Sitting of 7 December 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
Oral Answers to Questions
  INDUSTRY

    New Businesses (Factory Space)
    Sir William Elliottasked the Secretary of State for industry through which Government-aided schemes or bodies factory space for starter businesses is available in the principal conurbations.
    The Under-Secretary of State for Industry (Mr. John MacGregor): The English Industrial Estates Corporation, the Scottish and Welsh Development Agencies and the Northern Ireland Department of Commerce can all provide nursery units from public funds in the principal conurbations of the assisted areas.
    Local authorities throughout the United Kingdom and urban development corporations also build factories and receive central Government funds, for example through the urban programme. Privately-financed developments of this kind have been encouraged by the 100 per cent. industrial buildings allowance in the 1980 Finance Act.
    Sir William Elliott: I am grateful to my hon. Friend for that catalogue. Does he accept that Newcastle-upon-Tyne depends enormously on the further encouragment of small businesses in that city Will he consider all possible further means of encouraging small businesses, possibly through the EEC regional fund?
    Mr. MacGregor: I am well aware of what my hon. Friend said. Last Tuesday, I was in the Northern region at a business opportunities programme conference, which was well attended by representatives of small businesses. I assure my hon. Friend that I shall continue to study all ways of helping small businesses.
    Mr. Campbell-Savours: Is there not among those bodies British Steel Corporation (Industry) Ltd. and the enterprise trusts which it is fostering? In what way can the Minister help Sir Charles Villiers, who this moring suggested that additional funds should come from the European Community to help foster the development of enterprise trusts in areas of high unemployment?
    Mr. MacGregor: There is a distinction between British Steel Corporation (Industry) Ltd.—I am well aware of its excellent work, and I have visited it on a number of occasions—and the enterprise trusts, which involve large firms, local authorities and others, including local chambers of commerce, combining to help small firms.
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    Much aid, in the form of funds of one sort or another, comes from European sources, and the hon. Gentleman will know of the encouragement that the Government are giving through exchange risk guarantee schemes and other such measures. I shall consider Sir Charles Villiers' suggestion, but we are doing all that we positively can to encourage such initiatives.
    Mr. Steen: Why is my hon. Friend so sure that these public funds are best spent in this way? Would it not be better to privatise the English Industrial Estates Corporation and other organisations to which the Government give sizeable funds, because many private sector development companies would be happy to build factories in inner city areas.
    Mr. MacGregor: I am aware of my hon. Friend's recent publication "New Life for Old Cities", which I have read, and we are now studying a number of its suggestions. There is a substantial role here for the English Industrial Estates Corporation. Under this Government, the EIEC has concentrated on building smaller factories. At the end of October, it had built 592 units of less than 2,500 sq ft, another 537 were under construction, and 841 were at the design stage. In many cases, it is building in areas where so far the private sector has not been involved. As my hon. Friend will know, it is also building with private sector funds, and it can sell off its estates at the end. There is a role here for the EIEC in conjunction with the private sector.
    Mr. John Garrett: Does the Minister agree that, regardless of the amount of space being made available for new starter businesses, the rate of new small business formation today is no higher than it was in the 1970s and the rate of small business deaths is about four times as high? Compared with such facts, which are caused by the Government's squeeze, which is reducing more small businesses to bankruptcy, the availability of space is surely a somewhat secondary matter.
    Mr. MacGregor: We have no precise figures for start up and close down of small businesses in earlier years. We are working on the figures for last year, and they show a high rate of small business formation. It is interesting that more smaller premises of this kind are being built now than for many years past and that the take-up is very high.

    Iron Foundries
    Mr. Easthamasked the Secretary of State for Industry, further to his reply to the hon. Member for Manchester, Blackley, on 9 November, Official Report,c. 26, if he is satisfied that his Department has full information as to the number of iron foundries closed in the United Kingdom.
    The Under-Secretary of State for Industry (Mr. John Wakeham): I am satisfied that the information available to my Department is substantially complete.
    Mr. Eastham: I thank the Minister for that reply. Has his attention been drawn to the fact that every foundry in the country is now working at less than 60 per cent. capacity and that manning has declined by 12·5 per cent? I make two suggestions. First, will he consider giving special assistance towards energy charges? Secondly, will he give special consideration to better loan guarantees for such companies, or is he prepared to let them wither away?
    Mr. Wakeham: The deterioration in market demand by manufacturing industry, including the vehicle industry—which accounts for one-third of demand—is the main, overwhelming reason for the industry's difficulties. In certain circumstances, selective assistance, under the Industry Act 1972, may be available to foundries. Obviously, the Department is anxious to consider any such circumstances. Energy prices are primarily a matter for my right hon. Friend the Secretary of State for Energy, but we are considering the position of major energy consumers.

    Bank Lending
    Mr. Heddleasked the Secretary of State for Industry, pursuant to his reply to the hon. Member for Lichfield and Tamworth of 9 November, Official Report, c. 23, whether he has now completed his study of the Conservative parliamentary industry committee report on the terms and conditions of bank lending in Great Britain and its relationship to industry in general.
    The Secretary of State for Industry (Mr. Patrick Jenkin): Both my right hon. and learned Friend the Chancellor of the Exchequer and I have discussed this report with representatives of the committee and study group. The report is an interesting contribution to the important question of financing industrial investment, and we are still considering its conclusions.
    Mr. Heddle: Does my right hon. Friend agree that while last week's welcome reduction in the bank rate will ultimately have a beneficial effect and that a further and larger reduction would, hopefully, have an even greater and more immediate effect, nevertheless many of the report's recommendations will have an immediate and beneficial effect, particularly on the cash flow of companies in a recession and that, if its recommendations are taken up, companies will be encouraged to invest more and so create more wealth and, particularly, more jobs?
    Mr. Jenkin: Any fall in interest rates will help industry, particularly industries that have projects to invest in. We can take some comfort from the fact that, despite the depth of the recession, manufacturing investment has held up remarkably well in very difficult circumstances.
    Dr. John Cunningham: Rubbish.
    Mr. Jenkin: It is not rubbish. The ratio of investment to output has broadly been maintained. In such circumstances, one would have expected investment to fall much further than it has. That is a cause for some satisfaction. I agree that if it were possible to find a way to reduce the perceived rate of interest and to help companies' cash flows, investment would probably be encouraged still further. My right hon. and learned Friend the Chancellor of the Exchequer and I are discussing precisely those points.
    Mr. Hooley: Is the Secretary of State aware that the banks are now showing a welcome nervousness about their poor reputation in this sphere? Is the right hon. Gentleman further aware that one problem is the short-term nature of loans to manufacturing industry for capital investment? Will he discuss that point with the banking authorities?
    Mr. Jenkin: The hon. Gentleman is a little out of date. I do not think that there is strong evidence now to support the view that the banks are reluctant to lend for medium or long-term projects. They have devoloped their lending
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    facilities to meet the increasing demand from industry in recent years. On the industrial side, the problems have involved inflation, high wage settlements, low productivity and declining profitability. Those matters are of great concern to industry when considering investment. There is not much evidence of a shortage of funds.
    Mr. Grylls: When my right hon. Friend and his colleages consider this matter further, will they bear in mind the point made by my hon. Friend the Member for Lichfield and Tamworth (Mr. Heddle) about cash flow advantages and the term lending aspect of the report's proposals? As a result, many projects might come forward that otherwise would not if there were no such initiative.
    Mr. Jenkin: I congratulate my hon. Friend on the part that he played in producing the report. It has aroused a good deal of interest, not least among my colleagues and I. One of the attractions of my hon. Friend's scheme is the cash flow advantage to companies, which would be able to get tax relief at the time of paying the interest by deduction of tax instead of havint to wait until they can claim the deduction of loan interest from their corporation tax profits. We are considering that point.
    Mr. Orme: Does the Secretary of State accept that his statement does not match the facts? In the past two years there has been a reduction of more than 20 per cent. in investment and output. What has the right hon. Gentleman got to say about that?
    Mr. Jenkin: The right hon. Gentleman is well aware that the recession has hit manufacturing industry hard and that there has been a reduction of about 17 per cent. In the circumstances, the reduction in investment might have been expected to fall much further. However, the figure for 1977 is £3·5 billion; for 1978, £3·8 billion; for 1979, £4 billion; for 1980, £3·6 billion; and for the first half of 1981, £1·5 billion. Although that is a fall, it is nothing like as great as might have been expected, given previous recessions. That is a cause for some comfort.

    Assisted Areas
    Mr. Barry Jonesasked the Secretary of State for Industry if he will regard high levels of unemployment as evidence of long-term structural decline in making decisions on assisted area designation; and if he will make a statement.
    The Minister of State, Department of Industry (Mr. Norman Lamont): The state of unemployment is certainly one of the statutory criteria which my right hon. Friend is required to take into account in designating assisted areas.
    Mr. Jones: Given that there is a desperate need for new jobs, what study has the Minister made of the Euroroute? It is claimed that a road and rail bridge across the Channel would create 100,000 jobs annually and that it would provide a stimulus to quarrying, steel, engineering and other industries. What news does the Minister have for the hard-pressed regions about the Nissan car factory project?
    Mr. Lamont: The Euroroute is primarily a matter for my right hon. Friend the Secretary of State for Transport. Discussions are continuing on that matter. I note what the hon. Gentleman said about the difficulties facing his area which has been extremely hard hit by closures. However, more that £35 million in Government assistance has been

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    given to the two travel-to-work areas in the hon. Gentleman's constituency—£14 million to Shotton and £21 million to Wrexham. Therefore, the Government cannot be said to have been ungenerous in their assistance to those areas.
    Sir Anthony Meyer: Is my hon. Friend aware that there is support on both sides of the House for the concept of the Euroroute? Is he further aware that a great stimulus has been given to jobs in Wales by the very large, low-interest loans from the EEC, which have been announced today? About £30 million of low-interest loans will he made to North and South Wales.
    Mr. Lamont: I am aware of those loans, which all receive cover from the exchange risk guarantee scheme, operated by the Department. I annouced the extension of that scheme last week. I am sure that my hon. Friend will be pleased that the United Kingdom is taking up well over 50 per cent. of the ECSC loans provided under article 56.
    Mr. Marksasked the Secretary of State for Industry when he will announce the results of his review of the July 1979 decision to make certain intermediate assisted areas non-assisted.
    Mr. Charles R. Morrisasked the Secretary of State for Industry if he has any plans to review his assisted area policy.
    Mr. Norman Lamont: The Government stand by the commitment to review those assisted areas due to become non-assisted from 1 August 1982 having been downgraded by more than one step. As regards the timing of the review, as my hon. Friend the Under-Secretary of State said on 26 November in answer to the hon. Member for Edinburgh, East (Mr. Strang) my right hon. Friend hopes to announce the results of the review in the spring.
    Mr. Marks: Has the Secretary of State studied the detailed submission made to him and the Prime Minister by the Greater Manchester council and by all 10 metropolitan districts? Will he receive a delegation from the area as soon as possible? Is he aware that several of the areas that will retain assisted area status have lower figures for unemployment than Greater Manchester?
    Mr. Lamont: I am aware of the hon. Gentleman's last point. It is true of some areas, but not of others. I have received the submission from the metropolitan authorities. Of course, we shall be prepared to see them.
    Mr. Charles R. Morris: Does the Minister recall that the Secretary of State said that he is prepared to review assisted area status if there is evidence of long term structural decline? Is the hon. Gentleman aware that since assisted area status was withdrawn from Greater Manchester, unemployment there has risen by 133 per cent.—from 98,000 to 171,000 with 68,000 under the age of 25? Is not that evidence of long term structural decline?
    Mr. Lamont: I am aware of what the right hon. Gentleman said. Unemployment has risen nationally as well. On the post 1982 basis, unemployment in the Manchester travel-to-work area will remain below the average of all intermediate areas. The right hon. Gentleman has a case, but it is not quite as strong as he said. In the last three years £11 million in selective financial assistance has been given to the Greater Manchester area. That has created more than 4,000 new jobs and safeguarded 5,000 jobs. That is before
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    considering regional development grants and section 8 assistance which amount to £15 million, which must have had a similar affect on jobs.
    Mr. Anthony Grant: Is my hon. Friend aware that almost any area can make a strong plea to be included for assistance of one sort or another under regional policy? In the review, will the Minister bear in mind that it does no service to the nation or to the economy to spread the largesse too widely and too thinly?
    Mr. Lamont: One of the aims of regional policy is to cncentrate on certain areas. That makes the policy more effective. My hon. Friend is absolutely right. At any time when unemployment rises, some areas will experience an above average rise. We cannot give aid to every area with above average rates of unemployment, because there are bound to be variations.
    Mr. Arthur Davidson: That is all very well, but is the Minister aware that he phased out assisted area status from north-east Lancashire on the basis that unemployment there was low at about 4 per cent.? The rate has now soared to 12 per cent. Is he now trying to fob me off by saying that there are worse regions than that? I know that there probably are worse regions, but the figures are deplorable. North-east Lancashire's case is overwhelming. Will he do something about restoring assisted area status to that region before the situation becomes catastrophic and it is too late to do anything about it?
    Mr. Lamont: We are determined to stick to our policy of concentrating aid on certain areas and of reducing the total area of the country that is covered by regional aid. Within that policy we are prepared to examine the long term implications of any individual area.

    Steel Industry
    Mr. Hal Millerasked the Secretary of State for Industry how far his examination of the case presented by the private steel industry for help with restructuring has progressed; and if he will make a statement.
    Mr. Hooleyasked the Secretary of State for Industry what plans he has to provide public money to assist the private sector of the special steels industry; and if he will make a statement.
    Mr. Patrick Jenkin: I am considering the representations made to me by the British Independent Steel Producers Association on which I hope to take a decision shortly.
    Mr. Miller: I thank my right hon. Friend for looking into the private steel industry's case. Will he bear in mind the resentment that it still feels that EEC aid has not been distributed even-handedly in relation to redundancies? Is my right hon. Friend aware that Britain is the only country that persists in confining EEC decisions to its steel corporation rather than to the steel industry as a whole?
    Mr. Jenkin: Such considerations prompted me to accede to the association's request that I should at least look at its case. I say, entirely without commitment, that the factors to which my hon. Friend has drawn to the attention of the House apply in this way only to steel. That makes it right to examine the industry in the way that I am examining it.
    Mr. Hooley: Is the Secretary of State aware that if his proposals are designed to preserve jobs and capacity in the

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    special steels industry, they will be welcomed? Is he further aware that if he dithers much longer, there will be no special steels industry to preserve?
    Mr. Jenkin: The hon. Gentleman does less than justice to the announcement on special steels by the European Commission on 23 October, which specifically recognised the problems of the United Kingdom industry. The Commission has undertaken to take steps to restabilise the market to achieve higher prices for producers. That is in direct response to the action that we took in conjunction with the British Independent Steel Producers Association as a follow up to the Warner report.
    Mr. Beaumont-Dark: Is my right hon. Friend aware that many private steel companies believe that, if they had been treated on a fairer basis, more of them would still be in business today? Is he further aware that if a decision is not soon made on the aid that is to be given, the few firms that are left might follow other private sector firms down the hill and have no business left?
    Mr. Jenkin: I well understand the urgency of the matter. I hope to make a statement fairly soon.
    Mr. Hardy: Has the Secretary of State met representatives of the people who manage and work in the private sector of the special steels industry? If so, have they made it clear—if not, I do so—that although the EEC measures might be welcome, the problem is not so much one of structure, but that other Governments, both within and out of the Community, are more determined to ensure that their special steels industries are successful?
    Mr. Jenkin: The special steels industry has a future. I make it clear that it is not a question of propping up a dying industry. The special steels industry has a real, long term future in Britain. In the European context, it is important to ensure that the aids given by the EEC or individual Governments are fair and that they do not distort competition.
    Mr. Hardy: But they do.
    Mr. Jenkin: The hon. Gentleman may say that, but our intention is to ensure that they do not. This week I am chairing an informal meeting of Industry Ministers at which we intend to require that the Commission shall apply rigorously and fairly the June decisions of the Council of Ministers on aids to the steel industry.
    Mr. Moate: Are the Government in strict compliance with the European Coal and Steel Community and EEC rules when they restrict disbursement of subsidies for restructuring solely to the public sector?
    Mr. Jenkin: I am advised that we are complying strictly with the rules. The justification for confining the aid to the British Steel Corporation is not at first blush self-evident. That is why I am examing proposals put to me by BISPA.
    Dr. John Cunningham: Is the Secretary of State aware that the Opposition welcome support for private steelmakers in Britain, especially special steels manufacturers? In view of his comments this afternoon, will he explain why it has taken five months for the Government to reach a decision? We debated the issue in July. Did not the Warner report make it clear that, without a substantial help, which can come only from the Government, much of our special steels industry would not survive?
    Mr. Jenkin: I wish that all Opposition Members shared the hon. Gentleman's enthusiasm for the private sector of the steel industry—[HON Members: "We do."] That is not apparent from what they have said over the years. I saw the BISPA delegation within two weeks of taking my present office.
    Mr. Peter Hardy: Too long.
    Mr. Jenkin: The hon. Gentleman may say that, but we have moved quickly. It is a complicated matter. I understand the urgency involved in announcing a decision one way or the other.

    English Industrial Estates Corporation
    Mr. Anthony Grantasked the Secretary of State for Industry what was the level of Government grant to the English Industrial Estates Corporation in each of the last three years.
    Mr. Norman Lamont: It was £29·7 million, £32–7 million and £37·4 million in 1978–79, 1979–80 and 1980–81, respectively.
    Mr. Grant: I appreciate the work that the English Industrial Estates Corporation has done over the years, but have not the majority of its developments been in areas which could have been tackled by private enterprise? Would it not have been better to concentrate the substantial sums involved on inner city problem areas?
    Mr. Lamont: My hon. Friend is not quite right. The English Industrial Estates Corporation is an arm of regional policy. It has been building factories in areas where the private sector has not been willing to go. My hon. Friend has a point about inner city areas. The corporation has been building smaller units. That is the emphasis under this Government. I hope that meets my hon. Friend's point.
    Mr. Adley: Will my hon. Friend consider the related question, that manufacturing industries might wish to lease an existing building and use resources either in their possession or borrowed for their manufacturing process? Does he recognise that in such cases it is possible to retain many useful factory buildings in towns and cities? Can he give some hope to people, especially in my constituency? He may know the case that I have in mind.
    Mr. Lamont: I do not recall the case mentioned by my hon. Friend. However, what he said is happening a great deal and should be encouraged. I shall find out about the case my hon. Friend has in mind and consider it.
    Mr. Wrigglesworth: Is the Minister aware that the English Industrial Estates Corporation has made a major contribution to the development and growth of factory premises in the Northern region? Will he therefore ignore plans for turning that corporation over to the private sector in the way that has been suggested this afternoon? Further, will he try to ensure that the English Industrial Estates Corporation does not operate in such a way as to stop many firms taking the premises with which they are provided because of bureaucracy and unwillingness to provide freehold premises in many instances?
    Mr. Lamont: I agree with the point made by the hon. Gentleman. The English Industrial Estates Corporation has built many much needed factories under its regionl policy. I do not believe that incentives would work without

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    the factories being made available. We have put the English Industrial Estates Corporation on a commercial basis. It is now required to make a commercial return. Encouraged by us, it has also worked more and more with the private sector, pension funds and institutions. That must be the right basis on which to proceed.

    British Leyland
    Mr. Canavanasked the Secretary of State for Industry whether he will meet the chairman of British Leyland to discuss his plans for investment and employment.
    Mr. Patrick Jenkin: I meet the chairman of BL whenever the need arises. We discuss a variety of topics.
    Mr. Canavan: In view of the points raised last week by my hon. Friend the Member for West Lothian (Mr. Dalyell), may we have an assurance that the Department of Industry will make available to the Comptroller and Auditor General any documents that he requires during his inquiry into the proposed sale of the British Leyland tractor line at Bathgate to private interests? Is it not also about time that the Secretary of State told Sir Michael Edwardes to stop such senseless public asset stripping, which will destroy the jobs of 900 British Leyland workers?
    Mr. Jenkin: I have read the speech of the hon. Member for West Lothian (Mr. Dalyell), who is not in the Chamber at the moment. He was very free with allegations of impropriety, when he variously referred to British Leyland's action as a "rip-off", "commercial treachery" and spoke of management having their snouts in the trough. I strongly deprecate such language about what is a straight commercial decision by British Leyland. However, I can tell the hon. Gentleman that if the Comptroller and Auditor General or any other House authority wishes to investigate the matter on a normal basis, I and my Department shall co-operate fully.
    Mr. Stokes: Is not the main task of British Leyland today to make as many good cars as it can without any interruption of production by strikes or any other means? When that has been accomplished, surely the time will be right for further investment, as it will have the confidence of both customers and dealers.
    Mr. Jenkin: My hon. Friend is absolutely right. We are pleased that the company and its employees have found a solution to the dispute at Longbridge and that the production of cars started again this morning.
    Mr. Orme: Is the Secretary of State aware that one reason for the cuts in the truck and bus division of British Leyland, leading to widespread redundancies in Scotland, Preston and Wolverhampton, is the cuts in public expenditure, not least to local authorities? Is he further aware that the Government's policy has a lot to answer for in that regard?
    Mr. Jenkin: The right hon. Gentleman really could not be more wrong. He cannot have heard what my right hon. and learned Friend the Chancellor of the Exchequer said on Wednesday. Expenditure by local authorities has consistently exceeded the targets set by the Government. In his announcement about next year, about £1·3 billion of the £5 billion extra expenditure is accounted for by local authorities. The reason for the British Leyland cutback is
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    that the market for trucks weighing over 3½ tonnes has halved from 80,000 to 40,000. The demand for buses and coaches has fallen by 35 per cent. In those circumstances the company has decided—as a commercial matter—that it must check its manufacturing base so that that part of the business can remain viable and become profitable. That is a decision for the company management, and I do not intend to intervene.

