4 p.m.
The MINISTER of STATE, DEPARTMENT of EMPLOYMENT (The Earl of Gowrie): My Lords, for more than a decade we have been talking about changes to our industrial relations system. First, there was In Place of Strife and the Labour Government's abortive plans for trade union reform in 1969. Then there was the Industrial Relations Act 1971, which in my view suffered more from bad luck than bad design. Then, more recently, there was the last Government's legislation of 1974, 1975 and 1976. No one can say that this is a record of legislative consistency of which Parliament as a whole can be very proud. Despite all the effort expended, we as a country still have not got the legal framework for industrial relations right, workable or able to withstand the assaults of different
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pressure groups and different Administrations.
The Bill before the House is modest in that it does not attempt to create a whole new legal framework for industrial relations. It concentrates rather on areas where specific abuses have occurred and where there is clear public support for changes in the law. It is ambitious, however— very ambitious— in that our objective is nothing less than to bring much needed stability to industrial relations law, play up the practical and play down the political effects. As Professor Higgins said of Eliza Doolittle in "My Fair Lady", "By Jove, she's got it!" I believe that the measures before us are workable, will stick, and that in this limited but crucial area at least "we've got it".
Although laws based on people's immunity from actions in the courts are inevitably complex, and although references to previous legislation always make the going a bit heavy, the principles underlying the Bill before the House are simple and straightforward. So are the mechanics of the Bill; that is to say, what it is actually designed to do and where it is actually aimed to go. We are committed and we are determined to redress the imbalance, caused largely by the last Government's employment legislation, in respect of the balance of power between organised labour and employers, and in respect also of the balance between the rights of individuals as individuals and the rights of individuals to act collectively. Underlying this commitment is a simple and I would say a rather frightening phenomenon. It is that, while British workers' organisations enjoy greater powers and immunities than their counterparts in the industrialised democracies, British workers themselves are considerably worse off.
In line with this general approach, the Bill is designed to deal with specific union abuses and bad practices, such as picketing at a place where you do not work, and the wider troubles of secondary or sympathetic action, such as blacking the goods and services of an employer remote from the employer with whom you are in dispute and who is himself in no position to settle any problems or difficulties which exist between you and your own employer. Then there are the

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abuses and bad practices connected with the closed shop— and I shall deal with the general question of the closed shop in a few moments— and the urgent need to protect individuals who suffer from these.
The specific measures in the Bill, as I have said, are designed to be effective against specific and manifest abuses. I use the rather old-fashioned term "manifest" deliberately. We are concerned in this Bill with abuses which are seen to be such by people who never have supported, and probably never will support, the Conservative party— and I mean to include here people who are giving or have given, indeed, their whole careers to the Labour movement or the Labour party. Parliament is a pretty intimate place, and so is the high command of industry— and I mean here both sides of industry. It is no secret and no indiscretion to say that this Bill has received some considerable tacit as well as overt support. I, for one, would be very surprised if, when the Bill becomes an Act, its repeal forms part of the next Labour manifesto. By whatever means you choose to measure public support, this Bill has it. The criticism which the Bill has to meet, and which I shall try to meet, is that it does not go far enough; that public opinion, both within and without the trade union movement, is said to be in some way ahead of the pragmatic reforms of the Bill, and that the climate is now right for much more comprehensive legislation.
Our concern has been to deal with the specific abuses and bad practices, and to do so not theoretically but effectively. We have consulted every step, every clause, of the way; as, before last year's general election, we promised that we would do. The TUC has no credible complaint on this score. That is why your Lordships are considering this Bill this summer rather than last autumn; we wanted labour legislation that was workable, and we wanted labour legislation that would stick.
At the Second Reading of the last Government's Trade Union and Labour Relations Bill six years ago, I said from the Dispatch Box opposite that although we did not like the Bill and were sorry to see the comprehensive and sensible— though, I acknowledge, bitterly controversial— Industrial Relations Act fall, we felt nevertheless that by accepting
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only a few amendments the Labour Government had an immense chance to do good to the country by taking industrial relations law out of party political dispute for a generation. That would have been worth many jobs and much prosperity. But it did not happen. Indeed, after the General Election of 1976, the Government extended trade union immunity from action in the courts in such a way as to give unions privileges grossly in excess of their special needs. And I acknowledge the needs were special. By contrast, in seeking to tackle the problems of industrial relations, we are determined not to create more problems than we solve. We are starting with the kind of industrial society that we have and the kind of industrial situation that we have— unsatisfactory in many ways though both may be.
We are determined not to undermine existing, responsible management and existing, responsible union leadership and so create more disruption and unrest rather than less. These considerations have always been the core of the thinking of my right honourable friend the Employment Secretary and he has given six years' hard slog to the subject. They are reflected in the whole character of the Bill, which does not set out to impose rigid blue-prints from on high but which seeks to establish satisfactory general rules which can be built on by all concerned throughout industry.
This emphasis on satisfactory ground rules shows that we are in agreement with the party opposite and the labour movement generally, on the importance of voluntary guidance. We recognise the need to work from within the present basically voluntary system and to work with the grain of the system rather than against it.
But, my Lords, voluntarism is not enough. It is not enough to identify a right unless you can go on to provide an enforceable remedy if that right is infringed. Without an underpinning of legal protection, voluntary guidance can easily be made ineffective by a militant minority who simply do not care what damage they do or whom they hurt or what, in this television age, the effect on public opinion may be. The winter of 1979— and we have had instances since then— show how easy it is to ride rough-

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shod over voluntary guidance, even though it had the full backing of the TUC, when those concerned are indifferent to the effects of their actions on the rest of the community, or on their fellow workers or to the reputation of the trade union movement itself. We believe that as long as the law condones and protects abuses of industrial power, it is futile to look for improvements in industrial relations by voluntary means alone. That, perhaps, is where we part company with the noble Lord, Lord McCarthy, and with the work of the noble Lord, Lord Wedderburn— and both of these noble Lords are probably the most-informed and most expert thinkers in this whole field in the country at present— but it is not, in my view, where we part company from the official Opposition in another place as evidenced by its somewhat less than whole-hearted opposition towards this Bill. Watching Mr. Varley, that very able man, in action was like watching a terrier being made to play with a ball when there were real rabbits elsewhere. A large majority of trade unionists believe the proposals contained in the Bill are right and necessary; and the Opposition know it.
It makes for dull and, more important, often confusing Second Reading speeches if one goes through Bills clause by clause. May I suggest that the most practical way of coming to grips with the Bill is to think of it as a series of five parcels, each containing a number of relevant clauses. There is the "enabling powers parcel" (Clauses 1 and 2). The substantive issues here are the provision of funds for union ballots and the code-making powers for the Secretary of State in respect, principally, of the closed shop and picketing.
There is the "closed shop parcel" (Clauses 3, 4, 6, 9 and 14). The substantive issues here are unreasonable exclusion and expulsion from a union; dismissal in a closed shop situation; protection for employees where action short of dismissal is taken against them to compel them to join a trade union; and the ability of an employer to bring in a union as a party to unfair dismissal proceedings so that the union may bear its fair share of the compensation which the employer is obliged to pay. Then there is the "individual rights parcel", a broad grouping
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covering unfair dismissal, rights of return to work following maternity, including the new right to time off for pre-natal care and guarantee payments. There is the "secondary action parcel", covering picketing and secondary action generally. Phrases like "secondary action" in my view are confusing and I find expressions like "blacking" or "sympathetic striking" while technically imprecise in legal terms, rather more helpful as a general guide here. Clause 16 is the clause of the Bill which, noble Lords will remember, had to wait for the Court of Appeal judgment and its being over-ruled in the Judicial Committee of your Lordships' House in the case of Express Newspapers v. McShane. Clause 17 seeks to prevent any recurrence of SLADE's practice of recruiting by blacking, as was documented in the Leggatt Report.
Lastly, there is a "miscellaneous parcel" of repeals of previous legislation: in particular, relating to the press charter, to statutory as against voluntary recognition procedures by ACAS; and there is also the repeal of Schedule 11 to the Employment Protection Act which was intended to deal with low pay. Schedule II is inconsistent with our view that individual firms should be free to negotiate the terms and conditions of their own workforce in the light of their individual circumstances, and so we are repealing it.
My instinct is that the substance of the debate this afternoon will derive from the issues of secret ballots, the closed shop, the whole area of immunity for secondary action including picketing, and those modifications to employment protection legislation which I have labelled the "individual rights parcel". I hope therefore that the House will understand if I spend the time remaining to me on these issues, which do, after all, constitute the red meat of the Bill. I shall, of course, try to deal in detail with any other matters raised as well when I come to wind up, if given leave, at the end of the debate.
The provision of public funds for secret postal ballots has been widely welcomed as following best existing practice of many trade unions and as part of our overall aim of encouraging greater participation by rank-and-file members of unions whose views, I think, as recent industrial disputes and the response to the embarrassing "Day of Action" have

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shown, are often neglected by their representatives.
This substantial new encouragement to union postal ballots in no way reflects adversely on the value of workplace ballots. Indeed, the Government intend to put down an amendment to give immediate encouragement to such ballots by placing an obligation on an employer to provide on the request of the trade union a place on the premises where the union can hold a secret ballot on any of the purposes set out in Clause 1 (3) of the Bill. This idea has been put forward by the CBI and pursued with his customary vigour by the noble Lord, Lord Robens, who has immense experience in this area. I am most grateful to the noble Lord for help on this matter and I believe that the amendment which will result will add greatly to the value of the Bill.
We have, however, been criticised for not providing for compulsory ballots. There are two major reasons for our not having done so. In the first place, we want the pressure for greater union democracy to continue to work upwards from the shop floor and not be obscured and inevitably politicised by Government pressure. That again lies very much at the heart of my right honourable friend's approach, and I would have thought that all recent signs were that things were turning his way.
In the second place, ballots inevitably involve procedural matters and delay. A strike ballot held at the wrong time due to an inflexible statutory provision could strengthen and prolong a strike against the wishes of both the union and the employer. It would assist militants who want to see an early strike, at a time of maximum solidarity of feeling, as against moderate leaders who might still have hopes of a reasonable settlement being reached. This would not help sensible employers, either. Nor do proposals on compulsory secret ballots deal satisfactorily with the problem of unofficial strikes— the most prevalent form of industrial action in Britain. Indeed, their effects might well be to increase unofficial action. If you try to put a penalty on official action which you do not put on unofficial action, the odds are that this must encourage more unofficial action.
But we do recognise the strength of feeling behind other proposals in this area;
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notably, that a trade union which proceeded with a strike without a ballot in favour would lose its immunity against action in tort. Such matters will be taken up, together with the whole question of trade union immunities in the Green Paper on immunity which we intend publishing later this year.
As with compulsion for secret ballots, the Government must face industrial realities on the matter of the closed shop. No responsible Government can ignore the fact that over 5 million people are covered by closed shop agreements, often of long-standing and often valued by practical employers. And no responsible Government can ignore the clear lessons of experience. We are convinced that making the operation of the closed shop unlawful would fail to achieve our central objective, which is the protection of individual rights. It would only drive the practice underground and would deny individuals the very protection that the Bill is designed to give them. That is what did happen in 1971 and that is what we are determined shall not happen now.
We dislike the closed shop intensely for all the obvious libertarian reasons. But if we are to recognise the realities of industrial life, we have to adopt the approach of the Bill and create effective safeguards against abuse of the closed shop. The Bill therefore greatly extends the protections of individuals in the closed shop. It is designed to protect existing non-union employees in both new and existing closed shops; to give new rights to those with deeply-held personal conviction against joining any union whatsoever or a particular union; to secure— by depriving employers of their protection against unfair dismissal claims in appropriate cases— that new closed shops are only established with the overwhelming support of employees concerned— 80 per cent.— voting in a secret ballot; and to provide a new remedy for those who may be unreasonably expelled or excluded from their union in the circumstances of the closed shop. In addition, the Secretary of State has indicated that he intends to issue a code of good practice on the closed shop under the powers Clause 2 will give him. This, together with the other provisions of the Bill, amounts to a substantial range of new protections.

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I should like briefly at this point to refer to the proceedings concerning the three ex-British Rail employees currently before the European Commission on Human Rights. Most regrettably, the Government's position on these cases has been grossly misrepresented by some Press comment— most recently by the Daily Express last Friday— where the piece was ill-informed or mischievious or both. I must say that I expected rather better of Mr. James McMillan (who wrote the piece) as he is a great authority on the "Gowrie conspiracy".
It was the previous Administration whose legislation caused the applicants to need to go to the European Commission in pursuit of a remedy. The Employment Bill, I am glad to say, provides a domestic remedy for just their type of case; indeed, we had their unfortunate experience in mind when we formulated these proposals. The Government have made clear to the Commission its very different stance from that of the previous Government and the Commission in its communiqué on the final hearing of the case has acknowledged this.
The whole thrust of the article's criticism that we were in some way defending the closed shop to the European Commission is wrong. What we were doing was drawing the Commission's attention to the provisions of this Bill and the protections for individuals in it. We are wholly satisfied now that when this Bill becomes law we shall be meeting the standards of the convention.
Let me come now quickly to the nub of the Bill: picketing and secondary or sympathetic action. Our industrial relations system is rooted in history, evolving over 100 years or more, and continuing to adapt and change to meet the pressures and problems of modern industrial society. It has grown up in ways which have involved the minimum of legal interference and regulations. We do not in this country have any tradition of legally enforceable agreements, and there is no provision for compulsory arbitration. Managements and unions do not habitually use the courts to sort out their problems; indeed, they have preferred to make use of voluntary methods.
One aspect of this voluntary system is
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that our trade unions do not exist as a result of legal rights, but on the basis of legal immunities from action in courts. Nowhere will you find in statute a right for trade unions to organise or to prosecute their case through industrial action; indeed, there is no legal right to strike as such at all. The unions have developed on the basis of the desire of workers to be represented collectively so that they can bargain with their employer on more equal terms. The role of the law has been to ensure that the unions can do this effectively without laying themselves open to action in the courts. It does so by providing those who call strikes, and other forms of industrial action in contemplation or furtherance of a trade dispute, with immunity from civil proceedings for inducing breaches of contract.
Many people have questioned whether an industrial relations system based on legal immunities rather than legal rights is the best of all possible systems for the present industrial world. Let us say that the matter is at least open to question, and that is why we shall, as I said earlier, issue a Green Paper on immunity later this year.
What is not open to question is that the law currently in force has drawn the concept of immunity intolerably wide. Your Lordships' Judicial Committee in the case of Express Newspapers v McShane in December last year made it clear that under the Trade Union and Labour Relations Acts of 1974 and 1976 the test of whether an action is in furtherance of a trade dispute is fundamentally a subjective one. If the person calling the industrial action establishes that he honestly believes that it will in some way further an imminent or existing trade dispute, that is enough to give him immunity— the modern equivalent of reaching the church door in the Middle Ages. Indeed, the more I have had to immerse myself in trade union law, the more I have a sense of dé jà vu with essays on 14th century ecclesiastical organisations which I had to write at university 20 years ago.
So long as the person calling the industrial action is found to be sincere, therefore, it does not matter how remote the industrial action is from the original dispute or how much it involves people— both employees and employers— who have no means whatsoever, however well

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intentioned they may be, of influencing the outcome of the dispute. It does not even matter if the principal motive for calling the action has nothing whatsoever to do with the original dispute as long as the person who calls it believes that it will further the dispute in some way, however slight. So the law as it stands is a licence to spread industrial action far and wide beyond the original dispute, putting at risk the jobs and businesses of people who had nothing whatsoever to do with it. No responsible Government could have put the law into that state. No responsible Government could allow the law to stay in that state.
Without doubt the most damaging form of secondary action is secondary picketing. As the then Prime Minister, Mr. Callaghan, told Parliament on 18th January 1979 during the road haulage dispute— and I am quoting the right honourable gentleman:
" the movement of supplies of all kinds is being held up. Hardship and considerable dislocation is being caused to the general public and to industry particularly because of the severe effects of secondary picketing ".— [Official -Report, Commons, 18/1/79, col. 1957.]
Or as Mr. Rees, the then Home Secretary, said on the same day:
" picketing is not being confined to drivers and vehicles in the hire and reward section of the industry and it is interfering with the movement of essential supplies and services … There is no doubt that secondary picketing … is the major cause of our problems ".— [Official Report, Commons, 18/1/79, cols. 1984–85.]
My Lords, the effect of Clause 15 of this Bill is quite simply this. In future if you want, by picketing, to persuade people to break contracts you will lose the immunity the law currently provides if that picketing takes place anywhere other than at your own place of work. The clause contains specific provisions for exceptional limited cases: the position of dismissed employees, trade union officials and those who work at more than one place or for whom it is impractical to picket at their own place of work. But when the Bill becomes law the immunity for the rotating or flying picket will be over. In future, the employer who finds his business and incidentally the jobs of his employees— threatened by pickets from outside will be able to seek a High Court injunction for the picketing to stop and sue for damages if he so wishes. He will be able if necessary
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to proceed against the organisers of the secondary picketing, up to the leader of any union concerned.
My Lords, some misunderstanding has arisen about the role of the police when our picketing proposals become law, and I should like to take this opportunity to clarify the effect of the Bill. It is important to understand that it creates no new criminal offences, nor does it extend or alter the role of the police in any way. The police already have a duty to deal with obstruction and breaches of the peace on the picket line. It is not lawful to obstruct and it is not lawful to cause a breach of the peace. The Bill does not change this. Again, the police have powers to control the number of pickets and the Bill does nothing to change that. What the Bill does is to allow employers to take civil proceedings if their business is damaged by secondary pickets and if they wish to do so. Normally this will involve seeking a court injunction to restrain the secondary picketing to see that the thing stops. The provisions are drawn widely enough to cover the organisers. Thus they work against flying and rotating pickets. The Bill also empowers the Secretary of State to issue a code of best practice, and this will help the police.
The principle underlying Clause 16 is that sympathetic action is justifiable only to the extent that it is used to put direct pressure on the employer in a particular dispute to settle that particular dispute. We have retained immunity for industrial action directed against an employer's customer or supplier while the particular dispute is taking place. The reason we have done so is that we would otherwise be cutting into the quick of long established legitimate union activity, whereas we are concerned with the discouragement of irresponsible union activity. The Court of Appeal judgments widely associated with the name of Lord Denning attempted to derive from the wording of the statutes a commonsense and workable doctrine of remoteness where legitimate industrial action was concerned. The Bill gives formal expression to this sensible and acceptable idea. My Lords, the case of McShane demanded an immediate legislative response and this is therefore it.
Lord DAVIES of LEEK: My Lords, I am so sorry to interrupt the noble Lord

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but this is relevant to Clause 15 and is important in the eyes of some of us. May I ask whether consultation in depth took place between the police on the official situation of their position in regard to Clause 15? Secondly, were these provocations dealt with by the police at all? Many of them believe that the existing situation is good enough, and quite enough to prevent what I would call provocative action that might damage the public property.
The Earl of GOWRIE: My Lords, the noble Lord, Lord Davies of Leek, must distinguish between the withdrawal of immunity from civil proceedings by an employer against a secondary picket and the general issues of demonstrations which are covered by criminal law at the moment, where we did, of course, consult the police, and where we shall consult them again in respect of the code of practice.
As I indicated earlier, several clauses in the Bill seek to reduce the burden which the last Government's employment protection legislation imposed on employers, particularly small employers. I would remind the House here that it was not just ourselves, then in Opposition, who expressed concern that the Employment Protection Act did not turn into the "Employment Destruction Act". It was the noble Lord, Lord Lever, then Chancellor of the Duchy in another place, who used those words. Our aim is to allay the noble Lord's fears, and those of small employers everywhere at a time when we need every job we can get. Our amendments deal with questions of unfair dismissal, the method of calculating entitlement to guarantee pay and maternity leave and reinstatement.
My Lords, on this last issue, I hope there will be no flurry of excitement in which some horrifying conclusion is reached that the Government are hostile to the rights of women. Quite apart from any issues of principle, or even vulgar electoral considerations, the Government have a huge economic interest in women's employment. I spend a lot of my time, as the Minister responsible in this area, urging girls at school to take up elementary maths and science to enable them to enter the new electronics industries. But the protections which now exist weight to
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a damaging degree against the very small business, and have in our judgment created a poor psychological atmosphere for recruitment by small business. Our modest amendments aim to correct this.
In concluding, I do not want to suggest that the law if the only aspect of industrial relations or even the most important aspect. There are the problems which arise from the lack of any proper system of communication between management and employees. We do not plan to impose a constricting legislative framework of participation on industry and commerce. But, we do want to give every encouragement for it to develop sector by sector; and we shall continue to look at ways to encourage workers to take more of a financial stake and interest in their companies. Nevertheless, we cannot escape from the strong feeling among the British people, and one widely shared by all our competitors abroad, that undisciplined industrial relations have hindered our economic progress in recent years. This view is widespread and restricted to no particular political party; it is also held by a large majority of members of unions. Hence this Bill and the consultations that lead to it. It is only common sense and existing best practice in action.
My Lords, while there are significant differences in approach between the Government and the leaders of organised labour over industrial and economic policies our objectives are the same as theirs. We both want a stronger economy and one where prosperity is less regionally imbalanced. We both want a standard of living for the British people which, while it reflects our own habits and tastes as other nations reflect theirs, comes a bit closer to the standards of our neighbours and competitors. I repeat what I said earlier: while British workers' organisations enjoy great powers and immunities, British workers themselves are worse off than their counterparts abroad. We both want higher rates of real employment. We both want to use our truly formidable energy position— and I am thinking of course of coal and natural gas as well as of oil— to help restructure our industrial capacity. We want the same things.
We have no quarrel therefore with the labour movement. We know that the work of the movement is critical if there is to be sufficient economic recovery,

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particularly in industry, to ensure a better life for its individual members and a less shabby environment for them to live and work in. There is no innate reason why these common aims should not be achieved by the efforts of British industry within the next few years. But in the short term the going will be tough and unpleasant, for the Government and everyone else. The reason is that we have not yet had a pay round in the public sector, where the Government are directly responsible and where it is incumbent on us to set an example free from the doctrines of comparability which the previous Government initiated or from the settlements which they postponed. We are on our own now and the barometer is falling.
My Lords, we have no illusions as to the magnitude and sensitivity of our task. We are convinced that we have the human and national capacity to undertake it. In a world shaken and made very volatile by recession, we are aided by the immense stability of our political traditions and institutions— among which I include, of course, the great labour organisations. It is because I believe that this Bill makes for greater stability in industrial relations affairs, by bringing them in line with what the vast majority of people think and feel and expect, that I commend the Bill to the House. My Lords, I beg to move that it be read a second time.
Moved, That the Bill be now read 2a.— (The Earl of Gowrie.)
3.40 p.m.
Lord MCCARTHY: My Lords, I should like to begin by saying something nice about the noble Earl, Lord Gowrie, because he said something very nice about me, although I would exchange the nice things he said about me if he would take my advice a little more. Our advice is that this is not a good Bill, although I admit that the noble Earl has made out a good case for it. We believe— and it falls to me to say why— that this is an irrelevant and dangerous Bill, which makes an unfair attack, at least in its present form, upon both workers and their trade unions. I must say to your Lordships that if the House accepts the amendments we intend to put forward this Bill will end its days in quite a reasonable form; but in its present form it remains an irrelevant and
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dangerous Bill, which will do nothing to deal with any of the major economic and social problems facing this country.
I should like to mount the argument from this side of the House under three heads. This Bill defies the lessons of experience; this Bill ignores the realities of union leadership and union government; this Bill mistakes the causes and the roots of industrial conflict in contemporary Britain.
It is now nine years, on 5th April 1971, since the noble Lord, Lord Drumalbyn, moved the Second Reading of the Industrial Relations Bill in this House. He said that that Bill was wholly constructive in its aims and was designed to preserve all that was best in industrial relations. He said it was intended to strengthen and secure the position of trade unions, to discourage unconstitutional action and to provide a framework of justice and fair dealing. He concluded by saying:
" We have had to wait a long time for this Bill but it was worth waiting for ".
It was quite in vain for the late and much lamented Lord Delacourt-Smith, in what was almost the last speech he made in this House, to point out from the wealth of his experience that the Bill would not do any of the things it set out to do; that instead it would increase the volume and pace of industrial unrest in this country.
The noble Lord who introduced the Bill said at the end of the debate in answer to Lord Delacourt-Smith:
" It is a good Bill. We shall make of it a still better Act— an Act of which the British people will say ' We have had to wait a long time for this, but it was worth waiting for ' ".
The noble and learned Lord, Lord Hailsham, actually commended the Bill to the House and silenced the doubters in verse. He said:
" Be of good cheer, ye fearful saints:
The Bill ye so much dread
Is big with mercy and will break
In blessings on your head ".
It certainly broke upon our heads, my Lords. As a result of that Bill, all kinds of untoward things occurred. We now know that all collective agreements began with what was called in those days a TINALEA clause— "nothing in this agreement is intended to give rise to legal obligations". That was the first farce.

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Then we had the farce of the compulsory ballot, used so disastrously only once; resulting in a more inflationary settlement in British Rail. Then we had the ludicrous spectacle of the Official Solicitor engineering the release of the Pentonville Five. Meanwhile, each year working days lost rose in number. There were 11 million in 1971, 24 million in 1972 and in the average life of that Government 17 million working days lost a year, virtually all of them in unofficial, unconstitutional and unlawful strikes as a result of the Industrial Relations Act. Indeed, the Government themselves were destroyed by an unlawful strike by an unregistered union, in defiance of their statutory incomes policy. Never at any time did anyone dare to suggest that legal action might have been helpful against the National Union of Mine- workers in that strike. Yet we have a similar kind of Bill being put before us this afternoon.
There have been studies of the operation of that Act. It is extremely important that noble Lords should stay awake during this debate because I intend to read out what the authors of Industrial Relations and the Limits of the Law (a survey by Warwick University) said were the lessons of the 1971 Act. They said:
" Our general survey of employers and unions confirmed the impression that the new law on industrial action had relatively little impact on the general conduct of industrial relations. Employers felt that the experience of the Act showed either that it did not solve disputes or that it made them more intractable by making workers or unions more intransigent…. Indeed, the Act came to be seen as an increasing embarrassment to a Government seeking some accommodation with the unions on national incomes policy. This and its relative failure encouraged the Conservative Government to accept the need for a substantial amendment to the Act even before their defeat in the General Election of February 1974 ".
Indeed in the debate in 1974 on the Trade Union and Labour Relations Act, the noble Earl, Lord Gowrie— I believe he has already quoted from one part of that speech— made a similar point. He said this:
" The single most penetrating remark that I have read about the Industrial Relations Act was made when it was still in Bill form, and it came from the then Mr. Douglas Houghton … He said: 'This Bill reads like a guide to good order and discipline in a grammar school. It was drafted in the solitude of the Inner Temple and many of the provisions will not stand the mighty roars of disapproval from mass meetings' ".
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The noble Lord, Lord Gowrie, concluded in this way:
" May I say to the noble Lord how wise I believe those words to be. My own political motto, for what it is worth, is borrowed from a road sign in current use and is: 'Do not enter box unless your exit is clear'. Perhaps we neglected that principle ".
Our argument today is that they are putting us back into the box. How can it come about, so shortly after the experience of the 1971 Industrial Relations Act, that we are putting ourselves back into this box and that we are giving ourselves, as the noble Earl said this afternoon, five exploding parcels? Why are we doing that? I know it will be said that this is not the 1971 Industrial Relations Act. It has been said: but that does not help the Government's case. This Bill is certainly more one-sided than the 1971 Industrial Relations Act. That is one difference. The 1971 Act contained provisions for unfair dismissal; it gave protection for registered unions in respect of commercial contract breach. The 1971 Act did something about trade union recognition, and certainly disclosure of information provisions. In contrast, this Bill is negative on all these matters. This Bill gives small firms the right to dismiss unfairly and my only answer to the point which was made so repeatedly about the noble Lord, Lord Lever, is that perhaps he spoke without the benefit of all those surveys which were commissioned by the last Government, delivered to this Government and published in the Department of Employment Gazette, which show that all the things people say about small firms not taking on people because of the unfair dismissal provisions are all nonsense. That is the only excuse I can find for him.
This Bill also narrows the fairness criteria in unfair dismissals; it abolishes the basic award; it reverses the onus of proof and it extends and complicates the whole process of maternity notice requirements. It is true that there are two other differences between this Bill and the 1971 Act, and in a very small way they do help the Government. There are no threats here to make contracts legally enforceable and there are no direct replications of the monstrous Sections 96, 97 and 98, which sought to make unions responsible for the authorised acts of their agents. But, at least, with the 1971 Act, we were told that it was the end of the line. We were

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told that there were to be no further legislative proposals. But today— and, of course, in another place repeatedly— we hear from Government spokesmen that this is not the end of the line; that they are going to produce more consultative documents where the TUC's advice will again be ignored and, presumably, more Bills which will deal with things such as legal enforceability and making unions responsible for the authorised acts of their agents.
Also, in the two most crucial areas of the Bill, the closed shop and the right to use industrial action, we would argue, and we shall be arguing in detail at the Committee stage that this Bill is worse, more dangerous and more irrelevant than the 1971 Industrial Relations Act. The best way to point this out, is to take up the point which the noble Earl made when he talked about providing a set of legal ground rules. These are not ground rules. This is a ground maze. This is a ground mist, which the Government are now going to see settle over industrial relations in these two crucial areas. When these parcels are exploded, the air will be filled with the vagueness and ambiguity of the law as it relates to them.
Let me go through them. In the closed shop, for example, the aim of this Bill— certainly, the result of this Bill— is to make existing union membership agreements unenforceable and future union membership agreements unobtainable. This will be done, by important disputable, and ambiguous notions, such as areas of exclusion for existing members, for those with deeply held personal convictions, for objectors to particular unions and the need to obtain from those affected 80 per cent. votes in favour, of new UMAs.
All these terms are likely to be extremely difficult to define and extremely difficult to apply. They will lead to a series of cases. Until such cases clarify the law, if and when they do, nobody will be able to say what are the legal boundaries of the lawful UMA. That is the effect of this Bill on closed shop law. For myself, I should prefer what was in the 1971 Act. At least, in the 1971 Act registered unions had the option of the agency shop and the qualified closed shop. Both were fairly clearly spelt out. But in this Bill there are a series of ambiguous, disputable
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notions which will need to be worked out after a great deal of case law.
The same could be said of picketing provisions. There is no definition in this Bill of "a place of work". The only way to find out, I suppose, will be to go to law and see. The Bill is also extremely ambiguous on what are the rights of trade union officials and representatives, and on how their right to move around the picket line relates to their position in the union rule book. Here again there will be a field day for lawyers.
Then as regards secondary action limitations, these depend on establishing a whole series of equal disputable, ambiguous notions. The "principal purpose" must be found. It must "directly prevent the dispute"; it must be a dispute involving a "supplier to an employer who is a party to the dispute" and, most difficult of all, in the opinion of the judiciary, the acts complained of have to be "likely to achieve their purpose".
I suggest to the House that if this principle had been in existence in 1940, the International Court at The Hague would have declared Hitler the winner. The fact is that you cannot prove what these notions mean without going to law. Then you are likely to get different answers, and until you have traced your way to the Judicial Committee of this Chamber you will not be certain.
But it is when we reach into the area of primary action that we find the single most unsatisfactory part of this Bill. Here is something which I really beg noble Lords opposite to take on board. We shall submit that this part of the Bill severely affects primary action, possibly by giving rise to various forms of tortious liability and, centrally and most clearly, by what the Bill does in Clause 16 (8), which sets out to repeal subsection (3) of Section 13 of the 1974 Trade Union and Labour Relations Act. We maintain, and we shall argue in more detail later tonight, that this seriously undermines the right of primary legal action.
Yet the Government have managed to suggest that these qualifications, which they introduce into primary and secondary industrial action, can be justified because of a historical fiction, because it is being argued, and was argued from the Dispatch Box this afternoon, that all we really need

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is to go back to the ambit of protection which the trade unions had in 1906, as it was seen in 1906, so that all that has happened since 1906 is that in 1974 and 1976 the Labour Government vastly extended the areas of protection of immunity, in defiance of the clear intentions of the framers of the 1906 Act.
Nothing could be further from the truth. The fact is that there have been a whole series of judicial decisions since 1906 which we shall spell out this afternoon. As a result of that series of judicial decisions, the wording of Section 13 of the Trade Union and Labour Relations Act was necessary, in order to protect primary industrial action; and the single most important part of that protection is undermined by Clause 16 (8), which repeals subsection (3) of Section 13 of the 1974 Act. Therefore, if the Government do this, they are, in effect, making it impossible for trade unions to carry out their normal business by the use or threat of primary industrial action. If the Government cannot see that at the end of this debate, then I am afraid there is no hope for them.
So I should like to turn to my second argument against this Bill, which is that it is not simply against the lessons of history. It is against the realities of trade union leadership. If those of your Lordships who will agree with me as far as I have gone, and even if those who do not, will give me half my case, I would ask you to think of the position which faces the moderate trade union leader at national level, at local level or on the shop floor itself, faced with the immunities left to him as a result of this Bill. The Government presumably believe that he should read the Bill when it becomes an Act, and take it all in one go, anticipate exactly what the Court of Appeal will make of all the provisions and go out and tell his members. If his members ever go outside that extremely clear ground rule, says the noble Earl, then he should expel them or discipline them in some way.
I suggest that it is impossible for any leader to know what are the legal boundaries, and there is nothing that he can tell his members, except that things have become very misty. If, at a subsequent stage, somebody brings an action— and under this Bill it need not be an employer involved in the dispute; it could be any
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crackbrained third party who thinks that he has been affected in some way— that person can seek an interlocutory injunction. Then, presumably, the noble Earl believes that the moment that our trade union official learns of the threat of the interlocutory injunction, he should rush to the members and tell them to stop. But, of course, we all know that interlocutory injunctions are not always granted, and even when they are granted, as we saw as recently as a week or so ago, those involved think better of it before they put them to the test.
So what should the union leader do? Should he wait until some action comes to court and then tell his members?
I suggest that the effect of this Bill is to make the position of an ordinary trade union leader impossible. It is impossible to see how he is to evade charges of cowardice, charges of incompetence or counter-charges of contempt for the law and running the union into debt. The easiest thing for him to do is not to lead at all, or not to be there when the 'phone rings. That is what you might have to tell your trade union friends: do not be there when the 'phone rings. It may be a lawyer. Then you have got to tell the members what he said. If noble Lords have ever tried to tell trade union members what lawyers said, they will know that they do not believe it; they cannot believe it; they find it unbelievable. But that is the sort of schizophrenia one is leading trade union leaders into by this Bill. Either they will struggle with it, as they struggled with the 1971 Act, with the consequences which we have seen, or they will refuse to lead, or— and I must say I thought that the Government had learned this lesson and that the Secretary of State for Employment in the other place had learned this lesson— leadership in the trade union movement will pass into the hands of men who do not care what the law says and who are willing, and able, and keen to defy the law of this land.
I thought that had sunk in by 1974. I thought that the Secretary of State for Employment in another place saw that personally and knew it well. Yet we have a Bill of this kind which threatens to bring us into a worse situation than any situation which arose from the 1971 Act. We on this side of the House find it

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inconceivable that people can openly put this country into that box.
That brings me to my last point: the nature and causes of industrial conflict in contemporary Britain. There was a time when the Conservative Inns of Court Association wrote, A Giant's Strength — when the Conservative Party published, A Fair Deal at Work — the Donovan time. There was a time when there was a kind of argument for more legal regulation because this country could be said to be suffering each year from a 25 or 30 per cent. increase in the number of unofficial, unconstitutional strikes. It was argued that the measures of 1971— much the same as these measures— were designed to deal with the unofficial, unconstitutional striker and forced the union leader to discipline this man, otherwise the union's funds would be at risk. Those of us who were associated with the Donovan Commission never believed this story. Our argument always was that what was required were the Donovan reforms: the changing of the nature of procedure agreements, the development of new procedures and the creation of plant and company bargains. I would argue that we were right, not simply because of what happened between 1971 and 1974 but because of what began to happen to the number of strikes in this country in the early 1970s, through the mid 1970s and to this day.
The fact is that in 1970–71 the number of strikes in this country reached the all- time record figure of around 4, 000. After a year or two they began to fall, more or less steadily— I am not making a party point, but particularly after 1975— and last year the number of recorded strikes in this country was running at about 2, 000. The number has been cut in half, so the argument for that kind of legal regulation has gone. We have had the Donovan revolution, and this country does not suffer from any more unofficial, unconstitutional strikes than it was suffering from in the early 1950s. What has replaced the unofficial, unconstitutional strikes are official, mass industrial actions— above all, mass industrial actions in parts of the public sector which in the early 1970s began to resort to industrial action during the period of the Heath Government. That is why we had 17 million working days lost, and that is why
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the Industrial Relations Act failed to prevent it.
Those are the kinds of confrontation that we have had since 1970— large numbers of working days lost in a few important, strikes, particularly in the public sector. And they were all brought about by the failure of the Government of the day, both Conservative and Labour, to gain some kind of overall consensus for their economic policies; in particular for the impact of their economic policies on pay. It has been the consequences of that failure which have caused the present industrial disputes problem facing this country.
History, both in this country and in other countries, shows that you cannot solve major confrontations of this kind by changing the basis of industrial law. In this country we had periods of this kind from 1910 to 1914, from 1921 to 1924, in 1926 and again from 1970 to 1974. History shows that you solve, or bring to an end if you do not solve, confrontations of this kind in one of two ways. Either you solve them, as in 1921 to 1924 and again in 1926, by prolonged and deepend economic recession which brings the nation to its knees, including the trade unions— and that may be the policy of the Government. But if it is not, then the only other way history shows that this kind of confrontation can be solved is not by law but, as in 1914 for a while, as in 1940 and as in 1974, by a broadened consensus which makes possible a measure of agreement on overall policies, particularly policies relating to pay.
It is true that the Government have said today that next year they are going to do something about pay in the public sector. They have also said that one of their problems about pay in the public sector has been that they inherited the collapse of the last Government's incomes policy. All I am saying is that they did not do much to remedy that matter. Moreover, this Government have had one thing in the public sector all of their own to do, and they have done it. They have honoured in full the report of the special review body on doctor's and dentists' pay recommending 31 per cent. That is the way in which they are beginning the next wage round.