    Industrial Growth
    Mr. Rentonasked the Secretary of State for Industry what steps he is taking to ascertain which sectors of British industry have the most promising prospects for growth in the 1980s.
    The Minister for Industry and Information Technology (Mr. Kenneth Baker): There will be growth in many sectors of British industry. We have chosen some sectors and technologies for special attention and support, including information technology, microelectronics, fibre optics and the application of advanced manufacturing techniques.
    Mr. Renton: I thank my hon. Friend for that reply and I know of his contribution in the area. Does he believe that, at a time when Britain is in the middle of a technological revolution, we need some new concepts in the area of industrial incentives? What does my hon. Friend think about the recent Neddy report, which showed the degree to which industrial incentives exist among our competitors, incentives which continue whichever Government are in power and which have given great stimulus to new, high technology companies?
    Mr. Baker: The report to which my hon. Friend refers was taken at the previous Neddy meeting and will be taken again at the February meeting because we consider it of such crucial importance. It is a report on the whole of the electronics industry.
    On the question of special programmes, I remind the House that I announced during the past few months a special programme of support for robotic development amounting to £10 million, a programme for the introduction of computer-assisted design in British businesses for £6 million, and a research and development programme for fibre optics costing £25 million. It is my intention to announce further such programmes next year.
    Mr. Douglas: Does the Minister accept that what he has announced to the House has a narrow technological base? Is he aware that he and the Chancellor of the Exchequer have undermined large sections of British manufacturing industry, and that the statement last week by the Chancellor will do nothing to enhance industry's growth prospects generally because it will have no effect on gross domestic capital formation?
    Mr. Baker: I do not wish the hon. Gentleman to feel that the measures that I have announced and will be announcing are restricted to a narrow technological base. That is not the case. Many industries, whether manufacturing furniture, biscuit tins, carpets or clothing, must use the new technologies or they will not be in business in the next five or 10 years. It is depressing that, despite all the efforts of the Government and the previous Government, 50 per cent. of British companies still do not use microtechnology. Perhaps the most modern piece of equipment that they have is an electric typewriter.
    Mr. Maclennan: What does the Minister believe are the growth prospects of timber-based industries in the 1980s, especially pulp? What steps are the Government taking to strengthen their technological base?
    Mr. Baker: The industries to which the hon. Gentleman has referred are also eligible for the various programmes that I have announced, especially the product and process development scheme. His question on the Government's timber policy is more fairly directed to my right hon. Friend the Minister of Agriculture, Fisheries and Food.
    Mr. Forman: Is my hon. Friend aware that the measures to support industries with a future in the new technology are widely welcomed by Conservative Members? Can he be sure that there is enough going on under the heading of "Government procurement", especially with regard to the Civil Service Department and its lamentably slow procedure on the matter?
    Mr. Baker: My hon. Friend is right. It is an important area in which the Government can influence the development of companies and industries. I have already announced a scheme for offices of the future for parts of the public sector, which has direct support from the Government. The "micros in schools" scheme is an interesting and effective use of public expenditure to get microcomputers into every secondary school by the end of next year. We are considering other ideas and schemes where public purchasing could be used more effectively. After all, trade rather than aid is a good philosophy.
    Mrs. Renée Short: The Minister has announced a limited programme of getting a computer into every secondary school, but do we not need to aim at having a computer in every school and. before too long, in every home to make the necessary progress in the new technologies?
    Mr. Baker: That is an entirely laudable ambition, but our first target is to get a microcomputer into every secondary school by the end of 1982, and we are only a few hundred schools short of that at present. From January I am extending the scheme to all secondary schools and considering whether in the course of next year it can be extended to primary schools. Considerable impetus for computers in homes will be given through the BBC's computer literacy project next January, which will comprise a series of programmes associated with the British microcomputer. If people tune into the programme they will see that there is no great magic about such systems, and they are easy to learn.
    Mr. Butcher: Further to the point about trade and not aid, does my hon. Friend agree that the business of government is still under-computerised and that the greater use of computers in Government Departments might help to provide the figures requested by my hon. Friend the Member for Mid-Sussex (Mr. Renton), for example?
    Mr. Baker: I have sympathy with my hon. Friend's view. The business of Government is not only under-computerised but under-word processed and so on. The House is hardly a glittering example of the use of modern techology.
    Mr. Orme: Does the Minister agree that advanced technology can thrive only against the backgrround of a thriving manufacturing sector? Has he read the statement
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    made yesterday by a prominent industrialist, Raymond Shephard, managing director of International Harvester that the Government's economic policies
    "are ensuring that manufacturing industry faces a slow death"?
    Mr. Baker: In the three months from May to September manufacturing output rose by 1½ per cent. In the first nine months of the year manufacturing productivity has risen by 9 per cent. I was waiting for the right hon. Gentleman to tell us the official Opposition's attitude to the new technological industries, but again there is absolute silence. If the Labour Party believes that the growth of manufacturing and technology should be dominated by nationalisation, massive intervention and bureaucratic controls, the sunrise industries may become the sunset industries.

    Space Industry
    Mr. David Atkinsonasked the Secretary of State for Industry what financial support the Government give to the United Kingdom space industry.
    Mr. Kenneth Baker: The total amount spent this year will be some £72 million, of which £55 million will be spent by my Department and £17 million by the Science and Engineering Research Council.
    Mr. Atkinson: What is my hon. Friend doing to draw the attention of British industry to the possible immense commercial benefits from and opportunities in space, in particular in investing in the world-wide demand for satellite systems?
    Mr. Baker: My hon. Friend is right to remind the House of the benefits and opportunities. We have now reached the stage where there are possibilities for substantial private investment in the space industry, and I am having discussions with various companies so that British industry can benefit. The growth in the space industry in Britain over the past seven or eight years is one of our great unsung successes.
    Mr. Wilkinson: Has not the space industry in the United States proved to be one of the most important motors for economic growth? Will my hon. Friend confirm his full support for the European Space Agency and for the collaborative programmes with the United States, such as Spacelab? In particular, will he impress on the Americans the importance of the solar-polar mission?
    Mr. Baker: I shall certainly do so. Had it not been for ESA, I do not believe that we should have had much of a space industry in Europe. The maritime satellite, made principally by British Aerospace, will be launched before Christmas. It is the first example of an international satellite, and another will follow next year. Space is an exciting and growing industry.

    Northern Region (Industrial Assistance)
    Mr. David Watkinsasked the Secretary of State for Industry if he will take further steps to assist industry in the Northern region.
    Mr. MacGregor: The Government have to consider the needs of all parts of the country, and there must be a limit to the assistance that can be given to a particular region. The Northern region, as the hon. Gentleman well

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    knows, is already eligible for the whole range of regional financial and other assistance and is a substantial beneficiary of the policy.
    Mr. Watkins: Although I appreciate the Minister's answer, has he seen the recent Central Statistical Office figures which show that the Northern region now has the slowest industrial growth when it once had the fastest? Therefore, is there not a need for radical change and a more positive approach to regional policy?
    Mr. MacGregor: I should like to study the Central Statistical Office's figures in more detail before commenting or giving an analysis. As I said, the hon. Gentleman is well aware that a battery of Government assistance is concentrated on the Northern region and in particular on his constituency, where we have undertaken a large-scale programme of various aids. I visited the hon. Gentleman's constituency again in October and was encouraged by the progress made there. I pay tribute to all who are dealing with matters there. The local industrial committee is dealing with over 38 active industrial inquiries, many of which are reaching maturity, which is a good record in a short time. One must always be hesitant about predicting job potential, but possibly about 2,600 jobs are attached to the progress that is being made.
    Mr. Wrigglesworth: As the Northern region has the biggest problem, does it not need the boost that extra demand in the economy can give by bringing jobs back? How did the mini-Budget last week help the growth of jobs?
    Mr. MacGregor: Aid for the Northern region is a continuing and continuous process. Since May 1979, £362 million estimated total regional aid has been offered or accepted in the Northern region, which shows what the Government are doing.
    Sir William Elliott: Would not hon. Members on the Opposition Benches do well to visit the headquarters of English Industrial Estates Corporation in Team valley, as I did last Friday, where they would learn that the interest being shown in the enterprise zone on Tyneside and in other trading estates, particularly smaller factories, is encouraging?
    Mr. MacGregor: I am grateful to my hon. Friend. I had a meeting with the English Industrial Estates Corporation board on Wednesday, and what my hon. Friend says is entirely correct.
    Mr. Dormand. Is not the Central Statistical Office's report supported by the unemployment figures in the Northern region, which remain the highest in the country and which have increased every month since the Government came to power? Does the Government's regional policy, introduced more than a year ago with a great fanfare of trumpets, not urgently need to be revised?
    Mr. MacGregor: As the hon. Gentleman knows, the Northern region stands to benefit most from our new emphasis on concentration aid in the areas of greatest need. When the policy takes full effect next August, nearly 90 per cent. of the working population in the region will still be in assisted areas.

    High Technology
    Sir Anthony Meyerasked the Secretary of State for Industry what discussions he has had with his EEC counterparts on the stimulation of industries in the high technology sector.
    Mr. Kenneth Baker: On 9 November I presided over a meeting of the European Community Council of Research Ministers, which considered the future direction of EC reseach and development. It reached agreement on a number of programmes, including support for some microelectronics and biotechnology research projects to promote the competitive capacity of Community industries. Ministers have also held bilateral discussions with their colleagues in France, Germany and Italy.
    Sir Anthony Meyer: Is there not an imminent risk that Japanese and other Far Eastern competition will eliminate our technology advanced industries, just as surely as it is virtually eliminating our traditional ones? Therefore, should not the type of programme that my hon. Friend the Member for Mid-Sussex (Mr. Renton) suggested be considered in conjuction with a European joint effort, such as the SERENA project for a commercial fast-breeder reactor?
    Mr. Baker: My hon. Friend will appreciate that the SERENA project is principally a matter for my right hon. Friend the Secretary of State for Energy. The fast-breeder reactor policy is currently under review and we are examining all possibilities, including co-operation. Broadly speaking, I agree with my hon. Friend. In many areas we can make the greatest progress through international co-operation, which may be on a Community basis or on a bilaterial or trilateral basis.
    Several Hon. Members rose—
    Mr. Speaker: I shall call one more hon. Member and allow one additional minute at the end of Question Time.
    Mr. John Garrett: What does the Minister say when his EEC counterparts in West Germany and France tell him that they are spending between two and four times as much as his Government on support for high technology?
    Mr. Baker: They have never said that to me. If they did, I would tell them that, overall, the amount spent on research and development in Britain is similar to that spent in both Germany and France. The figures bear that out.

  ATTORNEY-GENERAL

    Court Proceedings (Use of Tape Recorders)
    Mr. Christopher Priceasked the Attorney-General, if Her Majesty's Government are satisfied with the operation of the Lord Chancellor's practice direction on the use of tape recorders in court proceedings.
    The Solicitor-General (Sir Ian Percival): I assume that the hon. Gentleman is referring to the practice direction which was issued recently by the Lord Chief Justice and the other heads of divisions. It was not issued, as he supposed, by the Lord Chancellor. Since the direction was only issued on 19 November, it is too early to assess its operation.
    Mr. Price: Does the Solicitor-General remember the all-party deal during the Contempt Bill under which,

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    although the Bill was not changed, he promised to ensure that a practice direction would be issued? Is he aware that I decided to teat the practice direction by applying, as a journalist rather than as a Member of Parliament, to take a tape recorder into the House of Lords appeal court hearing on the GLC case? Is he further aware that not only was I told that the court was not prepared to allow me to do that, but that it was not prepared to allow the parties concerned to do so either? I was told that the direction did not apply to the House of Lords. Has Parliament no control over that element in the legal system? Will the hon. and learned Gentleman hold discussions with the House of Lords appeal court to ensure that its practices conform with those of other courts?
    The Solicitor-General: I recall the debate to which the hon. Gentleman referred. I refreshed my memory of it this morning. I am glad that a practice direction has been issued so soon. All that I said was that it was too early to assess its operation.
    I understand the hon. Gentleman's main point. It is important for the House to remember that there will be a complete discretion in every court to which an application is made. Although practice directions may be given, that discretion must not be fettered. In pursuance of the undertaking, the practice direction has been given by the Lord Chief Justice and other heads of divisions where a large number of judges are in one division. The Home Office has given a direction to magistrates. The Lord Chancellor has applied the Lord Chief Justice's direction to county courts. The House of Lords is so small that there is no point in its giving itself a direction. It must decide each case on its merits.
    Mr. Price: No.

    prosecution Policy
    Mr. Greville Jannerasked the Attorney-General whether he will discuss prosecution policy with the Director of Public Prosecutions.
    The Solicitor-General: My right hon. and learned Friend has regular meetings with the Director of Public Prosecutions, during which different aspects of prosecution policy are discussed.
    Mr. Janner: Will the Attorney-General or the Solicitor-General be good enough to discuss with the Director of Public Prosecutions whether the time has not now come to follow the Scottish practice of not permitting private prosecutions for shoplifting offences, such as occur in London? Because of the imminent and grave risks run by honest Christmas shoppers of being wrongfully charged for shoplifting, will they make such discussions urgent?
    The Solicitor-General: I know of the hon. and learned Gentleman's great interest in this matter. He will recall that such suggestions have been made on a number of previous occasions. It entails doing away with the right to bring a private prosecution in such cases. I can only repeat what I and my predecessor have said previously—that the right to bring a private prosecution is a part of Britain's constitutional rights. I, for one, would not favour its abolition.
    Mr. Alton: When the Solicitor-General next meets the Director of Public Prosecutions, does he intend to discuss
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    the workings of the Bail Act 1976? Why has the Solicitor-General issued leaflets in his constituency blaming the Liberal Party for the workings of the Act? Does he believe that the Act should be rescinded and, if so, why did he not vote against it in the first place?
    The Solicitor-General: Either someone else has been issuing leaflets in my name, or the hon. Gentleman has the wrong person. I am not aware of any reference to the Bail Act under my name in any leaflet. It is not a matter for the Director of Public Prosecutions. No doubt the Department concerned will pay attention to the hon. Gentleman's remarks.
    Mr. Archer: I revert to the question asked by my right hon. and learned Friend the Member for Leicester, West (Mr. Janner). Have the Government reached any conclusion on the comments of the Royal Commission on Criminal Procedure that it is inappropriate to permit or expect private organisations routinely to accept responsibility for decisions to prosecute in shoplifting cases?
    The Solicitor-General: Discussions are taking place on the matter referred to by the right hon. and learned Gentleman. There are only two prosecuting authorities to which that criticism applies—Northumbria and the Metropolitan Police. There have been few complaints about those two authorities. Nevertheless, the points mentioned are under consideration, but no conclusions have been reached.

    Traitors (Exposure)
    Mr. Canavanasked the Attorney-General how many injunctions have been granted to stop the publication of the names of people alleged to have been involved in traitorous activities since 1945.
    The Solicitor-General: I regret that the information is not available.
    Mr. Canavan: In the light of the revelations in The Sunday Times about the cases of Messrs. Blunt, Long and Scott—none of whom was prosecuted for his traitorous activities—and in view of the case of Mr. Dolivet who last month obtained an injunction to prevent The Sunday Times from publishing more names, is it any wonder that many people suspect that the legal establishment is involved in a massive cover-up that should be the subject of a full public inquiry?
    The Solicitor-General: That suggestion is as monstrous as it is absurd. The injuction process is available to all citizens. It is an entirely independent process. If either the Government or lawyers tried to interfere with it, they would have their fingers severely burnt. I suspect that any right hon. or hon. Member, including the hon. Gentleman, if it were about to be said without foundation that he or she was a Soviet agent, would be glad to have the independent protection of the courts.
    Mr. Lawrence: Will my hon. and learned Friend take this opportunity to make it clear to the hon. Member for West Stirlingshire (Mr. Canavan) and others that under English criminal law no one can be prosecuted for an offence where the only evidence is a confession that is not voluntary?
    The Solicitor-General: I had hoped that that point was already clear. If it is not, I am happy to endorse it. The

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    injunction process, of which Mr. Dolivet availed himself, is an independent process available to all citizens, and we should be glad that that is so.
    Mr. Stokes: Why are Opposition Members so obsessed with the past? Is not the main criterion now to ensure that we have no traitors within our midst?
    The Solicitor-General: The answer to the first question may be that some feel that they have no future. I have no further comment to make on the second point.

    General Register-Office (Records)
    Mr. Newensasked the Attorney-General when the study, undertaken at the behest of the Lord Chancellor, on providing space for the deposit of General Register Office records over 100 years old at Kew is likely to be complete; and when he expects to be able to make a statement.
    The Solicitor-General: The report is expected before the end of the year. The possible provision of space for the General Register Office records forms part of study. Before the report is received, it is not possible to predict when it will be possible to make a statement about it.
    Mr. Newens: I thank the Solicitor-General for that reply. Can he estimate the time that will be needed to pass the necessary legislation to transfer records of births, marriages and deaths to the Public Record Office, and how long it may be before those records eventually become available to the many people who wish to consult them?
    The Solicitor-General: I know of the hon. Gentleman's interest in this matter and the helpful questions that he has raised in the past. I wish to be as helpful as I can. He will know, however, that the study requested by the Lord Chancellor was a feasibility study. The initial work was completed in the summer, but it was not possible to obtain comments from all those from whom such comments needed to be obtained until the middle of October. The final report is now being revised to take account of those matters. As it is a feasibility study, one hopes that the answers which the hon. Gentleman rightly seeks will emerge from it, but I cannot give them in anticipation of it.
    Mrs. Renée Short: On a point of order, Mr. Speaker. I refer to the very serious concern that has been created in my constituency by the announcement about the closure of Guy Motors Limited. I raised the matter with the Prime Minister last week, but received no reply from her. I raised the matter again during Friday's debate on the West Midlands, but got nothing out of the Under-Secretary of State for Industry. Would it therefore be possible to ask the Secretary of State to reply to question No. 18? I should be very much obliged.
    Mr. Speaker: Order. I know that the hon. Lady would be much obliged, but I should be setting a precedent that would present difficulty for me in the future.
    I have had notice of two other points of order, which I shall take after statements.

Severn-Trent Water Authority
3.32 pm
The Minister for Local Government and Environment Services (Mr. Tom King): With permission, Mr. Speaker, I will make a statement on the Monopolies and Mergers Commission's report on the Severn-Trent water authority and the two water companies in its area.
The commission recognised the authority's real achievements in its first seven years in absorbing the functions of 200 predecessor bodies and improving standards of service. It endorsed the authority's practices on charging and very largely rejected various general allegations of extravagance.
But the commission says that the authority still has much to do to control its costs. It concluded that the authority's present inadequate control over its divisions was against the public interest.
The authority has studied the report and prepared a full response and a "Plan for Action", of which I am placing copies in the Library of the House.
In response to the commission's public-interest finding, the authority is acting to improve headquarters' control over divisions. It is improving its management information systems and developing better ways of relating costs to output. Its manpower review is leading to savings of several hundred posts. Overall, the authority expects to save £6·5 million in 1982–83 with increasing savings in the following years. In the light of this response, I do not consider that a direction under section 12 of the Competition Act is now required. I shall continue, however, to monitor the authority's progress.
The water companies have also acted on the recommendations affecting them and we have been considering the report with the other regional water authorities. They have all reported to my Department on the action they are taking to improve efficiency. Budgeting, management information, operational practices and capital investment assessment methods are all being re-examined. Most authorities are reviewing their management structure and expect significant savings. Progress is being made in implementing the water industry productivity payments scheme. After continuous increases since 1974, the water authorities' total manpower has fallen for the first time over the last year by some 3 per cent.
Those are encouraging signs, but there is still much to be done.
I shall be discussing performance aims with regional water authorities this week in the light of their budgets for 1982–83.
Further water industry references will be made to the Monopolies and Mergers Commission. The Government are considering their timing and subject matter.
The commission critised the size and make-up of the authority's membership, comprising local authority representatives and ministerial appointees. This raises a number of questions, including consumer representation, which affect all water authorities. But, with the wide variation in size, the Government believe that it would be wrong to come to a conclusion applying to all the English water authorities on the basis of a study of only one of them. I shall therefore issue a consultation paper shortly.
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The Government are grateful to the commission for this thorough study. It has produced much of value which will contribute to the continuing pursuit of efficiency in the water industry.
Mr. Ted Graham: Will the Minister bear in mind that the water industry has special problems in reacting to ministerial financial diktats, due to long-term environmental considerations, and that the chairman of the National Water Council has already drawn attention to the deterioration of services to customers and of environmental standards? Will he acknowledge that the image of the water industry could be improved but that its unpopularity is due more to its basic structural weaknesses arising from the 1972 Act than to the range of issues that form the subject of this report?
The price of the report to the public is £10·80. How much did it cost to commission it? Do the Government still proclaim that they seek to interfere least in the day-to-day running of our nationalised industries? If so, will the Minister assure the House that it is the Government's intention to allow those with professional responsibility to act prudently in the best interests of water consumers by providing for the future in their water charges and that they will not be subject to the gross interference that they suffered in March this year when budgets were pruned dangerously to accord with ministerial bullying?
Does the Minister deny the authoritative criticism that this was a rigged accounting exercise? Does he accept that duly and democratically elected councillors—of all political shades—are ideally placed to represent local opinion and that they still reflect the view of water consumers better than any other method?
With reference to the penultimate paragraph, regarding the future make-up of water authorities, is the Minister aware that radical changes from the present practices of diffused democracy to a proposal for complete ministerial patronage will be resisted? Does he agree that, however well-intentioned those appointments might be, they can best be made by the bodies whose interests he professes to serve and that a change would be seen as a slap in the face by many consumer bodies?
Mr. King: The answer to the hon. Gentleman's criticism about the structure of water authorities is that the Monopolies and Mergers Commission's report specifically endorsed the concept of the river basin structure. I was not aware that the Labour Party intended to change that. The Government certainly have no such proposals. We believe that the original concept of the 1972 Act in this respect is correct.
In connection with what the hon. Gentleman described as interference, I make no apology for the fact that, as a result of the work done by accountants working in close consultation with my Department, we were able to reduce increases in water charges last year from an average of 19 per cent. to 13 per cent. The hon. Gentleman chose to criticise that act, but I understand that the authorities have found no problems with the revised budgets on which they subsequently worked. They have been able to work quite happily within those budgets, with considerable relief to the consumers concerned.
On the last point, about membership, the hon. Gentleman will clearly wish to advance his views on this when the consultation paper is issued. I understand the points that he has made, but he will no doubt have read

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the comments of the Monopolies and Mergers Commission on the extra costs involved in using the present structure.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend agree that if he were to have one of his famous referendums on the Severn-Trent or any other water authority he would find that about 90 per cent. of people think that the Severn-Trent authority and the companies are entirely unresponsive to and unrepresentative of the needs of the areas that they serve? If there cannot be direct election of members, will my right hon. Friend at least consider the compulsory holding of public meetings at least once a year in the areas that these bodies serve and so rid their members of the idea that they are the people who matter rather than the service that they are supposed to give? I receive more complaints about water undertakings than about any other type of authority.
Mr. King: I think that my hon. Friend will find that a number of water authorities hold meetings in different areas. The chairman, chief executive and other members make themselves very much available in different parts of the authorities area. The purpose of the Monopolies and Mergers Commission's study of water authorities was precisely to cut through many of the suspicions and prejudices and to try to get closer to the facts about the real efficiencies of their operations. I note what my hon. Friend says about the membership of these bodies. I know that he will be interested to see the consultation paper.
Mr. Michael English: Will the Minister accept that he has confused the issue by talking about the river basin concept? Whatever may be true elsewhere, the fact is that in this case two river basins were slammed together, basically so that the West Midlands could continue polluting the East Midlands. Is the right hon. Gentleman aware that most people in the East Midlands would be glad if this water authority were divided into two so that it did conform to the general river basin concept? Has he sacked any of his failures or his predecessor's appointees?
Mr. King: The answer to the second question is "No, Sir". The answer to the first question is that the Severn-Trent, as its name implies, involves two river basins. The basic concept of the river basin approach was specifically endorsed for Severn-Trent by the Monopolies and Mergers Commission. This was not done on the colourful basis that the hon. Gentleman described but is related to the real problem, that the basin divides in Birmingham.
Sir Albert Costain: Does my right hon. Friend accept that the unpopularity of water undertakings is mainly due to the high rates that they charge? It is difficult to explain such a situation to my constituents, who, having got over the shock of a rate demand from the Southern Water Authority, get a second one from the Folkestone water company. Can my right hon. Friend suggest any way in which these two bodies can be combined to make them more economical?
Mr. King: I am not sure whether my hon. Friend is criticising the existence of the Folkestone water company. It is interesting to note that two water companies covered in this report, the South Staffordshire water company and the East Worcestershire water company, were reckoned to be innovative in their approach and to give a better water supply service in certain respects than that given by the
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water authority. If that means that my hon. Friend's constituents receive separate bills, there are some merits in it.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising in their places. I gather from the Minister's statement that it goes wider than relating only to the Severn-Trent water authority.
Mr. Phillip Whitehead: Does the Minister agree that many of our constituents regard the Severn-Trent water authority as an overriding subject? Given the fact that it levies a rate that does not allow representation in the way that happens in other levying bodies, will the right hon. Gentleman give an undertaking that one of the options in his consultative paper will be directly elected members of the water authority?
Mr. King: I would prefer not to anticipate the consultative paper, on which we are still working. One of my concerns about the Monopolies and Mergers Commission's report is its criticism of the lack of control over divisions. I believe that it is important for water authorities to be as decentralised as possible, and also that they should have as much local identification as possible. I have been anxious to ensure that while there must be sensible financial control through divisions, those divisions should still maintain a real degree of autonomy.
Sir Anthony Meyer: Is my right hon. Friend aware that people in Wales who receive water from Severn-Trent count themselves furtunate compared with those who receive water from the Welsh water authority? Is he aware that the latter category must be wondering, if scope exists for cost-cutting in Severn-Trent, what scope exists for that within the Welsh water authority?
Mr. King: That is a matter for my right hon. Friend.
Mr. David Stoddart: Will the Minister, while ensuring that there is a national policy for water, examine in his consultation paper the question of returning the administration of water and drainage to district councils? Is he aware that that is the best decentralisation that could take place? Will he also consider in the paper the question of rebates for pensioners and others on low incomes who cannot afford the high charges that are levied for water and drainage?
Mr. King: The hon. Gentleman suggests that administration should be broken down to the 1,200 constituent bodies of the water supply and water treatment industry prior to reorganisation. To that, I would have to say a straight "No". All the evidence points to the need for sensible organisation on a regional basis. The local authorities play a major part under the sewerage and agency arrangements. I hope that those arrangements will continue. On the question of rebates, successive Governments have recognised that it would not be proper to include a rebate system on a charge for a service as opposed to a tax.
Mr. Ivan Lawrence: Does my right hon. Friend observe the arrogance and contempt for the democratic process with which the Severn-Trent water authority has swept aside the almost united opposition to fluoridation of the water supplies in that area? Does he not consider that the water authority should not fluoridate the

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water unless it has the overwhelming support of the people within its area? Will he see that something is done about the matter?
Mr. King: I am not aware of that in relation to Severn-Trent, but I shall look into the matter that my hon. and learned Friend raises.
Mr. Frank Haynes: Is the Minister aware that the statement that he has made will be viewed in the region, and in my constituency in particular, as political dogma? Is he aware that since he came to office in May 1979 he has continually made speeches at the Dispatch Box about efficiency in relation to water supplies? Is he aware that a firm in my constituency that employed 473 people when he came into office now employes 103, thanks to his efficiency? When will he wake up and get something done?
Mr. King: I am not clear how that relates to the statement that I have made—
Mr. Haynes: Efficiency in water services.
Mr. King: —and if the hon. Gentleman seriously thinks that a report of the Monopolies and Mergers Commission reeks of dogma, he must be able to find it everywhere he looks.
Mr. Haynes: Typical.
Sir William Elliott: In happily declaring an interest, as the president of the Water Companies Association, I thank my right hon. Friend for confirming the commission's finding that the two water companies operating in the Severn-Trent area are doing so with great efficiency. Will he be assured that any other company would happily welcome any inquiry into its activities?
Mr. King: I understand my hon. Friend's great interest in the matter. He takes me slightly further than what I said in my statement. I notice that in one respect the water companies appear to have lost the impetus for economies of manpower that the Government are anxious to press on the water authorities. I know that my hon. Friend will be anxious to play his part in encouraging the companies to examine this aspect of their operations.
Mr. George Park: Will the Minister consider carrying out an examination of the economic justification for Severn-Trent setting up its own machinery for handling bills to its customers, instead of directing them through the local authorities as previously?
Mr. King: That was a decision that the Government inherited. I made it clear in one of the first Question Times after we came to office that the matter had gone too far for the Government to contemplate an alternative approach. The Monopolies and Mergers Commission noticed a marked difference in productivity and efficiency between different divisions in the operation of direct billing departments. We shall watch the situation carefully. Severn-Trent is taking steps to put its direct billing on a more efficient basis.
Mr. Hal Miller: I thank my right hon. Friend for making available the views of consultants, and also the reference of the Severn-Trent water authority to the Monopolies and Mergers
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Commission. Is he, nevertheless, aware of the widespread disquiet over the fact that there still seems to be no machinery to limit the increases imposed by this water authority on our constituents and that it still does not appear to be answerable to anyone? In the context of water workers turning down an 8 per cent. pay rise, is he aware that many of my constituents feel it is unjust that they receive only zero pay rises, or at most 4 per cent?
Mr. King: I very much understand my hon. Friend's final point. As regards the costs that water authorities are able to impose, he will know the close interest that we took in charges last year, which resulted in a significant reduction in the charge that would otherwise have been made in the Severn-Trent authority area. The industry has a responsibility to break even, one year with another, and we pay great attention to the costs involved, in order to ensure that charges are kept at the lowest possible level.
Mr. Robert Maclennan: I do not ask the Minister to anticipate the conclusions of his consultative document, but will he at least assure us that he will canvass the arguments for and against directly elected representations on water authorities?
Mr. King: I replied to that question when it was asked by the hon. Member for Derby, North (Mr. Whitehead).
Mr. Kenneth Carlisle: Is my right hon. Friend aware that the Anglian water authority tells me that the lessons to be learnt from the Severn-Trent investigation do not apply to the Anglian authority, because their businesses are so different? Does he agree that all monopolies need to be closely supervised if we are to get value for money? If so, will he consider holding an investigation into the Anglian authority, as it claims to be different? Does he agree that such an investigation would be good for the morale of the industry, because it would become more efficient, and good for the consumer, who needs a better service?
Mr. King: I was not aware that the Anglian water authority was making that rather sweeping statement. There are differences. For example, the Anglian authority is preoccupied with issues such as land drainage, with which my hon. Friend will be familiar, but there are clearly messages of general application, and I shall be discussing them with the chairman and chief executive of the Anglian authority the day after tomorrow.
Mr. Graham: May I draw the Minister's attention to the penultimate paragraph in his statement, which has caused considerable controversy? It concerns not so much the report or the past, but the future.
The Opposition were heartened by what I took to be an undogmatic approach to the need to look at a range of options. The penultimate paragraph refers to the inability to be specific because of variations between different areas. May we take it that the Government are thinking, not of a uniform application on the running of authorities, but of genuine options left to local people to decide? My hon. Friend the Member for Swindon (Mr. Stoddart) made that point. I think that the whole House wished to get the best mix between central direction, for which the Government are responsible, and the opportunity for local people genuinely to manage their own affairs.
Mr. King: I am not sure whether the hon. Gentleman is suggesting that there should be optional management or board structures to be decided by local people in various

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areas. That proposition can be advanced and we shall seek to put forward a range of alternative ways in which the system could be structured.
It is not so much a question of Government involvement as of how much the industry needs organising on the lines of a nationalised industry and whether it needs a local authority imput and a form of consumer representation. The anomalies and the problems that we have to meet are not secret, and I hope that we shall have constructive discussions about them.

Questions to Ministers
Mr. J. W. Rooker: On a point of order, Mr. Speaker. On Monday 30 November I tabled a written priority question to the Secretary of State for Social Services for answer on Thursday 3 December on the subject of a reduction in the waking hours of elderly people in residential care homes as a means of cutting public expenditure. I had seen press reports that the Liberal-controlled council on the Isle of Wight was considering such an option.
My question was written in block capital letters. When if first appeared in the blue sheets in the Votes and Proceedings on Tuesday the reference was not to "waking hours", but to "waiting hours". The Table Office told me that it had spotted the mistake and would put it right and telephone the Department. On Thursday 3 December the question appeared correctly on the Order Paper with the reference to waking hours.
I was in my constituency on Thursday evening and Friday and, therefore, it was only today that I saw the answer in Hansard, and the private copy sent to me via the Board, as usual, and sent to the Press Gallery late on Thursday.
The typewritten answer refers to "working hours" in the question and departmental title, and the Minister's reply implies that he was referring to working hours. In Hansard, at column 219, the question and title refer to "waking hours", but the answer is the same as that given to me via the Board.
It seems clear to me that both the Order Paper printers and the Minister's private office could not comprehend that a local authority might seek to reduce the waking hours of the elderly as a means of cutting public expenditure.
The Hansard question is correct, and the Minister obviously cannot give the same answer to two different questions. May I therefore ask the Government to make an early statement about the reduction in the waking hours of the elderly, which is being considered by the Liberals on the Isle of Wight?
Mr. Speaker: I want to be as helpful as I can to the hon. Gentleman. There has clearly been a misunderstanding somewhere about the nature of the question that he put down. If he will table another question to clarify the whole issue I think that the Table Office will be co-operative.
Mr. David Stoddart: Further to that point of order, Mr. Speaker. Bearing in mind all the difficulties and what has happened on the Isle of Wight, if we cannot have a ministerial statement, could we not have a statement from the Liberal Party about treating old-age pensioners as—
Mr. Speaker: Order. The hon. Gentleman knows that that is not a point of order.

Jessica and Jason Riley
3.57 pm
Mr. K. J. Woolmer: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the removal from this country of the young children Jessica and Jason Riley, the grandchildren of Mr. and Mrs. McArdle of Morley, contrary to the terms of a court order making them wards of court".
I should like to explain briefly the background to this deeply moving case in order that you, Mr. Speaker, may understand why I am asking for a debate in the House today.
Jessica and Jason Riley are aged about 15 months and 10 weeks respectively. They are the children of Jay Arthur Riley and Maureen Claire Riley. Maureen is the daughter of my constituents Mr. and Mrs. McArdle. Some time ago Maureen met and married Jay Riley and joined him in the sect known formerly and the "Children of God" and now known as "The Family of Love".
Whatever the original intentions of this sect when it started in the United States in the 1960s, there is now strong evidence that it encourages, even expects, its members to engage in female prostitution as a means of recruiting adherents and of raising finance for its small communes. There is also strong evidence that the children of families in the sect are, from a very tender age, expected to engage in sexual activities, both between themselves and with adults.
There will be many views on such matters, but I believe that you, Mr. Speaker, will understand the deep concern felt by Mr. and Mrs. McArdle as the grandparents of the very young children in this case.
On 20 November the children were made wards of court by a court order in Leeds. It was ordered that they were not to leave this country. The McArdles' solicitors telephoned the Home Office at once and asked that a watch be kept on all ports of exit from the country. The solicitors sent the court order to the Home Office on the same day and advised that they had reason to believe that the Rileys had air tickets for travel to Canada from Heathrow.
Following some days of uncertainty and evidence that the Riley family had left their normal residence, a judge in Leeds, on 1 December, made a "seek and find order", lifting press restrictions in order to find the children as a matter of urgency. In fact, it now transpires that the Riley family, including the two small children, had left by air before the end of November and had arrived in Vancouver, Canada.
The specific matters that I seek to have discussed are the need for a thorough inquiry by the Home Secretary to consider whether all reasonable steps were taken to protect
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the interests of these small children, and to establish how and why the Rileys managed, in effect, to flaunt the court order and take the children to Canada.
I seek also an urgent debate on the activities of the sect known as "The Family of Love". I believe that many other families have experienced the desperate concern that the McArdles have felt as they have seen children taken away from them.
This is an important matter, as it concerns the lives of very young children, who are not able to choose and decide for themselves. The intentions of the court in this case have not given them the protection that they require. Even in this tragic time of 3 million unemployed, the welfare and care of individual children will still, I hope, have an important place in this House.
It is an urgent matter, for two reasons. First, the merits of the case should have been heard in the High Court on 16 December. This has now been thwarted, but it is still necessary that a full airing is given to the position and to the failure of the proper safeguards to operate for these children. I am sure that the views of the House would have some impact if the matter were to be raised in Canada.
Secondly, this matter is urgent because other children and families continue to be under the influence of this sect. I have heard only today of what can only be described as the kidnapping or abduction to Costa Rica, by the father, of four children of a mother from Bristol.
In the case of another religious sect, it took a newspaper and its resources to expose the sham and misery caused to many lives. We must always act carefully in these matters, but I believe that there are strong grounds for an urgent official inquiry into this so-called "Family of Love".
I am grateful to you, Mr. Speaker, for your attention, and for that of the House.
Mr. Speaker: The hon. Member for Batley and Morley (Mr. Woolmer) gave me notice before 12 o'clock midday that he would seek leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the removal from this country of the young children Jessica and Jason Riley, the grandchildren of Mr. and Mrs. McArdle of Morley, contrary to the terms of a court order making them wards of court."
The House will have listened with deep concern to the distressing story that the hon. Member has outlined, but he will know—I vary my usual reply in saying this—that there are other ways in which this matter can be brought before the House. I remind the House that I do not decide whether this matter should be debated. I merely decide whether it is of such a nature that it has to be debated tonight or tomorrow night.
The House has instructed me to give no reasons for my decision. After careful consideration of the hon. Member's representations, I must rule that his submission does not fall within the provisions of the Standing Order, and, therefore, I cannot submit his application to the House.

BILL PRESENTED
  HOUSING ACT 198o (AMENDMENT)
  Mr. David Stoddart, supported by Mr. Charles Morrison, Mr. Richard Needham, Mr. Ted Graham and Mr. Robin F. Cook, presented a Bill to amend Part I of the Housing Act 1980 to exclude from the right to buy provisions properties of unique historical or architectural interest; And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed. [Bill 36].

Statutory Instruments, &c
Mr. Speaker: By leave of the House, I shall put together the questions on the seven motions relating to statutory instruments.
Ordered.
That the Education (Placing in Schools-Deemed Decisions) (Scotland) Regulations 1981 (S.I., 1981, No. 1561) be referred to a Standing Committee on Statutory Instruments, &c.
That the Scottish Examination Board Regulations 1981 (S.I., 1981, No. 1562) be referred to a Standing Committee on Statutory Instruments, &c.
That the Education (Placing in Schools, Information) (Scotland) Regulations 1981 (S.I., 1981, No. 1559) be referred to a Standing Committee on Statutory Instruments, &c.
That the Education (Appeal Committee Procedures) (Scotland) Regulations 1981 (S.I., 1981, No. 1560) be referred to a Standing Committee on Statutory Instruments, &c.
That the Education (Publication and Consultation Etc. (Scotland) Regulations 1981 (S.I., 1981, No. 1558) be referred to a Standing Committee on Statutory Instruments, &c.
That the Company and Business Names Regulations 1981 (S.I., 1981, No. 1685) be referred to a Standing Committee on Statutory Instruments, &c.
That the Marine Fish Farming (Financial Assistance) Scheme 1981 (S.I. 1981, No. 1653) be referred to a Standing Committee on Statutory Instruments &c.—[Mr. Thompson.]

SCOTTISH AFFAIRS
Ordered,
That the matter of penal policy and the treatment of offenders in Scotland, being a matter exclusively to Scotland, be referred to the Scottish Grand Committee for their consideration.—[Mr. Thompson.]