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We say that this is not the way to run a country. And we say that this Bill is completely irrelevant to the problems now facing this country. We say that we shall oppose this Bill in its present form because it will become, and will remain, an overwhelming obstacle on the way back to consensus and agreement, which must come in the end.
4.6 p.m.
Lord ROCHESTER: My Lords, first, I should like from these Benches to thank the noble Earl, Lord Gowrie, for the clear way in which he has explained the principles of this Bill, involving as it does such a complex subject. I recall speaking in the debate nine years ago, to which the noble Lord, Lord McCarthy, has just referred, on behalf of my noble friends when the Industrial Relations Bill of an earlier Conservative Government was introduced into this House. The noble and learned Lord, Lord Donovan, whose renowned Royal Commission had reported three years earlier, spoke immediately after me, and I have found it instructive to read again what it was that Lord Donovan then had to say. I quote from col. 40 of the Official Report of 5th April 1971:
" But there is one overriding principle to which all legislation of this kind, if it is to be successful, must conform. It must be such as to offer the best hope of co-operation from both sides of industry. Not only does common sense require it, but all our industrial history proclaims it ".
Since then, our industrial performance has not improved and the power of trade unions has both grown and shifted more from the centre to the localities. For the British people, I think that this process culminated in the events of the winter before last and left the present Government no alternative but to bring in further legislation to restore the balance of power between employers and trade unions.
The main provisions of this Bill were endorsed by the electorate a year ago. The Secretary of State for Employment has, to his very great credit, consulted widely and at length before introducing it. Its scope is limited, and in its recently revised form we on these Benches give it our broad support.
For a time I had hoped that the so-called concordat between the TUC and the Labour Government, reached in February 1979 and seeking to deal on a voluntary
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basis with the same matters, would avoid the need for more legislation, but there was no indication that I could see, even before last year's general election, of that agreement actually operating. Nevertheless, speaking on behalf of my noble friends in the debate on the gracious Speech immediately after the present Government took office, I expressed the hope that they would consider the possibility of delaying the implementation of any legislation so that it took effect only if and when the need for it under the new Administration had been demonstrated beyond doubt. Since then, the trade union leaders have not in my view shown that they are able to exercise sufficient control over events to justify further delay. Indeed, the TUC itself positively encouraged action last Wednesday, which certainly was not in contemplation or furtherance of trade disputes but directed rather towards political ends, and in those circumstances, in my view, it is no longer a credible proposition that these matters should be left to trade unions alone to handle on a voluntary basis.
I should like now to comment briefly on the four main elements of the Bill as they were outlined to us by the noble Earl, Lord Gowrie. First, the matter of secret ballots. The TUC guide on the conduct of industrial disputes, issued in February of last year, contained a recommendation that trade onions should provide in their rules for ballots to be held where strikes were contemplated or taking place. For the Government therefore merely to provide in the first clause of this Bill for funds to be made available where requested to meet the costs incurred by unions when conducting secret ballots on certain limited matters, does not seem to me to be a point about which trade unions should get too excited. On the contrary, now that any financial impediment will disappear, I trust that in appropriate cases increasing use will be made of such ballots.
The issue of the closed shop arouses very strong feelings and I do not doubt that they will find expression in today's debate. Liberals naturally dislike the concept because of its intrinsic illiberality, but for my part I have enough practical experience of industry to know that it could not altogether be prohibited as easily as might appear and that the attempt to outlaw it in 1971 simply did not work

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in practice. If therefore the overriding principle earlier advocated by Lord Donovan for legislation of this kind is to be met, it seems to me reasonable that the Government should in the first instance seek to illiminate the most intolerable impositions of the closed shop, as in the notorious case of British Rail in 1976, to which the noble Earl referred, by making the establishment of new closed shops more difficult and by extending the grounds on which dismissal is to be regarded as unfair.
In discussions on the Labour Government's employment protection legislation we on these Benches laboured hard with the party opposite to extend such grounds beyond religious beliefs to include grounds of conscience. That this is a reasonable word to apply seems to me to be supported by its inclusion in the agreement reached early last year between the TUC and the Labour Government; and I suggest that it is noteworthy also that a majority of the Donovan Commission considered that when a trade union secured a closed shop, employees should have a right of complaint for unfair dismissal on both conscientious and indeed other reasonable grounds. It remains to be seen what practical difficulties may arise in seeking to extend valid objections to union membership to include objecting to being a member of any trade union whatsoever, and of a particular trade union.
Having earlier joined in advocating that people excluded or expelled from a trade union should have a right of appeal to an arbiter independent of trade unions, we on these Benches naturally welcome in principle Clauses 3 and 4 of the Bill. We also strongly support Clause 17 which deals with coercive trade union recruitment practices and is designed to afford protection against the deplorable tactics recently used by SLADE.
The problems of secondary action and of picketing I approach with the deference which is due to noble and learned Lords who sit in this House in a judicial capacity. Indeed, when we reach that part of the Bill in Committee, I hope that my noble friend Lord Wigoder will deal on our behalf with some of the more complex legal problems which arise in it. All I will say now is that it seems to me to be understandable for the Government in the first instance to confine its legislation
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to limited changes in civil rather than criminal law, and assume that trade union members and officials will continue to respect that law. It is essential that it should be upheld because upon it depend the rights not only of people to withdraw their labour but also of others to work. I very much hope that on these points the Bill will prove effective, and that indeed the further Green Paper on immunities promised for later this year will not need to be followed by still more legislation. Even the provisions contained in this Bill should, in my view, be seen only as a legal long stop, and I trust that as much use as possible will be made of codes of practice such as the one already produced on picketing by that widely respected organisation, the Industrial Society.
We accept that Sections 11 to 16 of the 1975 Employment Protection Act, which obliged the Advisory, Conciliation and Arbitration Service to carry on certain procedures concerned with the recognition of trade unions, are inoperable in their present form. Indeed I understand that they are thought by ACAS itself to conflict with the conciliation and advisory work that it is doing so well. We support the proposal to deal with that part of Schedule 11 to the same Act which enables claims to be made that employers are not applying the general level of terms and conditions observed in the same industry and district by employers in similar circumstances. These provisions appear to have had inflationary effects and they do not seem to have fulfilled the proclaimed purpose of benefiting the low paid. I should make plain, however, that we continue to feel concern for people on low incomes. Many are not members of trade unions, yet under the schedule claims can be made only by unions or relevant employers' associations.
With considerations such as these in mind, I do not think that we on these Benches will be tabling many amendments to the Bill, but there are a few points of principle about which we have reservations. One is that under this legislation less favourable treatment is proposed for companies employing fewer than a certain number of people. For years the Liberal Party has advocated that more needed to be done to encourage the formation and the development of small businesses, including co-operative enterprises, but

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it is often the employee in a small firm who is more vulnerable and who needs greater protection than others. This point has application to the fairness or unfairness of dismissal, the period within which unfair dismissal complaints may be brought, and to reinstatement after maternity absence.
Although in the light of recent lengthy national disputes I can understand the reasons for including in the Bill Clause 13, which deals with guaranteed payments, its provisions strike me at first sight as retrograde, if only because they appear to have the effect of widening the differences in employment conditions between so- called white collar and blue collar staff, at just the time when everything possible should surely be done to narrow the gap. So much for the provisions of the Bill itself. Taking it as a whole, I do not myself see why it should not prove acceptable, at least to the general body of trade unionists as well as to employers and thus conform to the overriding principle that Lord Donovan considered as essential for legislation of this kind.
Before I sit down, I should like to offer briefly a few more observations from my own experience. This Bill, of course, will not do anything positively to solve our industrial relations problems. These problems must be tackled within industry itself by employers and trade unionists. I take this opportunity to reaffirm my continuing belief in the need for trade unions. In my view, if they did not already exist they would now have to be invented in order to keep management up to its job. But they are with us anyway, and our industrial performance can only be improved with their co-operation. In the aftermath of last week's damaging day of action, I believe it is more than ever vital to secure that co-operation.
As someone who thus acknowledges the essential role that trade unions have to play, and who has worked with them at various levels in industry, may I add this. We know what in the past trade unions have been against. They have made that pretty plain in effectively bringing down the last three Governments, if one excepts the interim Wilson Administration of 1974–75. What the nation now wants to
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know is what the trade unions are in future going to be for. There is need in particular for them to answer this question. Since they make such great demands on the wealth of the nation, what are they prepared to do to add to that wealth? Surely the primary objective of trade unions should be to further the interests of their members in the long term, and that can only be done by helping to increase the size of the national cake before arguing about how it is to be sliced up. There is need, in my view, for the Government, too, to help in this process of wealth creation, if I may put it that way, by taking every opportunity to encourage action within industry, first, to increase the involvement of employees in influencing the making of decisions that affect them, and, secondly, in promoting a shared understanding between management and employees of business realities. I was glad to hear what the noble Earl, Lord Gowrie, had to say in his opening speech on that point.
If it is right for management to inform and consult with their employees in industry, it is surely also right that the Government generally should practise what their more enlightened members are now preaching. With inflation running at 22 per cent. there is, in my view, an increasingly urgent need for discussions to be reactivated between representatives of Government, employers and trade unions at the highest level, with a view to establishing agreed long-term procedures for pay determination, and a greater general awareness that the nation can no longer afford increases in pay that are not matched by improvements in productivity.
It will not, in my view, suffice to claim that this has nothing to do with the Bill before us, for in the field of industrial relations the questions of pay, prices and employment are inextricably linked. I hope that when the noble Earl replies to the debate he will find it possible to respond positively to that view. We have all got this problem on our hands, and between us we have somehow got to reach agreement as to the purpose of industry and the action needed to achieve that purpose. It is my conviction that in the long run it is only through learning to work together in such ways that we shall succeed.

IRAN: SANCTIONS
4.24 p.m.
The SECRETARY of STATE for FOREIGN and COMMONWEALTH AFFAIRS (Lord Carrington): My Lords, with permission, I would like to answer, in the form of a Statement, the Private Notice Question which was put earlier this afternoon. Before I do so perhaps I may apologise to my noble friend Lord Keith, who is waiting to make his maiden speech, though, as I know him very well, I do not think he need be very nervous about that.
My Lords, I informed the House yesterday of the decision which the Foreign Ministers of the Nine had reached at our meeting in Naples on 18th May on sanctions. I would refer particularly to that part of my Statement in which I said that contracts for the supply of goods to Iran entered into after 4th November 1979 would be affected by the sanctions. This was indeed part of what we agreed in Naples. Our other partners thought it appropriate, in order to show the necessary solidarity with the Americans, to apply trade sanctions to contracts which had been entered into after the date when the American Embassy was invaded and its diplomats taken hostage.
Nevertheless, it became apparent to the Government yesterday afternoon that there was very strong opposition in Parliament to any element of retroactivity. The Government cannot ignore this. Accordingly, we have decided that sanctions will not be retrospective. No orders will be laid before the House which ban the supply of goods under arrangements assumed before the date on which those orders were laid. And last night we informed our Community partners and the Government of the United States that, in view of the opposition of the other place to retrospection, we would no longer be prepared to proceed to apply any element of retrospection among the decisions which we agreed to at the meeting in Naples. Arrangements which ban the supply of arms continue in force.
The Government have all along sought to assure President Carter and the Government of the United States of their support over US efforts to secure the release of the hostages. That remains
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our position, although clearly we must take account of the feelings of Parliament in the precise measures which we adopt for this purpose.
The Government will now proceed to lay the necessary Orders in Council before the House as soon as we can co-ordinate with our partners to ensure that the orders to be used by each country will cover the same ground and have parallel effect.
Lord GORONWY-ROBERTS: My Lords, may I first thank the noble Lord for making the Statement, and join with him in wishing good luck to the noble Lord who is to make his maiden speech? A good speech always improves with keeping for a little time.
We do welcome the response of the Government to the concern expressed in both Houses, the strong reservations in this House and the strong protests in another place, about any element of retroactivity arising from the Naples agreement. The Government have done well to respect the wishes of Parliament so clearly expressed to them yesterday. We also welcome the clear undertaking: that,
" no orders will be laid before the House "—
either House—
" which ban the supply of goods under arrangements assumed before the date on which those orders were laid ".
This takes us to Section 1 (2) (a) of the Temporary Provisions Act, which we approved last week. I should be glad of confirmation— I am sure the noble Lord can give it— that this applies to any sanctions action and any order which is laid either under the Import, Export and Customs Powers (Defence) Act 1939 or the Iran (Temporary Powers) Act 1980. Are we clear that any order in pursuit of sanctions agreed and co-ordinated with our Partners laid before Parliament will have this provision— namely, that it will not be operative before the date on which the order is laid?
Further, may I ask the noble Lord whether he will clarify a little further his final paragraph in which it is said that the Government will,
" co-ordinate with our partners to ensure that the orders to be used by each country will cover the same ground and have parallel effect "?

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I wonder whether he can enlarge that to include not only covering the same ground and having generally parallel effect but also being operative from the same date. Ground is the question of ambit and date is the question of timing, and it is the question of timing that has involved the Government in some difficulty in the last few days. Will these orders in each country not only cover the same ground but be timed to be operative from the same date?
Finally, we note that the Government have already informed our partners in the United States and in Europe of the decision not to apply any element of retrospection. May I ask whether, apart from the American and the European Governments, other countries, such as Japan, Australia and New Zealand, have been informed, and is the noble Lord in a position to give us some idea of the reactions to the decision as imparted to them?
I ask the question in order to make the comment that we on this side of the House— and I am sure noble Lords on both sides of the House— expect confidently that our partners in America, Europe and in any other country which is joining in this action, will understand and accept our decision that we cannot, in face of the opposition of Parliament and the feeling in the country, apply any degree of retroactivity to these measures. We confidently expect that our friends will understand the reasons and the necessity for our decision. The noble Lord can be assured of our support in whatever further friendly representations he may feel he must make to our friends.
Finally, while the Government, are preparing— reluctantly, if they have to, but as a matter of international duty and of loyalty to our friends in difficulty— these measures, may we be assured that they will in the meantime fully and consistently support all diplomatic efforts to free the hostages and to restore respect for international law and practice? In particular, may we be assured that they will support the new United Nations' initiative in Tehran, which coincides with some encouraging remarks by President Bani-Sadr and with the decision of the Tehran Administration to bring forward to next
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week the meeting of the Iranian Parliament which the Ayatollah has said has the power to decide the future of the hostages?
4.32 p.m.
Lord GLADWYN: My Lords, while also thanking the Foreign Secretary for his reply to the Question, we on these Benches confess that we are a little bewildered by what appears to be the sudden reversal of a policy agreed unanimously by all members of the Council of Ministers of the European Economic Community. There is no doubt that, as a result of the debate which we had last Thursday, rightly or wrongly, the impression was created that sanctions would apply only to future contracts that is to say, those concluded after the sanctions Act had actually come into force. When the fact that they would be retrospective as from 4th November last was announced yesterday we were surprised, but given that it was the result of a unanimous decision of the Council of Ministers of the EEC we did not protest. However, I should now like, with great respect, to ask a few questions of the Foreign Secretary.
First, was it made clear in Naples to our colleagues in the council that our agreement to retrospective sanctions was dependent on the consent of Parliament in this country? Secondly, will it now be necessary to have another urgent meeting of the council in order to arrive at a fresh decision on sanctions generally? And, if so, does the Foreign Secretary think that our colleagues will all be content to allow sanctions to apply only to future contracts? Thirdly, what is likely to be the effect of the reversal of the policy of the Naples Council on public opinion in America? Is there not a danger that it will be provoked by this reversal of policy, and might it not even increase the agitation in favour of some military action in Iran, which I think we all consider would be absolutely disastrous? Finally, broadly speaking— I do not know whether the Foreign Secretary can answer this question— what is the amount of British trade with Iran which would have been lost had sanctions been applicable as from 4th November last? Would the ensuing unemployment have been very considerable? I hope that the Foreign Secretary may be able to reply to those questions.
4.34 p.m.
Lord CARRINGTON: My Lords, I am most grateful to the noble Lord, Lord Goronwy-Roberts, for the non-partisan way in which he has approached this matter. I share, of course, the concern of the noble Lord, Lord Gladwyn, and the noble Lord opposite, about the effect that this decision might have upon the United States. I think that it is important that our allies should realise the situation in which the Government found themselves. I am quite sure that Senator Muskie, who is a congressman, a senator of some considerable standing, will understand the situation of a Government which rely on Parliament for their support. I am equally sure that he will understand that it does not in any way mean that anyone in this country is backing away from the support that we have given to the United States about Iran and the hostages and our determination to do what we can to help in the way of sanctions.
The noble Lord, Lord Goronwy- Roberts, asked me a number of questions. There will be no sanctions which will be retrospective, although the arms ban will continue. In so far as the other eight countries of Europe are concerned, there is a meeting being urgently called in Brussels, of, I think, permanent representatives— not a council meeting as the noble Lord, Lord Gladwyn, said, but a meeting of representatives in Brussels— to coordinate the sanctions which will need to be readjusted as a result of this decision. We intend not only that all of us should do the same thing, but that sanctions should operate from the same moment. The other countries have been informed, but I do not know what their reactions have been. Moreover, I believe— as I think does the noble Lord opposite— that the most likely way of achieving the release of the hostages is by diplomatic effort. We shall support that as much as we possibly can and in every way that we can, and our ambassador there is doing so, and I, too, with him, welcome the fact that there has been a date fixed for the meeting of the Iranian Assembly.
I think that I have answered two of the questions put by the noble Lord, Lord Gladwyn. As regards the third, there is only one large contract that the Government know of between the 4th November
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and today, but there may, of course, be a number of smaller contracts of which we are not aware.
Lord PAGET of NORTHAMPTON: My Lords, we have, I think, for long suffered from the difficulties of America in having a foreign policy or being able to implement it. Is it not rather alarming for us to be told that we are now in the same kind of difficulty? When we wished to support the Americans over the Olympic Games and declared that we would not attend the Olympic Games, the Olympic Association proceeded to express their indifference for British interests and their intention of defying the Government. All that the Government did was to say that they were helpless and that they would not consider withdrawing passports. Why not? Now we send the Foreign Secretary to sell an agreement to Europe on our behalf, and when he comes back he finds that what he has sold has been repudiated because the Tory Back-Benches do not like it, and he tells us that that is an American custom which they will understand. In England, I understood that when a Foreign Secretary was repudiated in that manner, he resigned.
Lord CARRINGTON: Well, my Lords, I do not think that I shall just yet, if the noble Lord will forgive me! I do not think that it would have met with the approval of Parliament, the House, or even the Back-Benchers of the Labour Party in this House— I suppose I must exclude the noble Lord— if we had removed the passports of those who wished to compete in the Olympic Games. I happen to disagree very much with the decision taken by the British Olympic Committee, but they have a perfect right to take it, and this is still a free country. I am surprised at the noble Lord.
I am also rather surprised at his second question. He seems to ignore Parliament and believes that the Government of the day can ignore the wishes of Parliament, their supporters and the Opposition, riding roughshod over any opposition quite regardless of the circumstances. I am frequently "twitted" that I have never sat in another place. The noble Lord sat in another place for rather a long time. I suspect that I am a better democrat than he is.
Lord HATCH of LUSBY: My Lords, I should like to ask the Foreign Secretary to clarify one issue which I know has somewhat puzzled a number of Members of this House and the other place. In the debate on 15th May we were assured by the Leader of this House that the sanctions order which we were being asked to approve would not apply retrospectively, and I have the quotation from Hansard here, which I shall not bother to read. How does it come about then that this Parliament was told that there would be no retrospective legislation in the debate of last week, but that the Foreign Secretary, representing the Government, agreed to retrospective action at the weekend?
This is a somewhat puzzling situation to arise, because the point was specifically underlined in both Houses, and in the other place specific questions were asked on this issue which were clarified by the Government before the noble Lord the Foreign Secretary went to Naples. What authority did he have— it could not be parliamentary authority— to make this agreement with his allies in Naples?
Lord CARRINGTON: My Lords, I think that this is where the misunderstanding arises, because the noble Lord is perfectly right in saying that that assurance was given for the new legislation which was going through the House. But it was explained— I think here, but certainly in another place— that there was legislation already on the statute book which it was possible to use in order to prevent the carriage and the despatch of goods— the export of goods— to Iran, and that this power was in reserve. It was this power that would have been used in the context of the contracts between 4th November and today.
However, I think that the noble Lord, Lord Hatch of Lusby, is quite right that the impression he had is the impression left both upon this House and another place. This was one of the reasons why the Government felt that they ought to make the decision not to go ahead with the proposal.
Lord ELWYN-JONES: My Lords, for clarification, can the noble Lord say whether the position at which we have arrived means that none of the other eight members of the EEC will apply
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sanctions orders retrospectively? If that is so, does it mean that we are all in line in that attitude towards our responsibilities, or are we still in a sense the odd man out?
Lord CARRINGTON: My Lords, I do not know that, but \ know of two countries which would follow our lead. I have not heard from the others. However, the idea of the meeting in Brussels as soon as possible would be to co-ordinate that point.

EMPLOYMENT BILL
Second Reading debate continued.
4.44 p.m.
Lord KEITH of CASTLEACRE: My Lords, it is an honour and a privilege to stand aside and make way for my noble friend the Foreign Secretary. Reverting to the Employment Bill, I am well aware of the fact that my first speech in your Lordships' House should be non-controversial. I hope that nothing I shall say will offend on that account. I speak, not as a lawyer, but as a manager. Seen through the eyes of a manager of British industry, the present Bill seems to me to be a moderate, middle-of-the-road attempt to deal with a limited number of major problems.
I would quickly make three general points. First, by confining themselves to a limited number of specific trade union affairs and not attempting a root and branch reform of trade union law, I believe that the Government have shown great common sense. The lessons of the last 12 years, which have already been changes attempted all at once in trade union law have tended to be counter-effective, and they have certainly not produced the results for which their advocates hoped.
Secondly, I believe that this law must establish a proper structure, a fair balance, to enable management and unions to work together constructively in order to raise productivity and to improve the comparatively low standard of living which currently exists in this country, and which would be considerably lower if it was not for North Sea oil. As a manager I do not believe that the laws as they

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presently exist are conducive to this end. I believe that I am part of the large majority of employers, trade unionists and members of both political parties who think that the law requires amendment.
I think that there is strong evidence of public support for the changes contained in this Bill, particularly those dealing with the closed shop, picketing and other forms of secondary action. I do not think that the clauses in the Bill will prevent all the worst features of the last two winters' industrial disputes from recurring. Nor do I think that any law which is currently enforceable can do that. However, I believe that this Bill will help to strengthen the hand of the moderates in the unions and in the workforce generally, and my experience as a manager is that it is the moderates who are in the vast majority. If the Bill does this, it will go a long way to reduce the extent to which exploitation and intimidation can occur.
Thirdly, I believe that the Secretary of State is right to take this step-by-step approach. There are no proposals in the Bill which I believe, by any stretch of the imagination, can be regarded as extremist. I believe that they will command the support of the vast majority of the nation's workforce, which is vital if the Bill, when it becomes an Act, is to be effective on the shop floor. The moderate tenor of the Bill will, I think, make it difficult for the extremists to exploit it for their own political purposes, as they did the 1971 trade union Act.
I should now like to turn to three particular aspects of the Bill. The first is postal ballots. I am wholly in favour of postal ballots for electing union officials, for amending union rules, and for other like matters. I think that in most of these cases these ballots should be made secret compulsorily. However, I should like to utter a word of warning about the too frequent use of the ballot in industrial disputes. They may have proved very effective on occasions, in particular in the British Leyland case. This was a major issue put to the workforce, and the workforce accepted what was put to them by an overwhelming majority.
I also think that, had we had a secret ballot last autumn for the engineering dispute, the outcome might have been different. The decision to take strike
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action was taken by the narrowest majority of the AUEW and the workforce was not consulted. The result of that long-drawn- out strike was that everybody involved suffered— the country, the industry and those who worked in it. I think that this is an occasion when the ballot should be used. I do not think, from my experience, that the ballot should take the place of the mass meeting and what goes on in the shops. It should be used when there is either doubt as to how the meeting was conducted, or doubt as to the outcome of the meeting, but it should not be used in substitution for the meeting.
I should now like to refer to the closed shop. I am against the closed shop as a matter of principle. There are arguments for and against. I appreciate that in some cases employers and unions have reached agreements to their mutual benefit, and provided there are proper safeguards I cannot see that, in a democratic society, one can cavil at that. What we must have, and what I believe this Bill gives, are the necessary safeguards to protect the rights of the individual. An employer cannot dismiss an employee without that employee having the right of appeal to an independent tribunal. The employer can deprive a man of his job. The union can deprive the man of the ability to get another job, and in normal times this is a more serious matter. It is only right therefore that a man threatened with the loss of his union card should have the right to appeal to an independent tribunal, as is laid down in this Bill.
I think that this is a sensible Bill, a workable Bill, and that we should give it our blessing. I know that one can legally find a great deal of difficulties and faults in it. One can try and go through the problems of secondary blacking and such areas, but they will be ironed out with experience. I believe this Bill is sensible, middle of the road, and that we should pass it.
4.53 p.m.
Lord HARRIS of HIGH CROSS: My Lords, this is the first opportunity I have had to follow and congratulate a maiden speaker, and I must say that it is a most agreeable occasion for me. I have met the noble Lord, Lord Keith of Castle- acre, in the real world outside, and had no doubt that he would impart something

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from his great practical experience. If I may say so to the noble Lord, it was a Rolls-Royce of a speech, although it was more audible, which is just as well in this strange Chamber. We look forward to the noble Lord's future contributions to our debates, to which we know he can bring a wide and almost unrivalled range of experience of industry and commerce that will help us to advance understanding in some parts of these Benches here.
We are going to hear expressed a wide variety of sincerely and deeply held views about the nature of trade union law before the day is done. There is scope for much difference of opinion. It seems to me that the least plausible view that we have sometimes heard— although not yet in this debate— is that which says that the law has no place in industrial relations. It should be obvious that free institutions cannot operate in a legal vacuum, and indeed they work only in a framework of law that specifies the rights and responsibilities both of individuals and of collectivities.
I want to turn, to learn from experience elsewhere, to Germany, from which the Bullock Committee took convenient examples of activities as a model for its recommendation on industrial participation. In Germany, trade union law rules out political affiliation and action by trade unions; it prohibits closed shops; it enforces collective agreements, and requires ballots before strikes. There being only 16 unions operating in Germany, demarcation disputes are extremely uncommon. Yet, lacking the enormous privileges and immunities that the noble Lord, Lord McCarthy, thinks desirable and that British trade union leaders have come to take as their birthright, German unions have served their members far better than British unions in this country over many decades.
I want to state my own personal conviction that it is the excessive power of British trade unions, both to obstruct improved techniques and to deflect the efficient use of labour, that is the chief reason why our wages have fallen over this century from approaching double European levels to nearer half. Even when in steel or cars our plant is identical to that operated by our European competitors, it commonly takes twice as
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many British trade unionists to manage it. No wonder our competitors have more modern equipment that they can use more effectively. It was Sir Henry Phelps Brown who showed for 1972 that wages and salaries took 84 per cent. of the value added of British industrial and commercial companies. Eight years later, in 1980, labour's take is considerably in excess of 84 per cent. of value added. This leaves little if any real reward for investment and risk-bearing. It seems to me naive in these circumstances for the TUC to complain about a strike of capital.
During the last two decades it seems to me that we have witnessed an irresponsible trade union movement deploying irresistible monopoly powers to cause an alternation between mounting unemployment and escalating inflation. First, they priced their members out of jobs by seeking wages above the value of output. Then they urged governments to restore full employment by monetary excesses that can only result in faster inflation. This debases the currency in terms of which the higher money wages were paid.
It is often thought that economists are rather dismal fellows, and it seems to me that we have a great deal to be gloomy about. But of all the episodes in post-war political economy the most depressing for me has been the frequency with which reforms on many topics, embodying lofty ideals, have led through neglect of market realities to results almost precisely the opposite to what was intended. However noble the original inspiration of the trade union's protectionism, its power has proved to be a power to impoverish. It has perversely destroyed jobs through inflating money wages whilst retarding real standards of living through checking the better use of capital and labour.
I conclude that British trade unions have too much power for their own good; they have too much power for the health of their leaders; they have too much power for the welfare of their members. The German example demonstrates that effective unions do not need to conscript members into closed shops; they do not need to rely on immunities for breach of contract. Responsible union leaders need not shrink from ballots nor tolerate picketing on a scale that amounts to intimidation.