Orders of the Day

  Local Government and Planning (Scotland) Bill
  Order for Second Reading read.
  4.4 pm
  The Secretary of State for Scotland (Mr. George Younger): I beg to move, That the Bill be now read a Second time.
  It is now eight years since the House had before it the legislation which became the Local Government (Scotland) Act 1973. That was the most radical reorganisaton of local government that Scotland had known. It replaced more than 400 local authorities with 65, reflecting in a more logical and systematic way the tasks of local government in the second half of the twentieth century. By and large, the system that we set up then has worked satisfactorily, and it is to the credit of all concerned in local government that they have adapted so quickly and energetically to the new structure, despite the continuing economic difficulties that have bedevilled us under consecutive Administrations since 1973.
  Before we came into office we said that we saw no need for a further full-scale reorganisation of local government. Our objective is, rather, to refine the present structure, and that is the main purpose of the Bill. Our priorities are twofold. On the one hand, we must build on the work of our predecessors—and not least, incidentally, our predecessors on the Opposition Benches, who put through the Local Government (Scotland) Act 1966—in bringing more discipline into the system of local government finance to ensure that due priority is given to the Government's economic objectives and the needs of industrial, commercial and domestic ratepayers. On the other hand, we must clarify responsibility for the various functions of local government by reducing concurrent functions to the minimum. These are the main objectives of the Bill.
  I should like to express the thanks of all hon. Members to Lord Stodart of Leaston, who chaired the committee that looked into this matter, and all who served on his committee. Although, of course, everyone cannot agree with all their recommendations, the report has, I think, been very well accepted. I am also grateful to them for meeting the somewhat tight timetable that I imposed upon them. They did extremely well to complete their work within a year. I know that it involved a great deal of time and hard work on their part to do so.
  Part I of the Bill deals with the rating system, including one alteration which I propose in the powers that I was given earlier this year to protect ratepayers against excessive and unreasonable expenditure.
  Part II deals with most of the recommendations of the committee of inquiry into local government in Scotland, under the chairmanship of Lord Stodart of Leaston. Part III makes a number of detailed improvements in the planning system. Part IV deals with a variety of minor miscellaneous improvements. I shall now comment on each of these parts before asking the House to approve the Bill.
  I start by commenting on clauses 1 and 2. These clauses give the Government a new power to help ratepayers. The

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  background to this was, of course, gone into at great length last Session and this resulted in the House approving certain new powers for the Secretary of State. These powers have now been used during the summer, and have proved to be effective in curbing spending which was excessive and unreasonable. There is no need, therefore, for any further new measures this year, but there is one respect in which the present powers can be substantially improved from the point of view of ratepayers.
  At present, the Secretary of State is empowered, with the approval of Parliament, to remove a particular amount of grant from an authority, but to give that authority an option either to let that sum return to the Treasury or to give an undertaking to return that amount to its own ratepayers. When this was introduced, it seemed to me to be a fair choice. It was hard to imagine any rational authority doing other than returning the money thus removed from it to its own ratepayers. However, it appears that both I and most of the ratepayers involved greatly overestimated the reasoning powers of some of the councillors involved. With the single exception of Renfrew district council, which gave its ratepayers a refund, all the councils chose to pay back to the Government the forfeited money.
  We are flattered that the councils considered the Government to be so worthy of their support, but it seemed hard on the ratepayers, many of whom were already suffering great hardship in trying to meet the frightening rate increases that the councils concerned had imposed upon them. I have no doubt that I shall have the warmest support of all ratepayers in asking for the small addition to last year's powers contained in clause 1. It will enable the Secretary of State to ensure that any savings on expenditure imposed upon an authority in future will be returned to that authority's ratepayers.
  Mr. Dennis Canavan: The Secretary of State is not telling the whole truth about the Stirling district council. I put forward a reasonable proposal to the right hon. Gentleman on behalf of the council. That proposal would have allowed him to restore the rate support grant in full and would have allowed the council to carry over some money to the financial year 1982–83, and, therefore, to reduce the rates for that year. Why did the Secretary of State reject such a simple and reasonable proposal, which would have helped the ratepayers of Stirling, including himself and myself?
  Mr. Younger: The hon. Gentleman's concern for the ratepayers in his constituency is most touching, particularly as he has warmly supported a rate increase of over 100 per cent. in West Stirlingshire. The hon. Gentleman's proposal would not have returned the money to the ratepayers in the year in question. That is what the ratepayers are concerned about, and that is what this measure will now do as necessary in future. I hope, therefore, that I shall be able to count on the hon. Gentleman's full support in the Lobby tonight. Certainly ratepayers in his constituency will be watching to see whether he gives it.
  Clause 2 follows logically from the change by prohibiting the use of borrowed money to offset a rate reduction made under clause 1. It is similar to the prohibition of the use of borrowed money to offset a grant reduction provided for in section 18 of the 1981 Act. I
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  hope that it will now be clear that this is a wholly desirable change from the point of view of ratepayers and an entirely desirable improvement, even for those who disagree with the whole principle of the 1981 power.
  Therefore, it would be surprising if, as I understand it, the Opposition were to vote against the Bill tonight. They should be thinking very hard about what they ought to be doing. If they vote against the Bill, there can be only one explanation—that their top priority is the prevention of any easing of the burden on ratepayers. If so, the antagonism that they have already aroused, because of the actions of Socialist councils in putting up the rates, will be as nothing to the fury that will come thereafter. Ratepayers of all political persuasions will be watching to see whether their Members vote for the Bill.—[Interruption.] It will be rather more difficult for hon. Members who are not here. Nevertheless, hon. Members will be carefully watched. Ratepayers will know what to do if they find their representatives voting against a power which ensures that money taken off them by the council is returned to them.
  The right hon. Member for Glasgow, Craigton (Mr. Millan) has often deployed an argument, which is freely bandied about in these debates, that this will lead to the end of local democracy and that we might as well forget it and go home. However, I was interested to see that the right hon. Gentleman may be having a few second thoughts. I read with interest an article in The Scotsman of 1 December which was a portrait of the right hon. Gentleman and his views on the subject. The words at the beginning of the article are relevant:
  "Recently reappointed as shadow Scottish Secretary, Mr. Bruce Millan is preparing for another major battle with the Government over council spending levels, and in particular the latest proposed powers for the control of rates increases. Mr. Millan believes that an unprecedented crisis has arisen over the relationship between local and central Government and is of the view that there are more acceptable ways of influencing local government expenditure. When Secretary of State for Scotland during the Callaghan Labour Government, Mr. Millan had his own spending battles with councils. By cutting the rate support grant by 4 per cent,. he forced councils to make spending reductions they found unpalatable, and big cuts were also made in the number of council employees. He explains"—
  as indeed he might; this is the good bit—
  "under successive Governments local authority expenditure had gone up sharply, and in the two years to 1976 there was an exceptional increase, particularly because of local government reorganisation. In those two years spending had increased in real terms by 20 per cent …obviously, that situation could not continue."
  Those are the words of the right hon. Gentleman. Hon. Members, in listening to them, might think that they are irrelevant to today's debate, because he was referring, after all, to local government expenditure increases in real terms of 20 per cent., and the right hon. Gentleman has given no support whatever to any of the measures that I have had to take to prevent local government over-expenditure in the past year. Yet the items that I laid before the House in the summer, which the House approved, showed conclusively that the councils concerned had incurred increases of considerably more than 20 per cent. in those cases. Therefore, the right hon. Gentleman's argument, that this destroys local government initiative, and so on, is a pack of nonsense, and he must know it. If he were in the same position, I am sure that he would have found it necessary to take action—and he knows it.
  No authority is affected in any way by these powers unless it takes the extreme and deliberate step of planning expenditure which is declared by the House to be excessive

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  and unreasonable. This power is not aimed at all authorities. It is not even aimed at all overspending authorities. They have complete democratic freedom to put through their policies, strike their rate, and be judged by their electors for doing so. Only those who go far beyond this, to the severe disadvantage of their ratepayers—and, incidentally, doing serious damage to other more sensible local authorities—are directly affected by this power. I am confident that it will be warmly welcomed by ratepayers throughout Scotland and will be of help to them in facing difficult rate burdens.
  Clause 3 contains a provision to allow for the derating of plant and machinery. The problem which this has been introduced to overcome has arisen because of technological change since the original statutes were framed. Since such change will continue to affect these provisions in future, I have chosen to seek an order-making power and to leave the details to be presented to Parliament later.
  The present statutory definition of lands and heritages in Scotland which are subject to valuation for rating has remained largely unchanged since the turn of the century. Because of this, plant and machinery outdoors is fully rated, whereas if the same plant were inside a building it would usually be free from rates. In England and Wales no such arbitrary distinction is drawn. The anomaly is, therefore, to the disadvantage of Scottish industrialists. It puts a heavy burden on the oil and petrochemical industries in particular, and could act as a serious disincentive to industrial development in Scotland.
  I therefore intend to use the powers sought in the Bill, as soon as they are available to me, to make an order derating external plant in Scotland broadly to the same extent as similar plant is derated in England, and thus to restore the broad equality of treatment between concerns situated on opposite sides of the border and between industries with their plant indoors or outside. We have started discussions on these proposals with the Convention of Scottish Local Authorities and other interests and we shall have further consultations on the detailed provisions that will appear in the order. In advance of those consultations it would not be right to speculate on what the arrangements will be or how they will affect the rate burden in particular authorities or industries.
  Mr. J. Grimond: Has the Secretary of State made any calculations of the effect that would have on the rates in Orkney and Shetland?
  Mr. Younger: We have made calculations on the effects, and we are in the process of trying to agree those calculations with COSL.A. We are certainly considering the effect on Orkney and Shetland. As we are in the middle of consultations, I do not believe that the right hon. Gentleman will expect me to go further than that at the moment.
  Mr. Dick Douglas: One of the areas that is likely to be affected is Fife. Will the Secretary of State say how a local authority embarking on capital intensive projects of a petrochemical nature can plan its expenditure in the next year or so without the detailed information that he should give as soon as possible?
  Mr. Younger: I appreciate that point. The hon. Gentleman is correct. The right way to deal with the matter is to consult the local authority associations. I assure him
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  that we are proceeding with those consultations as fast as we can, and we shall make announcements as soon as possible so that everyone knows where they stand.
  Mr. Robert Maclennan: Will the Secretary of State explain why he arrived at that decision in the absence of any global calculation about the impact on the oil industry and on ratepayers? The matter will, of course, affect my constituents in Caithness.
  Mr. Younger: The hon. Gentleman will probably agree that another important consideration is that Scottish industry and industry coming into Scotland should not be disadvantaged compared with similar industries south of the border. The hon. Gentleman may, therefore, agree that the right procedure is for the Government to try to deal with the matter by putting forward a proposal and then discussing it with those affected. That is what we are doing. I believe that is the right way, and I assure the hon. Gentleman that there will be no unwarrantable delay.
  The measures in part H underline our determination to improve the accountability of local authorities, on this occasion by cutting down duplication and overlapping of services and reducing concurrent functions to the minimum. It was satisfactory that the Stodart report as a whole met with such widespread approval. That confirms our belief that the review that we promised in our manifesto was needed. There have inevitably been points on which either districts or regions, individually or as a group, have taken issue with the committee, but the response from local authorities, both in their own right and through the region and district policy committees of the convention, has been positive and constructive. I am grateful to them for that.
  The detailed provisions reflect the Government's decisions on the report, which I announced to the House in June. Given the general welcome that my statement received when we debated it in the Scottish Grand Committee in July, I do not wish to add much to what I said then about the broad principles. However, I shall amplify a few of the detailed provisions which put flesh on the bones of the June statement. The major changes proposed in the present structure are in industrial promotion, tourism and leisure and recreation. It is no coincidence that those are three activities of local government where criticism and controversy about concurrent functions has been most marked.
  Industrial promotion is a matter on which I have not felt able to go all the way with the majority view of the Stodart committee. The effect of clause 5 will be to concentrate on region and islands councils' powers to undertake industrial promotion. I emphasise, however, that it will not affect the powers of all authorities to provide factories or buildings, and all, including districts, will still be free to advertise their factories throughout the United Kingdom.
  Regions and islands councils will, of course, be free to engage in promotion throughout the United Kingdom. To do so overseas, they must have my express consent or operate within any general consent or code of practice that I may issue in the future. That is in line both with the main Stodart report and the note of reservation by Professor Bradley and Mr. Bell. I have repeatedly explained that concentration is vital if we are to have a more effective promotion effort, and, in regard to overseas promotion, it will enable me to ensure that the effort is properly co-ordinated.

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  I intend to operate my consent-giving powers for overseas promotion with a light hand, and the code of practice that the clause empowers me to prepare, in consultation with the Convention of Scottish Local Authorities, will enable me to set the guidelines which I hope will allow authorities operating within them to proceed without any further consent from me. My objective will be to leave the maximum flexibility for individual initiatives within those guidelines. Where I am asked for permission to go beyond them, I shall wish to give such permission, unless there is an important reason against it.
  It will be clear from clause 5 that districts will retain a wide range of important powers. They will be able to acquire and develop land, build factories, provide mortgages for industrial purposes and, within the United Kingdom, advertise all those services. Moreover, in relation to promotion, they can still encourage industrialists in their area to undertake further development and can, under the terms of the clause, contribute financially, or as participants, to promotion with the United Kingdom or overseas organised by the Secretary of State or a region.
  Districts will therefore have considerable scope for enterprise in industrial development, despite the changes in promotion powers. Overall, our objective has been to streamline promotional activity. At the same time, by retaining the powers available to local authorities in industrial development, we have ensured that districts as well as regions are properly equipped to reap the harvest fruits of promotion effort, be it by the provision of factories or by financial assistance to developers. I believe that those proposals will be warmly welcomed in the districts.
  Clause 8 gives effect to the next major change that we have proposed—that district and islands council have sole responsibility for tourism functions. I described my proposals in our debate in the summer. They have not changed, and I do not intend to add anything now.
  Clauses 11 to 16 deal with leisure and recreation. They implement the Stodart recommendation that leisure and recreation powers should be concentrated on district councils, but they go much further. The Bill revises the present powers and duties of local authorities in relation to leisure and recreation, which are based on much obsolete and outdated legislation and have been much in need of revision. The clauses were published last summer in draft in our consultation document on the civic code, but I felt that they were more appropriate in the present Bill than in the Civic Government (Scotland) Bill.
  In connection with my proposals for leisure and recreation, and for tourism, I have qualified the complete transfer of responsibility to districts by conferring on regions a power to contribute financially to projects of special significance or benefit to their area. These specific powers are necessary because in general it seems desirable, if concurrency is to be reduced, that local authorities should not be able to exercise their general powers to incur expenditure on a function that is the express statutory responsibility of the other tier. This principle is set out in clause 4.
  I come now to part III and the changes that the Bill makes in town and country planning and listed building procedures. These changes are contained in clauses 32 to
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  44, schedule 2 and part of schedule 3. A number of the changes stem from the Stodart report. Others result from discussion between the Scottish Development Department and the Convention of Scottish Local Authorities.
  The Government consider that the planning system is basically in good heart and that it copes well with the increasingly complex task of reconciling competing demands and priorities. For that reason, many of the proposals in this part of the Bill are aimed at achieving more effective and efficient procedures without altering radically the basic statutory framework within which planning authorities operate. The Local Government (Miscellaneous Provisions) (Scotland) Act included a number of significant relaxations of the central Government's control over the details of planning arrangements. The planning proposals in the Bill relate mainly to the powers and duties of local authorities and seek to make improvements in four main areas.
  First, there are changes to the procedures for preparing and bringing into effect structure and local plans which have the function of guiding development. Secondly, the Bill includes changes to the procedures for dealing with applications for planning permission and listed building consent. Thirdly, there are improvements to the procedures for taking action against breaches of planning control. Fourthly, the Bill makes some limited adjustments to the allocation of planning functions between regional and district planning authorities in the two-tier areas.
  I apologise if at first sight the Bill appears to make a large number of small changes in a system which is already complex enough. I hope, however, that our consideration of the detail of these changes in Committee will show that, as a whole, they refine planning arrangements so that in practice planning authorities will be able to operate simpler and more flexible procedures, which are essential if planning is to be, as we intend, the servant and not the master of economic regeneration.
  Part IV deals with a variety of matters which I suggest do not require detailed explanation at this stage, but which no doubt we can go into in detail in Committee and on Report. However, I single out clause 50, which gives councillors in Scotland the right to choose between the receipt of financial loss allowance and attendance allowance for the performance of an approved duty. This choice is already enjoyed by councillors in England and Wales by virtue of a provision in the Local Government, Planning and Land Act 1980. In deference to the wishes of the convention at that time, the provision was not extended to Scotland. The convention, however, now wishes a similar facility to be available to councillors in Scotland, and clause 50 gives effect to it.
  The Bill as a whole, therefore, is a tidying up and refining exercise. Part I builds on the provisions enacted last year. Parts II and III follow from the recommendations of the Stodart committee and the experience of operating local government under the new system. Since the Local Government Act 1973, we have had local government legislation in 1975, twice in 1978, in 1980 and in 1981. This year, Parliament will consider not only this Bill but also the major Civic Government (Scotland) Bill which has started its passage in another place. I hope that after these enactments have been approved by Parliament, we shall be able to tell local government that the legislative

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  changes consequent upon the major reorganisation are complete and that we can enable it to get on with doing its job in Scotland.
  4.33 pm
  Mr. Bruce Millan: I am sure that the Secretary of State's closing words will have a very hollow ring for local authorities in view of this Government's record in their dealings with local authorities over the past couple of years or so.
  The Opposition, of course, oppose the Bill because of clauses 1 and 2, with which I shall deal later in my remarks. First, however, I want to deal with some of its other provisions. It is a long Bill, and some of it is incomprehensible, especially the schedules. Therefore it will be necessary to consider the Bill carefully in Committee, and I hope that the Government will not be unwise enough to rush into the Committee stage too early before we have had an opportunity to have appropriate consultations with the local authorities.
  I shall not comment on part III, dealing with planning. That will have to be scrutinised in Committee.
  Part IV deals with various miscellaneous matters. Like the Secretary of State, I welcome the change of view of COSLA about councillors' allowances. I only regret that clause 50 as it appears in the Bill was not included in the 1980 Act. But that was not the Government's fault. It was because COSLA said specifically that it did not wish to have that clause. The new clause will give councillors a choice of attendance allowance or financial loss allowance. It brings them into line with councillors in England and Wales, and it is a sensible provision.
  The other provision in that part of the Bill which I mention is clause 45. We oppose it because it would give the Lands Tribunal for Scotland the opportunity to exercise a discretion to grant even more excessive discounts on council house sales than are normally provided for in the Tenants' Rights, Etc. (Scotland) Act. We consider it completely unacceptable that a discretion of that kind should be given to the Lands Tribunal.
  I wish to comment on a number of clauses in that part of the Bill which deals with the Stodart committee recommendations. I begin with clause 5. I am glad that the Government rejected the majority recommendation of the Stodart committee which would have excluded district councils from both industrial provision and industrial promotion. The Bill provides something of a compromise, but in terms of the districts' powers it is still far too restrictive. To give districts the opportunity to engage in industrial promotion but then to say that, if they are to advertise at all, they must advertise only specific industrial sites or premises owned by them is ludicrously restrictive. That cannot be acceptable to the districts, given the vast interest that many districts take, quite legitimately with today's levels of unemployment, in industrial promotion and provision.
  Incidentally, the definition of "promotion" extends to carrying on correspondence. Presumably a district would not even be able to carry on correspondence about industrial opportunities in its district, which is an absurdity, unless it fell within the very restrictive provisions in the Bill. We shall have to look at that in Committee. However, having criticised the Secretary of State on a previous occasion—a criticism that I do not withdraw—I am glad that there is at least provision in the
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  Bill for a code of practice affecting overseas visits that I hope will take care in practical terms of some of the difficulties that I saw in the original provisions.
  Clause 6 deals with the countryside. I mention it only because of the very complicated schedule. Schedule I will require detailed consideration, because it is not clear on first reading whether the Government have it right, and there are a number of very important matters that, again, will be fruitful sources of discussion in Committee.
  Clause 8 deals with tourism. The Secretary of State knows that it is a controversial decision to put the matter basically in the hands of the districts. The clause demonstrates how difficult it is to make a neat distinction between districts and regions by providing for area tourist organisations and by providing that a district council may be directed by the Secretary of State to co-operate. On an earlier occasion, the right hon. Gentleman said he hoped that that power of direction would not be necessary. But it is not possible to get tourist provision going satisfactorily if some district council is brought kicking and screaming into the area tourist organisation. Some of the regions are unhappy about what is provided here, and again it will have to be looked at in Committee.
  We are all anxious to avoid concurrency where we can. But, if it has some disadvantages in terms of overprovision and duplication of provision, it has certain advantages of flexibility as well, and we do not want to lose that in providing what on the face of it is a very neat division between one level of authority and another.
  Similar problems arise on clause 11 and the succeeding clauses on leisure and recreation. I notice that the Government have drafted these clauses in a different way so that concurrency appears not to be excluded completely. Even so, I am not sure how the Government have provided for what they said they wanted—to safeguard the position of community centres which often are used as part of the education department of a regional council. We were assured that there would be no question of the forcible transfer of community centres to districts. It is not clear, although it may become clear in Committee, how the clauses on leisure and recreation and clause 30, dealing with the transfer of property, taken together, protect the interests of community centres.
  Those are the matters that I want to discuss in connection with Stodart. Basically, there is no great political division of opinion, but tricky issues still have to be settled if districts and regions are to have the right structure. I hope that the Government will show some flexibility in this connection in Committee, although that is something that they rarely show in other respects.
  I come now to part I. Before I deal with the controversial items in clauses 1 and 2, let me deal with clause 3. I fully understand, as I am sure do most hon. Gentlemen, the problems of those industries in Scotland that are rated for plant and machinery. That does not happen south of the border. Thus, a company pays more in rates on an installation in Scotland, compared with one in England or Wales, even after industrial derating. Clearly, that disincentive to industry should be removed, if possible.
  Large sums of money are involved here, although the Secretary of State did not mention that. As I understand it, if we were to adopt the English formula for the exclusions from rating, it would mean that a rateable value of no less than £31 million would be excluded from rates in Scotland. That represents a rate income of nearly £27