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Every indication of public opinion suggests that we would have overwhelming support— not least from union members— in strengthening the curbs that this mild Bill proposes against the coercive powers so often exerted by unrepresentative minorities in the trade unions in recent years. It seems to me that, in the widest interests both of higher employment and of rising real wages, noble Lords should not shrink from considering amending this Bill. Indeed, I hope that they will amend it in the direction desired by most of our fellow countrymen— including a growing number of former stalwart members of trade unions and the Labour movement.
5 p.m.
Lord ALLEN of FALLOWFIELD: My Lords, I rise to register a note of dissent and opposition to the Bill, in particular to certain clauses of it. Indeed, as I listened to the noble Lord, Lord Harris of High Cross, I thought we were going to be entreated to a claim for the total abolition of the trade union movement,
I wish, in entering this debate, to indicate the interest I have in doing so. I do so against the background of many years of active and genuine participation as a representative of the national centre of the trade union movement and formerly as a general secretary of a major union for 17 years. As a representative of the national centre of the trade union movement, I had meetings with Governments going back to the days of Harold Macmillan when he was Prime Minister and five Prime Ministers who have been in power in this country since then, discussing largely the problems on which we have been touching today, but most of all the economic issues and how we could best adjust to those in the name of society.
The trade union movement, I regret— but I understand the reasons why— is slowly but, it seems, inevitably entering a new and harder phase in its opposition to the Government's proposals. My opposition in respect of certain clauses arises because I believe the Bill to be totally unfair, and briefly I will explain why. It is unfair because it will remove many of the established rights of workpeople. One million working men and women have already had their protection against unfair dismissal taken away, and advance notice of redundancy has been slashed
778
for hundreds of thousands of workpeople. Particularly hard hit by these new measures will be people working for small firms and mothers wishing to return to work after having a baby.
Clause 5 is unfair because an employer called before an industrial tribunal in an unfair dismissal case, if these proposals are sustained and the measure becomes an Act, will no longer have to prove that he acted reasonably in sacking a worker. Instead, the worker will have to prove that his former boss acted unreasonably. The same clause is unfair because the job of proving the case is switched from the employer, with all the resources at his disposal, to the recently sacked worker, who usually has no job, no income and, unless he is in a union, nobody to speak for him.
Under Clause 8, the present minimum compensation of two weeks' wages will be dropped if these proposals are enacted. A worker could win his or her case for unfair dismissal at an industrial tribunal but still get no payment. Under Clause 5, employers may be able to "duck" their obligations to treat workers fairly by using let-out clauses concerning their size and, of course, their circumstances; the smaller the firm, the less chance a worker will have of winning his case at an industrial tribunal. Furthermore, workers in small firms will need two years' service, not the normal one year, to claim unfair dismissal. So one could go on to itemise the unfair aspects of the proposals in the Bill.
It is one thing for this Government, as one so often hears, to claim that in response to their election pledge something is being done, and quite another to demonstrate that the right thing is being done. We have witnessed a low key presentation, for which I am grateful, by the Government and especially by the Secretary of State for Employment in another place. He has claimed, as did the noble Earl, Lord Gowrie, today, that the Bill is limited and modest. Whether or not that be true is open to question. I simply want to say that industrial relations is not about political theorising, nor is it about drafting in the cosy conformity of any particular room. Industrial relations is about people at work, about human relations, and those work people who have been the casualties of Government policies,

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rising unemployment, escalating price increases, with no tangible intervention by the Government to restrict or minimise the great price rip-off that is taking place today in our society, take the view that there is precious little humanity about a Government who stand idly by while all this takes place. Many in the community today, the organised and the unorganised, I am sure condemn the Government for their casual attitude to the suffering and anguish that come from their present policies.
The burden of my opposition to these proposals at this time in the life of our society is that they will do nothing to ameliorate the effect of this indifference by Government to those men and women who have been the victims. The proposals are irrelevant to the basic issues of improving industrial relations, real earnings and, above all, job security. The Government may bludgeon this unnecessary piece of legislation through this House and another place, but what they will not succeed in doing is win the support of all those whom it will most affect.
What about the employers? I have no doubt, knowing many of them as I do— employers who are very far-seeing in their industrial relations policies— that they will be looking askance at the proposed legislation. Indeed, one believes there have already been some adverse utterances by the Engineering Employers Federation; and for those who are forward-looking and successful in winning the consent, co-operation and support of their workforce for good industrial relations, there must be a cavernous gap between what is political theory and practical reality, and that is the issue facing us today. My experience compels me to believe that this Government, regrettably like previous Administrations, will eventually see that proposals and legislation of this kind will not solve industrial relations problems, but that only people can solve those problems.
In making a statement of that kind, I ask noble Lords to bear with me while I relate briefly my experience as a member of the Commission of Industrial Relations when it was initially set up by a previous Government. I was privileged to serve and make what I believed and hoped would be a constructive contribution to
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industrial change between employers and the employed, and to make that contribution within the setting of a voluntary approach to those problems.
That belief, I regret to say, was destroyed when the then Government unwisely decided to distort the original structure of the CIR, and eventually decided to reshape it and then kill it off. I make bold to say that had that not happened then, a great many of the industrial problems that we have had since may not have been with us. I believed then and I have believed since that for the Government to do that was a shabby manoeuvre and an act of lunacy. Whatever one's political connections, there can be few who cannot be worried about the challenges which face us, not least in the area of achieving much more productive industrial relations, based on consent and co-operation, as opposed to confrontation— and I have been against confrontation all my life.
It was said from the other Benches earlier that these proposals will help the moderates. I am making bold to say that these proposals will unfortunately make many moderates militants overnight, and that is to be regretted. Industrial relations is the one key factor in our rather poor international performance, whether judged by growth rates, productivity, inflation or levels of investment. The survival of jobs, of companies, and in some cases of whole industries is at stake today in the United Kingdom. Today the Daily Telegraph economic commentator talks about the slide into recession. Here we are taking the time of this House and the time elsewhere, to deal with proposals which have no relevance to the economic issues confronting us in Britain.
This is a situation that will not be overcome by this Bill before your Lordships' House. It is clear to me, after drawing on many years of industrial relations experience, that an immediate objective of those responsible for management/labour relations, and who recognise (as many do) the urgency of the current situation, should be to attack the problem on a broad basis at company level, as opposed to total reliance on proposals or legislation of the kind embodied in the Bill.
I have never believed that there is any panacea for these problems. Whatever happens, the unions in the United King-

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dom should not be forced into the position— a risk, I am afraid, that will be run by some of the proposals in the Bill— where they acquire the irresponsibility that comes from rejection and mass disobedience. For me good management, sensible and responsible trade union leadership, and the development of good industrial relations remain the best antidote now and in the immediate and long-term future. There is no short cut to those objectives— certainly not by this Bill.
I oppose the Bill for many reasons. One of them uppermost in my mind is the knowledge, gained from past experience in dealing with trade union membership, Governments and employers and their representatives, that reform will not come from legislation, nor from the courts. As has been said so often in this House, this nation is facing immense problems— problems of inflation, problems of unemployment, problems of technology; indeed fundamental problems of how our society operates. Problems facing the United Kingdom of inflation, competitiveness, ineffective use of capital, the need for a response to new technology, lack of growth, unemployment, and social inequality, can be dealt with only by a partnership between the Government, the trade unions and the employers. It is my regret that so little of that partnership exists today.
Industrial relations, like pay, is but one of a whole complex of economic, industrial and social factors central to our economic future. We now have a Government apparently determined and committed to severe monetary constraints and to the releasing of the full vigours of market forces. Time will show how long this particular policy mix will last. I believe that it is doomed to failure. Why?— because there is no consensus in the country in support of it. There is no support between those who believe that the policy is right and those who are expected to conform to its operation. Sooner or later the accent will have to return to one of co-operation and fulfilment, rather than confrontation and frustration, if the problems of the 'eighties are to be tackled successfully.
Good industrial relations, the acceptance of agreed policies by Government, management and trade unions, are crucial to Britain's competitiveness. I very much
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regret that I do not see this Bill as making a contribution to this objective. Indeed, I believe that this Bill has about as much chance of being accepted by the overwhelming number of the British trade union movement as has a strongly motivated gathering of licensed victuallers of persuading an equally strongly motivated gathering of those who believe in the Band of Hope. That is about the chance that this Government have of gaining acceptance of these proposals in the country generally.
I challenge those who take a contrary view. I challenge those who believe— and I do not challenge them as a militant, but as, I hope, someone who has contributed to constructive trade unionism for many years— that the clauses of the Bill before this House make any contribution to the solutions to which I referred earlier. I am persuaded that lasting solutions to our problems must be found in agreement, and not in legislation or clauses of the kind now embodied in the Bill.
5.18 p.m.
Viscount DE L'ISLE: My Lords, in his opening speech my noble friend Lord Gowrie was, I thought, rather dismissive of the three dismissed railwaymen at Strasbourg. I think he will find that that case will not be so easily disposed of, nor will its consequences. I believe this because that case intimately effects our treaty rights, particularly our treaty obligations in the Council of Europe and under the European Convention on Human Rights. I should like to take a little of the time of the House to explain why I think so.
Today the European Court issued a communiqué to say that it was receiving a report from the Commission of Human Rights on the question of whether the three railwaymen's rights had been violated. Those three railwaymen, Messrs. James, Webster and Young, claimed that their human rights under the convention— under Articles 9, 10, 11 and 13; that is, those concerned with freedom of conscience, freedom of speech and freedom of association, and the remedy— had been violated when they were dismissed by British Rail in 1976. They were dismissed because they refused to join a trade union under the closed shop agreement reached

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between British Rail and the railway unions.
A reference to the court could not have been made unless at least a majority of the members of the commission were of the opinion that the present laws of the United Kingdom were inadequate to protect human rights. The railwaymen's dismissal was undoubtedly lawful under the legislation passed in 1974 and 1976. They had no means of redress under English law. Mr. Webster appealed to a tribunal consisting of railway officials and trade union officials, and his appeal was dismissed. Mr. James appealed to an industrial tribunal, and his appeal was also dismissed. On the advice of the Freedom Association, of which I am chairman, and with its support, the railwaymen took their case to the Commission of Human Rights. They were able to bring their application to Strasbourg because in 1966 Sir Harold Wilson's Government declared that they recognised the competence of the court to receive individual applications. It may be significant, my Lords, in the present context, that the Conservative Government which preceded Sir Harold's declined to recognise the right of individual application.
The European Convention of Human Rights and Fundamental Freedoms was signed in 1950, as noble Lords will remember, and entered into force three years later. A citizen of a member state which has recognised the competence of the commission and who can show that he has exhausted all domestic remedies may petition the commission claiming that his Government have violated his rights under the convention. In this case, as I have said, the petitioners alleged breaches of Articles 9, 10, 11 and 13. The Department of Employment, under Mr. Booth, strenuously contested the case and managed to delay the hearing by repeated applications for further time. The hearing finally took place on 9th July last, and the commission then reached a provisional opinion in the case.
Under the Strasbourg procedures a very large measure of secrecy is observed about the proceedings before the commission. Although the Government under question are informed as to the commissioners' opinion, the petitioners must depend on the communiqués published
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by the commission. However, as the proceeedings continue, certain matters become clear. The fact that the commission admits an application is an encouraging sign to the applicant, since the vast majority of petitions are declined and declared inadmissible. An oral hearing is a further encouragement.
Following the hearing, the commission stated that it was
" placing itself at the disposal of the parties concerned with a view to securing a friendly settlement on the basis of respect for human rights as defined in this convention ".
The only move in this direction made by Her Majesty's Government was a letter to the commission stating their willingness to consider costs for the railwaymen if they were willing not to pursue their case further. Very naturally, the applicants, by counsel, declined to comply. It therefore remains an academic question whether the commission could have approved any settlement on such a basis as showing respect for human rights.
Since no solution was reached by the time the commission held its next session, the commission
" drew up its report on the facts and stated its opinion as to whether the facts disclosed a breach of the Government's obligations under the convention ".
Again, in accordance with the convention, the commission's report was transmitted to the Committee of Ministers and to the United Kingdom. The petitioners had to rely for their information on the communiqué which the commission issued after its meeting last December, where
" it confirmed its provisional opinion on certain complaints of the closed shop in British Rail ".
There could no longer be any doubt that in the opinion of the commission there had been a breach or breaches of the rights of the three railwaymen, even though the nature and extent of that violation remained to be revealed.
After the December session, the commission once again informed the petitioners that it was still ready to use its good offices towards a friendly settlement; and, although the applicants held themselves ready to consider any move by the Government, none was forthcoming. In December last Mr. Prior introduced his Employment Bill in another place. As the Bill proceeded there, the railwaymen's case proceeded at Strasbourg. The

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Government are obliged to recognise any decision of the court as binding upon it, since Britain has already declared that it recognises the court's jurisdiction. It is relevant to note that in the 23 years of its existence the court has never so far failed to support the overall view of the commission on violation of human rights.
The petitioners' main argument before the commission was that the laws of the United Kingdom were inconsistent with Article 11 (1) of the convention. That article reads as follows:
" Everyone has the right to freedom of peaceful assembly and to freedom of association with others including the right to form and to join trade unions for the protection of his interests ".
One of the arguments put forward by the Government in resistance to the applicants' claim was that the right to freedom of association did not include the right not to be compelled to associate against one's will. It seems clear that the commission has rejected this argument, which is indeed contrary to the express terms of Article 20 (2) of the Universal Declaration of Human Rights— a declaration which is cited in the preamble to the European Convention. Moreover, in a case decided in 1969, the commission took it for granted that the right of association includes its converse.
Furthermore, it is difficult to see how the right to form and to join trade unions, for which Article 11 expressly provides, can be exercised where a closed shop exists, in such a case, it seems that the employer who has already agreed with an existing union to employ only its members would be unable to recognise a new union formed by some of his employees for the protection of their interests. He would be bound to dismiss such employees if they persisted in their enterprise. It would certainly be convenient for the House if it could consider the terms of this Employment Bill, and in particular Clause 6, in the light of the commission's adopted opinions in the railwaymen's case. But, since this specific information is denied us, noble Lords ought not thereby to neglect the relevance of the European Convention when considering and, if need be, amending the Bill before us.
It is, I suggest, a fundamental defect in the Bill that we are considering that, although it modifies and amends the legislation of the previous Government.
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it still permits the principle of the closed shop. This, I believe, is repugnant to the convention. It is certainly contrary to the whole concept of individual freedom, of which the convention is an authoritative expression, that a man's right to work in his chosen trade should depend upon his submission to the rules of an association which he is unwilling to join. This is no theoretical or trivial matter.
Let me refer your Lordships to the rules of the National Union of Railway- men. An applicant who wishes or is required to join the NUR must undertake— and I quote—
" loyally to promote the objects of the Union, and to be obedient to the rules now in force or which may hereafter be adopted ".
By rule 9.1, no person shall be admitted a member unless he has previously signed this declaration. The objects of the union, which the applicant promises loyally to promote, include the obligation:
" to work for the supercession of the capitalistic system by a Socialistic order of society … ".
The applicant who wishes or is required to join ASLEF must sign that he agrees to advance the interests of the society and conform to its rules. The objects of the society as set out in rule 4 include the furtherance of the Labour movement generally towards a socialist society. It is to be noted that rule 5 (10) provides— and I quote— that
" any member who is disloyal to the Society's interest by opposing official candidates in sectional council or local departmental committee elections … will render himself liable to expulsion from the Society or such disciplinary action as the Executive Committee may think fit ".
Can the Government really assure this House that a Bill which does not put an end to such situations can be in accordance with the European Convention? The Bill provides that dismissal for refusal to join a union shall be unfair if a union membership agreement taking effect after the Act comes into force has not been approved by a majority of not less than 80 per cent of the employees.
If my contention that the closed shop is inconsistent with the individuals' human rights to freedom of association, speech and conscience is sound, it must be inadmissible to empower a majority of the individual's fellow employees to deprive him of that right. It is fundamental to the convention that it is the right of the

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individual not to be deprived of his lawful freedom of conscience, speech and association by the actions of his fellow citizens. In fact, the convention upholds the right of dissent, which has been a valued right in this country for 400 years. The Bill, which offers compensation rather than redress, cannot meet the requirement of Article I of the Convention: that the high contracting parties shall secure to everyone within their jurisdiction the rights and freedoms defined therein.
A right granted under the Convention is a right granted to a person, not to an organisation, nor to the majority in an organisation. Under the Convention slavery or torture, which was mentioned earlier in this House, would remain unlawful whether or not these enormities had been endorsed by a majority here or elsewhere. The rights protected by the Convention are co-equal in the legal sense. There is more than one opinion in this House, as elsewhere, upon the relevance of human rights to British society. But that matter has been debated and was settled when we joined the Council of Europe and adhered to the Convention. There has been questioning, too, on the propriety of a British citizen being allowed to make an individual application at Strasbourg. But that matter too has been settled.
So we are brought directly to the consideration of the responsibility of your Lordships' House in this matter of human rights as these are involved by the Bill before us. We shall hear no doubt that, since the case at Strasbourg is still sub judice, we can legitimately await the Court's decisions while in the meantime accepting the Government's advice to pass it in its present form. But should we, in all conscience, do so?
We have already heard from the noble Earl that in drafting this measure, they have taken the railwaymen's case into account and have met precisely the grounds of that complaint. Could that be so in the light of the provisions to which I have drawn attention? In Mr. Prior's Bill, there is still no remedy which satisfies the Convention available for a man who is forced to join a union, and has to surrender his freedom of conscience under threat of losing his union card, and with it his livelihood.
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It was precisely because civilised opinion was appalled by totalitarianism as expressed before and during World War II by Germany and Italy and by Soviet Russia, that the human rights movement was born. "Everyone has a right to recognition everywhere as a person before the law"— so runs Article 6 of the Universal Declaration. A person from whom an undertaking such as I have just read out is unwillingly extracted, as a condition of his employment, is a person deprived of basic human rights which his Government as a party to the Convention has a duty to protect.
Let us remember, too, that this House has recently passed a Bill to incorporate into the British system Articles 1 to 18 of the European Convention. That Bill waits in the antechamber of the House of Commons. Must we wait for it to reach the statute book before we declare our attitude to those parts of the Employment Bill which directly affect the human rights of our citizens? Must we not insist that the Employment Bill shall satisfy the human rights which, as a House, we have agreed should be the justifiable rights of every British citizen? I should like to believe that we might persuade the Ministry that its obligations under treaty for the observance of human rights should take precedence over its immediate legislation and political convenience. But I cannot be optimistic.
The noble Lord who normally sits upon the Woolsack has convinced himself, and has helped to convince the House, that the time is ripe for individual rights to be enshrined in our constitution and thereby protected; but behind every member of every Adminstration stands the ghost of Lord Melbourne repeating softly, "It is not much matter what we say, but mind, we must all say the same." Members of this Government, including the noble and learned Lord, Lord Hailsham, will, I fear, follow precedent and speak in unison. But the rest of us are free to follow our conscience and our judgments. I believe that this is the time to do so.
5.35 p.m.
Lord PLANT: My Lords, the noble Earl, Lord Gowrie, in an excellent and persuasive speech, said that the Bill was simple and straightforward. I do not accept that for a moment, and I will

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attempt later to show why. In another place, the Secretary of State for Employment said that he wanted a consensus. The Government, unfortunately, could not obtain agreement from the TUC for any trade union legislation which circumscribed the rights of its members. The trade union movement has fought over the years for better treatment for its members. It is not prepared, in 1980, to give up any of these hard-won rights. It avoided the straitjacket of In Place of Strife which the Labour Government obtained from those Downing Street discussions and the valuable co-operation of the TUC that they voluntarily would urge the unions to greater co-operation.
The Industrial Relations Act 1971, so the Government said, was what the electorate wanted. It proved to be a disaster. In passing, it might be mentioned that the one ballot ordered under that Act was a disaster for the Government. You can only have legislation in industrial relations if there is ready acceptance of the law. Legislation cannot work if the great majority of the workforce are not prepared to accept the law on the basis that it is unnecessary, undesirable and unfair— as, indeed, time will show is the position with the Bill we arc now discussing. I believe that the rights of individuals at the work place, as elsewhere, must be respected. I am a firm believer in accession to the EEC, to the European Convention on Human Rights. I was interested to hear the noble Viscount, Lord De L'Isle, discussing the possibility of a Bill of Rights. My Lords, this Bill, however, damages trade union rights and individual rights. This Bill, brought forward in stockinged feet with a Green Paper round the corner, seems to the TUC to be edging the trade union movement back to 1971.
Let me return to the so-called simplicity of the Bill. The pregnant woman will not agree that it is simple. The Bill's complicated procedure (which must be followed in order to secure entitlement to return to work) will act as a disincentive to exercising this maternity right. There is a new clause on the legal definition of secondary industrial action. This is dangerous. The new definition of the formula— "in furtherance of a trade dispute"— in respect of secondary action is objectionable, limiting the scope of that formula more narrowly than ever pre-
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viously in English law. There will have to be new, statutory, objective, capability tests; and the effects of this will be to put the control of the legality of industrial action into the hands of the judges. Here, may I read what the noble and learned Lord, Lord Scarman, said in the McShane case:
" It would be a strange and embarrassing task for a judge to be called upon to review the tactics of a party to a trade dispute and to determine whether, in the view of the court, the tactic employed was likely to further or advance that party's side of the dispute. And the difficulties which have beset the Court of Appeal in their attempt to formulate a test are a persuasive argument for keeping this act of judgment in the industrial arena and out of the judicial forum. It would need very clear statutory language to persuade me that Parliament intended to allow the courts to act as some sort of backseat driver in trades disputes ".
This issue has not been referred to, but I think it should be and probably will be in the Committe stage.
The noble Earl, Lord Gowrie, said that he did not think that the Labour Party would repeal this Bill. I think that they will— at any rate, certain clauses will go. At a late stage the Government accepted paid time off for ante-natal care. This was put into the Bill after the TUC gave evidence to the House of Commons Select Committee for Social Services last February on perinatal mortality. Obviously, we should wish this important provision to be retained. There can be little doubt that married women are being dealt with differently depending on the size of the firm employing them. I doubt whether this discrimination will stand up to the scrutiny of the various International Labour Organisation conventions and the European Convention on Human Rights. I believe that if this Bill stands as it is there will certainly be some women going to Strasbourg to test its validity.
We need to preserve he opportunity to talk. I believe that agreement and cooperation from the TUC is possible. The Government should invite the TUC for discussions over the whole field of industrial relations and economic problems. Do not let us remain at arm's length. I see the noble Lord, Lord Carr of Hadley, sitting opposite. It reminds me that in the autumn of 1973 talks took place at Chequers on an incomes policy, and I believe that we were within five minutes of agreement. It was unfortunate that agreement was not reached.

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Then again, early in 1974— very early in 1974— the miners were at that stage threatening to strike and banning overtime, and the Government asked the TUC if we would regard the miners as a special case. One morning, just before the NEDC met, we agreed that they should be treated as a special case. But imagine our surprise at the NEDC in the afternoon when Len Murray announced that the Government said that they were not prepared to accept the miners as a special case. Those two instances I mention from my experience where talks have gone wrong, when, with hindsight and a little more forbearance, the country would have been in a happier state.
This Bill is basically irrelevant, as so many people have said and will be saying, with 1½ million unemployed and inflation at 22 per cent. It will do nothing to deal with our twin enemies of the social structure of this country. In 1960 there was a mood of co-operation. We had the Donovan Commission. Then the trade union movement went on the defensive against Government legislative interference. The TUC became less constructive and more defensive as legislation came forward. The TUC disputes committee, operating the Bridlington Agreement (which deals with poaching issues and disputes between one union and another) is in danger, and is now threatened by this Bill through Clauses 3 and 6. The TUC takes a similar line to that of the chief constables when they gave evidence to the House of Commons Select Committee on Employment. They said: "Let the law as it now stands deal with picketing".
There could be gross exploitation of workers where they are weakest; that is, in the small firms. We feel that most employers of small numbers of people respect the opportunities of their workpeople; but there are some who do not. There will be some exploitation as a result of this Bill by the employers of small numbers of workers. There is a genuine fear among trade unions, which has not yet been dispelled, that the Bill is designed to diminish the negotiating strength of unions in modern society. The detailed discussion at Committee stage will no doubt help to dispel some of our fears and will deal with the important issues raised by the noble Viscount, Lord
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De L'Isle, where the Strasbourg ruling has still to be reviewed by the European Court at Luxembourg, although I believe that I am right in saying that Luxembourg has not overturned a Strasbourg ruling since it was set up.
5.46 p.m.
Lord ROBBINS: My Lords, we are confronted today with a Bill of very considerable technicality. I suspect that the issues concerned will detain us very many hours in Committee. I make no complaint of this. Indeed, I will argue later on that this is the best way to deal with the anxious problems of the day. But, at the same time, it is a Bill which raises in one's mind deep questions of principle very appropriate for discussion at Second Reading. It raises the question of the function of law in general in the sphere of international relations. It raises the question of the place of associations, of producers and their rights in a free society. I hope therefore that noble Lords will bear with me if, before coming to the specific object of the Bill, I allow myself to reflect a little on these fundamental issues.
I begin with the function of law in industrial relations. As the noble Lord, Lord Harris of High Cross, has already said, how often do we hear it said, even in this House: The law has not a part to play in this area, and it is better to leave things to adjust themselves as a result of spontaneous evolution of industry. Nothing but harm is done by interference in these connections "?
I cannot easily say how wrong-headed this seems to me to be. It ignores the fact that the law as it stands in this country is already deeply committed for good or for bad with industrial relations over a very wide field; and as anyone who has taken the trouble to look at this involvement of law in industrial relations— even superficially— will discover from a few minutes' examination, this involvement is not such as can be simply written on two tablets of stone
Secondly, I find it wrong-headed because it ignores the fact that in other free societies the law in this respect has assumed the forms and invaded relationships in the industrial field which in this country— rightly or wrongly— has been regarded as inappropriate. Our famous immunities

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are not regarded elsewhere as inviolable. As Lord Harris points out, in Germany the law in this connection is entirely different.
Thirdly, my Lords, ascending for a moment to the philosophy of the free society, the belief that law is out of place in this connection rests wholly and totally on misconception. The idea of a free society is not the idea of a free-for-all. We often hear it so depicted by its enemies, certainly elsewhere— I will not say in this place; but it is not so. The conception of a free society is a conception which seeks freedom within a framework of law which attempts to prevent the freedom of individuals and groups of individuals from curtailing the freedom of others.
This brings me to the question of freedom of associations in industry. Now let us remind ourselves that in an unfree society such societies are planned and controlled from the centre and any alleged freedom of a group, be it trade union or some other association, is a façade; behind lie torture, concentration camps and exile. In a free society there is no prohibition of spontaneous association. On the contrary, the institutions of property, contract and so on give rise to widespread initiative and activities in no way specifically planned or directed from the centre. But at the same time— and this is where the function of law comes in— it is recognised that completely unregulated association may give rise to manifestations which are anti-social in character.
Take, for instance, the formation of giant combinations of capital. These may or may not be inevitable in the interests of production, but they may also involve monopolistic powers which are inimical to social harmony. Accordingly, in most free societies there exist legal powers to investigate and prohibit the possibility of their misuse. In this country, we have the Monopolies Commission which exists to examine such possibilities and to recommend that certain combinations be prohibited and certain activities disallowed. Or take again the possible powers of industrial producers to restrict the output of would- be competitors or those producers who are dependent lower down the line on their own output. Here, again, in this country it is deemed appropriate to restrain such
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powers by law— the law relating to restrictive practices.
If we look around in our own country, it leaps to the eye that there are many very significant exceptions to the rule of law in this connection. Thus, the investigation of monopoly power among associations of employees is nobody's business as regards the law. Make no mistake, my Lords, I am not contending that all trade unions are monopolies— some are most clearly not— or that they necessarily abuse monopoly power. But the fact is that there is a good deal of monopoly power knocking about in such circles and it is open to question whether it is not sometimes ill-used. I need not allude to the events of the winter before last. I have even heard from the Opposition Benches pleas for an incomes policy depending upon the very true fact that the labour market is not unequivocally competitive; "oligopolistic" was the opprobrious word which has sometimes been used. Or, take restrictive practices. Surely what is sauce for the goose is sauce for the gander and no one who has any contact with business can deny that restrictive practices occur among associations of producers.
Are we really prepared to put our hands on our hearts and to say that whereas such practices are anti-social if they occur on the employing side, they are socially beneficial if they occur on the side of the employees? Are we prepared to put our hands on our hearts and protest that the delays in the introduction of superior technology in nationalised or non-nationalised industry are wrong if they occur on the side of management, and that they hold back the increase of the national product, but they have the reverse effect if they originate on the side of the unions?
Questions of this sort which run through one's head lead me to the conclusion that all has not been well in the historic development of our law in this respect. They lead me to the conclusion that there has been no invisible hand guiding the policy of laissez-faire in this respect, guiding the policy to results which are optimal from the point of view of the public in general.
Nevertheless, my Lords— and at this point some of my friends in your number

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may regard me as cowardly— I am not one of those who advocate immediate and drastic action all round. I am not one of those who press:
" To grasp this sorry scheme of things entire, To remodel it closer to the heart's desire ".
Our society is a going concern and democratic progress rests on argument and persuasion. Therefore, as the noble Earl who introduced this Second Reading pleaded, I regard it as a virtue in the Bill that it is not all-embracing but applies itself to the correction of the law in regard to a limited number of abuses. I have a strong conviction that where the historic tendencies have been of long duration— wrong though some of them may be— it is a mistake to deal with them all at once.
I suspect that Mrs. Castle's In Place of Strife and the Act which was passed under Mr. Heath's Government came to grief because they attempted to do too much too soon. I do not say I feel— far from it— that the present Bill removes all removable imperfections. I do not argue that the passage of this Bill will be the end of the road, but I do commend its method. The high spots of this Bill are threefold: limitation of the power of the closed shop and the coercive recruitment of non-members by unions; limitation of the scope of lawful picketing, and the financing of secret ballots.
May I conclude merely by indicating my initial attitude to these problems? I confess that I view the closed shop with suspicion. I do not think it fits well with the habits of a truly free society, as has been forcefully argued by the noble Viscount, Lord De L'Isle. Nevertheless, as the noble Lord, Lord Rochester, said, it exists and some employers prefer it. How much better, therefore, at this stage to deal with its abuses rather than its abolition and to ease the criteria under which it is lawful to disagree!
I reflect on possible events in my own sphere of action over many years. If there were a closed shop in the Union of University Teachers— which, thank Heaven! there is not— and if I had been a member I wonder whether I should have got out by pleading severe religious convictions which prevented me from accepting a proposal (which was actually
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made but which fortunately never commanded majority support) to make unsatisfied pay claims a pretext for refusing to mark the papers of students. It is surely just as well first to make sure that disagreements with the policy of a closed shop do not necessarily involve the dismissal of an objector or, if he is dismissed, preclude adequate compensation.
Similarly with picketing: I confess I do not like picketing. The events of the winter before last have created a certain prejudice in my mind, but I certainly do not see any libertarian argument against peacefully conveying to one's fellows on the job the nature of a dispute with an employer. I do see at the same time that the liberty of secondary picketing, however it may be defended, is liable to grave abuse and therefore I welcome the opportunity of improving the law in this respect. From a perusal of debates in the other place, I infer that the present Bill is not yet immune from criticism in this respect, and I foresee much talk in Committee on this subject.
As for the financing of secret ballots, I confess I regard this as something of a bonus for the unions. I believe that a great many practise secret ballots already without subsidy, and it is certainly not compulsory. I do no propose to vote against it, and I very much hope that it does some good, although it does not evoke in my breast any acute enthusiasm.
The question of the relevance of this Bill was raised by the noble Lord, Lord McCarthy, and has been raised by several noble Lords on the Opposition Benches since then. The noble Lord, Lord McCarthy, pointed to the fact that there are all sorts of troubles confronting this economy which do not necessarily spring from the state of the law. Do I not know it! Have I not in this House protested against inflation both on the part of Conservative Governments and on the part of Labour Governments? There are many other evils which do not arise from the state of the law. This is where I differ from those who have spoken in Lord McCarthy's strain, because I believe the majority of the public believe that there are evils in the present state of the law, and I further believe that the Government are well advised to attempt to cope with them.
6.8 p.m.
Earl DE LA WARR: My Lords, my noble friend the Minister of State has given us a brilliant account of the main features of this highly sensitive and important Bill— certainly one of the most important Bills of the Session. The Bill is designed, as he said, to make a start in dealing with the present imbalance that exists in favour of organised labour at the expense of the employer. This imbalance has quite clearly gone much too far, particularly during the last five years when the last Government were in power. The Bill starts to tackle this problem and does so effectively, in my opinion, but it does it selectively and with a noticeable moderation.
I should like to make three general points first, in order to underline this point of view. First, it does nothing to tamper with existing trades union immunities. Clause 14 of the Trade Union and Labour Relations Act 1974 is intact. I believe this is absolutely right. We must deal properly with the fundamental question of bringing the trades unions back within the civil law; but there is no way that this could have been part of a Bill presented to Parliament only seven months after this Government came to power. The matter is far too complex and far too deep-seated. Instead, union immunities are to be the subject of a Green Paper which I hope will be issued before many months are out. I would ask your Lordships to remember that this was fore shadowed as long ago as last October, in the first consultative document put out by the Secretary of of State.
Secondly, the Bill is highly flexible. It leaves the Secretary of State with the opportunity to deal with matters as they arise by codes of practice, and these can be amended at any time. Each one of them requires prior consultation with ACAS and then an Affirmative Resolution by both Houses. So the influence of Parliament will be many times greater as a result, because it will have the power to approve, veto or amend whatever the Secretary of State proposes. Thirdly, the strength of the Bill lies in its attention to the freedom of the individual, whether he be the worker or the manager. They must, both of them, have more power to protect themselves against various forms of industrial abuse.
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Turning to the detail of the Bill, I, like other noble Lords, want to confine myself to dealing only with the most important clauses— the closed shop, secret ballots and secondary interference in industrial disputes. In my opinion, closed shops are monstrous intrusions into personal liberty and a contravention of all the principles of natural justice. At least, my noble friend Lord De L'Isle and I agree with each other up to that point, although I do not think that our agreement goes very much further.
This Bill goes a long way to redressing the balance in favour of the individual worker, by protecting him from unreasonable expulsion from his union. If, as a result of losing his union card, he loses his job, the Bill will give him the right to compensation for unfair dismissal— something that was specifically denied to him by the last Government. The employer, if then sued by his employee for unfair dismissal, will in future, if he wishes, be able to enjoin the union in the case and let the court or tribunal divide any damages that may be awarded between the union and the employer— something that is exactly as it should be. Remember, my Lords, that this is a closed shop as a result of an agreement between the two parties, and it is the two parties who are at fault. Further— and this has been referred to more than once— the fact that a man now has only to show "conscience or other deeply held belief", is much fairer than the definition in the 1974 Act of "religious belief" only.
The Bill provides that there will be no new closed shops without a secret ballot and a very large majority in favour, so I doubt very much whether there will be any new closed shops. But how long will it take for the existing ones to wither, because this, in my opinion, is something that must happen. I think that, in due course, existing closed shop agreements will need to be balloted, too, but I would leave this alone for now. It would be an immense task and does not, in my opinion, at this time satisfy the test of practicality.
As to secret ballots, I have no doubt that a large majority of people in this country believe them to be essential. The Bill, as it stands, does no more than give the Secretary of State, through the certification officer, power to reimburse