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  million. So we are dealing with substantial sums. Unless the Government make a contribution, or unless the Government pick up the bill—if they really want to help industry, that is what they should do—the burden will fall on the rest of the ratepayers in Scotland, including other industrial ratepayers. That is absolutely unacceptable.
  If the anomaly is to be removed, it should be done at the Government's expense, not at the expense of the ratepayers, about whom the Secretary of State was weeping his usual crocodile tears this afternoon. However, the financial memorandum to the Bill makes it clear that the Government do not intend to put a penny towards the removal of the anomaly, because the financial memorandum contains no provision to that effect. It is all to be done by redistribution to the rest of the ratepayers in Scotland. That is the key issue in clause 3.
  For some areas, for example the Central region, Falkirk district and Orkney and Shetland, the loss of income would be prodigious, if no other adjustments were made—and I accept that some other adjustments would have to be made. If the English provisions had applied in the current year 1981–82 and no other adjustments were made, the rate poundage in Orkney, as I am sure the right hon. Member for Orkney and Shetland (Mr. Grimond) will be delighted to hear, would have gone up by 97p, and the rate poundage in Shetland would have gone up by 44p. That is the scale of the problem. In the Central region, it is about 6p in the rate, if no adjustments are made. Clearly, such a burden is unacceptable. It is no good the Secretary of State's saying "Once this goes through, we shall have discussions with the local authorities". Discussions have already taken place. Before we agree to clause 3, we want to know what the Government intend to do. We do not want to be told that there are to be further discussions.
  Mr. Douglas: My right hon. Friend will be aware that the decision to site the cracker at Moss Morran was held slightly in abeyance by Esso Chemicals. Is he also aware that the decision was taken for tax and rating purposes, and that the project will come to fruition? Discussions must have taken place, and assurances must have been given to the company. Thus, there is a potential loss of revenue to Fife. Does my right hon. Friend agree?
  Mr. Millan: Certainly, I agree. I understand from the discussions of the Minister in the Department of Industry with the company, and from the press reports following those discussions, that the company was assured that everything would be all right. I am delighted that those projects are proceeding. Successive Governments have worked very hard for that, but we should remember that if those arrangements are to be acceptable from the rating point of view, much rating revenue that would have come to Fife will not be forthcoming. We want to know the Government's intentions in that connection. They are very generous with ratepayers' money. The Secretary of State complains about local authorities being generous with ratepayers' money, but he is being generous with the money of the rest of Scottish ratepayers. I repeat that we are unwilling to accept that.
  We oppose clauses 1 and 2, because they represent a further tightening of the screw on local authorities. The right hon. Gentleman said something about rates, but he did not actually tell us anything. He never does tell us anything about rates, if he can help it—nor, indeed, about
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  anything else. So I shall fill out some of the realities of the rating prospects for 1982–83. If my forecasts are wrong, no doubt I shall be told so at the end of the debate.
  Last week the Chancellor of the Exchequer made a statement. So did the Secretary of State for the Environment, and so did the Secretary of State for Scotland. It is almost impossible to believe, but the Scottish statement was even more obscure than that of the Chancellor. Certainly, it was more obscure than the full information that was given about England and Wales. It is interesting to read exactly what was said for England and Wales, and ask why, if the information was made available in that case, it could not be made available for Scotland, and why it was not made available today in the right hon. Gentleman's speech. It is no wonder that both the Glasgow Herald and The Scotsman last week talked about the information gap, the confusion that arises from the inability or unwillingness of the Secretary of State to come clean with local authorities and the House, and say exactly what he intends regarding the rate support grant for 1982–83. The line given to us was that what the Chancellor of the Exchequer said last week was a tremendous concession to local authorities, that a good deal of extra money was being made available to them next year, that if only everyone behaved sensibly there would be no need for severe cuts next year, and that ratepayers would all live happily ever afterwards with moderate rate increases. We have heard what the Secretary of State has said before about moderate rate increases, and we know the reality of the past couple of years.
  The Secretary of State for the Environment said that the cash limit—different terms are now used, so that it is difficult to make comparisons—for 1982–83 in England would be 2 per cent. more in cash terms than the actual local authority budgets for England in the current year. That is 2 per cent. in cash terms. However, the right hon. Gentleman went on to say that, in real terms, the figure that he was allowing for 1982–83 in England would be 4 per cent. down, compared with local authority budgets for the current year. We have not been told those figures by the Secretary of State. He gave a cash limit for next year of £2,450 million. All that we can do is to compare that figure with the budget figures for the current year.
  I understand that the original budget figures for the current year, brought up to present-day prices, are about £5 million more than £2,450 million and that the figure is about £2,455 million. Even if the savings in Lothian and elsewhere are taken into account, local authority expenditure in the current year will be almost exactly what the Government are providing, in cash terms, for next year. Therefore, in practice, there is no allowance for inflation. Not for the first time, the Government are cheating. Indeed, they have cheated every year.
  The Secretary of State spoke about substantial implications for reductions in local authority expenditure. Why does he not tell us what he is looking for from local authorities, in real terms, in 1982–83? Is it 4 per cent., or more than that? In my opinion, he is looking for considerably more than 4 per cent., in real terms, in 1982–83. Of course, the right hon. Gentleman will not get it. However, the balance that he does not get will be paid for by the ratepayers for whom he continually expresses such grave concern.
  Even the figures given by the Secretary of State for the Environment included completely artificial inflation figures. They included an average inflation figure of 5½

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  per cent. for next year. Does any hon. Member believe that average inflation in local authority expenditure in 1982–83 will be 5½ per cent.? That is what the 4 per cent. for wages and the 9 per cent. for other costs mean. That even contradicts the Chancellor of the Exchequer's statement, made the same day. Does any Conservative Member believe that inflation can be reduced to 5½ per cent. for local authorities in 1982–83? If inflation does not fall to that figure, and if there is a cash limit of £2,450 million, the 4 per cent. reduction in real terms will be considerably more than that next year.
  There is no hope that local authorities will be able to budget for only £2,450 million next year. What is more, the right hon. Gentleman knows that. Why does he not admit it? He knows that there is no way that that figure can be met. At best, the gap between what the Government will pay grant on and what local authorities budget for next year may be not much larger than the considerable gap in the current year. However, even if local authorities freeze expenditure there will be a substantial gap, and there can be no doubt about that.
  Of course, the Secretary of State will not come clean. He is very interested about what happened in 1976 and so on. Why will he not tell us what will happen in 1982–83? That is what we are interested in. There will be a gap in expenditure and, therefore, all the talk about £1,300 million extra being provided is so much hog wash. In addition, the Secretary of State has reduced the rate of grant by 2·5 per cent. He mentioned what happened in 1976 and the 4 per cent. reduction in grant. However, he forgot to mention that in the immediately preceding years, the rate of grant for Scotland had increased by 7 per cent., to provide for local government reorganisation and that even after the 4 per cent. reduction, the figure was still 68·5 per cent., compared with the 64·2 per cent. that the right hon. Gentleman is providing for next year. If the right hon. Gentleman were to return to 68·5 per cent., Scottish local authorities would jump for joy. That is the reality.
  As the Secretary of State knows, the 2½ per cent. reduction will, by itself, put 8 per cent. on to the rate burden of every ratepayer in Scotland next year. When one adds to that the normal provision for inflation, the fact that penalties of £50 million are being carried forward to next year for 1980–81 and 1981–82, and the fact that there will be a substantial increase in rents, it is inevitable that there will be a very large increase in rates in 1982–83. Again, we have not been told the rent figures for Scotland, although the Secretary of State for the Environment told us that rents in England would increase by £2·50 per week.
  I do not know the exact figures, because we do not have all the information on which to base our calculations. However, the Secretary of State must have some idea of the rate increases for next year. We remember his record two years ago. He told us that there would be only moderate rate increases and that no one should worry, but the rate increases amounted to 32 per cent. Last year, he said that the rate increases in 1981–82 would be less than they were in the previous year. He said that they would be moderate, yet they turned out to amount to 36 per cent. Therefore, we take the right hon. Gentleman's forecast about very moderate rate increases for 1982–83 with a considerable pinch of salt.
  Mr. Younger rose—
  Mr. Millan: I have not yet finished with the right hon. Gentleman. I shall be astonished if next year's rate increases are less than 20 per cent. In many areas, they will be considerably more than that. The right hon. Gentleman takes a great interest in the Labour Government's record. Before he intervenes, I should remind him that, compared with the 32 per cent. and 36 per cent. increases that the ratepayers of Scotland have suffered in the past two years under this Government, in the last two years of the Labour Government domestic ratepayers faced a total increase in rates—over the two years taken together—that fell within single figures.
  Mr. Younger: As the right hon. Gentleman knows perfectly well, those rate increases were much higher than I forecast because certain local authorities deliberately and pointedly vastly increased expenditure. As the right hon. Gentleman well knows, I could not have been expected to forecast that, for example, the Lothian region would overspend by £60 million. That is just one authority. Surely the right hon. Gentleman is not asking me to aid and abet such authorities, as he has done.
  Mr. Millan: We know why such increases have taken place during the last few years. The Secretary of State, by direct and indirect means, has substantially cut Government assistance to Scottish local authorities. Therefore, the increases that Scottish ratepayers have suffered in the past two years are almost exclusively the Secretary of State's fault. It is about time that he owned up to that. If he cannot own up to what he has done in the past two years, why does he not intervene again and give us the forecast for 1982–83? Why does he not tell us that? Of course, the right hon. Gentleman remains silent, just as he remained silent during the previous two years about the expected increases and pretended that they would be very modest and moderate. They were not modest and moderate and they will not be so in 1982–83.
  We must also consider what was done by the Secretary of State in the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. Even without the Bill, the Government already have unprecedented powers of control over Scottish local authorities. Under the 1981 Act they have the power to impose penalties, which they used in the case of six authorities, and which involve a reduction of grant. There are no powers in Scotland for supplementary rating. In addition, the power to borrow to meet a deficit, which might have been available to Scottish local authorities, was taken away by the 1981 Act.
  As we made clear when debating the Local Government (Miscellaneous Provisions) (Scotland) Bill, the Government have interfered far too much in the democratic rights of elected local councillors. Even without the Bill, local democracy has undergone the most severe Government attack that it has ever experienced. I am glad that the Secretary of State read my interview in The Scotsman. I hope that he read it all and will pay some attention to it. When I said that local government faced an unprecedented crisis, it was no more than a statement of absolute truth. The local authorities and the general public alike take that view.
  The crisis in local government has arisen because, unlike earlier Governments who have legitimately taken a view about the contribution that they will make to local services, this Government have acted in an unprecedented manner by trying to dictate to local authorities what

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  contribution the local authorities will make through the rates to their own local services. Once that happens local authorities simply become the agents, the creatures, of central Government, with no independent decision-making powers. The Bill takes that process even further.
  I am glad that the proposal for referendums has been dropped. the Secretary of State forgot to mention that. Because of opposition by some English Tory Members there will be no referendums in England because the Government could not have got such a proposal through the House. It is not even clear whether the Bill for England and Wales will come before the House. I should be delighted if it never did. I should be delighted to dispatch this Bill to the same limbo. I should even be prepared to sacrifice some of the useful clauses on Stodart because they could be recovered later. Clauses 1 and 2 are offensive. There is no justification for them. It is said that they are needed because the Lothian region did not pay the money back to the ratepayers, but last year's Bill did not provide that it should do so.
  The Secretary of State wanted a political victory by forcing the Lothian region, and one or two other councils, to pay back money to ratepayers. Unfortunately, since he acted politically, Lothian acted politically. The only sufferers are the Lothian ratepayers. According to the Secretary of State, he set out to protect the Lothian ratepayers, but £30 million has been lopped off their services and they have received no money back.
  I am delighted that the right hon. Gentleman considers that to be grossly unfair. I agree, it is a tremendous injustice—but he can put it right. Nothing in the present legislation prevents the right hon. Gentleman, if he is so worried about the Lothian ratepayers, from giving that £30 million back now. Why does he not give it back?
  Mr. Younger: I do not have the power.
  Mr. Millan: The right hon. Gentleman has the power under the 1981 Act to give the money back to the ratepayers.
  The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): To the council.
  Mr. Millan: Precisely. The Secretary of State has the power. The Secretary of State has tried to reduce expenditure in the Lothian area in the current year. There is an agreement to do that. If the money is paid back to the council, and if it is not paid back to the ratepayers in the current year, it will not disappear. Ultimately it will go back, by way of adjustment next year, to the ratepayers.
  The Secretary of State has powers under the 1981 Act if he wants to exercise them. I am not recommending that he does that. He also has power to control the rates in the Lothian area in 1982–83. It is indisputable that under the Act the money could be paid back to the council now. If it is paid back and expenditure in the current year meets the Secretary of State's requirements—as it is bound to do—the money will be available to the Lothian ratepayers as an offset against the otherwise crippling burden that they and other Scottish ratepayers will have to meet in 1982–83.
  If I were a Lothian ratepayer I should take a dim view of a Government who said that they set out to protect my
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  interests and then reduced my services and failed to ensure a financial adjustment either in the current year or in 1982–83.
  Mr. Younger: Will the right hon. Gentleman give way?
  Mr. Millan: If the Secretary of State is about to tell us that he will give the money back to Lothian council for adjustment to its ratepayers in 1982–83, I shall be delighted to give way.
  Mr. Younger: The right hon. Gentleman knows that I have no powers so to determine. If I return the money to the council that is where it will go—to the council. The right hon. Gentleman must not give the false impression that there would be any guarantee by me or anyone else that the money would go to the ratepayers. We all know from the council's record that it would spend the money. The right hon. Gentleman must be fair. He knows that the money was for spending and that, because of our action, it was saved from being spent. I hope that he will state clearly whether he supports Lothian region's decision not to return the money to the ratepayers last year. Does he support that or does he not? That is what the reatepayers want to know.
  Mr. Millan: I shall put a proposition—[HON. MEMBERS: "Answer."] I shall answer because the interests of Lothian ratepayers are at stake. The right hon. Gentleman has an agreement with the Lothian council that £30 million will be taken from its spending in the current year. It is a firm agreement. The right hon. Gentleman has no evidence that Lothian council will go back on that agreement. I assume that he can check that again with the council. Let us assume that the right hon. Gentleman receives assurances from the council—as I am sure that he will—that decisions to reduce spending in the current year will be adhered to. The money that he has taken from the Lothian ratepayers could be repaid to the Lothian council in the current year. There is nothing to prevent the right hon. Gentleman from doing that. If he did that, the money would be available as a large offset against the rate burden that the Lothian region and ratepayers will bear in 1982–83.
  The only argument concerns a reduction in expenditure. There is no reason why penalties imposed on the Lothian region and elsewhere, as my hon. Friend the Member for West Stirlingshire (Mr. Canavan) said earlier, should not be paid back to the councils now, if they give the necessary assurance to the Secretary of State that the money will not be spent within the current year. The money will be available for the ratepayers in 1982–83. That is indisputable.
  Mr. Younger: With respect to the right hon. Gentleman, I am sure that he does not wish to mislead anyone, but that money would not be available to the ratepayer unless the Lothian regional council decided to make a special payment back to its ratepayers. Nobody can tell whether it would do that. It had a chance to do that, but openly decided not to. I understand that the right hon. Gentleman supported the council in that decision.
  Mr. Millan: The Secretary of State is evading the question. If the money were paid back to Lothian council now there is nothing in legislation to prevent the money

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  being paid back to Lothian ratepayers. If it were not paid back, it would be like any other balance in the hands of a local authority.
  Mr. Younger: The money would be spent.
  Mr. Millan: The Secretary of State could get an assurance that the money would not be spent. Even if it were spent next year, it would not have to be rated for. It will be rated for in present circumstances because the Lothian ratepayers have been swindled out of £30 million by the right hon. Gentleman. There is no reason why he should not give that money back now. The Bill is phoney in that respect.
  Mr. Michael Ancram rose—
  Mr. Millan: The hon. Gentleman seems to be disaffected in many other directions. Perhaps on this occasion he is rising to help me, but I shall not take the risk. I have almost come to a conclusion. As I say, I shall be grateful for the hon. Gentleman's support as presumably he is a ratepayer, although not in Lothian region. The hon. Gentleman, if he is defending the interests of his constituents and ratepayers, should put every pressure on the right hon. Gentleman—he can do so during his speech—to ensure that the money is paid to the Lothian ratepayers.
  Mr. Ancram: On a point of order, Mr. Deputy Speaker. I understood that it was a convention of the House that if a right hon. or hon. Member referred to a Member of the House—the right hon. Gentleman has just given me instructions—the hon. Member referred to was given a chance to respond.
  Mr. Millan: I referred to the hon. Gentleman only because he kept bobbing up and down in his seat.
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): The right hon. Gentleman who is addressing the House has the right to decide whether he gives way.
  Mr. Millan: I give way to the hon. Gentleman.
  Mr. Ancram: I am grateful to the right hon. Gentleman. As a Lothian ratepayer for whom the right hon. Gentleman professes so much concern, I ask him again the question that is worrying Lothian ratepayers. Did he, as the Shadow Secretary of State, support Lothian regional council in its decision not to give back the money to the ratepayers?
  Mr. Millan: I supported the Lothian region, as I would support every local authority in Scotland, on the principle that it is for local authorities to make decisions about the rates and not for the Secretary of State for Scotland. I shall support every local authority that takes the view that rates are a matter for determination by it. As soon as rates are determined, as they will be under this Bill or they would be under the English Bill—which is now in some sort of limbo—by the Secretary of State or central Government and not by local authorities, local democracy is lost, because one of the basic responsibilities of local authorities is to make such decisions. I have made the point about the pay-back to the Lothian ratepayers. I hope that they will understand that they are being swindled out of that money by the Secretary of State. There is no reason why he should not pay back the money now.
  Clauses 1 and 2 represent a further attack on local democracy. We also remember the Secretary of State's
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  promises when introducing the Local Government (Miscellaneous Provisions) (Scotland) Bill that we would not have to worry about the matter in the case of responsible local authorities. He said that only a few authorities would be affected. The fact is that every local authority in Scotland is affected by a clawback of expenditure for the current year. The Secretary of State is taking £50 million from Scottish local authorities collectively. Each one of them, whether in breach of his so-called guidelines or not, will pay a penalty in 1982–83. The Secretary of State's protestations then, as are likely in this case, that all he wished to do was to look after the interests of the ratepayers in a few authorities, and that ratepayers generally must not worry, turned out to be completely false.
  There were not even the rudiments of consultation with the local authorities about the Bill or last week's announcement. COSLA has been treated with absolute contempt. The rate support grant settlement, which is supposed to be a matter for negotiation, was announced in a written answer to the House.
  Mr. Younger: That is misleading.
  Mr. Millan: It is not misleading.
  Mr. Younger: It is untrue.
  Mr. Millan: If it is untrue, the Minister will no doubt explain to us how the local authorities were informed about last Wednesday's—
  Mr. Younger: They were offered a meeting.
  Mr. Millan: The local authorities were offered a meeting for this week. They heard about the announcement when they read the newspapers on Thursday morning. There was no attempt at negotiation. The decision was taken to reduce the rate of grant and to lay down the total cash limit for 1982–83 without consultation with the local authorities.
  The local authorities in Scotland, like the local authorities in England, have during the past two and a half years been treated with absolute contempt by the Government. Just as the protestations that the right hon. Gentleman used to make about local democracy and more decentralisation of decision-making have been set aside, so the principles of local democracy have, during the past two and half years, been treated with absolute contempt by the Government. Because of the contemptuous attitude demonstrated towards local authorities and the unfortunate ratepayers who have had to pick up the unprecedented mass of bills during the past two years, and because of our dissatisfaction with and opposition towards that, we oppose the Bill.
  5.16 pm
  Lord James Douglas-Hamilton: I followed closely the arguments of the right hon. Member for Glasgow, Craigton (Mr. Millan). I agree with one point in his speech—that there is much to be said for the Bill abolishing concurrent jurisdiction between regions and districts. I shall concentrate on that later in my speech.
  I congratulate the Government on bringing forward the Bill and especially my predecessor, now Lord Stodart, on the dedication and hard work that he put into his report, which is typical of the thoroughness with which he has been associated in my constituency for a long time.
  I wish to deal briefly with one matter that has been omitted from the Bill—the establishment of all-purpose