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costs and it gives no clue as to how the machinery will work and in what circumstances. Once again, I believe that this is exactly right. The balloting question is par excellence a case for maximum flexibility by the use of codes of practice. If we were to put any sort of structure into the Bill now, I believe that we would be almost certain to get it wrong. But I know that everybody is looking forward to hearing, before too long, what it is that the Secretary of State intends.
I now want to talk about secondary interference with industrial disputes. The last Government made all secondary action, including picketing, legal; that is, immune from civil action. We bitterly opposed this immunity at the time and, my goodness!, how right we were. The events of the last two winters surely proved that beyond doubt. Secondary picketing is a social evil that we cannot allow to continue, at least on anything like the scale that we have seen in the last few years. The Bill provides that from now on an employer will have the right to ask for injunctions against any pickets who are not from his own workforce.
Of course, there are complexities here. Of course, there will be difficulties. There will, on occasions, be large numbers to contend with. There will be the problem of the revolving picket— here today and gone tomorrow. But, once again, this is a question of timing, a question of trial and error and of finding out how far we have to go to put things to rights. Once it is generally realised that secondary picketing is illegal and actionable, I believe that it will dramatically diminish and that is why I support the line that is taken in the clause.
As to secondary action rather than secondary picketing, which can really be defined as secondary blacking, it is not overtly so unpleasant to the public, but its economic effects can be very serious and, on many occasions, far worse. In any case, the recent judgments in the House of Lords made it absolutely necessary that the Government should legislate. My noble friend has made clear why a complete ban on all secondary action could not be made to stick, and I am totally persuaded by his arguments. So I believe that the Government have done the right thing in restricting immunity to as few people as is practically possible.
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Certainly, immunity will not exist if secondary action goes beyond direct suppliers and customers of the firm in which the dispute exists. Even then it would have to be shown, if it came to an action for tort, that the secondary action was likely to achieve only its declared purpose— namely, to black the goods of the company in dispute— and did not have some other extraneous reason. Nevertheless, it has to be admitted that this is a difficult and complex clause and is likely to need interpretation, and possibly much interpretation, in the courts. But, like secondary picketing, once that process begins and it becomes clear what is illegal, then I believe that the provisions of the clause will be very effective and that we shall see a big fall in secondary action.
Despite all these arguments, there are union officials and, if I may say so, their political allies who say that the whole Bill is unnecessary and is unfair to the trade union movement and to the workforce alike. I will not waste noble Lords' time in contradicting them. This Government were elected by an overwhelming majority to redress some of the abysmal injustices of their predecessors' industrial legislation. A Bill was needed and a Bill is before us today.
Equally, there has been criticism that the Bill has come too late and done too little. I entirely disagree. The Bill reflects very clearly my noble friend the Secretary of State's wise understanding of the practical limits of legislation. We cannot legislate to change attitudes. Let us be quite clear about that. It is only when circumstances cause more realistic attitudes to prevail that we shall start once again to make industrial progress.
The results of the Leyland ballot and the massive rejection of last week's "Day of Action" certainly give me more than a glimmer of hope that good sense may be on the way back. But despite that, let us make no mistake about it: we are going to have a hard winter on the wages front and we are going to have to look for steadfastness on the part of the employers, both Government and private enterprise alike, and very good sense on the part of the trade unions. What folly if we were to wreck our chances by an act which bore all the signs of confrontation. For this reason, I judge

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the Bill to be a masterpiece of good timing and good sense. And if I may end on a personal note, with all my heart I congratulate my right honourable friend the Secretary of State for the militancy of his moderation.
Lord McCARTHY: My Lords, before the noble Earl sits down, I wonder whether he could answer this question. I am trying to follow his argument. If he accepts that secondary picketing and secondary action is unlawful but that it existed, for example, at the time of the miners' strike in 1974, and if he accepts that the 1971 Act did not prevent it, why should this Act prevent it in the hard winter which the noble Earl says is coming?
Earl DE LA WARR: My Lords, I am afraid that I was taken unaware by that question. I wonder whether the noble Lord would be good enough to repeat it.
Lord MCCARTHY: My Lords, the point I am trying to make is this. In 1974— indeed, from 1972 to 1974— secondary picketing and secondary action was unlawful; yet we had it, most notably in 1974 during the miners' strike. The 1971 Act did not prevent it. Why should this Act prevent it in the hard winter that the noble Earl says is coming?
Earl DE LA WARR: My Lords, I have not said that it will prevent it. I have said that in due course, when people realise that it is actionable and illegal, it will have a dramatic effect. We heard from the noble Lord a great deal of history about the 1971 Act. We have heard by implication that two Acts have produced some very unforeseen circumstances. I cannot foresee what is going to happen, but I am perhaps being more optimistic than the noble Lord, Lord McCarthy, when I say that I believe that the mood of the country is such that now this sort of legislation will bite.
6.24 p.m.
Lord KALDOR: My Lords, I think that the Bill before us needs to be examined from two different angles. The first— and it is one upon which the debate so far has largely concentrated— is whether it is likely to make a positive and a beneficial contribution to our industrial relations.
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The second is whether it is likely to make an effective contribution to the Government's chosen short- and medium-term strategy.
As most of my remarks will be critical of both aspects, I think that I ought to make it clear at the outset that I regard the problem of industrial relations as one of the most serious and deep-seated in our society. At a time when class conflict and class antagonism have abated in most other Western countries, the feeling of alienation among our working class and their general sense of frustration seem to get worse. This makes them more conservative— with a small "c"— and more resistant to the introduction of changes in techniques, or of changes in working practices, and at the same time increasingly indifferent to the fate of the particular enterprises which employ them, an indifference which stems from the lack of any opportunity for participation in decisionmaking.
We have a complex and archaic structure of trade unions which is the result of a long-drawn-out historical development and a long series of struggles, proceeding in the face of hostility, and gradually acquiring freedoms, not in the form of positive rights associated with specific duties but in the form of immunities, of acts which under the common law are regarded as illegal and which are still so regarded by the courts. It is a peculiarity of our labour legislation that acts in restraint of trade and combinations in restraint of trade, which under old English law are regarded as criminal conspiracy, and are also actionable for damages under civil law, nevertheless give workers immunity if they commit these illegal acts in furtherance of or in contemplation of trade disputes.
These rights were acquired largely under two of our great political figures. It was Disraeli who gave them immunity from criminal liability and it was Campbell-Bannerman who in 1906 gave them immunity from civil liability. But precisely because they are given in the form of immunity from prosecution while still retaining their illegal character, they are subject to a constant process of erosion by the judicial process. I do not wish to go into that, but it places a fundamental uncertainty upon the whole question of trade union rights which I am sure my

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noble friend Lord Wedderburn of Charlton will, in his closing speech tonight, explain far better than I can.
I have little doubt that our inherited structure of union organisation and the "immunity" form of our labour legislation is a serious handicap to the workings of our whole economy. If we could start afresh, if we could be like the Germans who started with a clean sheet after their old union structure was completely smashed up under the Nazi dictatorship, I am sure that we could create a degree of social consensus and cohesion which exists in Germany but which is unattainable here.
I agree with a great deal of what the noble Lord, Lord Harris of High Cross, said about the German system of rights and duties, but I noticed that he did not remark upon the second leg, so to speak, of that system which consists of their system of social partnership and participation. Nor did I hear him mention that he personally thoroughly approved of the recommendations of the Bullock Report which recommended such a system for this country, which is an essential element of changing over to that system. All of us who observed the events of the early months of 1979 which have already been referred to by several speakers, when relatively small numbers of workers performing essential tasks went on strike in apparent total disregard of the harm which they caused to innocent individuals, and indeed to the wider interests of the working class of Britain— that these wider interests were harmed is best shown by the fact that noble Lords opposite would not be where they are now but for the events which occurred in the winter of 1979— could not be left in any doubt of the need for a basic reform of our labour organisation and our system of wage bargaining.
But it is one thing to state a problem; it is an entirely different thing to find the right solution. The Conservative Party, not so very early but some time late in the 1960s, convinced themselves that the solution lies in the curtailment of the existing immunities of the unions and in the curtailment of the umbrella of protection which they had under the 1906 Act. The first such attempt, the Industrial Relations Act 1971, soon proved
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unenforceable, and I think everyone would agree that it was put on the shelf de facto long before it was formally withdrawn.
By comparison the present Bill is a modest affair, but it is much less modest than the original proposals made in the Green Paper, and it has been considerably widened in scope in the course of its passage through Parliament, particularly since the insertion of a new Clause 16 at the Report stage in another place. Now we are told that this Bill is only the first in a series, and that there will be further Bills which will bring back other important features of the 1971 Act concerning the collective liability of unions for the actions of their members.
Earl DE LA WARR: My Lords, if I may interrupt the noble Lord, would he accept it if I were to tell him that in another place when the Secretary of State was asked during the course of the debate on Report, whether he would give an undertaking that the Green Paper would be followed by further legislation, he specifically declined to do so?
Lord KALDOR: My Lords, I am grateful for that assurance. The present Bill contains some good features and I think the noble Earl, Lord Gowrie, gave an admirable exposition in their favour. He made out a far better case than I thought it was possible to do and showed that there are features of the Bill which I personally would support if they could command a consensus and if they were enforceable. Those two things are largely coterminous, and if I do not support them it is for these two reasons. But apart from these the Bill contains many features which would cause resentment and annoyance and appear to have no justification other than a kind of nastiness.
To give one example, reversing the onus of proof in cases of unfair dismissal from the employer to the employee means that the employee would have to prove that he was unfairly dismissed instead of leaving it to the employer to make out a case that the dismissal was reasonable in the light of the facts. It is obvious that it is much easier for the employer to make out this case than for the employee to prove the opposite, so what is the point of it? What is the point of curtailing

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the rights of unfair dismissal and maternity benefits in the case of small firms when we know very well that workers need far more protection in the case of small employers than in the case of large employers? It is not Marks and Spencer and ICI and other large firms of that kind who are liable to welsh on their obligations as regards maternity benefits.
The Earl of GOWRIE: My Lords, I do not wish to interrupt the noble Lord except on a point of information. I think there has been some misunderstanding about the maternity clause. The reinstatement change is only for very small firms of three or four employees, and the onus is entirely on the employer to show that it is not reasonable for him to give that job back to the lady in question. Therefore, it must be clear that the onus is entirely on the employer.
Lord KALDOR: My Lords, I am grateful to the noble Earl for that information. But the very fact that he gave it shows that there was some point in what I said. However, I think more important aspects are the restrictions placed on picketing and secondary actions which are so strongly welcomed by several noble Lords on the other side of the House, and which we think are likely to prove a boon to lawyers because they open wide avenues to cascades of litigation. The wording and complexity of Clauses 15 and 16 provide a paradise for lawyers, in interlocutory proceedings to obtain injunctions, of which we have seen quite a number recently, some of which were upheld by the House of Lords although some were not. Such actions will be even more numerous as a result of these restrictions placed on secondary action and on "offside picketing" (if I may use that expression) which, as my noble friend Lord McCarthy remarked although illegal were not enforceable under the 1971 Act while that Act was in force.
If there are a large number of such injunctions the law faces an awful dilemma. These injunctions are frequently disobeyed by the workers or by the trade union officials, which makes the union official or the non-compliant employee open to criminal prosecution for contempt of court. But if the latter stage is not proceeded with, as was the case with an official of NATSOPA recently, then the
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only effect of these injunctions is to bring into disrepute public respect for the High Court. If, on the other hand, it is proceeded with, then in a large number of cases it is likely to cause sharp confrontation and fierce resistance, such as occurred when some dockers were gaoled under the 1971 Act.
In this connection I should like to draw the attention of noble Lords to a vivid and admirable account of the difficulties and absurdities which arise when workers and union officials are prosecuted for strike action. They have only to read the clear and concise evidence— it is only a page and a half, and it can be read in five minutes— given to the Donovan Commission by Sir Harold Emmerson, the war-time Permanent Secretary to the Ministry of Labour, and which related to his experience of an illegal strike during the last War in 1941, when the Kent miners went on strike at a time when such strikes were illegal tinder the emergency regulations.
The Kent miners were prosecuted, the union officials were given prison sentences and 1, 000 of the 4, 000 miners on strike were fined. The reason for the limitation to 1, 000 was that the resources of the law were not able to cope with more. Within a very few days the Secretary for Mines himself, the head of the Mines Department, went down to the prison in person in order to secure an agreement with the union official who was in prison so as to allow the mines to start operating again and work to be resumed, which required his consent. And here I quote from Sir Harold Emmerson:
" Apart from some face-saving words it gave the men what they wanted. Then the Secretary for Mines took a deputation to the Home Secretary to secure the immediate release of the prisoners "
who were condemned for three months or one month.
" After their release the mines were reopened and in the first week the normal output of coal nearly trebled ".
So the nation lost very little coal. The court was in addition advised from above by some higher legal personality not to enforce the fines, which were paid by only nine workers out of one thousand. For the rest, those who did not pay never had to pay. So everything was fine and rosy. Sir Harold Emmerson goes on to say that in the Ministry of Labour

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there was gloom and apprehension, if not despondency, as the remissions which were necessary to start the Kent mines again, essential from the point of view of the war, were bound to weaken the authority of the law. This was the difficulty with the 1971 legislation and will be the difficulty with the present Bill.
Is it possible to alter the balance of power between capital and labour by legislative action within the parameters of a democratic society? Legislation cannot be enforced by the courts if it does not carry the consent, explicit or tacit, of a large majority of the population. The ultimate sanction of the law is the consent of those who are governed by law. If labour has become too powerful in this country through organisation, that power cannot be reduced or eliminated by legislation.
There is no way of restoring the situation to what it was before trade unions were first established. We must go forward and not back. Going forward means seeking fundamental reforms through social partnership and co-operation, not through legislation and confrontation. Judging from debates in another place, I think that in the matter of trade union rights the party of the noble Lords opposite are like the Bourbons: they have learned nothing and forgotten nothing.
The question I should like now briefly to examine is how it will help the Government's short- and medium-term strategy. I set out in an earlier debate in this House my reasons for thinking that the Government's strategy can only succeed if what Sir John Hicks calls "real wage resistance" is broken; that is to say, if you can prevent the workers from obtaining or commanding rises in money wages that offset the rises in prices. In his concluding speech in the debate on 16th April, the noble Viscount, Lord Trenchard, indignantly denied that the Government had any intention of impairing the workers' ability to resist a cut in real wages. Yet last Friday, when the monthly figures of retail prices revealed that inflation is now running at 21.8 per cent. the Chancellor of the Exchequer, in an interview on the radio which I happened to listen to that afternoon, gave the workers' insistence on seeking full compensation for price increases in wage increases as the reason
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for the magnitude and the persistence of inflation. He said that the rise in the price of oil made it necessary that real wages be reduced— that is, that the standard of living of the working class be reduced— and that other industrial countries had recognised this and that in consequence their wage increases were several per cent. lower— I think he mentioned 3 or 4 per cent. lower— than price increases, which is not the case with us.
There were several things wrong with that statement. In the first place, Sir Geoffrey Howe forgot that we are producers of oil and not only consumers. Therefore, our real income per head, unlike those of Germany, France, Italy and others, does not suffer a diminution because the price of oil is rising. In fact when we reach the stage, after next year, where we have a net surplus of oil and are net exporters of oil, our real income per head should increase and not fall, as a result of every increase in the price of oil.
But the second and more curious error was that he was wrong on the facts concerning what happens in other countries. I have not had much time since last Friday to do extensive research, but for the six countries, other than the UK, for which figures are given in the National Institute Economic Review, the facts are that for the latest 12-month period— that is now up to the last quarter of 1979 as against the last quarter of 1978— the rise in earnings exceeded the rise in prices in the majority of countries; it exceeded it by 4½ per cent. in Italy, by 2½ per cent. in France, by 1½ per cent. in Japan, and it was virtually identical in the case of Germany and Canada. The one country for which Sir Geoffrey Howe's statement was true, was the United States, where earnings rose over the 12-month period by 8½ per cent., while prices rose by 13 per cent. But that is the one country for which his argument about oil was inapplicable, since, as everybody knows, the United States follows a policy of not allowing the rise in world oil prices to be reflected in domestic prices.
And what happened in our case? At the beginning earnings were rising faster than prices, but the rise in prices since last November has been much faster than the rise in earnings. The rise in earnings hovered around 19 to 20 per cent.— one month 19½ per cent., then nearly

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20 per cent., between November and March, the latest month for which figures are available— whereas the rate of increase in retail prices went up from 17 per cent. in November to nearly 22 per cent. And most of this increase is largely attributable to acts of government, to taxes, charges, interest rates and so on, rather than increases in costs, either of labour or fuel, or material costs. But the effects of these price rises are by no means fully reflected yet in earnings. I expect that from now until the end of the present wage round the monthly figure for earnings rises will increase, so that by July and August you will find that the rise in earnings will be at least around 22 per cent., which is 6 per cent. more than it was after the complete breakdown of incomes policy and everything that followed from it at the end of the previous round last July/August. That July/August 1979 figure was only 2 per cent. higher than the corresponding figure for the previous wage round which ended in July/August 1978, despite the complete breakdown of incomes policy.
Whether the Government deliberately aim at reducing real wages or not, at least they now recognise that, on the economic strategy actually pursued, with falling output, falling production and falling employment, their policy objective of reducing inflation is quite unattainable without it. No amount of interest increases or fiddling with money figures or interest rates can possibly cause the rate of inflation to be reduced, let alone eliminated, unless real wages fall or unless they make a U-turn, adopt a different strategy and follow a policy of expansion, of increasing production and employment, and thereby increase the real product of the country so that real consumption can increase as well as real investment.
Whether their present Employment Bill will make a contribution to the rather miserable strategy, the monetary strategy, which is now followed remains to be seen. But, I doubt whether, in view of the modesty of its provisions and the fact that such provisions are not instantly obeyed— but rather, if past experience is any guide are ignored— it can be significant within the time-span of the medium-term strategy.
6.52 p.m.
Lord CARR of HADLEY: My Lords,
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as the Minister responsible for the introduction of the Industrial Relations Act 10 years ago, I am sure that your Lordships will understand that I have been under some temptation this afternoon to defend that Bill against some of the myths that have been built up around it. However, let me hasten to assure your Lordships that I intend ruthlessly to resist that temptation, great though it may be and particularly strong as was the temptation offered to me by the noble Lord, Lord Kaldor, at one point of his speech which we have just heard— another occasion, perhaps, but not today.
I wish strongly to support the Second Reading of the Bill before us today. I have my reservations about it, or some parts of it. I certainly believe that further instalments of legislation will be needed. However, neither of those considerations deflect me from the clear support which I wish to give to the Bill, and in particular my support for its step by step approach. Perhaps I may say to the noble Lord, Lord Robbins, that, with the wisdom of hindsight, I would perhaps agree that one— just one— of the mistakes which I made when I was the Secretary of State responsible, and perhaps which my predecessor Mrs. Barbara Castle also made, was to try to do too much at one go. There were reasons for that too, but I shall also resist the temptation to go into them tonight. However, I most strongly support the step by step approach at present.
It is also worth saying, and important to say, that I believe that it is incontrovertible that legislative action in this field has the overwhelming support of the majority of people in this country, and that includes the support of the majority of trade union members. I can see the noble Lord, Lord Allen of Fallowfield, whose experience, of course, we all know and respect in this area, shaking his head. With great respect I suggest to him that, like all leaders— whether they be industrial managers or trade union leaders— one can sometimes easily convince oneself that the view of the leadership is, in fact, the view of the majority of those whom one is leading, and that is not always right. For years now every conceivable inquiry into public opinion has shown that the majority of rank-and-file trade unionists do not agree with their leadership in certain major

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matters regarding the role of law in the area of industrial relations.
I think that if we are to judge this Bill we must put it in the context of our industrial relations policy since the war. Historically, we in Britain have had a good system of industrial relations and collective bargaining. But, in the 1950s it began to deteriorate in its performance. That deterioration became rapidly more acute during the 1960s— indeed, so much so that by the middle 1960s a Labour Government felt that it was necessary and advisable at least to appoint a Royal Commission to look into this whole area. Hence, the Donovan Report about which, perhaps, we do not talk as much as we ought, even though I certainly did not agree, by any means, with all that it said. Hence, too, that same Labour Government felt compelled to introduce their proposals contained in the famous or notorious— according to how one looks at it— White Paper called In Place of Strife, and to say to the country that the enactment of those proposals was essential in the national interest. The deterioration which caused a Labour Government to do that also caused my party, when in Opposition, to conduct its own inquiry and to produce the report, Fair Deal at Work, and then, when we came to power in 1970, to enact our Industrial Relations Act.
Neither the Labour nor the Conservative Governments took those steps lightly, or for fun, or for any doctrinaire reasons. Both parties— and both Governments of both parties in the 20 years previous— had resisted the use of law in industrial relations, and were only driven to believe in its necessity because of the serious and accelerated deterioration in the system of industrial relations which had previously served us so well— at least, so well comparatively with the systems in use in other countries.
I must, in passing, make a brief comment on the potted version of recent history of the noble Lord, Lord McCarthy. If the Industrial Relations Act did so much harm, why was it that the number of strikes fell so dramatically in 1971 and 1972 compared with the years previously? I shall not argue that it was due to the Industrial Relations Act, but such evidence as there is leads one to conclude that the
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strike record was not aggravated by the Industrial Relations Act.
Lord MCCARTHY: My Lords, I was arguing that it fell as a result of Donovan, and that it fell even sharper in 1975 and 1976 under a Labour Government.
Lord CARR of HADLEY: My Lords, I do not want to go into a long argument about the history, but I have all the strike figures here in front of me. I should like to ask the noble Lord why, despite what he has just said, after that very brief, apparent improvement, after the Labour Government came to power and repealed the Industrial Relations Act, the trend of deterioration in our industrial relations, including our strike record, set in again even more acutely, and with an even greater accelerating trend than before?— because that is what it did.
May I also draw the noble Lord's attention to the comparison which he made between the late 1970s and the late 1960s. He said that by the late 1970s the number of strikes— and I was glad to hear him give importance to the number of strikes, because it is a far better measure than man hours lost of the degree of ferment in industrial relations— had fallen to the relatively low number of 2, 000 or thereabouts. I must remind him that that was about the level it had been in 1968 which was judged so serious in the national interest by the then Labour Government that they felt compelled to propose legislation as detailed in In Place of Strife. So, we only came back to where we were 10 years previously, which was thought to be so serious.
He also said that there had been a change because far fewer of the strikes were unofficial and far more were official. But, with respect, if he looks at the record he will find that he is wrong. In both years, of course, the percentage of official strikes was very small, something like 3 per cent. to 4 per cent. at the most, but the percentage of strikes which were official was actually higher in 1968 than in 1978. If anyone believes that we have seen this transfer from unofficial to official action then really he is not studying the figures in the Department of Employment Gazette.
Lord MCCARTHY: My Lords, perhaps the noble Lord will give way. I do not

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want to lecture the House at this stage, but three points could be made very quickly in answer to the questions he has asked me. First, I think that he is using gross figures. The figures that I use when talking about strike numbers are almost always those which others use; that is to say, figures net of mining. If we take out figures for mining strikes we see that I am absolutely right; that right from the middle 1950s— even from the beginning of the 1950s— until the middle of the 1970s strikes rose about 25 per cent. to 30 per cent. a year net of mining. Mining is a special case.
Secondly, I never said that we had a switch from official to unofficial strikes. I said that the nature of our strike problem at the moment is the few large concentrations of strikes, which for the most part are official and which, for the most part, take place in the public sector. That is the issue of working days lost. Our problem now is working days lost. That is the economic cost of strikes; not strike number, which is to do with fragmentary small strikes which, for the most part, are unofficial.
Lord CARR of HADLEY: My Lords, this is all very interesting. I am at least glad that the noble Lord now wants me to take figures net of mining. I remember that when I used to do that in the late 1960s I was severely reprimanded for so doing— perhaps not by the noble Lord, Lord McCarthy, himself, but by most of those who support him on that side of the House and in another place.
However, it is the present and the future that matter. The fact is that our present system and structure of collective bargaining, which used to work well— certainly as well, if not better, than the systems of other industrial countries— is no longer working well or anything like as well as the systems in most other industrial countries. It has not succeeded in adapting itself to the enormous industrial and social changes of the last few decades.
Therefore, in important sectors of British employment— not, of course, in all— our collective bargaining has become chaotic in its results and in the atmosphere which it creates, or at least fails to solve. It is surely a vital national interest that we should develop a more orderly and stable system of collective bargaining in this
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country. We need to establish and to practice a new and more relevant set of rules governing the conduct of industrial relations, equivalent to the sets of rules of the type that they have in every other industrial country except ours.
The question is whether these rules should be established by law or by voluntary self-regulation. In other countries they are almost wholly, but not completely, established by law and supported by the law. In this country we have had the opposite tradition. In the British context I want to make it quite clear that I am in favour of doing as much as possible by voluntary self- regulation. We should legislate, not with eagerness, but with reluctance, and only as and when it is clearly necessary. Hence my support for the step-by-step approach, and hence also my support for the role given by this Bill to codes of practice, which I believe are potentially of the greatest importance.
However, I suggest that in the light of experience of recent years, no Government could refrain from some new legislation. My right honourable friend the Secretary of State and the present Government could not have done less than they are doing in this Bill. Many— probably the great majority (I am not just referring to the Government's supporters in Parliament but to the great majority in the whole country) — feel that the Government should, in fact, have done more. I personally believe that they are right to err on the side of doing too little at this stage, rather than run the risk of doing too much, But I really do not believe that they could have done less.
For example, after the experience of the last few years no Government could have failed to take some action about picketing. What we have seen in this country, from the days of the first miners' strike in 1971–72— repeated, not on such a massive scale, but in various important instances afterwards— is a total abuse of anything that trade unionists used to think of as picketing. It cannot be allowed to continue without the Government trying to protect the country from such abuse. Whether or not the measures in the Bill are exactly right, can, of course, be proved only by experience. For myself, I am doubtful whether my right honourable friend the present Secretary of State will

815
find himself justified in putting so much weight on responsibility of individuals, and enforcement if necessary against individuals, and no responsibility on unions. But, there again, only time will show.
Equally, no Government could have neglected to act against the present, almost unlimited, scope of immune secondary action, as practised in many recent strikes and as supported as being immune under the present law by the recent decisions made by the judicial Members of your Lordships' House. I believe that proposals in this Bill are the minimum that had to be taken to meet this immediate situation, pending a much fuller consideration of the extremely difficult and complicated matters tied up in this whole field of trade union immunities, about which a Green Paper is promised in the near future.
Again, no Government with any respect for individual liberty could have failed to act to provide some remedy against the potential and, indeed, on occasion actual tyrannies of the closed shop, as permitted by Acts passed by the last Labour Government. I greatly and warmly welcome and support the reliefs and remedies offered by this Bill. I am bound to say that, as one of the few things I did agree with in the speech of the noble Lord, Lord McCarthy, 1, personally, perhaps have a natural prejudice in favour of the proposals for dealing with this problem which were included in the Industrial Relations Act because I believe that they guaranteed unions the stability of representation which they require and protected union members from what I understand to be the offensiveness of the "free rider", while at the same time giving proper protection to individual members who did not, for whatever reason, wish to join a particular trade union. But although I would prefer that, I warmly welcome the reliefs and remedies offered in this Bill.
I move to the next major point in the Bill. In the light of recent experience and of all the pressure in recent years for more industrial democracy, no Government could have failed to act to promote the greater use of secret and postal ballots. To talk about industrial democracy and not to do something to increase the use of secret ballots in the industrial process, is
816
either idiocy or hypocrisy. Something had to be done in this field. My belief is that we shall have to go further than we go in this Bill; but this is a welcome first step, and, again, I think that it is better to start by doing too little rather than by attempting to do too much.
Here I strongly agree with the points made by my noble friend Lord Keith of Castleacre— whom I congratulate on his excellent maiden speech— and by one or two other noble Lords about the danger of legislating for compulsory ballots for strike action. In this country we do not believe in direct democracy; we believe in representative democracy. It would be a very dangerous mistake in principle to say that properly elected trade union leaders, acting within the rules of their unions, should not be free either to call a strike or to call off a strike without having a referendum of at least the members affected. I believe that we shall have to insist that where they do choose to consult their membership in that way, it must be done by secret ballot and can no longer be done by mass meetings and the raising of hands. I do not want to enforce a referendum every time, but it must either be done by proper leadership or, if they do wish to consult their membership, then I think that in due course we shall have to insist that it can be done only by secret ballot and not by the raising of hands at a mass meeting.
Lord KALDOR: My Lords, if the noble Lord will allow me, surely that was the case as regards the miners; their rules provided for secret ballots.
Lord CARR of HADLEY: My Lords, I agree. Let me be quite clear. Any person in your Lordships' House or anywhere else who imagines that ballots are always going to lead to there being no strikes needs to think again. That is not the point. The point is that where the membership is to be consulted they should be properly consulted. While I could perhaps criticise some aspects of the way in which the NUM conduct their ballots, I can only wish that all unions did the same when faced with that sort of situation.
I really believe that this Bill is a necessary, moderate step, and I hope that we shall proceed from here as much as possible

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by voluntary self-regulation and as little as possible by law. May I just say in conclusion how much I agreed with so much said by the noble Lord, Lord Rob- bins, about the principle of law in this field? The Opposition oppose this Bill at heart not because of the contents of this Bill but because of their belief that the law should not, indeed cannot, play an effective part in helping to improve industrial relations.
But if that is so, how do we explain the deterioration of our system before the Industrial Relations Act and since its repeal? How do we explain the experience of every other country? Of course I wish, like the noble Lord, Lord Kaldor— although not for the same reasons and not for the same cause— that we could have a chance to start from a new situation as West Germany did. But I cannot accept that because we were spared that, we must therefore do nothing and go on sliding down under our old system and must refrain from doing anything to change it.
Lord DAVIES of LEEK: My Lords, will the noble Lord give way for one moment?
Lord CARR of HADLEY: I really think I should not because owing to giving way I have already spoken for five minutes more than I meant to, and I am about to finish. The trade union leadership of this country, if they wish to maintain their present attitude on the acceptance of legal responsibility and liabilities, must answer some fundamental questions in a positive way. Why do they need these present unique immunities and privileges in order to do their job for their members? In other countries unions do not have them.
Lord DAVIES of LEEK: No.
Lord CARR of HADLEY: They do not.
Lord DAVIES of LEEK: Sweden.
Lord CARR of HADLEY: No, in Sweden they do not. They have certain important rights, and it is a basically different approach. If the trade union leadership of this country wish to carry the majority of the public with them, in a free country it is necessary for the trade unions like anybody else to either
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accept responsibilities which they have hitherto refused, or really explain to us in specific, concrete, positive terms why they need these immunities. Why do British trade unions alone need all these immunities at law to do their proper job for their members? And why, with all these immunities, are they less successful than the unions in most other countries in getting better pay and conditions, and a greater degree of participation for their members?
I do not believe that the law can on its own solve problems in industrial relations, but I believe it can help. I want, let me repeat as I close, as little law and as much voluntary self-regulation as we can manage, but I do not believe that we shall solve our industrial problems to a tolerable extent— we shall never solve them completely— until we have, by a gradual step by step process, provided ourselves with a framework of law based much more on a system of basic legal responsibilities and legal rights than the present wide and ill-defined system of legal immunities. In the end, freedom and good order exist under the law, or they do not exist at all.
Baroness GAITSKELL: My Lords, before the noble Lord sits down, may I ask him how can we possibly solve our industrial problems by continual and escalating unemployment?
Lord CARR of HADLEY: My Lords, I should like to embark on a debate on unemployment. I thought that the noble Lord, Lord Kaldor, was moving into that area of an economic debate, but I do not think that I had better follow him or the noble Baroness at the moment.
7.15 p.m.
Lord HANKEY: My Lords, I support this Bill so far as it goes. The objects it sets out to achieve are undoubtedly necessary, but that was obvious to everyone at the time of our general election in the spring of 1979, and personally I am deeply concerned that we should get this Bill only in May 1980. First of all, this Bill deals only with a small part of setting industrial relations on a proper and more equitable footing. There are many even more important aspects of these to be dealt with, and this is urgently needed if our inflation is to be corrected.

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I can quite see that the Secretary of State does not want to try to do everything at once. That is a view that he is entitled and eminently competent to hold and express. But if we are to tackle this problem like an artichoke, pulling the leaves off one by one and not forgetting to eat each of them with a little emollient oil, we must try to see that the process is kept moving all the time. It is only four years before the next general election. Both sides of industry need time and certainty before they can get production going and really begin to steer this country away from the rocks. We have all the genius and the manpower and most of the equipment to do that, but at present any selfish, stupid, or Marxist-oriented pressure group can stop it, and can do so legally. That is dangerous nonsense, and I shall now explain why.
Inflation is basically due to too much money chasing too few goods. The Government are entirely right to correct the damaging monetary policies we have been suffering from. But, if industry languishes or recedes as a result of these and other factors, then production will suffer and inflation will not get any better for a long time. The experience of OEEC and OECD was quite clear in that respect. I really fear for the future if we do not take this very seriously.
There are of course many factors which impede production in this country, but, in my view and experience, difficulties over industrial relations are among the most important. The Labour Party have generally, with all respect, been more interested in problems of distribution of wealth than of production, and their nationalisation policies have not encouraged investment such as we require. In gross fixed capital formation the United Kingdom only comes equal twentieth in OECD, although we do better if we look only at machinery and equipment.
But our general performance is absolutely abysmal. In gross domestic product per head we now come seventeenth in OECD. There are only six countries poorer in income per head than we are: Turkey, Greece, Ireland, Spain, Portugal and Italy coming up now only one length behind. In 1965 we came eighth, and I repeat that we are now seventeenth. In
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income per head all the Scandinavian and Benelux countries, the French and the Germans and even the Japanese, now earn 1½ times or more as much as we do. They all used to be far behind. Incidentally, the United States has fallen to eighth place in income per head, although of course its economy is far the largest in OECD and it still represents by itself nearly 25 per cent. of the world economy. All the same, that it has fallen to eighth place is perhaps a factor one should bear in mind.
I always mistrust detailed figures of economic aggregates, and OECD statistics are not totally comparable in any detail as between countries, but the downward trend of Britain is really undeniable and certain, and it is most dangerous for this country in the long run.
Our economy has been shockingly mishandled, if I say so with all respect, by our successive inflations, by the inevitable industrial unrest they have caused, and by the most incompetent way in which we have handled industrial relations in recent years. I agreed with a great deal of what the noble Lords, Lord McCarthy and Lord Carr of Hadley, said in that exchange of views across the Chamber, but neither of them spoke much of inflation. If we have inflation, we automatically have shop-floor workers, and for that matter the white-collar workers too, very worried as to how they are going to make the grade, and this gives great opportunities for people who wish to stimulate trouble.
In the last five years we have had strikes by the most devoted and courageous people, including firemen, nurses and hospital consultants. The electricians not only turned off the electricity in the hospitals when doctors were working, but in one big hospital in London they pulled out the fuses and took them away. It is incredible that they should have been so ruthless. The sewage workers north of Manchester allowed sewage to get into the drinking water, which had to be boiled. The miners, by secondary action, prevented the electricity board from using its own coal stocks on its own premises. The dustmen and other essential services also caused strikes, which anybody who walked round parts of London will remember with horror. The Government simply must be able to look after the public

821
interest better than that and I do not understand why the noble Lord, Lord McCarthy, seems to think that the Labour Party had such a good record on industrial relations. I would say they showed themselves singularly incompetent to look after them.
Of course we cannot make good industrial relations just by passing laws. But if we enact laws which allow anyone to create a dispute, stop production and break any contract anywhere without reasonable cause and with complete immunity, which is what we have now, then of course we hamstring production and damage the whole community. I recall the case of five Chilian aircraft engines. One trade union— I will not name it— did not like the fact that Señ or Allende had been got rid of in Chile, so they prevented those aircraft engines, which had been reconditioned by Rolls-Royce, from leaving the Glasgow area, and they were left out of doors for four years until they could be returned to Chile; but for some reason the Labour Party did not deal with the matter effectively. Can we expect to sell more aircraft engines or have more aircraft engines reconditioned in this country under those circumstances? Of course not. It is extremely damaging to trade, it hamstrings our employment and builds up every sort of ill-will and difficulty overseas.
I believe that a great deal of that was intended to be made possible when they drafted the law of 1974, which we here called the bully-boys' charter and which was passed over the dead body of this House. I believe that was certainly intended by Marxists in the Labour Party because, if they had not intended it, they could not have been so idiotic. I will give one instance. Look at the effects on the motor industry, where industrial relations have been among the worst in the country. In 1966 we produced 1–6 million cars in Britain. In 1972 it went up to 1–9 million. Since 1974 the figure has fallen steadily to just over 1 million and it may still be declining. But new registrations have gone up from 1 million in 1966 to 1–7 million in 1979; this vast difference is covered by imports. The figures I am quoting are from the Society of Motor Manufacturers.
Meanwhile, the French make three times as many cars as we do; the Germans
822
nearly four times; and the Japanese nearly six times as many. The Ford Capri and Granada are now made in Germany and the Cortina is partly made in Belgium. General Motors, Renault and the Japanese are moving in. Does that look as though we were moving forward to industrial success or that our industrial relations have been effectively handled? I do not think it is possible to say that, and nobody can be proud of that performance.
My Lords, there is no future for this country so long as any contract can be broken with complete impunity; so long as collective bargains can, without breaking the law, be made collective swindles; so long as we pay out public money to strikers and their families regardless of whether they have acted in breach of agreements; so long as some people can refuse one job after another and still get unemployment pay or supplementary benefit, payments which are clearly inflationary; or, for that matter, so long as we have an inflation rate which forces men and women to strike in order to keep their pay in line with the rise in prices because their works agreements take no account of such inflation.
This is a controversial remark and it is meant to be, because this situation really needs thought. I am not just saying that we should have index linking, because the Treasury will not have it under any circumstances, but something has to be done about this so long as we have inflation at more than about 4 per cent. if anyone hopes to see better industrial relations. The man on the shop floor cannot stand high inflation unless somebody does something about it for him.
The Bill before us takes only a healthy nibble at the reforms that are required. We owe it to our children to carry the process of reform forward as quickly as possible, and this job must be finished at the very latest one full year before the next election. It will take 10 years to restore this country to prosperity, so we really must get on with it. When I say that, I am speaking on the basis of much experience in OEEC and OECD. It is a long and difficult job and it will be painful.
To conclude, I firmly believe that we have a great common interest in setting this country back on the road to success.

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I believe the great majority of our countrymen see this already and that that was one reason for the change in Government which took place last year. I used to hope that sensible men and women of all parties would come to see this and co-operate; there are so many good and sensible people in the Labour Party and trade unions. But the Marxists, whose object really is to pull down the present structure, both of the state and of industry, have been allowed to get themselves on top. They are a suspect and dangerous Mafia and a poisonous element which vast numbers of our workers resent. I greatly hope that the provisions of the Bill will help true democratic elements in the trade unions to reassert themselves and I hope they will have the initiative and guts to do so. Of course, the Left Wing will not like it, but I hope that in the end the way may be cleared for the real co-operation in industry, and even in Parliament and Government, which our country so desperately needs on these issues which are vital to all of us.
7.29 p.m.
Lord HOWIE of TROON: My Lords, I join with those in all parts of the House who were impressed with the presentation by the noble Earl, Lord Gowrie, of the case for the Bill. He was able to show that the Bill was sensible in parts, and so indeed it is. He also demonstrated that there was a certain measure of public support for it, and no doubt that is true. But neither of those things means that the Bill will work if it becomes an Act. The noble Lord, Lord Carr of Hadley, showed that he was slightly irked by some of the unkind things that had been said about his measure, the 1971 Act, and I would say to him, and perhaps bring the smile back to his face, that some parts of that Act were sensible, too, and many parts of it were popular. Even so, I doubt that he would claim that that Act had worked spectacularly well. It may have worked a little, but it was not a wonder in all its works.
So, although this Bill might be sensible, and some of it might be popular, there is no certainty that it will work and produce the effect that the Government doubtless expect. Therefore the noble Earl and his colleagues should pay very close attention to the criticisms of the Bill
824
which came from the noble Lord, Lord McCarthy, on the Front Bench in front of me, and perhaps more especially to the criticisms from the very senior and experienced trade union leaders who spoke from the Back-Benches here where I am now standing. These men know a great deal about the effects of law on the curious negotiations and relationships which trade unionism involves. A great deal of attention should be paid to them.
The noble Earl spoke of the "day of action" last week as embarrassing, and I am perfectly sure that he was right. It was possibly more embarrassing for us on this side of the House than it was for noble Lords opposite, but "embarrassing" is, I believe, the correct word to be used to describe it. But what lesson should we take from that embarrassment? The lesson we should take is that it demonstrated that the union movement was weak rather than strong, as the noble Lord, Lord Harris of High Cross, described it earlier this afternoon. He feared the trade union movement as some great strong monolith which would gobble up everything.
But if your Lordships cast back your minds to the winter before last, I think you will agree that the trade union movement then was unable to control its members when they were militant; and last week the trade union movement, for all its rhetoric, was unable to make its members militant when they were quiescent. So perhaps the strength of the trade union movement lies not in the structure, but in what members want to do. When a trade unionist appears after a meeting and is asked what are his opinions, very often he will say— and he is often made fun of for this— "I have to go back and ask my members." Very often that seems to be almost a catch phrase, but he means it, because the strength of the movement lies in the members, not in the leadership and not in the structure.
That leads me to wonder whether the Government strategy here is not wrong. They are trying to curb trade unionism with a variety of legal devices. I am not one who believes that there is no place for law in industrial relations— I believe that there is— but perhaps the Government should be trying to encourage the strength of the centre of trade unionism to ensure that the TUC is a power in the economic

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activities of this country, to ensure that the unions are strongly led and that they follow their leaders.
I believe that the Bill is quite likely to have the reverse effect, and that rather than strengthen the leadership of the unions— which the Government ought to be doing— it is more likely to encourage militant leadership, to make moderate leaders militants overnight, as I think the noble Lord, Lord Allen of Fallowfield, said earlier today. That is what is wrong with the Bill. The point is not that parts of the Bill are sensible and popular, and that taken by themselves they may be desirable, but rather that taken as a strategy they are mistaken and are likely to lead us in the wrong direction.
I do not want to speak for too long this evening; we have had a long debate. I wish merely to touch on two specific aspects of the Bill. The first is the matter of secondary picketing and secondary action. I am not sure that the Government's aim here is the correct one. When the noble Lord, Lord Carr of Hadley, was dealing with secondary action, he was most passionate not when speaking about the immunities or the possible economic effects of secondary action, but rather when speaking about the behaviour of certain pickets; and of course that is the case whether the pickets are secondary pickets, primary pickets, or are pickets of any number whatsoever.
In so far as picketing is objectionable to the people, it is not because of the immunities, which people do not worry about; nor because there might be financial harm or economic difficulty caused to an employer at a place somewhat remote from the trade dispute. What annoys people about picketing is the behaviour of a small minority of pickets; and it annoys them rightly because much of that behaviour is inexcusable. I am sure that no one on these Benches would ever attempt to excuse that behaviour. However, the point is that the Bill does not improve that situation. It is not aimed at the behaviour which is inexcusable. In fact there is already a whole armoury of legal provisions with which to deal with the objectionable aspects of picketing. Obstruction is illegal. Insulting language is illegal. Intimidation is illegal. Coercion of people is illegal. All these things can be dealt with, and should be dealt
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with. Yet the Bill does nothing at all along those lines. It merely follows a kind of dogma, and it aims at a target which is an illusion.
There is nothing at all wrong in a working man endeavouring to persuade another working man to come to his aid in an industrial dispute, even if that means encouraging that other working man to come out on a sympathy strike, to black work, or to do anything of that kind. There is nothing wrong with that so long as the man confines himself to persuasion. After all, earlier today the Foreign Secretary from the Front Bench opposite was demonstrating that he is taking secondary action in sympathy with the Americans. If the Americans are able, and are permitted, to persuade Great Britain to come to their aid, there can be nothing wrong in a working man persuading another working man to come to his aid—
The Earl of GOWRIE: My Lords, will the noble Lord give way? Is it not also true that the House of Commons is preventing my noble friend from blacking the commercial contracts?
Lord HOWIE of TROON: That is a long way from where we are today, my Lords, and I am not so sure that we should be too strongly guided in all things by what the House of Commons does; some of the time perhaps.
There is only one other aspect of the Bill to which I want to turn. It concerns one minor part of the closed shop agreement. The impact of the closed shop on professional workers poses a curious dilemma. It poses for some of them— I have in mind in particular professional engineers; I should confess an interest here, being one myself— a conflict between duty to a trade union in an industrial dispute and the duty owed to a professional organisation which has a code of professional practice. The kind of code that I have in mind generally contains provisions that members of professional organisations shall take no action which is inimical to public health and public safety. A little while ago the noble Lord, Lord Hankey, spoke of certain disputes involving sewerage services and so on where exactly that dilemma can arise, and in fact has arisen in the past.

827
If our professional man is obliged under a closed shop agreement to join a union, he might find himself in a situation where he has to choose between obeying his union and breaching his professional code. That is a situation which this legislation can deal with, ought to deal with, but has not dealt with. Perhaps the Government will say that there is some protection to be derived from the Bill in Clause 6, which deals with unfair dismissal. The suggestion there is that the member of a profession or organisation might have an objection to joining a union on grounds other than the religious ones which are now allowable. But that does not really go far enough, because it is quite conceivable that a professional man might want to join his union and still be able to fulfil the obligations of his code of professional practice.
The other defence which the Government might offer is that Clause 3, which deals with the question of unfair dismissal and compensation, will provide some protection for a professional man who has been thrown out of a union for disobeying it. Because he disobeyed his union in order to obey a code of professional conduct and lost his job on account of that, he could then be compensated under the unfair dismissal arrangements. But that does not answer it either, because what the man does not want is compensation for a lost job. What he wants to do is to keep his job and carry out his professional activity without having to face this conflict. I think the Bill should contain some provision to the effect that a closed shop agreement must contain a clause such as the one I am about to read out:
" No member who is a member of a recognised profession or organisation which requires adherence to a code of professional conduct as a condition of membership or of professional standing shall be required to take action in the course of an industrial dispute which is in conflict with the requirements of such professional membership or its code of conduct ".
The idea underlying a clause of that nature is well understood by trade union leaders. During the inquiries of the Finniston Committee into engineering, a number of unions recruiting professional engineers and people of that sort were asked how they reacted to such a provision. Without fail, these leading unionists said that they accepted that there was a
828
conflict or a possible conflict of loyalty, and it was a conflict which they would wish their members to avoid and be protected from. There is no doubt at all that these assertions on the part of these trade union leaders were sincerely meant and would be carried out at the highest level of trade unionism; but it is not quite the same when you are dealing with trade unionism at a local level, where the same level of responsibility is not always found. While the leadership of unions might behave properly in relation to professional men, it might not always be the case at the local level. So I think provision should be made to support such assertions by strengthening the law.
My Lords, that is really all I want to say on this Bill. I repeat what I said at the beginning, that while individual parts of it are sensible— and I have been illuminating one where it might be even more sensible than it is— I have no doubt at all that the strategy of the Bill is mistaken, because it will lead to strengthening those characteristics of militancy which we find among some trade unionists at the expense of the characteristics of moderation which we hope to find, and in fact do find, widespread among the unions.
7.44 p.m.
Lord DAVIES of LEEK: My Lords, most of us have sat through a long debate. They have been very long speeches. I will endeavour to reduce mine to half the usual length of the speeches that we have had today. That is not meant as a derogatory comment at all. The fundamental importance of this Bill has been such that I should have liked two days for the Second Reading rather than just one. It is tempting to deal with the clauses individually— and I have listened with care to every speech; I may slip out to get something to eat fairly soon, but I have listened to every speech— and I have heard the comments on each clause. I shall try to resist the temptation of evaluating some of these clauses, but will touch upon the philosophical purposes of this Bill.
The first question to ask is this. We have had all these marvellous economic and social facts given to us about the condition of Britain, but there is one outstanding one at the present moment. We have the highest inflation in Europe and

829
the lowest pay. We will take that as the beginning factor. Will this Bill, when it becomes an Act of Parliament, improve the inflation situation or improve the pay of the people who are working? The answer to that is somewhere in the Kingdom of Heaven. The search for a failsafe system of society has been with this animal, man, since he left the treetops. We have not reached it even yet— and I have listened carefully, as I always do, to the noble Earl, Lord Gowrie, who presents his case brilliantly. No matter how bad the case is, his speech is always brilliant; and, as a consequence, we have to be very careful that we do not fall for the halo that shines around his black hair.
The oxygen of industrial happiness that keeps life going is a certain amount of security and full employment. Now this is why I interrupted the noble Lord, Lord Carr, who also always makes a constructive case. I was about to interrupt him, and now I will reduce the interruption by saying that the sad fact is that in Sweden, where we have had a social democratic system of Government pretty near to the socialists for 40 years, there has been a changeover to a bourgeois regime and suddenly, despite the prosperity and despite the happy flow, as those of us who have been to Sweden know, the whole thing has collapsed, or did.
The Earl of GOWRIE: They have settled now, my Lords.
Lord DAVIES of LEEK: I know, but I am hoping we will settle this Bill by throwing it out. The thing I am upset about is what this unhappy Bill will do. I was told by a noble Lord opposite that it is a masterpiece of timing— a masterpiece of timing when our unemployment graph is going up towards the top of Mount Everest and when our pay conditions are not meeting the height of inflation. I do not see this Bill being a soothing thing for industrial relations. I think this Bill exacerbates the present industrial situation.
I agree with the noble Lord, Lord Howie, though, that trade union leadership has the power to direct when it has been elected. I think the House has benefited today from two excellent speeches by two highly experienced trade union leaders, to whom it was a pleasure to listen; and, without expanding any more
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eulogies in that direction, I want to say that this is the mistake that the Conservative Government have made. You cannot pretend that the trade union movement, representing 12 million people, plus their families, which brings it up to 24 million people in Britain, can be neglected by Downing Street. Never mind the jokes about beer and sandwiches in the Sunday Express. The mentality of the trade union leaders of today is much higher than that of some of these journalists, who have made a hash of the newspaper world, anyway, with their strikes. I like them writing pontifical articles on Sundays or at weekends, knocking them out to fill a column, on how to run trade unions when they themselves have messed up the economy of the country with their own faults.
Consequently, I think that this Bill, if it becomes an Act, will increase the chances of unofficial strikes. I was glad that somebody mentioned Betteshanger. I I am old enough to remember the colliers down there. Some of my own people, miners and colliers, went down, some to cut coal and some to manage. But there are times— although we were at war— when, if the law is unfair, men will go to the greatest lengths to protest against it— and not just for gain but out of a sense of righteousness. Do not scoff at it! The Tolpuddle martyrs and others, with their self-righteousness, built up the movement and paid a heavy price for building it.
Mrs. Thatcher, the Prime Minister, has said (and the Employment Secretary of State has claimed) that this Bill, unlike the 1971 Industrial Relations Act, is not a measure designed to "clobber" the unions. That statement seems to be untrue; for not only do the changes proposed in the Bill represent a major attack on the rights of the trade unions, but the Bill is (and I note this in passing) only the first part of a wider programme of restrictive legislation forecast by Mrs. Thatcher. She has described it as a "start" and has already indicated that the Tories intend to introduce another Bill which will go even further in eroding the rights of the trade union movement. I had better say it now: If that is the intention, we will have more trouble on the industrial front than ever we have had in the past.

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I am not making up this unwise statement. The lady is clever; she is charming— but she lacks wisdom. I have said it many times, and I have said it several times in your Lordships' House, that when the offer was made to Solomon to grant him the wish that he desired, he did not ask for cleverness; he asked for wisdom. It might be worthwhile, in the euphoria of their victory, for noble Lords opposite to remember that Biblical tenet.
The Employment Bill itself is, therefore, more than a limited measure; and many of these limitations have been expanded upon and explained by previous speakers. Consequently, keeping my promise, I do not intend to go into them in depth. We will have the opportunity to do that in Committee.
I want to take up another issue, one which has not been mentioned. The Economist this month says that budgeting is already in train in Government for increasing by 11, 000 the staffs in the Department of Employment and in the Department of Health and Social Security. Just at the moment when they are going to make a cut in these specific departments, they are, despite this Bill, increasing by 11, 000 the staff in these two departments. Why?— because, as the unions have pointed out already, for every extra 200 people unemployed, two extra clerks are needed in the social services; one in the Employment Department and one in the Department of Health and Social Security. Here is the preparation for the unemployment ahead.
The irony of this is that in the efforts to bring trade unionism to heel, the Prime Minister is generating bitterness in the hitherto most docile unions, those of the Civil Service. Says the Economist:
" The total [now in the Civil Service] is down to 705, 000 from 732, 000 when the Tories took over one year ago; the chop was announced for a further 39, 000 last December: and to keep to the 1980–1981 Civil Service cash limits, a further 15, 000 jobs must go— most of them to be arrived at by a new option for early retirement at 55 … "
We have reached a pitch where, as Mr. Alfred Kalin, adviser to President Carter, says:
" Anybody who isn't a schizophrenic these days just isn't thinking clearly ".
This worries me very much. The Economist goes on:
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" The Government's broad target does not distinguish between industrial and non-industrial civil servants.
" It is the 548, 000 non-industrial civil servants who measure the girth of the bureaucracy rather than the 157, 000 industrial civil servants, three- quarters of whom work in the Government-owned dockyards and arms factories, much of whose production is exported ".
Here is my warning. Why have I quoted from the Economist? We are talking about arms, about selling arms abroad, about tanks and munitions. I listened to a debate in this House the other day and I got up exhausted and said, "I have been listening to pillars of clouds. We have not the manpower and it has not the peacefulness and industrial know-how at the moment." At this moment, when we need in the dockyards and in the munitions areas, first- class and peaceful conditions of work, we have Bills like this which come forward and irritate people in the key points of production.
The other point, the fall of 9, 000 industries in the first year was due more to the loss of orders from all over the world than to anything else. In this period when we are wanting maximum production, we irritate the industrial background with this kind of Bill. The Government are daily pounding the industrialist. He does not know where he stands. The CBI gave advice; and its advice (as the trade union leaders and others will tell you) was not 100 per cent. behind this Bill. The entrepreneurs in overseas services, in shipping and behind our hidden earnings, are worried about it as well as are the trade unions.
Last but not least, the women and the maternity rights which everybody has mentioned. I will not go into them in depth. We shall have the opportunity to do so in Committee. May I point out that there are now more women in paid employment than ever before in the United Kingdom. There are 9.1 million women workers compared with 13.1 million men. Women form 41 per cent. of the workforce. Although this growth is most marked in the United Kingdom, it is common to the entire industrialised Western nations. Not only are more families dependent on two wages but— and here is the point— more and more women have gained, and expect to retain, a degree of financial independence. Do noble

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Lords realise that the little cars, the holidays and the seaside resorts and—
Lord MOTTISTONE: My Lords, if I may intervene, is the noble Lord aware that the number of extra women in employment over the last seven years equals almost exactly the number of unemployed?
Lord DAVIES of LEEK: My Lords, I suffered from that because as a young man, my very highly intelligent mathematical wife was not allowed to work because she was a married woman; and this at the time when they wanted top-class mathematicians. That was pre-war. When war broke out, they wanted her to teach higher mathematics in the Royal Air Force. This is a short-sighted policy. I can remember the time when a poor retired policeman on about 28 shillings a week was called a rascal if after he had retired he stood outside a cinema for the pittance of a wage from the cinema proprietor. We must be careful about using that kind of argument. I did not expect a scion of private enterprise, with all the knowledge of the noble Lord opposite, to interrupt me about that and to say that women work because men are unemployed. He must not say things like that, because a lot of lumpen workers say that, too. As I have said, not only are more families dependent on two wages, but the increase in the number of employed women has not been matched by a decline in the traditional distinction between men's work and women's work. Women are concentrated in certain industries and particularly in low paid occupations. That is the point.
What am I driving at, my Lords? This clause is about small factories, where only six people work, not giving the same maternity allowances. Those women in the big concerns like ICI or working in shops like Marks and Spencer, have decent conditions. Are we wanting small businesses to return to the conditions of the 1900s? The sweat shops? Unless those little industries with only six or seven people in them are carefully watched women will be the sweated employment. That is what I am driving at. That is what will happen under this Bill. I have said enough, and I might as well, since everybody is looking tired despite the fact that I tried to wake them up, finish the speech.
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I hope that we will get a reasonable opportunity spanned out over a period of days to discuss this Bill in depth, clause by clause.
8.1 p.m.
Lord RENTON: My Lords, the noble Lord, Lord Davies of Leek, is an old parliamentary colleague of mine. I have always enjoyed his speeches as much as the one I have enjoyed tonight. His speech ranged very widely but, if I may adopt a phrase we often used in another place, I hope that he will forgive me if I do not follow him in all his arguments because I have a few other things to say, though I will pick up some of his points on the way.
This Bill has my warm support. If it had gone even further towards implementing the Conservative Party's manifesto at the last election I should have been even happier with it. However, with confidence in the judgment of the Secretary of State for Employment and in the collective wisdom of the Cabinet, I accept that the Bill goes almost as far as could reasonably be expected in the first Session of this Parliament. I agree with the noble Lord, Lord Robbins, who said that in a matter of this kind it may not always be sensible to legislate at once right across the board.
As I seem to be the only lawyer speaking in this debate, I hope that it will not be taken amiss if I address myself to the question which has already been posed: "What part should legislation play?" That is, what part should it play not only in industrial relations— by which we all mean relations between the representatives of employees and management— but, perhaps even more importantly, in the relationship between trade unions and the people in general in our democratic society?
I agree that, as the noble and learned Lord, Lord Scarman, has been quoted as saying, in pay bargaining itself the law has not much, if any, part to play. But it is when negotiations break down, and when rough or damaging methods are used by trade unions or some of their members to impose their will in a way which conflicts with the interests of the community, that legislation must play a part. Even Labour Governments in the

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past have acknowledged that broad foundation proposition from which we cannot escape.
If I may say so with deep respect, there has from time to time been confused thinking on this question of the part that legislation can play. When some people— mainly on the Left— say: "We do not want the courts; we do not want the lawyers", they forget the interests of the community at large. Legislation of course has a part to play also, and it has played a long and honourable part, in protecting the interests of workpeople, whether or not they belong to trade unions. I cannot go along with the noble Lord, Lord Allen of Fallowfield— and I took a note of his words— who said:
" Reform will not come from legislation or the courts ".
It surely must be accepted that legislation has a part to play.
Indeed, the last Labour Government thought legislation so important that they added 160 clauses and 23 schedules to the statute book; and very controversial much of it was, especially when it extended immunities from actions of tort, actions to which people other than members of trade unions would have been liable if they had behaved as members of trade unions have done. Also, they extended picketing rights, a closely allied subject. Indeed, in another place in opposition in 1974 we described the 1974 Act as "a militants' charter". I was amazed to hear the noble Lord, Lord McCarthy, speaking from the Opposition Front Bench, say today that that statute was necessary in order to reverse the decisions of the courts. I was not conscious of that at the time. We were not told so in another place except on a couple of points, if I remember rightly. If I may say so, I think that the noble Lord, Lord McCarthy, would wish to reconsider his suggestion.
Of course it was a militants' charter; it was also part of the social contract. We all know that the social contract ended in a wage freeze, and the social contract, as such, failed. What the militants want, it seems to me, is anarchy under the protection of the law, and that is what they received from the last Government in their legislation, besides some good legislation— genuine employent protection legislation— as well. It is that anarchy under the
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protection of the law which is the mischief which this Bill should largely cure.
But how far will it succeed? It will go a great way. Under Clause 1 the secret ballots which may be held for a wide range of things should help. I think that it is right that they should be paid for out of public funds if trade unions decline to pay for them out of their not inconsiderable funds. But I was astonished to read in the paper this morning that yesterday the Trades Union Council were urged not to hold secret ballots, using the opportunities given by this Bill. I find it very strange that Mr. Basnett and others should frequently on the one hand talk about industrial democracy and on the other hand show so little confidence in their members that they refuse to let industrial democracy work by secret postal ballots. I find that incomprehensible and even more incomprehensible when we know that it will not be costing them any money because the taxpayer will pay.
The other mischief which the Bill will cure is the protection given to secondary industrial action. It is a protection afforded at present mainly under the 1974 Act by granting immunities from actions in tort. The Bill does this in Clauses 15, 16 and 17. My Lords, surely this limited removal of immunities is clearly right. We do not go the whole way back to 1906, we are not trying to sweep away. Although there may quite well be a case for doing so, nobody is going to do it. Of course, the case for doing so, if I may state it academically, is that the 1906 Act was based on the assumption that, if the unions were sued in actions for tort resulting from strikes, they would not have the funds to pay the costs and damages. But that situation has passed long since. Some of the unions now have very big funds; they are among the biggest investors in the country; they can buy precious antiques and just keep them in a strong room until inflation increases their value. They are also among the principal supporters of pension funds and so on all over the country.
So the original reason for that immunity, the general one, could possibly be argued to have disappeared, but there is no intention, as I understand it, of sweeping it away, certainly not in this Bill. The intention is only to examine it and then

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we shall have the chance to discuss it when we see a Green Paper.
My Lords, I say in conclusion that we cannot restore what should be our great opportunities as a nation without a partnership between the trade unions and their members on the one hand and the Government on the other. So many of the union members, not only the last time but on many previous occasions, have voted Conservative. I stood myself— I am happy to say, successfully— in 10 General Elections and had a majority of never less than 5, 000 in a large constituency. I could never have won one of those elections without pretty massive support from members of trade unions, or at any rate weekly wage earners who were not members of trade unions, and their families. I could not have done so, and therefore I am grateful to them.
But co-operation with the unions does not mean— and the Government made it clear in their manifesto that it should not mean— that the Government should interfere with pay bargaining. That gets me back to a point I made earlier: there is no place for the law in pay bargaining as such. What it means, this need for partnership and co-operation, is that sensible, moderate trade union leaders should be encouraged in their leadership. This means having a legal framework which enables moderation to defeat militancy. One day perhaps the right to strike will cease to be abused. We shall never abolish it. It would not be right in a free society to do so, but it is not the best way of deciding things. Indeed, I think sometimes it is almost as senseless as duelling used to be for settling private disputes. My Lords, it is because I believe sincerely that this Bill improves the legal framework which we must have that I trust it will have your Lordships' broad support.
8.14 p.m.
Viscount MASSEREENE and FERRARD: My Lords, I am very pleased to follow my noble friend because it is perfectly true, as he said, that industrial relations must largely be governed by law. I welcome the Bill but I would greatly prefer that it had a few more teeth in it. We have been told today that the excuse is that the 1971 Act did not work. That is so, as it turned out. But we are
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now in 1980. I feel that after their experience in the two winters of 1978 and 1979, when they saw corpses not being buried, hospitals with the electricity cut off and such horrendous things as that, probably the public attitude has changed. The majority of members of unions, I think, are moderate. I was surprised by the speech of the noble Lord, Lord McCarthy. I always thought he was a moderate, but he spoke like a militant; he was completely unconstructive. He tried to tear the Bill to bits, but of course he did not succeed.
I am not at all anti-union. I have had to deal with shop stewards and, in a small way, I have had to work with members of unions; but I have always objected— and I say it again, as I have said it in this House fifty or sixty times over the last 20-odd years— to the unlimited power and immunity from the law, unknown in other countries of the closed shop. This has always seemed to me, and in fact to most reasonable people, to be an infringement of the liberty of the subject. The power the unions now have in this country would have been all right, no doubt, at the turn of the century when the worker had to be helped. Then the employee had to be helped vis-à-vis the employer. But their power is now too great. That is certainly my opinion.
What is the cause of our industrial decline? It is not because we have no brains. We have the finest inventors in the world; many of our factories have very modern machinery. But I am afraid the main cause arises from the large annual wage rises, without any increase in productivity, allied to frequent damaging strikes and "go-slows", and the tendency of unions— this is very important— not always to honour their productivity agreements and agreements in general. We lose a great many orders because of that. I am now thinking of ships, in particular. We have lost a great number of shipping orders simply because a man having a ship built, especially a foreign owner, cannot get delivery on the date he wants, because the unions frequently do not honour their obligations and agreements.
I remember asking this House a few months ago what the Government would do if we had an oil blow-out in the North Sea. They had no answer at the time;

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but I was glad to see a few months afterwards— not that it had any bearing on my question— that we had a fire ship arrive. It cost a great deal of money and it was built in Japan. Of course that ship ought to have been built here; but that was not possible because we could not give delivery on time. Delivery would take two or three years longer and the ship would be more expensive.
Another fire ship is being built in Finland. This order too, ought to have gone to our yards. It has gone to Finland because our shipbuilders were quite unable to guarantee a delivery date.
My Lords, I should like to refer very shortly to one or two clauses in the Bill. Clause 1 refers to ballots. I quite agree with my noble friend who has just spoken. I think we ought to have secret ballots. Often trade unions have had ballots. But if they are really to be secret I fear the only way is to have a postal ballot to the members' homes. I think a secret ballot cannot otherwise really be guaranteed. Public funds should only be utilised for postal ballots. I am all for having open- air meetings, still, with hands being raised and all that. They should not be stopped, but I think that to have a secret ballot it must be a postal ballot.
One reason why I should like to see secret ballots concerns the election of union officers and the amendment of union rules. Your Lordships will know, I am sure, that the elections for union officers usually take place late at night after the AGM, when most members have gone home. In fact, I believe there have been instances where members' votes have represented only about 5 per cent. of the membership of the union. If there were postal ballots for those elections, I am quite sure more moderates would achieve power— of course, there are some moderates in power now— and it would eliminate most of the militants. I heartily agree with that clause.
The other clause I should like to refer to is Clause 2, concerning codes of practice. As I understand it, the codes of practice are to go before both Houses of Parliament to be either accepted or rejected. But ought not Parliament to have the power to amend these codes of practice? Surely that would be better,
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because if Parliament cannot do it, then who can? The CBI and other organisations cannot do it: only Parliament can do it. I think it would be far more fair for the liberty of the subject.
I should like also to say something about Clauses 3 and 4, which cover the closed shop provisions. There are deep personal convictions about unfair dismissal within a closed shop situation. These two clauses, of course, give the right to compensation for unfair dismissal where there is a closed shop, and they allow for a deeply-held personal religious conviction in such matters. One has always been able to opt out in such a case if one pays to a charity of one's choice the equivalent of the union dues. I quite see there is going to be a lot of argument as to whether one's conviction really is an honest one, but as regards the tribunal I think the Bill well sets up the machinery. However, as I say, I am convinced that this may lead to qutie a lot of difficulties.
I have said often before that the situation would be much easier if we adhered to the European Convention on Human Rights, as other countries in Europe do, so that we did not have the closed shop and if everybody was free to join, or not join to, the union of his choice. If we had that situation, then it would be only fair that a person would have to pay the equivalent union subscription into a charity of his choice, if he did not join a union. I believe that unions might even find an increase in their numbers; but the closed shop seems wrong— it is definitely against individual freedom and against human rights. Also, you get many abuses of power under the closed shop situation; and it is primarily responsible for the artificial inflation of wages, because barriers are erected in various employments.
I should like to congratulate the Government on Clauses 5, 7 and 8. Here the employer no longer has the burden of proof put on him; he does not have to prove his innocence if an "unfair dismissal" is involved. It is up to the tribunal to decide. It appears to me to be a complete reversal of British law that the employer should have had to prove his innocence and was instantly the guilty party— rather like the law in France.
The most important clause, I believe, is that on secondary picketing. After all,