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  authorities in the cities of Scotland. I do not believe that the problem will go away. The Stodart committee was allowed to consider the request by districts for all or most-purpose status, but its recommendations had to be consistent with fully maintaining the viability of the regions. It came to the conclusion that, in terms of population and resources, the cities of Edinburgh, Glasgow, Aberdeen and Dundee were fully capable of discharging the functions exercised at regional level.
  Mr. Ernie Ross: Hear, hear.
  Lord James Douglas-Hamilton: I am glad that the hon. Gentleman agrees, because I understood that there was considerable support from not only Edinburgh but the other cities in Scotland. The hon. Gentleman has confirmed that.
  In Edinburgh's case there are strong demands for such a proposal, on the ground that it has the character and status of Scotland's capital. Glasgow is the industrial and commercial capital of the West of Scotland, as well as being a viable regional centre. Aberdeen and Dundee have problems that are quite different from the rural areas that surround them.
  There were essentially two reasons why the Stodart committee rejected the call for legislation to allow all or multi-purpose status for the cities. First, the committee considered that it might have an adverse effect on the viability of the regions. Secondly, it considered that after the major upheaval of five years ago a further reorganisation might have an unsettling effect. It seems that the second reason carries more weight than the first. As Edinburgh district council made clear, the disbandment of Lothian region could readily be completed by relating West Lothian to the Central region, and Midlothian and East Lothian to the Borders region.
  That could have been done, but at a time when the Government are considering bringing forward a Green Paper—which I understand will be published soon—on the options for rating reform, which no doubt will lead to another major upheaval, they do not wish to have a major reorganisation in local government. However, the matter will not go away. Support for all-purpose status will gather as the years continue. Before 10 years have passed, legislation may have to be introduced. I merely mention the matter so that the Government may note it.
  That brings me to a second issue, which is not fully dealt with in the Bill, and that is the activities of the Scottish Tourist Board in promoting Scottish tourism overseas. At present the Scottish Tourist Board is not allowed to promote Scotland overseas, as the British Tourist Authority is responsible for the function and the Government are naturally and properly anxious to avoid excessive expense or duplication. For instance, it would be crazy to have a British Tourist Authority office in New York and a Scottish Tourist Board office nearby.
  However, the Scottish Tourist Board believes that the occasional visit overseas by one of its members would greatly assist promotional activities. The Highlands and Islands Development Board already has the privilege. From time to time one of its members can take part in an overseas visit, and that facility works satisfactorily in the interests of the Highlands and Islands when an important event takes place. The freedom is extremely valuable.
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  The British Tourist Authority may argue that if a similar concession is given to the Scottish Tourist Board other United Kingdom tourist authorities may also ask for it. However, the principle has already been breached in the case of the Highlands and Islands Development Board. I hope that a formula can be devised whereby, when the British Tourist Authority is promoting an important Scottish venture, it will take the advice of the Scottish Tourist Board and enable a member to attend and give the best of his expertise and experience. Such a practice would have many advantages.
  The conclusions and recommendations of the Stodart committee on page 55 are particularly strong. Paragraph 150 states:
  "We are … convinced that the distinctive attractions of Scotland and its high dependence economically on tourism merit a separate promotional effort abroad. We are in no doubt at all that this can best be done by the Scottish Tourist Board. Indeed such an extention of the Board's powers is clearly logical when the Highlands and Islands Development Board already has them and uses them with such success. We recommend very strongly, therefore, that the Scottish Tourist Board should be given overseas promotional powers in its own right".
  I understand why the Government cannot go as far as that, but I hope that they will urge the British Tourist Authority to take into account the great authority of the Scottish Tourist Board in Scotland, the headquarters of which borders on my constituency, so I feel entitled to mention the matter.
  Mr. Maclennan: Is the hon. Gentleman saying that he would leave the question whether the Scottish Tourist Board should be involved solely to the British Tourist Authority
  Lord James Douglas-Hamilton: We cannot have two bodies doing the same job if we wish to avoid duplication and expense, but I hope that the British Tourist Authority will make full use of the views, expertise and experience of the Scottish Tourist Board.
  My third point concerns lighting. The strength of the Bill is that it removes duplication in many fields. Duplication of responsibility for leisure and recreation has certainly been removed. The fact that the facility of the Hillend skiing slope is to come under the control of the district will be warmly welcomed in Edinburgh. There have been complaints that the district has not had sufficient responsibilities, so the additional responsibility will be a great advantage.
  The Stodart committee suggested, in paragraph 181, that it would be sensible for regional councils to control lighting facilities, and there may be an omission from the Bill. The committee recommended that control of public lighting be vested in regional councils. It wished to have one clear responsibility so that there would not have to be separate electrical departments, but the matter is not dealt with in the Bill. Clause 87 of the Civic Government (Scotland) Bill deals with the lighting of common stairs and allows districts to provide and maintain lighting in common properties. If the Government reject the Stodart recommendations that lighting should be under one tier, it may mean separate electrical departments in regions and districts, which the committee wished particularly to avoid.
  Mr. Donald Dewar: The hon. Gentleman talks about the importance of ski slopes and leisure and recreational activities. He will have seen the prominent story in The Scotsman about the Tory group's

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  decision to find £7·5 million at the Government's dictate. These savings are likely to mean the closure of tennis courts and swimming baths—indeed almost the total abolition of the leisure and recreation department. What is the hon. Gentleman's attitude to that?
  Lord James Douglas-Hamilton: The Stodart committee dealt specifically with the issue of the region having the discretion to contribute funds to vital projects and recommended that it would be highly advisable for members of the regional council to be on management committees. I am grateful to the hon. Gentleman. I hope that that point will also be considered when we are dealing with the Bill. If we are both selected for the Committee, no doubt the hon. Gentleman and I can discuss the matter.
  There has been, and will be, much discussion about clause 1. I very much welcome the Bill, and particularly clause 1. The Local Government (Miscellaneous Provisions) (Scotland) Act made it clear that, in practice, the Secretary of State had the power to restrict the rate support grant where he had decided that expenditure was excessive and unreasonable and the House of Commons had passed an order or orders. However, he was not in a position to protect ratepayers, as was seen last year by the ratepayers of the Lothian region. The Secretary of State wished for £30 million to be returned to them, but through the vindictiviness of the Lothian region Labour group and its bad political judgment the sum was not returned.
  The money could have been returned to the ratepayers. The normal method for owner-occupiers to pay rates is by 10 monthly instalments. Had a revised rate poundage been decided on by the region at some time during the year, the remaining instalments could have been adjusted so that the total rates for the year would be consistent with the reduced rate poundage. That would have meant substantially smaller payments for ratepayers for the remaining months of the year.
  Some ratepayers, although not many, pay in a lump sum. They could have had a refund. Similarly, for those who pay in two lump sums, the second payment could have been reduced by an appropriate amount. Other ratepayers are tenants of the local authority, new town development corporations or the Scottish Special Housing Association and pay combined rates and rent to the district council or housing authority, which could have adjusted the combined payments for the remainder of the year. In the event, the Lothian region ratepayers did not have the £30 million returned to them.
  I have no difficulty in supporting clauses 1 and 2. They will give protection to ratepayers. Parliament is the protector of the freedoms of the people. In a conflict between the rights and freedoms of local government and the rights and freedoms of citizens the Government are entitled fully to weigh the balance and, where necessary, to protect the rights and freedoms of citizens.
  5.29 pm
  Mr. J. Grimond: I was glad to hear the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) emphasise the importance of all-purpose authorities. He rightly said that the matter would not go away. I wish that it had been dealt with in the Bill. I also have some sympathy with his comments about the representation abroad of the Scottish Tourist Board.
  The Government are displeased with some local authorities in Scotland, England and Wales. Certainly,
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  staffing levels have risen enormously and some authorities have been extravagant. Some authorities have taken on things that they cannot handle. However, we must remember that local authorities have remained far closer to their financial targets than have the Government. We are all suffering because of the Government's failure to control their expenditure. We must also remember that the explosion in local authority staffing levels dates from the reorganisation of local government by a Tory Government, and is also the result of the continuous flood of legislation from the House and innumerable directions and circulars from St. Andrew's House and Whitehall. While Government expenditure has been rising, local authority expenditure—in real terms—has been falling.
  The Bill is yet another Bill of some 60 pages. Whatever the explanatory memorandum states, it will increase expenditure on staff. As usual with modern Bills, it is unnecessarily complicated and goes into the most fiddling details. I recommend the House to examine clause 18, which deals with how the fee of the public analyst should be decided, and also clause 22 which confers upon island or district councils the right to equip fixed or moveable public conveniences and charge for them. I was under the impression that they could do that already, and that it was not illegal. The provision of public conveniences is a growth industry in Orkney and Shetland. Perhaps it is a question of charging being included as an alternative to the privatisation of public conveniences. As a final, nice point, the clause includes a definition of a public convenience. It is a little late in the day to tell the human race what a lavatory is, but what Governments do never ceases to surprise me.
  In spite of all the detail, the root causes of the trouble of local authorities are not touched upon in the Bill.
  The root causes are, first, their relationship with the Government, which is not clearly defined; secondly, the failure to abolish one of the tiers and have all-purpose authorities; and, thirdly, the lack of any sensible method of local government finance. The Bill does nothing about that. Until we have a sensible system of finance which makes the great majority of the ratepayers responsible for most of their authority's expenditure, we shall never have efficient or responsible local government.
  The Bill allows local authorities to propose expenditure, but gives the Secretary of State—subject to the approval of the House—the right to disallow it. Surely that must be a most unsatisfactory way to go about any business. As a local authority is neither allowed to raise a supplementary rate nor to borrow, how on earth is it to proceed? We give local authorities the right to decide that something is necessary. They presumably know more about it than does St. Andrew's House. But then the Secretary of State can tell them to stop the project. He does not tell them how, but simply that they must stop. That is not a sensible way to do things.
  It is not sensible to allow local authorities to prepare their budgets and then throw a spanner into their works. A definition of their powers is required, together with a clear reformation of their methods of finance. That can no longer be purely through the rating system. It is a grossly unfair system, about which industry rightly protests. More and more quite rich people are excused from paying full rates. Yet we do nothing about that fundamental matter.
  As the Secretary of State is aware, my local authorities are gravely concerned about their financial future under two heads. First, Shetland will suffer under the

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  recommendation that a greater proportion of available funds should be allocated to the resources element of the rate support grant and that there should be discrimination between the island authorities, to their detriment. Secondly, there is the question of industrial rating.
  Shetland, with its scattered population and outlying islands, is notoriously an expensive area to serve. No doubt some economies can be made. However, if there is to be a change in the system and money is removed to the needs element, that will be serious for Shetland. It adds to the uncertainty faced by all local authorities.
  Clause 3 could be a devastating blow to Orkney and Shetland if it means that there will be a severe loss of rateable value through a new rating of machinery and plant. That may be carried through without the authorities being told in time what is intended. Although the Secretary of State said that he was consulting local authorities, he should give the House an estimate of the difference that that change will make. I am told that it will make a great difference to rating. Whatever the ultimate solution, surely he should tell us now his estimate of what it will cost Orkney and Shetland.
  Clause 3 must impose some additional expenditure on the Government, but I see nothing in the financial memorandum about that. I find that worrying. Is it proposed that the whole of the diminution in rates should be thrown on the local people of Orkney and Shetland, or is it proposed that it should be paid for by other sources? If the changes are carried through, and Sullom Voe and Flotta are substantially derated, the Government will have greatly increased their taxes on the oil industry, while local authorities suffer a drastic reduction. The increased central taxation on oil will be given as a reason for oil companies resisting any renegotiation of their local undertakings for compensation. It does not appear to me that oil companies are seriously impoverished. Special charter flights are flying from Orkney to Aberdeen so that the wives of oil workers can do their Christmas shopping. That has not endeared Occidental Oil to the local people in Orkney or to the shopkeepers.
  The Government have fundamentally altered the taxation of oil, to the detriment of local authorities. Further elevating the extra tax on oil will be another serious blow to local autonomy, due simply to the fact that the Government have lost control of their expenditure. The local people of Orkney and Shetland should not be penalised for the expenditure that they have undertaken in connection with oil, not for their advantage but for national advantage. Nor should the rules regarding rating be changed in the middle of the game without compensation. I ask the Secretary of State to tell us what figures are involved and what proposals he intends to discuss with local authorities.
  I turn to what is now called concurrence—the overlapping of functions. Will the Minister tell us the meaning of clause 5? I understand that it does not mean that an island authority cannot use oil revenues to take shares in a company. They have been doing that, although admittedly under private legislation. I hope that the Government will explain what effect the clause will have on the rights of island authorities to promote and share in business. There is overlapping, not only between local authorities but between local authorities and public
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  authorities in the promotion of agriculture, industry and tourism. Is that affected by the Bill? I do not think that it is, but the matter should receive some attention.
  My last point relates to planning. I am amazed to hear the Secretary of State of a Tory Government say that the planning procedures are excellent. I do not know if they have ever examined the planning forms. They drive people crazy. The planning procedures with their emphasis on zoning and their complication were misdirected from the start.
  If the Government are sincere in their desire for local government economy, they should relieve local authorities of some of their obligations to produce structure plans and to keep them up to date. What happens when an extremely important matter arises, such as possible uranium mining in Orkney? If that is forbidden by the structure plan, what happens then? It is not ruled out. A public inquiry must be held and there is no conclusion even then. Therefore, I ask the Secretary of State to look at structure plans again.
  On the matter of planning, there have been representations from the district councils of Kyle and Lochaber, Inverness, and Badenoch and Strathspey about planning and building controls. I believe that reason is on their side. On the subject of planning, 10 district councils with smaller populations and rateable values than Inverness have responsibility for planning as well as building control. I believe that building controls should be a matter for district councils and that most districts, at any rate, should be the planning authorities. I am told that the present arrangements between the districts and the Highland regional council have not worked too well. In addition, there is a new scheme for capital grants to local youth and community organisations which will hit rural areas extremely hard.
  Altogether, I consider this a disappointing Bill. It does not deal at all with the real root troubles of the relations between central and local government. It does not deal with the fundamental matter of finance. It does not give my constituents the vital information about what will happen to their rates if there is a change in the rating of machinery and plant. I do not believe that the Bill will contribute anything to the better government of this nation, and it will complicate matters further when—goodness knows—they are complicated enough.
  5.42 pm
  Sir Hector Monro: I listened, as I always do, with great care to the right hon. Member for Orkney and Shetland (Mr. Grimond). Referring back to the original local government reorganisation legislation, I recall the points that he made then about finance being more important than structure. I had hoped that when the right hon. Gentleman came to his peroration this evening he would tell us what the Liberal Party intended to do about the Bill tonight. Will Liberal Members support it, or will they vote against it?
  Mr. Grimond: I can answer the hon. Gentleman now. We shall vote against it.
  Sir Hector Monro: That is even more interesting. It seems surprising that the Liberal Party wishes the ratepayers of the Lothian region to continue to face the attack on them by their local authority, as has happened in the past year. It seems strange that the Liberal Party

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  should support the Socialists—the few of them that are here—in attacking the Bill. I had hoped to hear more policy from the Liberal Party.
  I had hoped to hear some policies from the SDP. Unfortunately, nobody from that party is present. I had hoped also to hear some policy from the SNP, but no Member of that party has attended the debate. It seems to me that those parties that make so much play of their interest in local government have taken singularly little action to participate in a debate that is so important to Scotland.
  This is an important Bill. It is unfortunate that, because part I contains a number of valuable clauses to help the ratepayer, the extremely important parts deploying the Stodart report recommendations have been somewhat submerged, particularly in the speech of the right hon. Member for Glasgow, Craigton (Mr. Millan) who opened for the Opposition today. I believe that the Stodart report is an extremely welcome addition to our knowledge of local government in Scotland. It was compiled by a committee chaired by Lord Stodart of Leaston, a wise parliamentarian with great experience of the Scottish Office. That is why many of his recommendations are so valuable, although I do not agree with every one of them. By and large, however, the report represents an important step forward.
  I think that a fairly substantial transitional period must be allowed—I am sure that my right hon. Friend has this in mind—for functions to be transferred from region to district, or vice versa, because it will not be an easy process. I shall refer later to some of the problems that I foresee. I believe that this applies particularly to the clarification of finance.
  It is most important that the value of the Stodart report should not be submerged by the rating issue becoming paramount in the debate.
  I find it difficult to understand why Labour Members oppose the Bill, when the whole tenor of part I is to assist the ratepayer. I cannot understand why the Labour Party is so against ratepayers being assisted. Indeed, it is astonishing that, so far as I can understand, all of the Opposition parties are against a Bill that should help the man and woman in the street to pay their rates each year.
  We all want major rates reform, and we look forward to the proposals that will be introduced in due course. Until that time comes, however, it is our duty as Members of Parliament to assist in every way to alleviate the burden imposed upon ratepayers by councils that press on without any regard to the consequences. The damage has been there for all to see.
  Here I speak from an unbiased position, as the three authorities in my constituency have had above-average success in keeping rates down. Indeed, they are among the lowest in Scotland. I hope that new industries wishing to come to Scotland will bear in mind that mine is an area of low rates and therefore advantageous to them. The stories that one hears about what has happened to valuations and the rates paid on them in the Lothians and in Glasgow, however, fill one with horror. It is no wonder that shops are closing, left, right and centre, which is entirely contrary to the Conservative desire to help and promote small business men.
  I must tell my right hon. Friend, quite frankly, that I am glad that there is no referendum proposal in the Bill. I certainly felt that it would be unnecessary in the South-West of Scotland. Indeed, I think that throughout Scotland
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  it would not have added to the ease of determining the rates each year. It might have added just a little too much complication.
  I therefore welcome part I. I emphasise that good councils with a responsible attitude to expenditure have nothing to fear. If councils are irresponsible, the Secretary of State should have the right to step in and return some of the money to the ratepayers. I hope that ratepayers will bear in mind that they can express their disapproval of irresponsible councils in the appropriate elections.
  I hope that my right hon. Friend will allow as much time as possible for local authorities to reach conclusions about the rates. I appreciate the difficulties that both he and they face in this respect. The time scale for the rate support grant and capital allowances and for local authorities to bring in their own budgets is relatively short for such a complicated matter. I am sure that the greater the length of time that my right hon. Friend can allow, the more likely local authorities will be to reach satisfactory conclusions.
  Part II deals with the Stodart proposals. Many of the issues that arise are basically Committee points, but some should be aired in principle. The Stodart report advocated that responsibility for tourism should go to the districts—with, of course, an input through the area tourist organisations. This is very much the approach of my regional council. The Dumfries and Galloway tourist association is independent, but has a regional input, a district input and the input provided by the Scottish Tourist Board itself.
  I was interested to hear the remarks of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) about the promotional activities of the tourist board outside Scotland. This matter has been examined by many people, including Stodart. I welcome my hon. Friend's suggestion that the British Tourist Authority should liaise even more closely with the Scottish Tourist Board on overseas promotion. Hon. Members wish to see the best value for money from the expertise that exists within the tourist board in Edinburgh.
  I am worried and perplexed about the proposed change from the status quo. I am aware that districts vary enormously in size and population and that their tourist attractions also differ. Annandale and Eskdale would say that Gretna Green is an exceptional international tourist centre, and one can talk in terms of scenic beauty or fine sporting facilities such as those for skiing at Hillend in Edinburgh.
  Tourism has to be seen as bringing people from outside into a region to spend holidays and to visit the attractions. Care must be taken to avoid losing the ability to attract tourists into a region by concentrating on the idea that a district should be the centre for organisation. Tourism, and the attraction of tourists, is not so much an organisational problem as one of finance. A splendid arrangement can be provided, as in Dumfries and Galloway, but it can operate effectively and efficiently only if there is a sufficient input of money from local authorities and the tourist board. I shall wish to examine this issue carefully in Committee.
  My right hon. Friend the Secretary of State is right in his approach to industry. The promotion of industry is crucial to Scotland. In the South-West there is a fine industrial development committee that works well with the Scottish Development Agency, the Scottish Economic Planning Department and the districts. I hope that my right hon. Friend will find an opportunity to take a special