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secondary picketing, in the last large strike we had, held up exports and delayed imports. I have perhaps not read the Bill fully, and I am afraid I could not hear all the opening speech of my noble friend as I was unavoidably delayed. What I am not sure about as regards secondary picketing is the question of who is the subject of an injunction. For instance, I understand that an employer whose works are being secondary- picketed could apply to the court for an injunction under the Civil law. However, when he applies to the court for, and gets an injunction, I do not quite understand whether it is against the union or against the pickets as individuals. If it is the latter, the employer will have a very busy time running backwards and forwards to court, because he may perhaps get an injunction in respect of eight or ten pickets, and then eight or ten new pickets will turn up. Surely that process could go on and on.
The Earl of GOWRIE: My Lords, perhaps it would be helpful to the House if I were to clear up my noble friend's query at this point rather than later. An employer can seek a High Court injunction to ensure that the activity ceases. In order for it to be stopped the injunction has to be taken out against a person; but if he should approach a secondary picket and that person facetiously gives, say, the name of my noble friend, or whatever, he can then proceed against the organisers of the activity, up to and including the leadership of the union involved.
Viscount MASSEREENE and FERRARD: My Lords, I thank my noble friend for that explanation. I understand from that in fact that it is the union— is it the union which will have the injunction against it or only the union leader?
The Earl of GOWRIE: My Lords, the union leader.
Viscount MASSEREENE and FERRARD: My Lords, I thank my noble friend. I have almost finished, but I should like to take just 30 seconds more. I understand that in Germany— it is chiefly in Germany— when the unions put in a pay claim they put it in at 5 per cent. under the inflation rate at the time. It is a great pity that unions here cannot
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follow that custom, because if they did that inflation here would begin to fall.
I understand that that is done in Germany because they realise that there are various things, such as the cost of oil, over which they have no control, and that if they put in a claim which is the same as the level of inflation, they will only increase inflation. There is a lot that we could learn from German industrial relations. That applies also to France, where the closed shop is illegal. I welcome the Bill, and I hope that it will go some way towards improving industrial relations.
8.31 p.m.
Viscount ROCHDALE: My Lords, I think that I have listened to every word that has been said during the debate today, and I have certainly found it extremely interesting. So much has been said about the various points in the Bill, some favourable and some very critical. That being so, I shall resist the temptation to deal with detailed clauses of the Bill; that can come out in the Committee stage. What I want to talk about is something which I regard as very important; that is, the general background to the whole Bill and the main subject matter that underlies it.
As other noble Lords have said, it is a great human question as to whether those in employment, whether employed in management or employed manually, whether employed in service industries, manufacturing industries or otherwise, can get on together. That is the great issue. So much has been said over the years about industrial relations, sometimes rather ill-understood— though certainly not in your Lordships' House— that this is a subject which transcends everything else that we have to consider. Unless we can arrive at a really good spirit within our employment activities, and unless there is really good team work, we shall not be either creating or conserving the wealth needed to pay for all the other home affairs matters that we have discussed in your Lordships' House.
We have had a number of very important Bills this Session on education, health, social security, defence and so on. Unless we have a team spirit, the efforts which are needed to make those Bills— the Industry Bill, the British Aerospace Bill

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and the rest of them— and those activities a success will be blunted and we shall not make progress. I give that very quick background to the Bill, because it is all too easy when considering this matter, when considering the difficult legal and other details, to lose sight of the wood for the trees, and to lose sight of what we are really trying to see.
In the course of his speech, the noble Lord, Lord McCarthy, used the word "negative" in relation to the Bill. He may be surprised if I also use that word "negative" in relation to the Bill, but not in the same way as he did. I use the word "negative" as no criticism whatever, either of the Bill or of the Secretary of State, but rather as a very sad reflection on the present unsettled industrial climate, which sometimes makes the negative approach absolutely unavoidable.
I use the word "sometimes", because that raises another important matter which we want to remember. It is far too often forgotten or overlooked that, certainly in manufacturing industry, an overwhelming majority of industry— whether measured in terms of individuals or even more, in terms of manufacturing establishments— never resort to strikes. Their work goes on smoothly. Therefore, it is only to a relatively small number of enterprises, where, regrettably, good industrial relations break down, resulting in strikes, distressing examples of picketing, the consequential and sometimes unhappy impact of the closed shop and so on, that so much of this Bill is directed. It is to only a small part of the whole issue that the Bill is directed and all the rest goes on fairly smoothly.
Admittedly, these breakdowns and troubles which so often affect the great nationwide industries— and it is those which hit the headlines and which the public hear about and get mesmerised by— have an impact which can be very damaging, even though there are only a small number of industries concerned. But the smooth and happy daily running, as well as the successes, of the medium and smaller firms— and to be fair, also, of some of the very big firms— are not heard about. They do not appear in the press, because they are not news.
We cannot entirely blame the media for that. They are commercial enterprises
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and have to play to their market, and to highlight what they think excites their market. But the fact remains that the public and, even more seriously, our friends and customers overseas, receive a picture of British industry which I believe to be out of focus, and dangerously and infectiously emotive, when what is needed is a very clear picture of the true position in our industries. That is essential if we are to be able to assess a Bill such as this and to decide whether it is too little or too much. So much for the negative aspect.
I want to refer to one clause which is a very definite and positive one and which, in particular, I very much welcome. That is Clause 2, on the codes of practice. So much has been said and written about industrial relations by individuals, organisations and so on, that a clear distillation of all this experience that can, with common consent, be produced must be to the good, and that is what I hope the codes of practice will be. I am, however, particularly glad that the production of these codes is to be on a continuing basis, and that failure to observe any of their provisions shall not in itself create any liability for proceedings.
After all, codes of practice can only provide very useful guidelines. They will not necessarily result in good industrial relations. Good industrial relations, which is the main objective, can come only from the people within the industries concerned. They cannot be imposed or legislated for by Government. Government can certainly help. They must do a certain amount in that way but they can blunt, if they go too far, and that is even worse.
Some of your Lordships will have heard the debate in your Lordships' House on 8th May on the Defence Estimates. I was particularly interested in something which was said by the noble and gallant Lord, Lord Harding, who sits on the Cross-Benches. He made a point which is extremely relevant to what we are discussing this evening. At column 1803 of the Official Report he expressed the hope that the concept of "two sides" in industry, as he put it, would never be incorporated into the armed services. To quote his exact words, he said:
" Any tendency or trend of the slightest extent to apply that same practice to the armed forces would be disastrous ".

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Of course, one agrees with the noble and gallant Lord, in the context in which he was talking, but I would go further and say that industry has something to learn in this context from the armed services. What people have got to learn, somehow, is that there is the need for an identity of interest within industry, on all sides. In industry, particularly in medium and smaller firms, one can see this identity of interest, all pulling together. But too often— I believe through the incidence of history— there are divided loyalties, pulling in opposite directions. We see union loyalty given priority over company loyalty. I find this extremely difficult, in theory though possibly not in practice, to understand. It is difficult to understand when it is the company which in the end provides the livelihood for all those engaged in industry and which indirectly provides the cash that the union needs in order to exist. This is not "union bashing" but, I believe, common sense.
To a visitor from outer space, coming here unaware of our industrial history, we must at times seem to be almost suicidal. One can almost hear them saying, "In your games— cricket and rugger— you make sure that the eleven or the fifteen all pull together as one man, and you even do that with your defence services; but when it comes to your livelihood, and that of your families and dependants, to say nothing of your country, you have produced an inbuilt mechanism so easily triggered off that it will pull the enterprise to a standstill".
Our present system of trade unions and industrial organisation has taken over a century to build up. It is deeply embedded in our thinking. Possibly we cannot imagine anything very different, except perhaps changes in detail and by way of constraint, whether on employer or employee. But can we really look with any feeling of comfort at the prospect of that ding-dong battle— with one party doing one bit of legislation and another party doing another bit of legislation— going on for another century? If we are going to achieve any significant change of direction, which to my mind we must, it can be achieved only by general consent, and step by step. I believe that the implication of that is that we have to come back and think very seriously about participation. Perhaps this has now become slightly out
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of fashion, but I have always been keen on participation— right from the top to the bottom.
I apologise to my noble friend Lord Carr of Hadley for referring to the 1971 Act. I have always felt that that Act went far too far and far too quickly. I hate to say this, but I have always felt that it was doomed from the outset. The present Bill is far more modest. Indeed, it is criticised by some, though not by me, for not going far enough. Personally, I believe that the Secretary of State, even if he has stiffened up the provisions on picketing and immunity, has been right to stick to his line.
I regard the Bill as a holding operation, not as a beginning, to deal with some of the worst abuses of the present employment law. However, a great deal more will be necessary, not so much by legislation but even more between management and unions, between the CBI and the TUC. One thing, however, seems to me to be most important. In this wholly emotive issue, calling as it will, for a very long haul stretching over the lives of a great many Parliaments— not merely this one or the next— one thing is essential: that we should try to keep the temperature as cool as possible.
With that in view, dare I suggest— it has not been suggested, let me say straight away, in the debate today— that oppositions (I use the word in the plural to show that I am not particularly referring to the official Opposition) should resist the temptation to give notice that when next they are in power they will immediately repeal the relevant Act; and, equally, that parties in power will recognise their need to do everything possible to avoid the provocative. I believe that that is not appeasement but common sense.
Circumstances will change— with us indefinitely. The circumstances in industry within which we shall have to operate will be changing. I need not itemise them; your Lordships will recognise them as well as I do. Some change in legislation will be needed to meet those changes. But when it is necessary, do let us try to build upon and not merely knock down what the last Government did so that we do not always have to start all over again.
In speaking as I have done this evening on the broad background, as I see it, of

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the Bill, I have had very much in mind what the Secretary of State himself said in another place on 17th April. Perhaps I may conclude with a very brief quotation from what he said, because I think it is very, very important. He said:
" Reform of industrial relations law is necessary, but in itself it is not sufficient ".
He then went on to say:
" So the solution is not to be sought only by changes in industrial relations law, important as they are … The fundamental improvements in our industrial relations institutions, procedures, attitudes and working practices which we are all seeking will be the work of years, requiring patience and determination ".— [Official Report, Commons, 17/4/80; col. 1503.]
I interpret those words as meaning patience and determination, not so much in legislation as in the actions of everyone on every side concerned with industry. It is against that background, and prospect, that I wholeheartedly support the Bill.
8.47 p.m.
Lord SPENS: My Lords, I shall not keep your Lordships very long, but I am one of those recently mentioned by the noble Viscount who has just sat down who criticised this Bill for not being strong enough. Of course I shall support it in its passage through the House but, like my noble friend Lord Harris of High Cross, I will seek to amend it in certain clauses, or to persuade the Government to consider some amendments.
I accept that there is a right to strike, even though that right is not embodied in any law but is only an immunity. But it is not a paramount right. Nor is it superior to other rights, in particular to the right of ordinary men and women to work, whether or not they belong to a trade union. Yet the present immunities, especially after the latest judgment coming from this House, have made the right to strike paramount. I believe that those immunities must therefore be restricted.
A group of Members of this House has been looking at the Bill, not from the point of view of either industrialists or trade unionists but from the point of view of the ordinary man and woman.
" We do not think that this Bill goes far enough, it is a matter for concern that at present it is possible for a major official strike to be called when the support of those involved may be in doubt. A number of unions already have provisions in their rules making a ballot of their
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members obligatory before a strike. In other cases, the holding of a ballot is discretionary. In others, there are no provisions about ballots in the rules ".
I have been quoting from the document which has been mentioned several times in this debate, the famous document, In Place of Strife, and that quotation goes on like this:
" The Industrial Relations Bill will give the Secretary of State discretionary power to require the union or unions involved to hold a ballot on the question of strike action ".
That was the policy of a Labour Government 11 years ago, although it did not remain their policy for very long. We do not want to go as far as that in the case of ballots. We realise that there are great difficulties, although not insuperable ones, in legislating for statutory ballots, but we think that at the least legislation should be made giving the workers a statutory right to ballot if they call for such a ballot. So we shall be looking at Clause 1 of the Bill to see whether we can produce a suitable amendment.
Again, looking at the Bill from the point of view of the ordinary man or woman, we do not like the present powers of the closed shop, especially now that the Commission for Human Rights has referred the case of the three railwaymen to the European Court of Human Rights. My noble friend Lord De L'Isle has dealt with this point, so I shall not take it any further and I hope that my noble friend Lord Orr-Ewing will deal with some other aspects of the closed shop.
There are other points which are not satisfactory. The small businessman is deeply afraid of the implications of the Employment Protection Acts. I see the noble Lord, Lord McCarthy, sitting on the Front Bench and he has told me on several occasions now in the Select Committee that small businessmen have nothing to fear from the Employment Protection Acts; but the trouble is that those Acts are much too complicated. Even after this Bill has been passed there will remain two Employment Protection Acts, that of 1975 and the Consolidation Act of 1978, which between them have 221 sections and 30 schedules, with a total of about 340 pages. How can any small businessman think that he can disregard that bulk of legislation? So I believe that, if there is nothing for small businessmen to fear, we ought to

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produce that in some form of publicity which will be simple for the small businessman to read and understand. We also do not think that the clauses on picketing go far enough, but again I will leave that to my noble friend Lord Orr-Ewing.
I have not mentioned Clause 2, the code of practice. It is difficult to comment on this until we have seen a draft of the code, but the deterioration of industrial relations between management and employees is great and is one of the major causes of industrial unrest and strikes, and I believe that management is mostly to blame. I believe that, with a few remarkable exceptions, they fail to communicate properly and effectively with their employees, and I hope that the code of practice will contain sufficient guidance on this point to make industrial relations a little better. It strikes me that there is an opportunity here for entrepreneurs who have the knowledge and the experience to set up specialised consultancy firms to advise management on this subject. I do not propose to go any further tonight but I give notice that I and a small group will be tabling some amendments and we shall try to argue about them at the Committee and Report stages of the Bill.
8.56 p.m.
Lord GISBOROUGH: My Lords, over the years unions have built up power and immunities that may have had their origins in necessity, but in recent years we have seen those powers thoroughly abused by union leaders, frequently pushed on by minority groups of militants, often elected by highly questionable if not corrupt voting systems. Some constraint on union licence is therefore absolutely necessary. It was promised by ths Conservatives and it will be thoroughly welcomed, above all, by the workers themselves.
The first clause of this Bill is about balloting, and one really cannot understand the objection to the fact that a union will now be able, if it asks for them, to have Government funds to hold a secret ballot. If secret ballots existed at the moment and it was proposed to do away with them, can one imagine the fuss that there would be about it?
With regard to picketing, the Bill restores the right for an employer to seek
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an injunction to restrain a person from secondary picketing. To my mind this fails on two counts; first, that it may take a brave employer to venture into a crowded picket line to ask for a name, and it is highly unlikely that the correct name will be given— more likely, "Mickey Mouse". It will of course also be almost impossible to separate the primary from the secondary picket, or from those legally holding a demonstration there, all milling around together. Having taken the name, the person who is asked will say that he is not picketing but only demonstrating— and that he is allowed to do under this Bill, as close to the picket lines as he wishes. Therefore, not only should demonstrating be made illegal within a short or a specific range of a picket line but it should be the union that is held responsible for secondary pickets and not the individual, who may well, as has been seen in the past, be courting arrest and imprisonment in order to be held up as a martyr.
The unions can and do fine and discipline, and even take away the livelihood of people who work when they are told to strike. They can as easily fine and discipline those of their members who strike when they are told to work or who "secondary picket" when told not to do so by their unions. If the unions do not discipline their members, it can reasonably be assumed that they are condoning and are therefore responsible for the actions of their members. This is the most important omission in the Bill, and I hope it will be amended before leaving this House.
There also appears to be totally inadequate provision to deal with the excesses of the closed shop. I was glad to hear that this Bill will now bring the law into accord with the human rights legislation, but I think this Bill should be further tightened up to protect the individual. Most people just want to get on with their jobs, and many join a union only because they are compelled to do so. But they are certainly not prepared to waste a lot of their spare time in the evenings after work at long and political union meetings, where the agenda is designed to drive away the ordinary bloke by means of a long and boring agenda. Needless to say, when the unions then take decisions in the names of all their membership, they are doing

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nothing of the kind but only speaking for a small number of union activists. As new closed shops under this Bill have to be agreed by ballot, I believe that all recent closed shop agreements should be subject to a secret vote of agreement by the members, and I hope there will be a suitable amendment to bring that in.
The business of blacking can be as damaging as picketing. I think it is Clause 15 which deals with the example of SLADE, where the goods from a company were blacked by the workers of another company to force the members of the first company to join their union. It is not clear whether the injunction to deal with this that will now be available is also only capable of being served against an individual up to the union leader, or whether it can be served against the union itself as an organisation. To punish an individual, whether a worker or union leader, can only lead to martyrdom. To fine a union seems far more effective, more apt and relative to the damage done to an industry. Perhaps the Minister will elucidate on this point.
I was up in Scotland at the weekend, which is not noted for its Conservative support, and one quite ordinary worker told me, "We elected the Government, and for some of us it was the first time we had not voted Labour, to put the boot into the unions. If they do not do it now, they will never get elected again ". I do not like the analogy and the Conservatives have never had the intention of putting the boot into the unions. This Bill certainly does not attempt to do so. But the average genuine worker— the vast majority who want to get on with their jobs— is fed up with those who control his union, and he showed it quite clearly on 14th May.
This Bill is not strong enough, and it will be extremely difficult and time-consuming to bring in a stronger Bill in a year's time if it becomes necessary. Therefore, if it is felt necessary to tread softly and to pass what one Labour Member in another place called "this puny Bill", I believe it must be amended with enabling clauses so that the Minister may tighten the Bill in a number of respects, and in particular in respect of union responsibility for the actions of their members, by order and without the necessity of further legislation. The further tightening amendments can be
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drafted and argued in Committee, and written now at this stage into the Bill. They would not come into effect but rather be held in reserve. Meanwhile, the provisions would become acceptable by familiarity, if not by use. The presence of easily available new measures would probably mean that they would never be needed. I hope it will be possible to consider this option at Committee stage.
9.3 p.m.
Lord HATCH of LUSBY: My Lords, my first objection to this Bill is its title. One can understand why the Government, after their previous experience, have decided not to call this an Industrial Relations Act, but to call it an Employment Act is surely a misuse of the English language. What has this got to do with employment? At a time of rapidly rising unemployment, as we have seen from the figures today, what have the Government done about employment? As far as I can see, they have done two main things, reduced the budget of the job creation scheme which the Labour Government set up, and undermined the Manpower Services Commission.
The Earl of GOWRIE: My Lords, would the noble Lord be kind enough to give way? What shred of evidence has he for either of those statements? The overall provision in real terms, adjusted for inflation, for the Manpower Services Commission is increased this year over the previous year.
Lord HATCH of LUSBY: My Lords, I am now speaking about the measures that were taken in July of last year. The budget of the job creation scheme was reduced, I think I am right in saying, by £ 170 million, and the powers of the Manpower Services Commission were similarly reduced at the same time.
Let us look at the context in which this Bill is being discussed, a context in which unemployment is rapidly increasing; in which the inflation rate has been doubled over the past year; in which rents, rates, mortgage payments, gas and electricity bills have all been substantially increased; in which the Welfare State has been seriously eroded; in which protection for workers redundancy has been cut and safeguards for the unfair dismissal of workers have been reduced.

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The Government say that this policy is designed to squeeze inflation out of the economy. I think that is a fair summary of the excuses that have been given by the Government for the list of facts about the nation's economy that I have just recited. So far the Government can hardly claim great success in squeezing inflation out of the economy. But there is a much deeper danger that arises out of this Bill so far as the Government's objectives are concerned. I would refer to the speech made by my noble friend Lord Kaldor in a previous debate on the economy and industry, when he spoke of the factor of workers' resistance; I believe his actual phrase was "wages resistance". This is where this Bill comes into context, because it is clearly designed and openly designed to undermine, to attack the strength of the trade union movement. The noble Earl who opened the debate with an extremely lucid explanation of the Bill, his noble friends behind him and Members from the Cross-Benches, have made no bones about this. The object of the Bill is to, as they say, redress the balance between employers and employees, and in doing so they are expressly attempting to reduce the power at present exerted by the trade union movement.
But if they do that, then surely the result must be increased militancy among the trade union movement, increased resistance to the cuts in the social services, to the cuts in redundancy payments, to the cuts that are being made in employment itself, and to the attempts to restrict wage increases. If in our country you get a confrontation between the Government and those who are attempting to defend their standard of living, surely you are justifying the whole thesis of Marxist philosophy.
Here you are creating the class struggle which you accuse certain sections of the trade union movement of bringing into this equation. If you are following a policy which is designed to reduce the standard of living of a large number of the working class of this country, and at the same time reduce their power of resistance, then there is a class struggle, whether you want it or not. It is not an artificial one: it is a class stuggle which is created by the resistance to Government policy. To follow my noble friend a stage further, let me say that the probable effect of that kind of class struggle, of that kind of
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resistance by the organised workers to Government policy, is likely to be increased rather than decreased inflation. The trade unions are bound to ask for more than they would ask for if there were not the attack being made upon their rights. So, from the Government's own standpoint, from their standards, their policy is leading to the exact opposite of what they are attempting to achieve.
The noble Earl who opened the debate referred to the hope that it would be possible to take industrial relations out of party politics. He also referred to the role of the law in industrial relations. Surely the noble Earl knows something of the social history of this country? The trade union movement in this country supports, has supported, and indeed created the Labour Party precisely because the working class of this country needed to change the law which at that time was grossly discriminating against it.
The rights which the trade union movement has today are rights which have been fought for and which have eventually been won through a whole gamut of struggles going back over the past 150 years. I would point out to the noble Lord, Lord Harris of High Cross, that, if the Labour Party in this country had anything like the contributions from the trade union movement that the SDP has in Germany, the Labour Party would not be in its present financial difficulties. I would say further to him that there are countries in Europe— and I hope that the noble Earl when he winds up will deal with this issue which has been raised previously in the debate— where the trade union movement has greater rights than it has in this country, and which are showing the possibility of considerable growth far beyond that of this country. I would refer him to Sweden, to France and to Norway.
Lord HANKEY: My Lords, will the noble Lord give way for a moment? The noble Lord is aware, I presume, that works agreements are executable at law in Sweden and that the recent strikes only took place when those agreements had come to an end?
Lord HATCH of LUSBY: Yes, my Lords, but that does not in any way detract from the point that I am making.

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I am simply saying that it is not correct— as the noble Lord, Lord Harris of High Cross, was suggesting— that, because the trade union movement in this country has, as he appears to think, too strong a power, that is preventing the economy of this country from growing. In other countries, trade unions have greater rights than they have in this country and the economies of those countries are growing. That is the point that I was making.
I come briefly to the Bill. Clauses 5, 7 and 8 attack the whole issue of unfair dismissal. Clauses 10 and 11 are, in my view, the meanest in the Bill, because they are the clauses which deal with maternity rights. Is it not ironical that, for the first time in the history of this country when we have a woman Prime Minister, this is the second time that we have had to point out that sexism is being introduced into our laws and regulations?— the last time being as regards immigration. Please do not think that this is just a personal assertion; it was the Under-Secretary of State himself who admitted in another place in the Second Reading debate on this Bill that these clauses left women as second class citizens. It is a mean and indefensible attack upon women workers; in Kiplings words:
" Mean as a collier's whelp, nosing for scraps in the galley ".
Clause 13 deals with the limit on guaranteed payments and Clause 18 is an attack on the Employment Protection Act and on the powers of ACAS to carry out their rightful duties and their rightful responsibilities, and it attacks, totally unfairly in my view, their independence. But let us suppose that all these clauses of the Bill had been put together and that the Bill had become an Act, would the Bill have prevented or have solved The Times strike, the engineering strike or the steel strike? Not one of them. Would it have prevented the scenes outside Grunwick, or the scenes which we all so deeply deplored outside Charing Cross Hospital? Not at all.
Therefore, I come to the issue which was mentioned by the noble Lord who preceded me— Clauses 15 and 16. I would call these clauses, which slightly change the right of secondary picketing, the "martyrs charter" for the reason that they do not, as has been made clear,
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extend the criminal law in any way at all; they extend the civil law. If an employer is going down to where secondary picketing is taking place, intends to take out an injunction against an individual— and it must be an individual— and take him to court, surely that is an invitation, to those who want to be martyrs and who want publicity, to martyrdom, to go to prison and to repeat some of the tragedies that we have seen in industrial relations over the past 10 years or so.
On the matter of the closed shop, of which the noble Lord, Lord Gisborough, also spoke, I should like those who are to follow me— and I believe that they will be speaking closely in conjunction with the noble Lord who preceded me and the noble Lord, Lord Spens, on the necessity of extending, as they see it, the provisions of the Bill— to address themselves to the following issue on the closed shop. If we undermine and attack the principle of the closed shop— and those of us on this side have always agreed that individual con- science must be preserved, so that is not the issue— are we not thereby encouraging and stimulating multi-unionism?— which not only weakens the trade union movement, but which at the same time is dangerous and distasteful to most employers. Most employers would far prefer to be able to deal with a well-organised body of workers in a single trade union than to have the fragmentation of trade unionism, which can come from the under- mining of the closed shop.
Therefore, I say that this Bill provokes the trade union movement unnecessarily, irritating a body and an organisation with which the Government need to co-operate, because co-operation between the Government, the trade union movement and employers is the only alternative to the class struggle, of which I spoke earlier in my speech. At the same time, as we have heard tonight and as we have heard in another place, the Bill will not satisfy those who are commonly called the trade union "bashers". But, as has already been pointed out, there is a danger that this Bill is simply the "sighter"; this is, just the kite that is being flown, to be followed by further more stringent legislation by the process of gradualism, eroding workers' resistance to the policies of the Government, with which I opened my speech. It may be that this Bill is simply an infant,

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" Mewling and puking in the nurses arms ".
When it is followed, it will become a soldier:
" Full of strange oaths … seeking the bubble reputation
Even in the cannon's mouth ".
But eventually this approach to industrial relations— so vital to the future of our nation— of undermining the mass of the people of this country in their organised industrial organisation will become a second childishness and mere oblivion; sans teeth, sans eyes, sans taste, and sans everything.
9.20 p.m.
Lord MOTTISTONE: My Lords, it is a great pleasure to follow the noble Lord, Lord Hatch of Lusby, because it is so interesting to me that here we have what the Secretary of State during this last weekend described as a human relations Bill, and one of the problems about human relations is that we all see each other differently. We find that we know lots of trade union officials, both junior and senior; we know noble Lords opposite; we know tough and easy-going managers and employers. We know the lot. You know them, and I know them. On the whole they are pleasant, earnest, and full of good will; but they are practically always misguided, and a classical example is noble Lords opposite.
The fact of the matter is that I think the noble Lord, Lord Hatch, is misguided. He frightens us with talk of the class war, of mass revolution, of practically the barricades, and he ends his speech by frightening himself with continuing and never stopping legislation gradually eroding all the powers that have ever been fought for back to the beginning of the 19th century. That is the picture he was creating for himself. But it is a myth; practically all of it is a myth.
This Bill— and on the whole I think it is a good one, but I shall enlarge on that although I do not want to take too much of your Lordships' time— is more concerned with the individual them with the mass. The noble Lords opposite— and I give credit where credit is due; not all noble Lords opposite— Lord McCarthy, Lord Allen of Fallowfield, Lord Plant, and Lord Hatch of Lusby, all gave the
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impression of thinking in the mass; of lots of people responding; lots of people doing this, and lots of people doing that. This Bill is about trying in a delicate way— and it is delicate— to restore to the individual a certain amount of protection from the bodies which threaten him.
The bodies which threaten him include of course his company. They also on occasion include his trade union. We all know, if we are honest with ourselves, that there are occasions— and I have come across it repeatedly in life, but particularly in the last 10 years— where you meet somebody who is terrified, and who is bullied into following a particular line that his union wants him to, whether it be a strike or withdrawing his labour; his wife is sick and he has not got very much money, and he cannot stand being on low pay, but he has still got to do it. He is bullied.
At the time of the transport strikes of last winter there were kangaroo type courts set up by unions in the dock areas, to which the managers of companies not affected in the strike, but affected by the sort of thing this Bill is trying to deal with had to go almost literally on their knees, to plead to be allowed to have their goods, because otherwise their industry would go bust and their workers have to be laid off. There is bullying around, and bullying comes from giving people power.
Some people are greedier for power than others. If by chance you give people more power than they need, then you find that the bullies will use it. The bullies may well be— and I am certain they were in the last century and indeed up to, shall we say, 1950— in companies, and could come again in companies, if the various protections that were allowed under legislation were relaxed too much. It is a very neat balance and what this Bill, as I see it, is trying to do is to make sure that it is harder to bully the individual than is the case under the present legislation.
Let us not get it wrong, and here I particularly address the noble Lord, Lord McCarthy, who said in effect— I may be misquoting him and he will tell me if I am— that this Bill is as bad as the 1971 Act in its general effects. He gave me the impression that he had forgotten that since the 1971 Act there were the Trade Union

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and Labour Relations Act 1974 and the Employment Protection Act 1975. Those Acts changed the picture completely and, because of that, this legislation is not— and I am very much generalising— taking us back to the sort of situation that would have arisen if the 1971 Act had bitten; it is taking us back to the sort of situation we would have had in 1969 if In Place of Strife had been enacted.
Lord McCARTHY: I do not think I made that point, my Lords. The point I was making about strikes and what the Bill is doing about strikes will, I think, be developed by my noble friend Lord Wedderburn of Charlton. I was saying that this Bill is worse than the 1971 Act because that Act gave individual rights, whereas this measure takes individual rights away. In particular, it takes individual rights concerning unfair dismissal away from people who work in small firms.
Lord MOTTISTONE: Maybe, my Lords.
Lord McCARTHY: It does.
Lord MOTTISTONE: Perhaps, my Lords, but, on the other hand, it also takes away rights from superior bodies which are in a position to oppress individuals. It is, therefore, a matter of balance, and that goes all the way through. I said this was a human relations Bill. Human relations involve many facets. They involve guarding freedom for individuals. Directly one uses the word "freedom" one is asked: freedom for whom? Is it freedom for the trade union member, for the company employer, for the trade union official, for the company manager, or is it freedom for people who are not involved at all, people outside the company, in the street, the ordinary person? The answer is that it is freedom for all, and we have to get the balance right.
Take another theme, that of loyalty, which was mentioned earlier. Is it loyalty to the company? Goodness knows! that is necessary. How is the company to be solvent and how is the productivity that we all know is needed to be achieved unless loyalty lies with the company? Or is it loyalty to the trade unions? Or
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should these not be in conflict? But they are, and let us be practical about it. We know what happens. I do not say they always are in conflict, but they sometimes are; and that is where things go wrong.
We must try to ensure that the loyalty is right. Loyalty is not a direct something that one can legislate for. However, what the Bill tries to legislate for is power, and I talked about power earlier. It attempts to adjust power because, when one comes down to it, the loyalty lies where the power lies. If, as has happened in many countries in the past five to 10 years, in effect middle management has been deprived of its power, although it still has the responsibilities, and effectively the trade union officials— whether they be shop stewards or full-time officials does not matter— talk direct to the chairman (go to see him and drink wine with him) then everybody on the shop floor knows very well where the power lies; it lies with the trade union official. He is not interested, and I am not blaming him for that. It is not his business to be interested in whether a particular company is successful. He should like that in a general sense, particularly if he is a mass thinker, like certain noble Lords whom I mentioned earlier. In a general sense he would like all companies to be successful. But he does not care about a particular company. It is only when one cares about a company that that company is on the way to success.
So what happens is that the loyalty lies where the power is, and, from the point of view of the employer— the single man or woman, the person whose livelihood depends on the success of his company— it is very important that the power should not be in the wrong place. The more successful his company, the more secure is his job. The fact of the matter today is that there are many companies not so secure as they should be, and therefore their employees are not so secure as they should be; and that goes a long way towards causing the trouble. As I see it the Bill is designed to modify the power in an acceptable way.
I must not detain your Lordships any longer. I shall take the matter only one step further. Some of my noble friends, as well as some of my honourable friends from another place, feel that there are

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areas in which this Bill could be strengthened. As I see it at the moment, I personally do not agree with them. I think that the Bill is just about as far as one can go, because these steps must be taken at the kind of rate at which people can accept them, at a rate acceptable to their attitudes. To go any farther at this time would be a mistake.
I hope that the Bill goes through this House, perhaps with a few tidyings up here and there. We in this House are experts at tidying up Bills here and there, and usually for the better. The important point is that if the Bill is a success— and here I come back to the noble Lord, Lord Hatch of Lusby— there will not be a need for further legislation. I personally and genuinely believe, and I know that my right honourable friend the Secretary of State believes, that there is a very good chance that with the present attitude of mind of the people in the country as a whole, seen as individuals, the Bill will do all that is necessary to redress balances and to give greater freedom from threat to individuals, and will achieve all the good things that it is designed to do.
9.32 p.m.
Lord ORR-EWING: My Lords, first and foremost I wish to congratulate the noble Lord, Lord Keith of Castleacre, on his maiden speech. How appropriate of him to choose this occasion, bearing in mind his knowledge of high class, meticulously careful engineering which he gained from his Rolls-Royce experience. He has much to contribute, and I hope that he will make many contributions to our debates. I know that we shall find them worthwhile, as we found worthwhile what he said today.
I should like to reply to the noble Lord, Lord Hatch of Lusby. He must not believe all the propaganda leaflets that he reads. He seems to believe that the unemployment figure is higher now than it has been in the past. The Statistical Digest simply does not show this to be true. The noble Lord's facts on other issues were also wrong. In 1977 there were 1.62 million unemployed; 6.7 per cent\, of the population. In 1978 the figure was 1.548 million, and the latest figure for May is 1.509 million. So through 1977 and 1978 the figures were much higher, and a much higher percen-
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tage of the population was unemployed. One ought to be accurate when quoting—
Lord HATCH of LUSBY: My Lords, I am very grateful to the noble Lord for giving way. According to the tapes tonight the figure given today for unemployment in this country— over 1½ million— is the highest figure for May since the war.
Lord ORR-EWING: That reminds me, my Lords, that
" There once was a fellow named Gover,
Who bowled 32 wides in one over.
It had never been done
By a clergyman's son,
On a Sunday in August in Dover ".
If one finds statistics, one will always find that the figures are the greatest in May— or something like that. I am quoting the figures, and the percentage was materially higher: 6.7 per cent., as against 6.2 per cent. on 8th May. It was very materially higher then than it was in May of this year.
The second point I wish to raise is that the noble Lord, Lord McCarthy, in opening the debate for his side of the House— and I noted his words; I hope I have them down correctly— said of this Bill that it is "an unfair attack on the rights of trade unionists". Am I right?
Lord MCCARTHY: Something like that.
Lord ORR-EWING: My Lords, it is very difficult to think that he really believes this. The right to combine remains intact; the right to organise to bargain remains intact; the right to strike remains intact; the right to picket peacefully remains intact; the right to assemble remains intact; the right to free speech, to petition, to persuade Governments of the day— all these remain intact. The right to a political fund— money going to the Labour party— also remains intact. The great rights of trade unions which have been built up over the years are not undermined by this Bill, and it would be stupid to try to deceive the country into believing that they are. So I am sure he will correct himself and not make those kinds of claim in the future.
My Lords, I believe, as a member of a small all-party group in this House, that this Bill ought, in its first phase, to go

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rather further than it does. I recognise that my right honourable friend who has been standing behind the Bar for much of the time or sitting on the steps of the Throne, Mr. James Prior, reckons that he has got the best compromise, but for reasons which I shall explain later I think it should go rather further at this stage. I am mindful of what we promised in our election manifesto, and what we were elected on. Let us be fair: it was the horrible scenes in the winter of discontent of 1978–79 which defeated the Labour Party and which brought us to power. I would remind noble Lords that we said in our manifesto, on page 9:
" As a result of trades union legislation in 1974 and 1976 it tilted the balance of power in bargaining throughout industry away from responsible management and towards unions, and sometimes towards unofficial groups of workers acting in defiance of their official union leadership ".
It went on:
" We propose three changes which must be made at once "—
not next year, but at once; and we were fighting this election in May 1979— and then it went on about picketing, about the closed shop and about secret ballots. It is on that manifesto that we were elected, and I feel that we are expected by the nation at large (and particularly by the trade unionists, because all the analyses show that between four and five million trade unionists supported us at the last election; and I would hazard the guess that a good many more of their wives voted Tory) to move rather further than this Bill currently takes us.
My Lords, I and a number of Members in all parts of both Houses take the view that the Bill needs some strengthening. Mr. Prior takes the view that the Bill is a contribution to restoring the balance, and that he will be perfectly able to proceed with another Bill, in the light of experience, next year. There were some hundred different Tory MPs who decided to vote on the amendments at Report stage. I think that in total on any one occasion they did not exceed 48; but I have to remind the House that they were tremendously supported by the leader of the Liberal Party, by Mr. Cyril Smith and by Mr. Jo Grimmond. There were five liberals in all who supported them on a number of occasions; and I have to be hopeful that that message will be pur-
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veyed up to the Liberal Benches here and that we may get some support from them in the latter stages of the Bill, particularly as it concerns the freedom of the individual and the closed shop, which must be anathema to any person who has been brought up in the Liberal tradition.
My Lords, I wonder whether events in the next twelve months are going to make it easier for Mr. Prior to bring in the next Bill, or the next half of this Bill, next year. If there is to be a world industrial recession (and there is every indication that there may be); if we are to have political demonstrations and massive strikes, more effective and better organised than on 14th May; if we are to have reduced industrial production; if we are to have increased closures (all of which have been forecast); if we are to have unemployment which is even higher than it was under Labour— and we should not be unique in having high unemployment, because Western Europe and other advanced countries are also forecasting it— then will this be the right climate in which to introduce another phase of this Bill and provide for more reforms of trade union legislation? I would hazard from all my experience that it is very much easier to bring in legislation in the first and second year than in the third year of a Government.
I feel that the picketing legislation (which I know is going to be in a code of conduct) as far as it goes in the Bill at the moment is pretty weak and flabby. All Governments have been worried about picketing, the Labour Party more than any; and I recall from the front page of The Times that flamboyant headline:
" Police arrest 70 as Grunwick battle leaves 30 hurt ".
Eighteen policemen had been injured. Mr. Scargill had brought down 18, 000 in buses from the Yorkshire mines to join the demonstration in support of the strikers— and they were striking against 350 mainly Asian and mainly women in a very small works on the edge of my old constituency. At that time the Government were clearly worried— as they should have been, and as the nation was. Here from The Times is an obviously inspired leak:
" The Government is considering changes in the law on picketing in the light of the Grunwick dispute, to relieve the police of what ministers now regard as an impossible burden ".

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Understandably so— 5, 000 policemen, one quarter of the police population of Metropolitan London, were deployed to try to keep the peace. Since then, we have had ugly scenes in other places. The Times goes on:
" They would include restrictions on the number who would have the right to assemble outside factories, and perhaps confining the legal right to picket to those with a legitimate trade union interest in the dispute so as to eliminate the gathering of politically motivated militants: the so-called 'rentamob' ".
This is exactly what this Bill seeks to do. I am surprised that this has not been picked up. That is probably why it went through the House of Commons with little "aggro"— fr that reason and a host of others. The Labour Opposition (as my noble friend said in his very able opening speech) went through the formula, the minuet, of objection; but there was no "aggro" behind it. When one went down there, one could see that, by and large, they were pleased that some other Government were picking up the responsibility that they failed to bring into law.
Then we have the transport strike of 1979. As a result of that, the TUC brought out some guidelines, as did the Transport and General Workers' Union. I have studied both of these. I have the admirable TUC booklet here. It was not obtainable in the Library but I obtained a special copy. The booklet sets out perfectly good, standard guidelines as to what ought to be the behaviour of mass pickets. They would be admirable if they were obeyed. But, as we saw at the private sector steel industry plants at Hadfields' and Sheerness, there was no intention of obeying them. I had expected the noble Lord, Lord McCarthy, with his lucid attack, to make one constructive suggestion. After all, for 11 of the last 15 years, the Labour Party have been in power. They are tied to the trade unions and they, above all others, would wish to see respectable behaviour and not mass picketing of the type which appalled not only our own population but, when shown on television round the world, amazed many of my foreign friends at what we have allowed to happen in Britain. It undermines also the confidence in British goods and in British deliveries.
So, my Lords, I support the idea of a code of conduct on picketing. I think that these sort of guidelines are unexcep-
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tionable; but I cannot help feeling that somehow we have to separate the official pickets, which will be allowed in limited numbers to do their proper task of peaceful persuasion, from the mass marches and demonstrations which Mr. Scargill, or anyone else, can lay on (as my noble friend Lord Gisborough said) at two hours' notice so as to put thousands of miners in buses and drive them anywhere in the country to cause a furore. We must try to separate the two. I would suggest that we ought to have a cordon sanitaire around works where there are major industrial disputes and where official pickets are mounted— just as, as so many noble Lords know, the rules apply to elections in the constituencies, where you are not allowed to "loud-speaker", to persuade, people too close to the polling station, for it is thought to be unfair to do so or to demonstrate near a polling station when people are making up their minds how they are going to vote. So there is a cordon sanitaire round the polling station. Could we not have a cordon sanitaire round a major industrial dispute? It does not need legislation, it just needs guidance. When the police are asked for permission to demonstrate or for permission to have a meeting or permission to march they will suggest that those marches and demonstrations should be kept away from the industrial dispute. That is the type of measure I would hope for.
On the closed shop, the noble Lord, Lord Spens, said that I was going to enlarge on this subject. My noble friend Lord De L'Isle made a most important speech when he drew attention to the fact that Parliament might be in contravention to the European Convention on Human Rights. We would want to study that speech and think about how we could make the closed shop more liberal in its approach and more respectful of individual human rights, as my noble friend, Lord Mottistone, said. This is of primary importance.
Now I come to the secondary action. This is contained, as the noble Lord, Lord Hatch of Lusby, said, in Clause 16. It deals with secondary picketing and blacking. I find Clause 16— I do not know whether other noble Lords do- desperately difficult to understand. One goes round and round about this and that. One really does not get the message very

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clearly. If we who are somewhat experienced in reading Bills find it difficult— and this is the case in both Houses because it was put in to the Bill so late that many of my friends in the Commons did not understand it very well either— how are both senior and junior management going to understand it? How are trades unionists going to understand it? How are those who organise, rule and pay the "Rentamob" going to understand it?
I cannot help feeling that there must be better ability within the law department of the Parliament of a country of 55 million people. Could we not find some lawyers who could write simpler English which could be more widely understood than the particular clauses that are drafted here?
The Earl of GOWRIE: My Lords, will my noble friend give way? I have no intention of explaining this difficult clause at this juncture. My noble friend is clearly illustrating the central problem behind this and the general debate, which is that law based on immunities is inevitably more complex than law based on rights and responsibilities.
Lord ORR-EWING: My Lords, my noble friend is right but I hope that it will not undermine his desire to make it simpler so that we can understand it. Every firm which has a contract to supply parts to a major firm which is in dispute could find, whether it is providing parts or services, that its own employees were taking industrial action in sympathy or as part of a blacking operation. This is desperately damaging to the whole economy of our country.
Take Fords, for example. I am the chairman of a company making braking mechanisms for the truck divisions of our big manufacturers. We have to deliver components every day. The same applies to Lucas or Smiths or people making axles and wheels and every part of a car. They are assembled. There are thousands of firms contributing to the main manufacturers. Are all these going to be liable to disruption? I have to remind the House that the car industry, which as
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previous Chancellors have found, is very important to our economy, has now gone over to what is called dual sourcing. If you are making axles, one axle will probably come from this country and another from Europe. Equally the big manufacturers in Europe will buy half from their own country and half from Great Britain, to their own designs. So, if you find this spreading through secondary action and secondary blacking, you will find our exports are also being undermined. You are not just stopping Ford UK or Vauxhall UK, you are going to stop our exports and further undermine confidence in our ability to deliver. So I would ask my noble friend, in the interval between now and the Report stage, when we shall be putting down amendments, to look at this, because at the moment it does not seem to me to make sense.
My Lords, I apologise but may I just summarise? I believe that this Bill still has certain weaknesses. We are a revising House, and to some extent a delaying House. I believe that the legislation about secret ballots should be somewhat strengthened not making secret ballots compulsory, as the noble Lord said when introducing it, but permitting them. When a certain number of people within a firm desire a secret ballot, whether they are 500 or 15 per cent., then there should be liberty to have a secret ballot and for it to be publicly financed.
On mass picketing, I believe we must look at this again, particularly secondary blacking, because that could be desperately damaging and people would be affected who are not really party to the industrial dispute. I think that the country expects your Lordhips' House to stand up on constitutional matters and be counted. I think it also expects us to stand up for individual freedom, and on both those scores I hope that we shall put down amendments and that each person will consider very properly and without prejudice whether we can make improvements to this Bill which will be persuasive and effective, and will be accepted by Parliament as a whole.
9.53 p.m.
Baroness SEEAR: My Lords, I must first apologise to your Lordships' House that I was not here at the beginning of the debate, and I apologise particularly to the Minister as I did not hear his opening speech. Unfortunately, I had a longstanding engagement in Nottingham which it was not possible for me to break. I am particularly sorry that I was not able to hear the maiden speech of the noble Lord, Lord Keith of Castleacre, but I understand from my noble friend Lord Rochester that it was a very considerable contribution to the debate in your Lordships' House this evening.
The best amends that I can make, my Lords, is to be very brief at this hour of the night, and that I intend to be. I have in fact cut out a good deal of what I intended to say. I cannot, however, quite resist responding to one comment made by the noble Lord, Lord Hatch, who claimed that it was only the development of the Labour movement which gave trade unions the position that they have in the country today. I would remind him that it was in fact the Liberal Government of 1906 that, rightly or wrongly, conferred on trade unions the immunities which we are discussing in your Lordships' House today. Be that as it may, wrongly you may say, rightly I would say, but that is a matter for another debate.
My Lords, there are matters in this Bill with which I am far from happy. I am not happy about the withdrawal of rights for people in small firms. I believe that that matter could be dealt with in another way. I believe that a great deal of the position in relation to small firms arises from misunderstanding. One is constantly being told, up and down the country by people who should know a great deal better, that it is impossible to get rid of anyone. Endlessly does one point out that the number of employees taking cases to industrial tribunals and winning them is smaller than the number who lose them. People do not believe it, and small employers have been almost brainwashed into believing that if they take people on, however incompetent, they are not able to get rid of them.
This is a very great mistake on their part. I do not believe the way to deal with it is to get rid of the rights which have been
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conferred on employees just because they happen to be employed in small firms. Nor, will your Lordships be surprised to hear, am I happy about the maternity provisions, but we shall return to this on another occasion.
I believe, too, that in removing Schedule 11— and I agree with removing it— we need to ask ourselves what we propose to put in its place in order to safeguard the position of the least well-paid of all who are often not defended by trade unions. We must not forget that to a very large extent the trade unions defend the position of those who are in pretty good employment, and there is a section of the community— the poorer section— which no longer believes that it is adequately protected by trade unions. I believe that the success at Edge Hill by a Member of my party in another place was due to the fact that there is a section of the employed population who no longer believe that the trade unions are going to give them the protection they require. When you remove Section 11, I believe it probably is necessary to find some other protection for that section of the working force. But these are matters which are probably more appropriately dealt with at Committee stage, and at this time in the evening I do not propose to enlarge on them any further.
Having had unexpected support from the Labour Front Bench, I am now going to forfeit all that support because, by and large, I support this Bill. I believe that good industrial relations have to be a blend of law and of good industrial relations practice up and down the country. It has to be both, and those who deny that law has a place in industrial relations really must explain why, of all relationships in society, only the relationship between employer and employed should not be subject to law. Of course that is nonsense. The relationship between employer and employed is in many respects subject to law, and members of the Labour Front Bench would be the very last people who would wish not to have law in industrial relations. It is absolutely essential that there should be law. The argument is not about whether there should be law in industrial relations: it is about what sort of law there should be. So let us forget all about this nonsense that you cannot legislate for industrial

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relations. You must legislate for industrial relations. Let us get that one out of the way.
Then we have the ridiculous argument— I was unable to hear the speech of the noble Lord, Lord McCarthy, which was most unfortunate from my point of view— that because the 1971 Act did not work therefore no Act will work. That is really like saying that if you have a sick patient and you give him the wrong medicine the first time, you let him die rather than try another lot. How the noble Lord, Lord McCarthy, can say that this is the same medicine as 1971, I simply do not understand. I know that the noble Lord, Lord Wedderburn, who can explain anything in this matter, will explain to us that it is exactly the same. I shall remain totally unconvinced. Anyway, there is no reason whatsoever why, because one piece of legislation was unsuccessful, we should not try again. There is in my view every reason why we should; so let us have some law.
What is the case for having this law? The case that has been put forward is that we need it because the balance of power has shifted from employer to trade union. I think that is far too sweeping a statement. The position of the balance of power is extremely complex. There are some parts of industry where the balance of power has indeed shifted, largely for technical reasons, and where it is impossible for the most powerful employer to continue in operation because some part or service which is under the control of a trade union and is so vital is denied to him. In those circumstances, the balance of power has indeed shifted abruptly and very severely against him.
There are still many other sections of employment in which the balance of power remains on the side of the employer; so do not let us have too sweeping statements about what has happened to the balance of power. Nor do I believe that this legislation or, in my view, any legislation would totally alter the situation in that first instance, where the reason for the shift in the balance of power is very largely technical. This Bill does not do it and, in my view, no Bill can do it. This Bill can modify it. It can modify the impact, but it cannot entirely redress
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the balance, because that has changed for reasons which have nothing to do with the law, and have very little to do with the nature of trade unionism itself.
Then we are told that we need it in order to protect the rights of individuals. Of course, anyone speaking from these Benches— and I believe anyone speaking from any of the Benches in your Lordships' House— cares about the rights of individuals, and I am glad that there are modifications to the previous position in relation to the closed shop, and that in future it will not be so easy to establish a closed shop. There are two arguments used against this, and against which I wish to protest. One is that, after all, only a very small number of people have been affected by the closed shop regulations. It cannot be said too often that an injustice done to one person is serious and an offence, just as much as an injustice done to 1, 000 people. To say that there are not many people who suffer is to show a total misunderstanding of the nature of justice and injustice. So that we certainly need to have some modification of the power of the closed shop.
I would also point out to those who think that this is going too far that, after all, all that is done in this legislation with the extension of the arguments that can be used, the extension from religion to other reasons for objecting to joining a union, is to give the people who so protest the right to compensation. It does not give them their job. So it is very difficult to see that this is an excessive extension of control over trade union power in relation to their members.
The other matter upon which I wish to take issue is when people say— and it has been said in your Lordships' House today— that a great many employers like the closed shop. So they do. But when I am told that both the trade unions and the employers approve of a certain practice, then I know that it is time that the rest of us started to protest.
That brings me to what I see as the major reason for legislation in this field. We need it not so much because of the balance of power, not even so much because of the need to protect individual rights, but because the community as a

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whole— and consumers in general— have suffered grievous harm because of the poor industrial relations in this country. I am not referring to the spectaculars on television last winter, deplorable though they were. Much more damage has been done, insidiously over the years, not so much by strikes but by working to rule, by resistance to technical change and by refusal to have innovation which would greatly have increased the wealth of this country. It is against that kind of abuse of power, and collusion in it from employers as well as trade unions, that the public as a whole need to be protected. That is why I believe that improvement in industrial relations, of which this Bill is a part, but, in my view, the less important part, is vital at the present time.
As I listened to the debate this evening, and I expect that it will be the same to the very end, I had a sense of fiddling while Rome burns. The position in this country is far too dangerous for arguments of this kind about what are relative details in a minor Bill. Unemployment figures are rising. Inflation is over 20 per cent. Industry in the North is frightened for its life. There are bankruptcies and there will be more as the year goes on. The unemployment among school-leavers is horrifying. The unemployment among black school-leavers is a horror and a disgrace. How can we be having this shadow boxing— and a lot of it is shadow boxing on both sides— while things are as serious as they are?
We have this Bill. It is true that we need some reform. We have been told that later there may be more law. I implore the Government, with the cooperation of the Opposition, to get this Bill through and to modify it here and there, if they must and if they will. But when it is through, let us have no more law. Let us work on the other side of industrial relations. Let there be cooperation at all levels. Let the Government start talking again— really talking, not lecturing, not hectoring us. Let there be three-party talks again within the framework of Neddy at national level. Let there be talk even about pay, because pay is a part of industrial relations. Unless we get this right we cannot get the rest of it right.
All right— do not have a formal policy if you will not, but talk about pay and
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about the real reason why we need progress on this front. It is not just the working classes, whoever, in God's name, they are today, but the whole country which will be gravely impoverished. And we may not recover from it this time— not in a decade, not in two decades. Then let us proceed from there: the Government to give the lead from the centre, with real collaboration at industry level and at factory level. We know that there is a great deal of good sense, a great deal of desire for recovery and a great deal of will to work.
I do not condemn so much the Government's policies. I believe that the Government are sincere, but they have not been able to get that over. If the Government want an improvement in industrial relations— yes, indeed, let them begin with this legislation; but having got it through, let them then not be afraid of what may appear to be a change in policy. Let them take the initiative to get co-operation going at all levels.
10.7 p.m.
Lord WEDDERBURN of CHARLTON: My Lords, it falls to me first to congratulate the noble Lord, Lord Keith of Castleacre, and particularly to do so because I share with him the experience of making my first intervention in your Lordships' House on a controversial issue, though attempting to be uncontroversial. I feel that we have succeeded in equal measure in that respect. I have the difficult job from this Bench of replying to the debate. As did the noble Baroness, Lady Seear, I will attempt to be brief, but I cannot promise to be so brief as she. One reason for that— I say this particularly to noble Lords like the noble Lord, Lord Orr-Ewing— is that sometimes I felt, as when the noble Lord, Lord Orr-Ewing, attacked my noble friend Lord McCarthy for misinterpreting and misrepresenting the Bill, that I had been reading a different Bill from that read by some noble Lords who have addressed your Lordships' House tonight.
I agree with the noble Lord, Lord Robbins, that the Bill raises issues of great principle— the principle of the relationship between the law and industrial relations. I agree with my noble friend Lord Kaldor in his penetrating analysis

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of the Government's economic and social policies in the debate on 16th April, when he said that it was an essential part of the Government's strategy to break wage resistance.
This Bill is the legal arm of the strategy of breaking wage resistance. It is not a modest Bill; it is not a moderate Bill; and, with great respect to the noble Baroness on the Liberal Benches, it is not a mild Bill. And we are not shadow boxing about it. This Bill was elaborately wrapped by the noble Earl. He always does that with his parcels. He had five this evening and the tinsel was glittering; there was the allusion to "My Fair Lady". But when one begins to look inside the parcel, one finds, as my noble friend Lord Hatch of Lusby said, that in it there is nothing to deal with any of the appalling economic problems which the Government have been exacerbating by their policies. One finds that there is nothing to stop the policy of smashing the national consensus which has existed since the war and which this Government have been the first Government to smash in this appalling manner. Indeed one finds a Bill which will make the smashing of the consensus quicker and more profound.
I was surprised to hear from the noble Lord, Lord Rochester, on the Liberal Benches, the complaint that the trade unions should now say what they are for. I commend to him the regular publications by the Trades Union Congress and its affiliated unions in which an alternative strategy is quite clearly set out. He may not agree with it, but he really cannot complain that the trade unions have not given a clear account of their alternative strategy; and my noble friend Lord Allen of Fallowfield spoke of the long tradition and the great contribution which he personally has made— and I am sure the noble Lord would recognise it— towards positive policies with Government.
Lord ORR-EWING: My Lords, before the noble Lord leaves that point— he said that it was the national consensus— may I ask: has he looked at the Gallup polls, which show that about 80 per cent. of the people of this country believe that there should be some trade union legislation and that 66 per cent. of trade
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unionists questioned also thought that? Where is national consensus if it is not behind this measure?
Lord WEDDERBURN of CHARLTON: My Lords, national consensus includes the element of treating the trade union movement as though it is a body to be consulted in a proper manner; not to be told that it can go away and play with wages after the Government have determined the entire range of social policies, given cash limits of an absurd kind for an industry which means a 2 per cent. offer. It means consultation in a real sense, and it is that kind of consensus which all Governments have followed. Looking back, we realise now what a change, what a watershed this is in national affairs; what a different style and what a different philosophy.
The Government have two great advantages in promoting this Bill. First— and I was grateful to the noble Earl for being one of the few speakers (if I may put it this way) who did not misrepresent this point this evening— the Government have the advantage of a quirk of history which has given us immunities in trade union law. The noble Earl was quite right when he said that the curious way in which our industrial revolution developed left us not with positive rights— the right to strike and the right to associate— which all other Western societies have, but with a set of immunities. The reason is almost certainly clear, that our Labour movement developed before any working class party developed in this country and before universal franchise.
That is the basic difference between our first industrial revolution and the rest. Instead of having positive rights we have a set of immunities. It is a very strange system; it is neither virtuous nor vicious in itself. It is strange, but of course it allows people to stand up and make the most extraordinary statements, such as that all the immunities are privileges. Without the immunities in our present structure of law trade unionism would be unlawful, trade union action would be unlawful.
To say that something is an immunity does not take the argument further one way or the other, despite the Aunt Sallys which were raised by the noble Lord, Lord Harris of High Cross, and, I am

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afraid, by the noble Lord, Lord Robbins, who said that law has no place in industrial relations; and the noble Baroness, Lady Seear, also spoke of that. I do not know where they have been reading these curious Aunt Sally propositions. Of course law has a place in industrial relations, but if one is scholarly about it one has to distinguish between individual protective law and the law relating to collective labour relations. Whereas the fashion of those who set up Aunt Sallys a few years ago was that we should import some law from the United States of America and Sweden, the fashion tonight seems to be that we should import our laws from Germany. The one thing that 20 years of comparative research into the realm of law and labour relations has taught me is that one cannot import law from any other system in this area, because in collective labour law the delicate threads of history weave in each society a most fundamental and intimate relationship— akin to family relations. One can learn by looking at other systems, but one cannot import them.
A number of noble Lords have said that our trade unions have more privileges than any other trade unions in the world. That is absurd. A number of countries have been mentioned. It so happens that Italy has not been mentioned, but Italy has a right to strike which takes precedence over breaches of contract, which prevents any worker from being dismissed by reason of going on strike and which allows for political strikes to be lawful.
Noble Lords may like or dislike that, but just as a matter of fact and comparing British law, they cannot say that our law gives trade unions the greatest rights in the world. Our trade unions labour, as the High Court and Court of Appeal have shown over the last two years, under a very large number of legal restraints which, until the House of Lords resuscitated the law of 1906 last year and this year, was being gradually narrowed by further judicial interpretation. These immunities are not privileges. It is no privilege in a democratic society to have the right to associate and the right to withdraw your labour.
It is also false to say that the immunities were extended in the Trade Unions and Labour Relations Acts. So many Lords have spoken of this point that I feel I
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must deal with it now, although I would have preferred to deal with it rather later in my speech. I say it is false to proclaim that the 1974 and 1976 Acts, which were what the Labour Government wanted to put on the statute book because in 1976 it was a majority Government, were an extension of the social compact established in 1906. The reason why it is false to say it— and I am surprised that the noble Lord, Lord Renton, as a lawyer does not know this— is that in the intervening years, as a number of Law Lords have commented in recent cases, there have been judicial extensions of liability beyond that envisaged in 1906. If I put it shortly, I put it this way: that in 1906 there were thought to be three main areas of economic pressure by which industrial action could become unlawful. One was conspiracy, the second was interference with trade, and the third was inducing a breach of employment contracts.
If the noble Earl consults the Donovan Report, where some research was done on this matter, he will find, in paragraph 887, the Donovan Report saying it is odd that employment contracts were the only contracts protected against interference, but, they say, the reason for that was that in those days the cases seem all to have been cases of that kind. Later, especially in the 1960s, the courts extended liabilities unknown to the legislature in 1906. The noble Earl does not have to take my word for this. He can look at the supplementary memoranda put in by his own department, the Department of Employment, to the Select Committee in another place, which speaks at page 11 of
" … the important new tort liabilities facing officials "
— that is, union officials—
" because of the wider ambit given by the courts to the modern law of interference with commercial contracts ".
I will quote the cases because Lord Renton suggested he did not know them, and therefore I should give them to him by citation in the proper manner.
Lord RENTON: My Lords, would the noble Lord allow me to intervene? In another place when that legislation was discussed the grounds for that legislation were not, so far as I remember, except on two points, put forward as being a method

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of in effect reversing or correcting— whichever term appeals to the noble Lord— what the courts had decided in several cases. The legislation was put forward as part of this new social contract of the last two Parliaments.
Lord WEDDERBURN of CHARLTON: My Lords, the noble Lord's memory is different from mine. I remember that Hansard printers were on strike at the time, but I still have some of the typescripts. He will consult the debates and so will 1, and we will see how far it was mentioned. My memory is clear that there were three areas— and certainly this was the reason for the legislation— in which the courts had extended liability. The first was direct and indirect inducement of breach of commercial contracts, which was what the Donovan Report realised the courts had done, and which obviously outflanked the 1906 Act.
Secondly, there was the decision in the case of Rookes v. Barnard in 1964 in the House of Lords, where for the first time it was held that a breach of contract was in the same category of unlawful means as violence and that therefore the threat of it was a civil wrong of intimidation. And the third can be no better expressed than in the words of the Master of the Rolls himself in the case of Torquay Hotels Limited v. Cousins in the second volume of the Chancery Reports 1969, where, at page 138, he said:
" The time has come when the principle "—
that is, the principle of interference with contracts—
" should be further extended to cover deliberate and direct interference with the execution of a contract without that causing any breach ".
When it is suggested— and the noble Earl fell into this category, although not as clearly and so strongly as some of his noble friends— by the noble Earl's Government (and it is on record certainly by members of his Government) that the 1974 and 1976 Acts extended the liabilities, I say to him that paragraph by paragraph the 1976 settlement is precisely the same as the 1906 settlement, except for the fact that the words are changed, because if we enacted the words of 1906 in 1976 we would leave three huge areas of liability which would make industrial action unlawful. So, in fact, it is a falsehood
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to suggest that in 1976 any extension of trade union rights occurred in this country. What was meant to happen in 1906 happened again in 1976.
I see that the noble Baroness, Lady Seear, has left the Chamber for a moment and so I shall keep my next remark until she returns. It is sad to see the Liberal Party not understanding what has happened to its great Act. However, that is the first great advantage that the Government have, especially in the country. It links with my second point, because the second advantage, of course, is the way in which the Bill has been presented to the country. The debate before your Lordships' House, although it has sometimes been quite different from the content of the Bill, has at any rate resembled the Bill on occasions. If we consider the media, what has happened as regards the presentation to the country has simply been a scurrilous campaign against trade unions which my noble friend Lord Howie of Troon suggested consisted of displaying the conduct of a minority of trade unionists as being representative of the movement as a whole.
The Earl of GOWRIE: My Lords, I wonder whether the noble Lord would allow me to make a point as regards the media? Some of us could also say that it has been a scurrilous campaign against my right honourable friend the Secretary of State.
Lord WEDDERBURN of CHARLTON: My Lords, I shall hope to show the noble Earl that nothing is further from the truth, and that what I am trying to do is to analyse his Bill and to show that it takes collective rights of trade unions back to the law of 1905. I say to the noble Earl— and no doubt he will wish to consider this matter on advice— that the Bill is a breach of the United Kingdom Government's obligations under the European Social Charter. I shall come to that point later. I say quite seriously as regards the trade unions— and it is not a question of attack— that action which is not approved by trade union leaders, by a number of trade unionists, has occurred many times in the history of trade unionism. In the works written in 1890 your Lordships will find exactly the same thing being complained of by trade union leaders. Now it is presented night after night and

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day after day as though it were representative of the trade union movement. The trade union movement in this country last winter— or, indeed, at any other time— mounted the most peaceful picket lines in the world, and the noble Lords who have spoken about picket lines abroad cannot have seen them in Canada, Belgium or in a large number of other countries.
It is totally false to suggest that the trade union movement is characterised by this kind of thing, which in any event existing laws are there to deal with. If noble Lords look at the evidence given to the Select Committee of another place on 27th February this year, they will find that, although in respect of some demonstrations some chief constables suggested that the law could be looked at in detail, generally speaking the existing law on violence and mass obstruction is, of course, [sufficient, if the police constables decide to enforce it.
I should like to quote the Chief Constable of South Wales, Mr. Woodstock, who gave evidence to the Select Committee of another place. It is a quotation which is very relevant to the mood of some noble Lords tonight. He said:
" Quite frequently there are occasions when pickets are there in large numbers and all is peaceful and no great difficulties are caused. They are sometimes there for comradeship and solidarity ".
This is a chief constable of police speaking, not a trade union leader. He goes on:
" You must not assume that on every occasion there is a mass picket there is going to be trouble. You sometimes get a very jaundiced picture from the mass media who tend to highlight the occasions when things go wrong, but this is by no means the norm, because there are many other incidents which pass off day by day without any difficulty whatsoever. "
No one likes strikes— as were mentioned this evening— by gravediggers, ambulancemen, hospital cleaners, firemen or, come to that, Kent miners. I had planned to mention the prosecution of the Kent miners in 1941. I thought that we had learnt 40 years ago that issuing writs and injunctions against free men and women did not make them drive ambulances or I dig coal, or clean hospitals or work in a way that no doubt we would all wish in a happy society.
On trade union power, many noble Lords have complained about the im-
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balance of power. I say that the real problem today is that trade union power is too weak in the sense that, opposed by concentrations of capital, our society allows the power of working people through their organisations to be expressed in only a negative manner. When the trade union movement comes forward with requests for new structures of industrial democracy which would allow a contribution in a full sense for the frustrated talents of a large number of our people, it is treated as demanding some unwarranted infringement of the rights of management and the board of directors. It just will not do for noble Lords to speak in the way they have about the power of the trade union movement. Unhappily, it is a negative power and it should be positive. If this Bill contained anything which was positive and which offered the trade unions a way of contributing, a response would come. But this Government make no such offer.
There is, in fact, a very old Conservative script which is brought out from time to time. For example, you read in The Times leader that:
" Judged either by Britain's present situation or by international standards, these are fair and moderate proposals. "
But that comes from The Times of 6th October 1970 and refers to the Industrial Relations Bill. The script is that once workers were oppressed, but now they are not. Now the balance has been restored and has swung too far the other way. One can find quotations in precisely those words in the 19th century, in 1906, in 1970 and again today.
It was, indeed, the great act of 1906 of the great Government of the noble Baroness, Lady Seear, and the noble Lords on the Liberal Benches, with their great Lord Chancellor, Lord Loreburn, which saved the country from industrial strife by making strikes lawful. I say to them that when they do not resist, as they say they will not resist, the cutting back of those rights to the proportions of 1905, "Oh! what a falling off is there". It is hardly worthy of the great party to which the noble Baroness belongs and its history to allow these rights to be cut in a way that her forbears would never have allowed.
There are three main areas of this Bill on which noble Lords have made remarks and on which I must at least comment