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  initiative in areas where unemployment, as in parts of my constituency, has reached 20 per cent. This is a matter of co-operation. It is necessary to have confidence in the ability of local authorities to work together to promote industry. I applaud my right hon. Friend's idea of a code of practice.
  I find my right hon. Friend's recommendation on recreation and leisure, taken in the main from the Stodart report, more difficult to make a subjective judgment upon. There is the danger of making what is already a complicated position even worse. Sports enthusiasts and many voluntary clubs and organisations have begun to make some sense of the present situation. If that situation is changed without achieving significant improvement, there will be no thanks to those responsible in the Palace of Westminster.
  The problem relates basically to education, through which channel most sporting facilities in Scotland have been provided, backed by the local authorities and by the Sports Council, which has been such a success. Districts have also played their part. I give as an example the two districts in my area. Nithsdale has an enthusiastic sports council of its own. Annandale and Eskdale district has provided a magnificent sports field at Annan for soccer, rugby and athletics.
  There is need to view the matter in the context of the use made of school facilities. I am talking in national terms. New schools should be designed so that their sports and community facilities can be used as much as possible outside school hours. I recognise the problem of the janitor, his time off and his overtime, which he must have, but throughout the United Kingdom there are some fine athletics facilities that lie idle at weekends and holidays due to lack of enthusiasm and drive by the authorities.
  I accept the difficulties of schools in providing staff. In that case, voluntary committees should be established to take over the responsibility. I do not wish to become too involved in what the Bill seeks to achieve. Many of the facilities are based on educational resources, yet that situation is to be changed. A duty is to be placed on districts to look after the facilities.
  A staffing problem also arises at community centres. The staff are often provided by the education authority. Under the Bill, the issue of free standing community centres will go to the districts. I wonder whether the "Sport for all" theory that has been projected for years will become complicated if no one knows where an approach has to be made to use a facility. I hope that this matter can be resolved in Committee in terms that are as black and white as possible. At the moment, the issue of who will be responsible for what seems to be a singularly grey area.
  One warning has to be sounded. It would be wrong to give the impression that our discussions on the provision of sports and recreational facilities and voluntary organisations mean that new people will be responsible and new money available. People should not be allowed to get into such an optimistic frame of mind. We need to see the best use made of what is available and careful planning of what will be provided in the future.
  In replying to the debate my hon. Friend may care to allay the concern that has been featured in the press about the possibility that resources for village and other rural
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  facilities will be taken over by urban aid. That would be thoroughly reprehensible. Any such idea should be killed as soon as possible.
  I find clause 17, which relates to flood warning, difficult and surprising. Those who will warn the public about floods are the police in their radio cars. The arrangements established in Dumfries, which floods two or three times a year, work well throughout the region. If responsibility is handed to the river purification board, the same degree of co-ordination will be required. Whatever happens, it will cost money, which again comes out of the regional kitty.
  I shall comment briefly, as the right hon. Member for Orkney and Shetland did, on clause 18 under which responsibility for the Food and Drugs (Scotland) Act 1956 goes to district councils. That seems rather strange, because it is working admirably under regional control where there is such close liaison between the consumer protection departments and food and drugs control. We need a stronger case than we now have to change after five relatively satisfactory years.
  I spoke at some length on planning in a recent debate on unemployment and deployed how we could dramatically increase private house building. I shall not go over that again. However, the point brought out so clearly in the Stodart report about areas such as the Highlands, the Borders and Dumfries and Galloway, which are general planning authorities, needs careful attention. There is no doubt that there is some feeling that planning is a little remote from the local issues, which it is mostly about.
  When the reorganisation Bill was originally drafted in the early 1970s, I was keen that all districts should have planning powers. I have not changed that view. However, I know that my region carefully considered the Highlands solution of what is virtually a joint committee and felt that that solution would not be an advantage at this stage. That is because there are so many district councillors who are regional councillors, but who may not always be so. It might then be valuable to have a much closer liaison in the form of a committee structure, which would give a greater district input into planning.
  My last point concerns part IV, the sale of council houses, which has not been mentioned to any great extent in the debate. It is manifestly right that we get on with selling council houses. It is unacceptable that certain councils are dragging their feet over the sale of houses to tenants who are desperately keen to own them. Delays of more than a year are not acceptable. I ask my right hon. Friend the Secretary of State to persuade councils that are taking far too long and using every sort of excuse, whether shortage of staff or something else, to get on with it.
  This is a valuable Bill and although it is being attacked by the Opposition on the rates issue, it includes an enormous number of valuable proposals to help run Scotland efficiently and effectively. Why on earth the Opposition should vote against the Bill I cannot understand.
  6.3 pm
  Mr. John Home Robertson: It is the height of humbug for Ministers and Conservative Members to rant on in the House and in Scotland about rate increases as if they had nothing to do with them. Scottish ratepayers and everybody else are well aware that a high proportion, if not the majority, of rate increases in recent years have been a direct consequence

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  of cuts in the rate support grant imposed by the Scottish Office under the present Government. The Scottish Office record on local government in recent years has been appalling. I cite a letter addressed to the Secretary of State for Scotland by the convener of a local authority in my constituency:
  "The indications are that if the council projects a realistic figure for inflation and maintains its existing level of services next year, the 1982–83 Budget is likely to exceed the cash guidelines by at least £2 million and possibly a great deal more. The present levels of services are already the result of successive cuts over the past few years and the Council believes that it cannot ask the public to accept any further reductions."
  The convener continues:
  "The council views this situation most seriously and wishes to represent strongly that to improve the authority's cash guideline to the Council for 1982–83 so that the Council can sustain the present reduced level of service without the necessity of having to levy a massive rate increase next year. The council is so concerned about its financial position that I have been instructed to seek an urgent meeting with you to discuss this problem."
  I do not know whether that meeting took place. The letter was from not the amiable John Crichton—the so-called "rabid red leader" of the Lothian regional council—but the highly distinguished and unquestionably Conservative convener of the Borders regional council—Major Jock Askew.
  The letter illustrates the length to which the financial strangulation of local authorities has progressed in Scotland under the present Conservative Government. The consequences of that financial strangulation have been appalling for local services, local authorities and, not least, for the ratepayers because the rates have been increased.
  Mr. Rifkind rose—
  Mr. Home Robertson: I want to get on. The Minister will have ample time at the end of the debate, and other hon. Members wish to take part in the debate.
  The Bill takes central interference in local affairs one unjustifiable stage further. I find it difficult to express in parliamentary language my feelings about what the Secretary of State has done to local government in Scotland. The Government have mounted an unprecedented attack on Scottish ratepayers by cutting the rate support grant in successive stages. At the same time, the Secretary of State has spun such an elaborate web of deceit round his activities that people believe that councillors, rather than right hon. Gentleman, are responsible for the consequences of his actions. That aspect of the Government's activities is downright despicable.
  The Government's actions have led otherwise reasonable people to pick up the wrong end of the stick throughout Scotland. I am sure that hon. Members who represent the Lothian region will have received letters from various representatives of the Ratepayers Action Group Executive—the so called "RAGE" group. That group has called on hon. Members from the Lothian region to support the Secretary of State's attempts to make life even more difficult for Lothian ratepayers.
  The Bill does not take account of the rate support grant cuts which have already occurred. It begs the question of what on earth will happen to local services and how they can be protected by councillors or anyone else. The people who are calling for restrictions on the way that local authorities have to finance themselves are the same people
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  who complain loudest about the cuts in local authority services—for example, those imposed in my constituency by the Secretary of State for Scotland.
  There is a long list of cuts which have been imposed throughout the Lothian region and Scotland as a result of the packages imposed by the Secretary of State—cuts in education such as a reduction in the number of teachers available in primary schools and elsewhere. Other examples include the closure of libraries on Saturdays, the closure of swimming pools, cuts in finances for community councils, and so the list continues.
  The argument in favour of the Bill put by the "RAGE" group relies heavily on the dangerous assumption that the Secretary of State for Scotland is reasonable. There is abundant evidence that he has been anything but reasonable in the way that he has taken advantage of the powers he obtained through the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. For example, a local authority which he singled out for punitive treatment under the Act's provisions was the East Lothian district council in my constituency.
  The East Lothian district council now has fewer staff than its predecessors before local government reorganisation. Even in the view of Conservative councillors on that council, it is nowhere near as profligate as suggested by the Secretary of State. Indeed, it is not profligate at all. Nevertheless, he has meted out this treatment and forced the council in a rather squalid horse-trading exercise to cut back on its services throughout the district. That has done great harm to many of my constituents. What adds insult to injury is that are they having to put up not only with these cuts in services, but with massive increases in rates which have been caused, partly, I confess, by the ineptitude of Lothian regional council, but largely and, for the most part, by the activities of the Secretary of State for Scotland.
  The Government have certainly made a fine job of confusing the issue about rates, and the Secretary of State was at it again today. He was talking about the £30 million that he has pinched from the ratepayers of Lothian. I recently attended a meeting in Haddington of ratepayers' groups in East Lothian. I can tell the Secretary of State that ratepayers' groups and the ratepayers are well aware of who has the £30 million that he has deducted. The Secretary of State has got it. He has pinched that £30 million from the ratepayers of the Lothian region. I do not understand why on earth he does not make it available to the regional council so that it can use the money to the advantage of the ratepayers. It is total humbug for the Secretary of State to carry on this ludicrous argument that it is all someone else's fault and that he had nothing to do with it. The Secretary of State did it personally.
  Mr. Rifkind: Does the hon. Gentleman, as a Lothian Member, think that the regional council was right not to give back that £30 million to the ratepayers, as it had the power to do?
  Mr. Home Robertson: Lothian regional council wanted to improve the services in the area and rated accordingly. That may or may not have been the right thing to do. The Secretary of State for Scotland decided that that was excessive and unreasonable. Some people may agree with him and others may not, but he took the money out of the budget of Lothian regional council and

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  he cannot get away with the suggestion that anyone else took it. He took it away. If he wants to give it back to the ratepayers of Lothian region, let him do so.
  Mr. Younger indicated dissent.
  Mr. Home Robertson: I see that the right hon. Gentleman does not. I am glad he has made that clear. That is helpful.
  Mr. Younger: The hon. Gentleman must know that I have no power to give money back to the ratepayers. I wish that I had. That is the power for which I am asking in the Bill. I hope that the hon. Gentleman will support us.
  Mr. Home Robertson: This kind of thing does not make sense. The Secretary of State is interfering in local accountability and democracy. He is taking money from the budgets of councils halfway through the year and trying to pass the blame on to somebody else, but he is not fooling anyone. He is no friend of ours.
  The Bill will cause a dramatic advance and increase in the control of Scottish local affairs from St. Andrew's House and, ultimately, from Whitehall. It will take the existing crisis in Scottish local democracy one stage further. If anyone wants to see how much the Bill will enable the Secretary of State to interfere in local affairs, he need look no further than the explanatory and financial memorandum. That states that the Bill
  "strengthens the Secretary of State's powers to take selective action against authorities … supplements the Secretary of State's present powers to reduce the level of rate support grant … allows the Secretary of State discretion to consider different categories of expenditure in proposing reduction of rate or of rate support grant … prohibits an authority from borrowing to offset the effect of rate reduction … provides that the Secretary of State may, by order, alter the definition of plant and machinery liable to valuation and rating."
  So it goes on. The Secretary of State can change the rules during the year regardless of the effects on local authorities, local accountability or local democracy. In effect, the Secretary of State will be able to dictate what services will be provided by local authorities. He will have the power to set the rate, and the local authorities will have no discretion at all. He will be what I have already described on an earlier occasion as an unelected third tier of local government in Scotland.
  Mr. Alex Pollock: Has the hon. Gentleman taken note of the comment in the explanatory and financial memorandum:
  "Any reduction will be subject to approval by the House of Commons of a report submitted by the Secretary of State"?
  Surely, therefore, the Secretary of State is subject to some elective control.
  Mr. Home Robertson: Not Scottish elective control. We also noticed that when the Secretary of State proceeded against various local authorities in Scotland earlier this year.
  Mr. Ernie Ross: Selective control.
  Mr. Home Robertson: Selective control. It is highly selective—some would argue that it is politically selective—regardless of the effects on ratepayers in he areas in question. Local accountability has gone out of the window. It will be subject to three-line Whips in the House, which does nothing to protect or improve democracy or local accountability or any other sort of accountability.
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  It is self-evident that the ratepayers have had an extremely rough time while the present Government have been in power. It is also important to note that councillors in Scotland have had a very rough time. They are being overruled and manipulated at every turn. I am talking not just about Labour councillors. I have already quoted what the leader of one Conservative-controlled council has had to say on this issue. This has happened as a result of a confrontation which has been engineered by the Government.
  As a result of all this, Scotland will lose good councillors and good conveners in local authorities all over the country, right across the board, and not just Labour councillors. We have had two cases in East Lothian district in the last month of respected and competent conveners of committees resigning because they do not see why they should carry on being rubber stamps for the Scottish Office.
  There is not much joy in being a local councillor at the best of times, but at times such as the present, when local authorities are being asked to carry out the Secretary of State's dirty work and compelled to betray their electorates, the situation becomes intolerable. I hope that the Secretary of State is aware of the demoralising effects that his activities produce on local authorities.
  While talking about councillors, I should like to comment on community councillors. Community councillors also have statutory duties. Community councils in the small communities in Scotland, in the former burghs and in the rural areas, have a statutory duty to ascertain, to co-ordinate and to express the views of their communities both to local authorities and to public corporations, and to the Government when requested. Scant attention is being paid to the opinions of community councils. Many councils have made representations to their Members of Parliament about this matter. They also made representations to Lord Stodart. On page 78 of his report, he said:
  "We detected in the evidence from community councils a good deal of frustration about their lack of powers, and the scant attention which was paid to their views by regional and district councils. Several councils sought more specific powers to perform functions of local significance, especially in the fields of leisure, recreation and amenity. Others urged that regions and districts should have a duty to consult them about matters affecting the community, and planning in particular was mentioned in this context. There was concern too that regions and districts need only contribute to the running costs of community councils if they feel so inclined".
  It is a pity that the Secretary of State has not seen fit to say anything constructive in the Bill about the functions of community councils. It is also a pity that the Government have not been prepared to face the urgency of providing adequate funding for community councils as such councils have statutory duties, to which I have already referred. The duties have been imposed by Parliament, but they still have to rely on discretionary grants from local authorities, which are themselves being subjected to intolerable financial pressures by the Government.
  I wrote to the Minister not long ago appealing to him to consider central funding for community councils. I am sorry that, in his reply, he did not feel able to say something more constructive. This matter ought to be debated in Committee.
  Part IV of the Bill refers to the Tenants' Rights, Etc. (Scotland) Act 1980. It is obviously wrongly titled. There is ample evidence that it does less to create tenants' rights

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  than to create ghettos of local authority accommodation in parts of Scotland. I have an interesting report from East Lothian district council. The report makes it clear that the sale of council houses, which the Bill is seeking to accelerate, is leading to a rapid sale of larger houses and houses in high amenity areas. It is also leading to an alarming reduction in the local authority housing stock in some of the smaller rural communities in my constituency.
  The existing legislation is doing enough damage. It would be more responsible of the Secretary of State to hesitate before accelerating council house sales any further. He should be aware of the long-term damage that he is doing. Many of my constituents, such as young married couples who want to get their first homes, will have to make do with rented council accommodation in some of the least attractive parts of my constituency.
  Mr. John MacKay: Does the hon. Gentleman accept that the logic of his argument is to send letters to council tenants who are thinking of buying their council houses in his constituency telling them not to do so, but to look to the private sector for their houses? That would make more housing available for others on the waiting list. Otherwise, the hon. Gentleman is talking the sort of humbug that he has been denouncing for the past 20 minutes.
  Mr. Home Robertson: I do not follow the hon. Gentleman's argument. I would certainly advise anyone who wanted a private sector house—it would be hypocrisy for me to quarrel with people who wanted their own private houses—to buy or build in the private sector, where they are perfectly at liberty to do so. The Secretary of State is indulging in asset stripping, which simply means that the most attractive houses in the local authority housing stock are disappearing. The best housing is going out of the local authority pool. In future, young couples will have to make do with second best. That is intolerable.
  Mr. John MacKay rose—
  Mr. Home Robertson: I am sure that the hon. Member will have an opportunity to speak later.
  The tidying-up clauses in the Bill—which for the most part are based on the recommendations of the Stodart report—are, broadly speaking, helpful. However, at best they are only tinkering with the problems created by two-tier government.
  The Bill is hopelessly misdirected. It will compound the financial damage and central Government interference that already exist in Scotland. We need a proper reappraisal of the whole of local government and the two-tier system. I have a certain amount of sympathy with what has been said about the desirability of one-tier local authorities. I go further and say that it should be considered not only for the cities but for areas outwith the cities, though that is a much broader issue.
  The Bill will not do much to reform the rating system. At best, it is only tinkering with it. I would rather do away with the rating system altogether. I look forward eagerly to the Government's proposals for scrapping and replacing that system with something fairer. In the meantime, all that we have in the Bill is more fooling around with derating particular sectors of industry.
  The industry with which I am involved has already been derated. In the Bill, the Secretary of State seeks to derate
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  parts of the oil industry. He might well be sorely tempted to derate the brewing industry. Somebody else might want to derate grouse moors.
  Mr. John Maxton: How about derating lawyers' offices?
  Mr. Home Robertson: My hon. Friend suggests derating lawyers' offices. I see a gleam in the eye of the Under-Secretary of State the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) at that suggestion. The Bill will reduce the rating income of particular local authorities, whether in oil or agricultural areas—or even in areas where lawyers' offices are to be found.
  The Bill will achieve nothing for the long-term improvement of the rating system and it will not help to make local authority finances fairer. Instead, it will increase the alarm, despondency and confusion among ratepayers in Scotland as well as among local authorities. The Secretary of State has done great harm already, and I wish that he would stop now.
  6.25 pm
  Mr. Michael Ancram: It is always a pleasure to follow the hon. Member for Berwick and East Lothian (Mr. Home Robertson). We spent many happy years at school together. Whether I have listened to him for five or 20 minutes, I have always been left in a state of bemused uncertainty as to what he meant, but I have, somehow, a feeling—and I cannot explain why I have it—that the hon. Gentleman is an expert at mirror talk, and that he really means almost the precise opposite of what he says. Knowing him and his background, knowing where he lives, and that the ratepayers in his area are making the same representations to him as mine are making to me, I think that today we have had another example of the hon. Gentleman saying the opposite of what he meant.
  Over the past week the hon. Gentleman has shown considerable alacrity in moving around the Chamber. He used to sit in the back row among the Scottish Tribune group, but the other day I found him, rather to my surprise, sitting among the Liberal and SDP Members. I wondered whether he was testing out the water. Today I find him sitting in the place that is usually occupied by the right hon. Member for Down, South (Mr. Powell). The hon. Gentleman is obviously wishing to keep his options open. Bearing in mind the state of his party, I cannot say that I blame him.
  This is a wide-ranging, multi-faceted Bill. It is difficult to deal with a whole principle in a complicated Bill such as this. I hope that the Under-Secretary of State will be able to answer some of our questions and to assure us that this egg of a Bill is not a curate's egg.
  Clauses 1 and 2, dealing with rating matters, have received much comment today. It is almost unbelievable that the Government have found it necessary to legislate on those matters. Once the Government had been empowered last year to cut expenditure, it was surely beyond the belief of any hon. Member, certainly of any Conservative Member, that there could be a council—even a Labour council—anywhere in Scotland which would prefer to give the money which had been cut from its expenditure to the Government, whom it professed to detest, rather than returning it to the ratepayers.