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very briefly. First, there is the area of individual rights. Much has been said about individual rights. The noble Lord, Lord Spens, spoke about the small business and individual rights and, of course, the individual rights of workers in the small business will be savagely cut back in regard to unfair dismissal in firms of 20 employees or less, and in maternity rights in firms of five or less.
In passing, I may say that we shall press the Government very hard in Committee, as we shall on this whole Bill, on this question of 20 employees, because in many areas— as has already been pointed out by some employers— the limit of 20 employees will encourage the worst employment practices, such as lump labour. Employers will take on lump labour; they will not go over 20 employees so they need not worry so much about employment protection. The myth of the small firm is being used to cut the rights of workers about dismissal and maternity rights. It is a myth. I ask the noble Earl, Lord Gowrie, to record for me, at any rate in Committee, if he cannot do it now, any independent survey— not the surveys of the National Federation of Small Businesses which had a 2 per cent. response, or the Small Business Bureau, which asked for ammunition against the Labour Government— of which there are at least three which have shown that these employment protection laws do not cause substantial practical difficulty for businesses, big or small.
It is said by the noble Lord Lord Spens, that the small businessman cannot understand the Employment Protection Act. What the surveys show is that too few small businessmen take the trouble to learn about the employment protection laws, and the small shop steward gets on pretty well when he really makes the effort.
Lord GISBOROUGH: My Lords, will the noble Lord give way?
Lord WEDDERBURN of CHARLTON: My Lords, I have given way already. I must not detain the House too long. This Bill, under the smoke screen of the small business, which is all the public knows about it, then goes on to reduce the unfair dismissal rights of workers as a whole— as my noble friend
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Lord Allen of Fallowfield, pointed out so well— and also the maternity rights of women workers in general, who are indeed one of the exploited groups of our workforce, and who will be subject to an absurd bureaucratic machinery where their maternity rights and return to work rights will be lost.
The second area of the law where this Bill will impede and weaken support for collective bargaining and trade union structures falls into four categories. First the Bill takes away the ACAS power to recommend recognition with binding effect of a trade union upon an employer. In this I agree with the right honourable gentleman who is now the Chancellor of the Exchequer in what I suppose will have to be called, in view of current terminology, the "demi-sec period "of his political life, when he wrote in the Daily Telegraph of 2nd January 1968:
" Employers should be obliged to recognise and negotiate with trade unions if this is desired, after a secret ballot if necessary by the employees concerned. "
I agree with that sentiment, and I agree too that the provisions of the 1975 Act are far from perfect in this respect. But to repeal them and put nothing in their place is simply to ask for more industrial strife about recognition. If that is what the Government are asking for, that is what they will get.
Similarly with Schedule 11. At least at the moment Schedule 11 does something about low pay. It does not do a lot. It has defects. I was glad to hear the reassuring noises from the Liberal Benches tonight which showed that at least the Liberal Party is in favour of salvaging something of Schedule 11 in order to help the low paid. This is an example of the national consensus.
We have had unilateral arbitration for the low paid of the undercutting employer since 1940. This ran from 1940 to 1951, and 1951 to 1958, when the Conservative Government replaced it with an Act of 1959. Only now are the low paid to be left with no statutory structure to assist them except the fair wages resolution which the Government dare not rescind because it would be in breach of yet another of their international obligations. "Wait and see", the noble Earl says. If the fair wages resolution is to be repealed I hope he will tell us now. We do not want to wait and see.
The Earl of GOWRIE: I did not say "wait and see". I said "wages councils".
Lord WEDDERBURN of CHARLTON: Indeed, the noble Earl reminds me; I had forgotten the point. If it is so offensive to the free market economy to have in Schedule 11 statutory machinery to help the low paid, why is it not offensive to have statutory wages councils? Do not they offend the Mancunian leanings of the Government? It is a strange line to draw between Schedule 11 on the one hand and fair wages resolution and wages councils on the other. It makes no sense. I suspect that sensible members at the less than dry end of the Cabinet know perfectly well that a lot of this makes no sense whatever. They know perfectly well that they are pushed into this measure partly because they have to resist the pressures from behind them to go further. The same is true of trade union affairs and the closed shop in general.
Before I make the point which I promised the noble Earl I would make in detail, I will make only three points on this matter as time presses me, because it is a serious charge against the Government in regard to their international obligations. On trade union affairs and the closed shop, I would say first that the Bill gives to industrial tribunals the right to decide whom it is reasonable to accept and admit into a union. Those who have spoken for it say this is only right because of individual protection. There is a case to be made for that. I happen to think it is the wrong way of doing it. It is better done by voluntary machinery. Such legislation gets in the way of the Trades Union Congress disputes procedures, as to which no one in the Government has yet explained the position in regard to this legislation, and which saves a great deal of industrial difficulty every day. It will be made much more difficult to operate by these clauses. I see the case; but I do not hear any voices saying there should be legislation whereby trade unionists who are refused a job can go to an industrial tribunal and say, "It was unreasonable not to employ me, not to engage me and admit me to the job". Where is the logic in that?
Nor do I hear any answer to the clear case made in the Donovan Report at paragraph 376, that you cannot have, and cannot expect, industrial tribunals—
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they called them labour or industrial courts— to operate on individual employment matters between employer and employee, if you also give them the much more politicised role of determining collective disputes or relations between unions and members. That judgment was right then and it is right now, and by bringing the industrial tribunals into a much more politicised area, the Government are throwing away such confidence as they have built up.
As far as the closed shop itself is concerned, which is the big bogy of British industrial relations, I noted that the noble Baroness, Lady Seear, answered the whole point by saying that if employers and trade unions were in agreement about it, she knew she was going to object. I am not sure of the logic of that. It may be a good or bad thing, but it is a strange position to take up on principle. It seems to me that most noble Lords who have spoken— I refer in particular to the noble Viscount, Lord de L'Isle, the noble Earl, Lord de la Warr, and the noble Lord, Lord Rochester— have overlooked the simple fact that in regard to the development of an industrial relations system which knows of union security arrangements (and that is not just the British system; the American and Swedish systems have union security arrangements which are quite strong in their own way) we have 100 per cent. trade union arrangements. These have grown up, and this gives rise to a clash of principle. On the one hand stands the only principle which the noble Lords opposite seem to know about, namely, the claim, "I want to be here as an employee without joining a union".
I understand that. But the right that they do not seem to understand at all is the right, on the other side, of each and every trade unionist to say, "I want to work here with brothers who make a contribution and do not just take the fruit as free riders from the collective bargaining to which they make no contribution ". Those two rights are in conflict, and what we did in 1974 and 1976 was to draw a compromise line. If you have two rights which are in conflict and which do not have logical priority the one to the other— and I make no claim that they do, although personally I think collective bargaining is sufficiently important to place great emphasis on the

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second— you draw a line. We drew the line at religious objection.
What the Government pretend to do in this Bill is to draw a different line. But I say— and we shall make this stick in Committee— that the line is a sham, that existing closed shops or 100 per cent. union membership arrangements will be managed only with a maximum of legal and legalistic difficulty, and that new closed shops and 100 per cent. union membership arrangements will be almost, if not utterly, impossible to make. The thing is a sham. Noble Lords behind the Front Bench opposite should cheer up; union membership arrangements will be more difficult to make than they think.
Thirdly, we come to the area of industrial conflict and what the Bill does. It must be already clear to your Lordships that I take the view that because the 1976 settlement was a modern equivalent of the 1906 settlement, as indeed it clearly was— that is clear to anyone who looks at the case law and extensions of liability— this Bill now tears that compact up in a variety of ways and, in doing so (to make the general point first) it is thought by some of its proponents to have a virtue. The words have not been spoken in your Lordships' House tonight, but I make the point because it relates to what has been said.
It is often said, "We are not making the same mistake this time"— I am not attacking the noble Lord, Lord Carr of Hadley; I am sure he will understand that— "because we are not setting up a special court. It will all be done by the High Court. Do not worry; there will not be a special court which will be perceived as an instrument of class justice or anything of that sort. It will all be done by the High Court". Then one thinks for a moment and looks to the noble and learned Lord, Lord Scarman, in the steel case earlier this year when, thoughtfully, at the end of his judgment, he said, and I quote from page 554 of the All England Law Reports for this year:
" Open-ended expressions will bring the judges inevitably into the industrial arena exercising a discretion which may well be misunderstood by many and which can damage the confidence in the administration of justice ".
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There are plenty of open-ended expressions in this legislation, and I hope the noble Earl will reply to this point because it is a very serious one.
This Bill is not only a danger to good industrial relations, it is not only an attack on trade union rights and it is not only a nightmare for a works manager. It is also a Bill which calls into peril the very authority and status of the High Court itself. The law does not have an infinite capital to spend upon enforcing statutes which men feel infringe their inherent rights and rights that they have enjoyed for nearly a century.
Sensible and moderate trade union leaders of experience in the movement— my noble friend Lord Allen of Fallow- field surely made the point tonight— hate this Bill because they join with the American trade union leader Samuel Gompers, who was no revolutionary or militant, who said in 1908:
" It is our aim to avoid strikes; but I trust that the day will never come when the workers of our country will have so far lost their manhood and independence as to surrender their right to strike. "
If the High Court is to be asked to do the job this time, then it will be the High Court's capital that eventually may well suffer, and in pursuing a voyage down that road the Government may well have a terrible reckoning to account for when the Bill is in operation.
My noble friend Lord McCarthy has been attacked and criticised on the ground that he said that this was a very technical Bill. The noble Earl suggested at one point— I hope I do not misrepresent him— that if we had positive rights, it would be rather less technical and less complicated, easier to understand. I do not know how many times he has read the National Labour Relations Act of the United States, with all its positive rights. I am not sure that it is much more easy to understand. It may be a little more, because of course what they are putting on the statute book is a nightmare.
Suppose you have a shop steward who asks: "What can I do?" He will remember of course, because he knows his labour history, that this has nothing to do with the winter of discontent. The Conservative Party have been trying to outlaw sympathetic action for the last 40 years. They never really got used to the Act of

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1906, because they think that the Act of 1906 was what Lord Halsbury called it in your Lordships' House in 1906: a Bill to legalise tyranny. For the past 40 years they have been saying that they want to ban and prohibit our sympathetic strikes. They said it to the Donovan Commission, the Conservative lawyers, the CBI— all of them. So the matter has nothing to do with the last winter of discontent. But now they have come up with a different phrase: it is now secondary action— an Americanism, but it will serve.
The shop steward asks, "What can I do?" You say, "Well, you say the Government have said"— and here I quote their working paper of 9th July—
" The law must be described with clarity. "
" Oh, good! "he says," I would like to hear it. What will I do? "You say this:" You must not induce your members to take industrial action in breach of their employment contracts— which industrial action normally is under the common law— if those employment contracts are with an employer who is not a party to the dispute (and you had better take further advice because he may be a party if represented by an employers' association) and if those breaches will be a fact relied upon to establish liability for an interference with some commercial contract by a person who suffered loss: and that may not be the employer that you are thinking about.
" Then unless you acted with the principal purpose of preventing or disrupting, and could prove to a judge that you were likely to prevent or disrupt directly and not indirectly either (a) the supply of goods or services during a dispute between an employer who is an employer in the dispute and an employer who is not an employer party to the dispute under a subsisting contract between them— not with anyone else; so you had better ask a lawyer where the contract is— or (b) the supply of goods or services from, and not to, an associated employer of the employer in dispute, as defined by Section 30 (5) of the 1974 Act to, but not from, another employer during the dispute, which would have been supplied but for the dispute by the employer in dispute, again directly and interfering with a subsisting contract— unless you do that, then you won't be acting lawfully, with one exception: unless of course you interfere with the commercial contracts by picketing. "
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The shop steward says, "I know about that. We have been picketing for years. We have never had any violence around here. This is a normal situation. I know that violence occurs, but we have never been ' done ' for picketing. So I can picket". You say, "No, wait a minute". But he says, "I had the right to picket in furtherance of the dispute. I am only doing it in furtherance of the dispute in the classical sense"— and it has been suggested in your Lordships' House tonight that the decisions of 1980 and 1979 of the Appellate Committee of this place introduced a new meaning to the word "furtherance". That I say is completely false. The meaning of the word "furtherance"has been the same since 1906. It was the Court of Appeal which began to limit it in the late 'seventies.
The man says, "I know about that. I am going to further the dispute". You say, "Wait a minute. You can only picket at your own place of work, and you can be accompanied only by a union official who represents you within the meaning of the new Section 15 (4)".
The man asks, "Where is my place of work? Actually we all work at two factories. Does it include both, because although they are owned by different companies, they are economically really the same unit? "You say," Oh no, you can only picket at your own place of work".
Then he says, "Is ' workplace' defined?"; and you say, "No, because if you look at the debate in another place on 18th March of this year, you will find that the Attorney General said, ' If we try to define "workplace", we shall find ourselves in a most awful mess', whereas the Secretary of State, Mr. Prior, said, ' For the vast majority of people there is no doubt where their place of work is'". So you say, "You know where your place of work is, although it cannot be defined", and he says, "Well, that's all right, but what will happen if some people come from another place? They will not be picketing lawfully". Then you say, "No, they will not be; and you had better be careful not to combine with them, because then you might well— indeed, it was suggested in Committee in another place that you clearly would— be combining with them to take

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unlawful action, and therefore the whole picket line might run into legal problems".
The noble Lord, Lord Gisborough, quite rightly spoke of the difficulties of identification, because the police have made it clear that they are not going to identify people because they think it has nothing to do with the criminal law. The right honourable gentleman the Secretary of State said at the same sitting:
" But many of the difficulties "—
that is, difficulties about identification which have been envisaged—
" such as people wearing beards or giving Mickey Mouse names, will not arise ".
The noble Earl, Lord Gowrie, has said this evening that there will be no criminal liability. I ask him to repeat that, and to repeat that the code of practice on picketing will have no effect on criminal liability. If it is to have no effect on criminal liability, presumably the Government have changed their mind, because in the working paper on picketing the Government said that the code of practice on picketing would help the interpretation of the law by the police and the magistrates. So let us know about this, because I cannot tell my shop steward whether it is going to have an effect upon picketing in criminal law. What a future for industrial relations, my Lords— the "private eyes" of the employers identifying pickets in beards giving Mickey Mouse names! Absurdities will be brought into industrial relations by ridiculous measures of this sort, which are an attempt to reverse the compact of 1906.
My final point, which is indeed perhaps the most serious of all and of which my noble friend Lord McCarthy spoke earlier this evening, is in Clause 16 (8), because there, in two lines, the Government repeal a part of the 1976 compact which was not needed in 1906. It was not needed because it was never decided until 1964 that a breach of contract was "unlawful means" in the civil law of tort; that is to say, that it could be actionable, for example, by a third party. Once it became actionable as "unlawful means", then, to quote the Master of the Rolls again in a recent case:
" Anyone who interferes with trade or business and does so by unlawful means is acting unlawfully ".
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Therefore it is clear that unless a protection is given in trade disputes to a breach of contract as such, as unlawful means in the law of tort, all forms of industrial action are at legal peril.
Indeed, the noble Earl's party knew this perfectly well, because although now they say that in 1974 and 1976 there were great extensions, when they were in the driving seat with their Liberal allies against the minority Labour Government in 1974 they changed Clause 13 (1) and they changed Clause 13 (3) (a), but with all the Lever amendments and all the other one-vote majorities they managed, quite properly, in another place, they did not change Clause 13 (3) (b). If it was such a major extension, why did they not change it then? Why do they come now with a proposal which in two lines will destroy the right to strike?
It is not good enough for a Government to put forward proposals of this sort and to pretend that they fought them in 1974 when in fact, with a majority, they put them on the statute book themselves because they knew they were needed to make the right to strike lawful. As the noble and learned Lord, Lord Scarman, has recently said:
" Briefly put, the law now "—
that is, the law before this wretched Bill goes through on to the statute book—
" is back to what Parliament had intended when it enacted the Act of 1906, but stronger and clearer than it was then ";
and in saying that he refers to a previous passage where he has talked about the judicial extensions of liability.
My Lords, I tell the Government that they cannot expect working people, who face the massive and growing power of both the state and giant corporations, as well as the risk of inflation and unemployment which this Government are putting to them, after a period when they realise what has happened, to have their industrial rights returned to the rights of 1905. For a time, a false story can be told; for a time, the movement can be seduced by constant repetition of the acts of the minority on the television box or in the press; but, after a time, if the Government go ahead with this Bill in this form (and we shall press every line of it in Committee) then, one day, very soon, the shackles will be cast aside and the Labour movement will

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get rid of the shackles of this Bill as part of its work to restore the consensus and the Welfare State which this Government are destroying.
10.50 p.m.
The Earl of GOWRIE: My Lords, when you have been debating the Second Reading of a Bill for eight hours, there is quite a lot to be said for warming up the atmosphere towards the end. We might all have been a little comatose by this time had not the noble Lord, Lord Wedderburn of Charlton, made his spendid début from the Dispatch Box opposite and the Front Bench opposite. I draw attention to the Dispatch Box opposite and the Front Bench opposite because I would hate to leave your Lordships with any impression that what the noble Lord has given us over 43 minutes— and I will try to undercut him there, if in no other way— has anything to do with official Labour Party policy. It has not; and the moment it becomes so, we will probably have a Conservative Government for 30 years— which even I might object to!
I go from the noble Lord's speech to perhaps almost the best corrective one could make to its general philosophy.
Lord McCARTHY: My Lords—
The Earl of GOWRIE: I will give way later. I want to make a remark about the maiden speech. One of the best correctives that could have been made to the spirit of the speech of the noble Lord, Lord Wedderburn of Charlton, happened earlier, in the maiden speech of my noble friend Lord Keith. Speaking as a manager, he praised the Bill for its commonsense and said that the lessons of the last 12 years have shown that sweeping changes in trade union law achieved all at once have not always been effective. He said— and this is the point that I would draw to the attention of the noble Lord, Lord Wedderburn of Charlton— that there was strong evidence of public support for the changes achieved in this Bill. Lord Wedderburn reluctantly conceded that; and tried to deflect that public support on to the media. The point that I tried to make to him was that the media have felt two ways about this Bill. Many sections of the Conservative press have felt very hostile towards
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it, very critical of it, for not going far enough; and relatively few newspapers, whatever their political persuasion, have attacked it as being a fundamental attack on the primary, legitimate trade union activities of the sort that the noble Lord, somewhat sophisticatedly, I thought (in the old meaning of the word), represented it as being a few moments ago. I hope to take up some of the points that the noble Lord made. He said, "We will fight the Bill line by line". I wonder whether that includes the new statutory rights for antenatal care. I look forward to returning to the issue at a later stage of the Bill.
We had a lively speech from the noble Lord, Lord McCarthy, as one would expect from someone who, I understand, won the Observer debating trophy and published a PhD thesis on the closed shop in the same year. He asked me whether repeal of Section 13 (3) of the 1974 Act would not have removed some of the immunity from primary action, the basic rights or basic immunities, of trades unions. This was partly behind some of the objections of the noble Lord, Lord Wedderburn of Charlton. I am advised that the clause does not affect the immunity for primary action which Section 13 of the 1974 Act, as amended, provides. The repeal of Section 13 (3) is necessary only to make it clear that an employer can seek an injunction where there is unlawful secondary action. My speech made it clear that we do not intend to cut into the quick of legitimate union activities. The noble Lord, Lord Wedderburn, is arguing that whether we intend to do so or not, we are doing so. That is the point where we disagree with him. It is certainly not our intention to do so.
Lord KALDOR: My Lords—
The Earl of GOWRIE: I will give way, but I would draw attention to the lateness of the hour.
Lord KALDOR: If what is intended in Clause 8 is what the noble Earl just said, all it needs to clarify it is to add the words:
" for the purposes of this section ".
The Earl of GOWRIE: I am sure, my Lords, that the noble Lord will put down an amendment to that effect, and I will certainly look at it. As I said in my

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speech, this is a Second Reading area; it is not our intention to cut into primary action in this way.
The noble Lords, Lord McCarthy, Lord Plant and Lord Wedderburn, asked us how judges would decide what the principal purpose of secondary action would be. The noble Lord, Lord Plant, asked: "Does not the clause put the courts in the position of what the noble and learned Lord, Lord Scarman, in a judgment called, the ' back seat drivers '? "Of course the courts are going to have to apply the new provision to the facts of any case that is brought before them. As a number of noble Lords have said, it is idle to think that courts can be kept altogether out of industrial relations, though we aim to see that their activities are at a minimum there.
Under the new clause, the courts will have a specific task of determining on the evidence presented to them whether the purpose of the secondary action is to disrupt supplies between the employer in the dispute and his customer or supplier, and whether it is likely to achieve that purpose. The noble Lord, Lord Wedderburn, with great brio — and I enjoyed it— used the old debating formula of taking a set of legal, rather tightly and perhaps rather stuffily drawn provisions, and translating them into the language of the shop floor. But one can do that equally well with his golden formula. I would have thought the courts have found equal difficulties in interpreting the so- called golden formula which says:
" in contemplation or furtherance of a trade dispute ".
We have now a House of Lords' judgment to say that that is purely a subjective measure and therefore impossible to apply as useful law.
A number of noble Lords asked me whether the Green Paper on immunities would be the prelude to much further legislation. I share the view of the noble Baroness, that it would be undesirable, if we can conceivably avoid it, to have additional legislation. The point of the Green Paper is to get to the debate which the noble Lord, Lord Wedderburn— if he would be so kind as to attend to me— mentioned at the very beginning of his speech. He said I had fairly represented that we have a curious— let us put it in a
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neutral way— history in this regard, and we think there may be a case for altering our general approach, and that is why the Green Paper would have discussion about the principles of rights in law as against the principle of immunities in law. If I may say so, I thought that that point was very brilliantly answered by my noble friend Lord Mottistone.
The noble Lord, Lord McCarthy, asked me about the position of trade union officials on the picket line. He said that it was not clear in the Bill. It is perfectly clear: a trade union official may picket peacefully at his own place of work and at another place of work when members of his trade union whom he represents are picketing lawfully there. I do not see anything difficult about that. If the noble Lord finds it difficult, no doubt he will put down an amendment and we can clarify it.
A number of points were made about the issue of small firms. Both the noble Lords, Lord McCarthy and Lord Wedderburn, were sceptical about surveys, and challenged me about the results of surveys, about the disincentive effect in small firms. I might say, incidentally, that if noble Lords are so keen on surveys perhaps they would like me to send them copies of all the polls and surveys of trade union opinion which indicate the support for the measures of this Bill among the rank and file.
I should like to quote a letter from a not highly politicised source— the Scottish Development Agency in Edinburgh— who wrote to my honourable friend the Under- Secretary in our department:
" The general story that we learned in Scotland at the time of the provisions of the Employment Protection Act was that firms were unwilling to engage staff when the Act was so heavily weighted in favour of employees, making it difficult to discharge people except under threat of financial penalty should business decline. "
But having given that piece of, if you like, anecdotal evidence, I do go a considerable way with the noble Baroness, Lady Seear, when she says that the effects on small businesses of the last Act were primarily psychological. That is why our amendments to the Act are extremely minor, even in the cases of the maternity issue, which has caused some excitement. They are very minor indeed, and they are there to try to correct the psychological imbalance.
Lord HOWIE of TROON: My Lords, will the noble Earl tell us whether the comment from the Scottish Development Agency was made before or after his Government changed the chairman?
The Earl of GOWRIE: My Lords, I do not have that advice to hand. All I am saying is that this letter was received and I offer it for what it is worth. The noble Lord is perfectly at liberty to challenge it and say that it is all nonsense, but the fact is that a perfectly reputable development agency gave us that opinion.
I want now to come again to further points made by the noble Lord, Lord Rochester, and I welcome his general support for the Bill, as I do that of the noble Baroness beside him. The noble Lord said that voluntarism is no longer a credible proposition. I do not think he was throwing voluntarism overboard entirely, and he gave a plug to the principle of codes of practice. But he nevertheless felt that it must be underpinned by law.
On the closed shop he did say: "I have enough practical experience of industry to know that it is not as easy to prohibit it as it might appear". I would be most obliged if he would tell that to his right honourable friend Mr. David Steel. If I may indulge in a brief anecdote, the Secretary for Labour in Mr. Carter's administration in America recently came over here, and I said, "We have a lot of trouble and debate and false alarms and excitements about the closed shop in this country. You were rather sensible to get it out of the way with the Taft-Hartley Act of 1947." Secretary Marshall said to me, "We may have outlawed it in Taft- Hartley, but we could not do without it ". Our anxiety has been all along that we do not want to drive the closed shop underground in order that the kind of protections for individuals which the Bill seeks to provide and which I would say to my noble friend Lord De L'Isle we believe that the Bill does provide, are driven underground as well.
The noble Lord, Lord Harris of High Cross, made a broadly supportive speech. He pointed out the many advantages of the German trade union law. In our department, on the way to my office, there is a bust of Mr. Ernest Bevin. I was always brought up to believe that it was Mr. Bevin who created the German
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system of trade union law, rather contrary to the noble Lord's point of importation, in order to escape from some of the curious history of our own. Nevertheless, be that as it may, one of my ambitions during my tenure as Minister in the Department of Employment, is to get equal time with Mr. Bevin by getting a bust in there of my late noble friend Lord Monckton of Brenchley.
I want to address myself now to the very powerful speech of my noble friend Lord De L'Isle on the issue of the European Court. We have always had profound sympathy for the three ex- British Rail employees, and I want to make that unconditionally clear. We vehemently resisted the last Government's legislation which left them without a remedy when they were dismissed. The Bill will ensure that in future similar cases to theirs will not be denied a domestic remedy. Under the rules of the convention we are not at liberty, as the noble Viscount knows, to reveal the contents of the commission's report, though this should be available in the next few weeks, now that the commission has referred the matter to the Court of Human Rights. But I can say to the noble Viscount that we are convinced on good grounds that when the present Bill becomes law we shall be meeting the standards of the convention.
The noble Viscount said that compensation in closed shop issues was not an adequate remedy. This is a matter specifically for Article 13 of the convention and it will, I understand, be covered in the commission's report. Our view is that compensation is the only practical remedy in this area and successive Governments have recognised this. The point is that it is not practical to force unwilling partners to work together, and that has always been implicit to the law. If the noble Viscount will do me the kindness of taking that statement, when he reads Hansard tomorrow, and combining it with our anxieties about driving these practices underground, he may be able to come a little nearer in spirit to us. That is certainly where we should like to find him.
I must congratulate the noble Lord, Lord Robbins, on a brilliant defence of the open society. He said that it was a virtue of the Bill that it is not all-embracing. My noble friend Lord De La Warr asked

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about the problem of the revolving pickets— "the here-today-and-gone-tomorrow-picket"— and that also caused concern to my noble friends Lord Orr-Ewing and Lord Gisborough. We anticipate that an employer whose business is being damaged by secondary picketing will seek an injunction against the organiser of the picketing. The organiser will not usually be difficult to identify because effective secondary picketing needs careful organisation: it is rarely anonymous or spontaneous. Injunctions are usually granted against a named person and his agents or servants, so that an injunction sought against the organiser will usually apply to anyone picketing on his behalf. Anyone who, knowing of the injunction, disobeys it and continues to picket is liable to be held in contempt of court, and that is a serious offence which the courts themselves will punish. I would point out to the noble Lord, Lord Kaldor, that he must make a distinction between going to jail for striking and going to jail for being in contempt of court. Therefore it will not be possible, in our view, for a picket organiser to get round a court order by the stratagem of replacing one set of pickets by another— that is to say, by using "rotating" pickets.
The noble Lord, Lord Carr, made the speech which, if I may say so, most interested and moved me this evening. Luck plays an enormously important part in politics, and two measures in the Heath Government years— the Sunningdale Agreement on Northern Ireland and my noble friend's Industrial Relations Act suffered the bad luck of getting embroiled in a general election on a somewhat different issue. My noble friend asked me whether the Bill was not proceeding too much against individuals as opposed to against trade unions or organisations generally. We feel that the best way to proceed is by injunction against persons, because a good example of an injunction being sought and observed was the recent case involving the private steel producers v. Sirs and others. The injunction was sought against the organisers of the strike— Mr. Sirs and other members of the executive. It was immediately obeyed in the trade union tradition of obeying High Court orders, and the strike was called off until the House of Lords overturned the decision. There was a recent
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comparable case concerning Express Newspapers in respect of the Day of Action.
The noble Lord, Lord Hankey, complained that we were treating with this Bill now. I think he would prefer to have been handling it last autumn. As I explained in my opening speech, we were determined to consult at every step of the way; and I must say to the noble Lord, Lord Wedderburn, in this context that the strength and vehemence of his objections are not what we have found in our ordinary consultations. I will, of course, look at everything he says with an open mind. The noble Lord, Lord Howie of Troon, made an argument on the closed shop in special circumstances. We do not believe that the professional employee he has mentioned and whose dilemma he posed requires protection additional to that already given by the Bill. If he has a deeply-held personal conviction based on his professional code of ethics against joining a union which may require him to go on strike, he may have an objection on grounds of conscience within Clause 6. If he has no objection to joining a union but when required to take part in a strike refuses to do so, then Clause 3 protects him from unreasonable expulsion from the union. So we think that the three points raised by the noble Lord, Lord Howie, are covered. But if he is not satisfied with them— I have a longer answer here which I am truncating— I will either write to him or encourage him to put down an amendment and deal with it at a later stage.
Lord HOWIE of TROON: My Lords, I am grateful for the noble Earl's encouragement.
The Earl of GOWRIE: My Lords, the most purely pleasurable moment I had during the debate was when I caught the eye of the noble Lord, Lord Wedderburn, when my noble friend Lord Renton said that he was the only lawyer speaking in the debate. My noble friend was uncertain as to whether we had kept to our manifesto commitment. Part of our argument is that we have not proceeded any further than we said we would go, and that that is the best way to proceed. I hope he will be convinced of that as the Bill proceeds in Committee.

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My noble friend Lord Massereene and Ferrard asked about the methods of codes of practice and whether they would come before the House. The Affirmative Resolution procedure does allow for parliamentary input, and we will see that the codes get it. My noble friends Lord Orr-Ewing and Lord Gisborough mentioned picketing and demonstrations. It is not difficult, in our view, to distinguish between demonstrators and pickets. The crucial question is not whether a person is demonstrating, but whether he is inducing a breach of contract; that is, whether he is stopping people from going to work or lorries from collecting or delivering goods. If he is inducing a breach of contract, there will be no immunity unless he is picketing at his own place of work.
I think, in one or two interventions I made to try to correct some false impressions, I dealt with the maternity point. I would just remind your Lordships that, in the case of the very small business being able not automatically to be obliged to reinstate a lady after she has had a baby, the onus is entirely on the employer to show that it is not reasonable for him to do so. I should have thought it was equally sexist to discourage the hiring of women of marriageable age, by the provisions of the law as they presently exist.
On the vexed and difficult issue of secondary blacking, which I agree with my noble friend is complex, we have always made it clear— and this leads me naturally to my last point on the matters raised by the noble Lord, Lord Wedderburn— that we intend to maintain the historic immunity for inducing breaches of contract of employment, first established in 1906. What we object to is the unlimited immunity for inducing breaches of commercial contracts which, in our contention, the last Government introduced, and which opened the way for indiscriminate secondary action to damage the businesses of those not involved in a dispute, thus spreading the disruptive effects of a dispute far and wide. We are trying to get to what I would, in shorthand, call the "Denning doctrine of remoteness".
The noble Lord, Lord Wedderburn, asserts that, in fact, the immunities for calling industrial action are now, as a
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result of the 1976 Act, in the same position only; that they have not been extended; that they have simply gone back to the 1906 Act and that the extension of the immunity for inducing breaches of contracts of employment to breaches of all types of contracts was, indeed, in the spirit of the 1906 legislation.
The noble Lord is a very great expert, but I do not think he altogether understands the real world in which Acts of Parliament are practically put into effect. Whatever the words of the statute may say— and we will have argument about this in Committee— there is a world of difference, surely, between the practical effects of the immunity, as it operated when Mr. Asquith's Government designed it, and as it operates today. It is, as it were, a modification of the operational excesses of this law that we are concerned to see happen. The legislators of 1906 could never have foreseen the development of flying pickets, so they could never have anticipated the extent to which other forms of industrial action, such as blacking, would be used to spread disruption far beyond the parties originally in dispute. That is the simple correction that we want to make.
Even on a matter of law, it is quite wrong to assume that nothing changed in practice between 1906 and 1971. Any trade union leader who was active in the 1950s and 1960s would tell you that the courts looked very carefully at cases involving breaches of commercial contracts, and certainly did not take the view that immunity depended altogether on the state of mind of the person who induced the breach of contract. Why is there so much support for these changes, and why is there no real commitment to repeal them?
On the issue of wages councils which I administer in this Government, they do, indeed, cater for the genuinely low paid. But Schedule 11 helped to give the relatively high pay comparability increases to BBC staff under the last Government. That was not what the schedule was originally designed to do. We want to get back to a voluntary system, and we think that Schedule 11 is standing in the way there.
Finally, I would say to the noble Lord, Lord Wedderburn of Charlton, that the

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code will not create new criminal offences; it will simply explain the existing law, including the criminal law. What we have been talking about this evening is the civil law. In sum, we have restored the right of workers to claim unfair dismissal if they are sacked through the improper imposition and operation of the closed shop. We have restored the right of an employer to seek a legal remedy in the civil courts when his business or livelihood and the jobs of his employees are threatened by secondary picketing; we have put strict and specific limitations on the immunity for spreading industrial disruption far and wide beyond those directly concerned in the dispute, and we have removed the immunity for coercive recruitment tactics, such as those employed by Slade. I look forward to detailed work on the Bill and expect to learn a lot, but I believe that these essential and modest reforms are long overdue.
Lord McCARTHY: My Lords, before the noble Earl sits down— he is a fair and reasonable man— can he help me? I listened with great care to what my noble friend Lord Wedderburn of Charlton said. Indeed, I had prior knowledge of much of what he was going to say. I could not see any way in which he went beyond the position adopted by the Labour Party in Committee and in the House in another place. I should like the noble Earl either to tell us specifically where he went wrong on this or to take back that remark.
The Earl of GOWRIE: My Lords, I have no intention of withdrawing the remark. I made it as a form of congratulation to the noble Lord, Lord Wedderburn of Charlton. I find his opposition a great deal more robust than I found it when following the different stages in another place. I was trying to pay the noble Lord a compliment. There is no need to throw it back in my face.
Lord WEDDERBURN of CHARLTON: My Lords, I thank the noble Earl for paying me a compliment, but may I—
Several noble Lords: Order, order!
Lord PEART: My Lords, I think that my noble friend ought to be able to reply quickly.
Lord SANDYS: My Lords, this is quite out of order. The noble Earl has sat down.
Lord WEDDERBURN of CHARLTON: My Lords, the noble Earl was asked a question before he sat down. Will he answer it? Will he answer the question which arises out of what was said by my noble friend Lord McCarthy?
Lord SANDYS: No, my Lords.
On Question, Bill read 2a, and committed to a Committee of the whole House.

LONDON TRANSPORT BILL
Brought from the Commons; read 1a and referred to the Examiners.
  JURY VETTING
  JURY VETTING
  " ACS ": DEFINITIONS
  " ACS ": DEFINITIONS
  TOXIC SUBSTANCES ADVISORY COMMITTEE
  TOXIC SUBSTANCES ADVISORY COMMITTEE