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  It was a travesty of natural justice, if not of political common sense, that Lothian region failed to give back to the ratepayers of the region the £30 million that the Government had rightly cut from its expenditure. It was an arrogant and petulant display of contempt for the ratepayers. It will not be forgotten by the ratepayers of Lothian region in the coming regional elections. It was, in effect, a statement from the Labour Party in the region which said to the ratepayers "We do not need you, we do not care about you, if it does not suit us politically to do so".
  Local government autonomy—of which the right hon. Member for Glasgow, Craigton (Mr. Millan) made so much—must depend on local government exercising responsibility. The reason why the Government had to act last year was that various councils in Scotland had shown that they were incapable of exercising that responsibility, and it remained the duty of central Government to protect ratepayers from politically motivated over-expenditure. It is worth remembering that Parliament supported them in that respect. Once the Bill had passed into law, the Government were justified in expecting, given that a cut in expenditure had been made, that local government would make it good to the ratepayers. Indeed, one council in Scotland—a Labour council—did so, but Lothian region and others preferred to use ratepayers as political footballs, and we could not allow that to continue any longer. For that reason I and my hon. Friends support the Bill.
  Earlier in the year, Opposition spokesmen were in a quandary as to whether to support councils such as Lothian or to speak up for the ratepayers, many of whom voted for them. They wittered, they whined, they refused to be drawn—the right hon. Member for Craigton refused to be drawn again today—they muttered responsible and concerned noises about the ratepayers, and then they turned their backs on them and on their concern when what they were saying was ignored by their councillors. At least today the mask is off and the position is clear.
  I was fascinated to hear the right hon. Member for Craigton describe what the Government are doing, in trying to ensure that the money is paid back to the ratepayers, as offensive. Offensive to whom? Certainly not to the ratepayers. When he made it clear that the Opposition will vote against the Bill tonight, he was in effect saying that they will vote against the ratepayers as surely as if they were ratepayers in Lothian or Dundee. There is no fudging that, and there is no hiding behind talk of local government autonomy. Tonight the vote is stark. The question that the Opposition have to ask themselves is whether they believe that the savings that are made by councils should benefit the ratepayers. Clearly, from what the right hon. Member for Craigton said, they do not. That deliberate and cynical vote against ratepayers in Scotland should be seen for what it is. The hon. Member for Stirling, Falkirk and Grangemouth (Mr. Ewing) may laugh, but the chips are down when the Opposition are prepared to let the ratepayers, many of whom are financially vulneralbe, go to the wall. I hope that there will be no more talk from Opposition Members about their being concerned about people or protecting jobs. Tonight they will be voting against that. They will be putting politics before any of those concerns.
  Mr. Tristan Garel-Jones: I apologise to hon. Members for intervening in a Scottish debate, but I should like to draw to the attention of my hon. Friend and Opposition Members the fact that the SDP and the Liberal Party have no representatives in the Chamber. I know that Liberal and SDP Members have intervened during the debate, but it should be placed on record that they are not in the Chamber now.
  Mr. Ancram: Members of the Scottish National Party should also be added to the list. They have not shown up today when we are debating a major Scottish issue.
  It was interesting that the right hon. Member for Orkney and Shetlend (Mr. Grimond) declared that his party would vote against the Bill. In my region, the Ratepayers Action Group Executive organisation, which wrote to all local Members asking them to vote for the Bill on behalf of the ratepayers, will be interested to know that the Liberal Party, which professed so much concern for ratepayers, is prepared to vote against the interest of ratepayers tonight. The Government have no alternative but to take these steps in pursuit of the principle that guides conservatism—that ratepayers must be protected.
  There are many smaller points on which I should like the advice of my hon. Friend.
  Mr. Home Robertson: I am grateful to the hon. Gentleman for giving way, because all that drivel about Conservatives protecting ratepayers must be challenged. Will he come clean on why the rates have risen as they have? Have not the cuts in rate support grant imposed by the Government played an enormous part in the increase in rates? Also, have not the Government filched £30 million from the ratepayers of Lothian?
  Mr. Ancram: I shall not answer the second part of the hon. Gentleman's question because my right hon. Friend the Secretary of State, my hon. Friend the Under-Secretary of State and others have tried slowly and simply to explain it to him. If they have not been able to do so, I doubt whether I shall succeed.
  Mr. Home Robertson: Where is the money then?
  Mr. Ancram: The money is coming out of the rate support grant. The hon. Gentleman knows that the council had the choice last year, under statute, of giving that money back to the ratepayers or of giving it to the Government with whom it professed to disagree. It is unbelievable that it chose the latter. As a Lothian ratepayer, I would have preferred to have given that money back to the ratepayers than to have seen the levels of expenditure that have existed in Lothian, which have not gone very far towards improving services, but which have gone a long way towards increasing the number of jobs in Lothian region. The ratepayers would have spent it more sensibly than the Lothian regional councillors.
  I come now to one or two more specific points on which I should be grateful for my hon. Friend's advice. Clause 8 deals with tourism, and here I declare an interest as the part-owner of a caravan park. The right hon. Member for Craigton was correct in saying that the Government have got themselves into a difficulty, because there is no single rule that can be applied across Scotland on tourism. Obviously, as an Edinburgh Member, I welcome the fact that the Edinburgh district council will be in charge of tourism for the city. That city is a tourist attraction in itself, and it is right and proper that the district council

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  should be able to organise tourist activity within it. Equally, I give the example of the Border regional tourist board, which is beginning to work, because it is of sufficient size to work. Were it to be broken up into smaller units of the four districts involved it might not be so effective. Will the co-ordinating factor in the Bill be used in a discretionary way to make sure that the effective tourist authority within each area is suitable to the needs of the area?
  My second point relates to clause 18 and the question of consumer protection, which was mentioned by my hon. Friend the Member for Dumfries (Sir H. Monro). It appears that certain anomalies will arise under the proposals in the Bill, where, if we are not careful, we shall be creating duplication and more manpower and jobs than we have at present. I understand in particular—it may be a. slight variation of the chicken and egg argument—that the equipment used by the weights and measures people, who will remain within the regional site anyway, is the same equipment as will be used in the part that is now to be transferred to the district. Where there is now one single expertise and one set of equipment, it will have to be duplicated. As my hon. Friend knows, I am not keen on supporting anything that will unnecessarily increase manpower in local government.
  My third point relates to clause 32 and structure planning. It appears that the Bill will simplify that, although I should like my hon. Friend to confirm it and to give an assurance that genuine public concern will be taken into account. How will the clause affect the present position in Edinburgh? The Secretary of State is still considering the structure plan that was submitted just over a year ago, which includes the whole question of housing need. At the same time, the Secretary of State has ordered a number of inquiries to be held on green belt areas, some of which are within my constituency, where I understand the reporter is requiring of the district planning authority evidence of housing need. I understand that he is, therefore, caught between two stools because he cannot do the one until the other has happened. I hope that that, and the duplication of effort that it is causing, might give my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary reason to consider sisting these inquiries, at least until a decision has been made on the structure plan. I hope that my hon. Friend will be able to reassure me about it.
  I turn, finally, to a subject that my hon. Friend would be surprised if I did not mention. It is the possibility of creating an all-purpose authority for Edinburgh. I shall not detain the House for long on it, because I have spoken about it on many other occasions. It is disappointing that the Government do not recognise in the Bill the damage that is being done by the present local government system to the city of Edinburgh. Amenities are moving out, people are following them, and we see a slowly emptying city centre.
  Edinburgh is in danger of becoming a capital city without status and with a decreasing base of population. It is a slow but sure movement. I hope that my hon. Friend the Under-Secretary of State, who represents an Edinburgh constituency, will realise how concerned I am to stop it. Before the Bill is passed, the Government ought again to consider Edinburgh's status with a view to making it an all-purpose authority, recognising once and for all its position as the capital city of Scotland. I shall try to help the Government to give Edinburgh that recognition, and
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  I welcomed the remarks of my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), who gave qualified support to a move in this direction.
  All in all, I welcome the Bill. It is a step in the right direction. At last ratepayers in my region and across Scotland can see that the Government have their interests at heart. I hope that the House will support the Bill.
  6.43 pm
  Mr. Norman Hogg (Dumbartonshire, East): The Government seem determined to introduce major legislation on local government at every opportunity. We see it again tonight. It appears that the provisions in the last major piece of local government legislation are not enough and that the Secretary of State wants even more powers. That is consistent with his attitude throughout the time that he has held his high office. He has taken every conceivable opportunity to extend his powers at the cost of democratic local government.
  Clause 1 adds to the powers that the Secretary of State has already to reduce the rate support grant. Local authorities will be required to reduce the rates regardless of their assessment of what is necessary for the communities that they represent. The legislation provides for the reimbursement of ratepayers, as we have just heard the hon. Member for Edinburgh, South (Mr. Ancram) explain.
  I am concerned that the Conservative Party has abandoned any pretence that it defends local government and, more importantly, the principles of democracy. This Government have abandoned that pretence steadily throughout their term of office, and it is extremely worrying that they no longer uphold local democracy, which was a very strong principle of theirs in the days when they included amongst their supporters in the House hon. Members who had had distinguished service in local government.
  Clause 2 prohibits borrowing to offset a rate reduction. It compounds the charge that I have levelled against the Government that they are telling local authorities what to do and intend to go on doing that.
  Clause 3 is an order-making power. There may be a case for the Government's proposal. I am conscious that in Committee on last year's Local Government (Miscellaneous Provisions) (Scotland) Bill hon. Members argued that there should be derating for plant in Scotland in the same way as it is given in England and Wales other than to buildings. There is a prima facie case for it.
  A company in my constituency has its Scottish plant rated, whereas its plants elsewhere are derated. I have received a number of representations from the company. It points out that it received certain benefits when it came to Scotland. By siting its activities in a new town, it was the recipient of an extremely attractive package of incentives. However, all that has now been cancelled out by the high rates bill which it has to meet but which it does not face in England and Wales. The company pays about £132,000 in rates in Scotland, whereas it pays only £40,000 for a similar plant in Wales. There are very large sums at stake, although I am the first to agree that the plant in question, which is in Cumbernauld, does not compare with a plant such as BP's at Grangemouth. Recently I was supplied with some estimates prepared by people who know a little about local government finance. I am advised that if there were to be full derating of plant in Scotland the cost to the local authorities would be £30 million.

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  That leads me to my second worry about clause 3. Although I recognise the arguments advanced for derating plant, at the same time the Government have to accept responsibility for the resulting very significant shortfall in the income of local authorities. The House must be told what it means for Central region and Falkirk district, which have the big petrochemical complex at Grangemouth.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) posed a specific question to the Secretary of State about what would be the shortfall of cash to the local authorities in his constituency, but he did not get a clear answer. That is hardly good enough. If the Secretary of State is persuaded that this is an area in which legislation is appropriate, he must be able to sustain that with some sort of argument. The only argument is the financial one. There must have been some investigation of what this would mean for those local authorities. It is not for me to speak for Orkney and Shetland, but the right hon. Gentleman asked a very pertinent question and a reply would be appropriate. I hope that the Minister will give a satisfactory reply both to that and to my question about Central region and Falkirk district.
  I worry about the £30 million that will go adrift if effect is given to the order, because that loss will be compounded by the Government's present policies. I recall the statement in the House last week when the mini-Budget proposals were published and we saw what they meant for the rate support grant in Scotland. If we add the 2½per cent. that is going adrift as a consequence of the Government's economic measures, and if we take account of what may be lost to local government if the order-making power in clause 3 is ever effected, the consequences for local government are not insignificant.
  According to the explanatory and financial memorandum,
  "The provisions relating to the valuation of plant and machinery … and any orders made thereunder, will not lead to any increase in public expenditure, although orders may be made which will lead to a redistribution of the rates burden."
  It is not often that Governments are as clear as that. The implications of that statement are clear. If orders are made under clause 3, domestic ratepayers will have to foot the bill—and not just domestic ratepayers, but other commercial ratepayers, too. That is bad news for some Scottish constituencies, which already face serious difficulties arising from the never-ending economic blizzard into which the Government have plunged them.
  It is irresponsible of the Government to bring in legislation of this nature without being certain what it involves. Instead of hectoring and lecturing local authority representatives in the way that some hon. Gentlemen have done today, and instead of coming here with half-cooked legislation and off-loading problems on to councils—of which this is another example—it would be better to give specific information about what the clause mean and what its implications are for the district and regional authorities that contain Scotland's major industries.
  This is a far-reaching Bill and it affects manpower. Unfortunately, it is not possible to follow all the arguments that have been advanced by other hon. Members, because of the width and scope of the Bill, but I want to say a word about its manpower implications. Perhaps at this point I should declare an interest, in that I am the parliamentary
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  adviser to the National Association of Local Government Officers. The implications for manpower are greater than would appear at first glance. Although the Stodart proposals cover a wide range of functions, none is in the mainstream of local authority functions. Therefore, there is a temptation to say that there are no serious implications for local authority manpower. However, it does have such implications because of the scale of what is proposed.
  Any redistribution of function in local government is, of course, a redistribution of people, because local government is labour-intensive, as the hon. Member for Edinburgh, South never ceases to remind us. One cannot have services without having people. It is in the very nature of services that they are staffed, manned and organised by people. Thus, any redistribution of services means transferring staff from one authority to another.
  Local government officers have considerable experience in this regard. Major reorganisations of local government took place both in Scotland and in England and Wales in the mid-seventies. That was a smooth operation. It was greatly to the credit of our Scottish local authorities and to their employees that the reorganisation was effected so successfully. However, that was due to a large extent to the existence of the Staff Commission for Scotland. That commission was headed by Mr. Fraser, the former right hon. Tom Fraser, who for many years was a distinguished Member of the House, serving for the constituency of Hamilton. He brought to the Staff Commission for Scotland his wide experience of many years in public life. Indeed, he served in the Cabinet. Local government officers had great confidence in him and felt certain that their interests were being properly looked after.
  It is extraordinary that, although local authorities are to undergo some reorganisation, there is a proposal in clause 52 to wind up the Staff Commission for Scotland. [Interruption.] It has been brought to my attention, Mr. Deputy Speaker, that no Minister is present in the House. That is unfortunate, when matters are being discussed to which I hope a Minister will address himself in winding up the debate. I cannot believe that an English Opposition Whip and the Secretary of State's beagle can be called spokesmen for the Government. I hope that the Parliamentary Private Secretary to the Secretary of State will draw this matter to the Minister's attention when he returns.
  Mr. Pollock rose—
  Mr. Deputy Speaker: Order. The hon. Member for Dunbartonshire, East (Mr. Hogg) seems to be under the misapprehension that the Whip is not a Minister.
  Mr. Hogg: You have properly advised me in that respect, Mr. Deputy Speaker.
  Mr. Jim Craigen: On a point of order, Mr. Deputy Speaker. We are having a debate that involves a Department of State, the Scottish Office, yet we do not have present a Minister from that office. Should you not suspend the sitting until such time as a Minister returns?
  Mr. Deputy Speaker: Perhaps the hon. Member for Glasgow, Maryhill (Mr. Craigen) will catch my eye in due course, in which case he can make his own speech.
  Mr. Pollock: While the hon. Member for Dunbartonshire, East (Mr. Hogg) is on the subject of party

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  representation in this debate, would he care to comment on the fact that, after about three hours of debate, the House has now been graced with the presence of one Member of the Scottish National Party?
  Mr. Hogg: I am not sure that even the presence of one Member of the Scottish National Party brings us to a state of grace.
  Mr. Gordon Wilson: I doubt whether the hon. Member for Dunbartonshire, (Mr. Hogg) East could define an appropriate state of grace. Perhaps he would kindly note that I am a casualty of British Rail.
  Mr. Hogg: I pride myself on always knowing what a state of grace is, because since childhood I have carefully considered the scriptures.
  As I was saying, local government officers have considerable confidence in the Staff Commission for Scotland, and now they are faced with another reorganisation. The Commission helped to iron out many of the problems that faced local government in 1975. It brought an independent mind to the problems. Its reputation among local authority staffs was one of fairness and good will. The Bill disposes of the commission, but more serious and worrying is the fact that it makes no provision to deal with the vacuum that will be left after the disappearance of the Commission.
  The Bill's view of the problem is, to say the least, naive. Clause 29(1) says that
  "the officer shall be transferred into the employment of the second local authority:
  Provided that, as regards any transfer in respect of which the first local authority is a regional council and the second local authority might be any of the district councils in the region, the authority which is to be the second local authority shall be determined jointly by the regional council and district councils; but they shall take into consideration any preference expressed by the officer concerned."
  There is no provision for arbitration. I can foresee circumstances in which a local government officer and the authorities concerned cannot reach agreement on his transfer and there is no means whereby the difficulty can be resolved. Although the Government do not recognise that problem, they recognise that there could be difficulties between authorities. Clause 29(4) gives authorities a right to go to arbitration. Therefore, on the one hand, the employing authorities will have means at their disposal to reconcile difficulties between them, but, on the other there will be no mechanism for reconciling difficulties between authorities and their employees.
  We should not disband the Staff Commission for Scotland, but should keep it in existence to deal with the Stodart proposals. If, having given effect to the Stodart proposals, the Government were to say that there was no longer a case for the Commission, I should accept that. The need for it will have vanished. However, that need has not yet vanished, because the Government are bringing forward measures that will have a profound impact on local authority staffing.
  The Bill is bad news for ratepayers and is not the good news that Conservative Members have endeavoured to persuade us that it is. It represents simply another attack on local government. It is bad news for local government employees, because it deals with their employment and takes away safeguards to which they have long become accustomed. The Bill changes well-established practices and procedures for dealing with staff. That will have a
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  detrimental effect. In addition, it will add to the burdens of ratepayers because of what will happen with regard to commercial and industrial rating.
  Above all, the Bill mounts a serious assault on local government democracy. The foundations of local government are built on the elective principle, and that is being undermined by the Bill. Local elections, manifesto pledges, thought-out local plans and programmes are all to be subject to a central diktat. Whatever Conservative Members may have said about local democracy or freedom of choice—I seem to remember that they once attached great importance to such slogans—is now exposed as empty rhetoric.
  The Government have no principle or underlying philosophy, save that which serves the discredited and destructive economic policies that they have pursued for two and a half years. Local government is now being sacrificed to that end. There are hon. Members who will not stand for that, who will stand up and be counted in defence of local government, and who will ensure that the Bill will be resisted in Committee line by line and that opinion will be mobilised in the country. At the end of the day we shall be supported by the electorate.
  7.3 pm
  Mr. John McKay: Until the hon. Member for Dunbartonshire, East (Mr. Hogg) went into overdrive towards the end of his speech I thought that it was quite good. His speech was particularly good for someone who, according to the The Sunday Standard, had never wanted to be a Member of Parliament. However, I noticed that he added quickly—just in case the Militant Tendency reads The Sunday Standard—that he had every intention of fighting like blazes to stay a Member of Parliament.
  Mr. Maxton: I gather that it was the wife of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg) who made that remark, not my hon. Friend.
  Mr. McKay: I do not know whether the hon. Member for Glasgow, Cathcart (Mr. Maxton) is dissociating his hon. Friend the Member for Dunbartonshire, East from his wife's remark. If so, it might cause trouble for the hon. Member for Dunbartonshire, East when he goes home at the weekend.
  The hon. Member for Dunbartonshire, East said that the Labour Party in Scotland would mobilise support in the country and fight the Bill line by line, but it has not managed to assemble many of its 44—or perhaps 42—Members to take part in the debate. If any of my hon. Friends care to walk through the Library now, they will probably find several Scottish Labour Members reading the Bill and scribbling like fury so that they can make speeches before the debate is over.
  It is hard to believe—the hon. Member for Berwick and East Lothian (Mr. Home Robertson) still cannot understand it—that any local authority and ordinary body of men would opt to give money back to the Secretary of State when told that they must either give back £30 million to the Secretary of State or return it to the ratepayers. That was the choice that confronted the Lothian regional council. Of course, we are not dealing with a normal body of men in Lothian region, because they chose to give the money back to the Secretary of State. Not only today, but during Scottish Question Time, the hon. Member for Berwick and East Lothian has failed to understand that the

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  Lothian region had the option of giving the £30 million back to its ratepayers, but it decided that it would prefer the Secretary of State to take back the money.
  In the first part of the Bill the Secretary of State takes powers to deal with something that—even in his wildest dreams—he probably did not contemplate. I refer to the fact that a local authority should deliberately choose to deprive its ratepayers of £30 million and prefer to see it returned to the Secretary of State.
  Mr. Home Robertson rose—
  Mr. McKay: I hope that the hon. Gentleman is going to tell me that he now understands what happened.
  Mr. Home Robertson: The hon. Gentleman is almost as dense as his colleagues. He suggests that Lothian regional council gave the money to the Secretary of State. The Secretary of State took the money from the council. The right hon. Gentleman has got the money. What has he done with it?
  Mr. MacKay: Whether it is "took" or "gave" is somewhat irrelevant. The point is that the Secretary of State told Lothian region that he could take back the £30 million or the council could give it back to its ratepayers. The council chose to allow the Secretary of State to take it back. "Taking" or "giving" is irrelevant. Lothian region preferred to see £30 million returned to the Scottish Office than to its ratepayers. If the hon. Member for Berwick and East Lothian checks, he will discover that Renfrew district council, when given the same choice, decided to give the money to the ratepayers, not to the Secretary of State. It was prepared to take the wise way out. I do not suppose that Renfrew district council liked the option any more than Lothian council, but it at least had the gumption to realise that it was better to give the money back to the ratepayers than to give it to the Secretary of State, as Lothian did.
  It is sad that we should have a Bill with such a first part and that we should have had the other Bills. It is sad, because the Bill has been introduced against a background of local authorities using their power to play at national politics and to campaign and work against the central Government. Every Government must decide on the level of both current and capital local authority expenditure. No Government have opted out of the broad decisions that have to be made. Indeed, my right hon. Friend the Secretary of State read extracts from speeches made by the right hon. Member for Glasgow, Craigton (Mr. Millan) that underlined that point. No Secretary of State—whether he be Secretary of State for Scotland or for the Environment—can opt out of making broad decisions about what local government is allowed to spend. My right hon. Friend reminded the House, by quoting from the right hon. Member for Craigton, that the previous Labour Government controlled local government expenditure in exactly the same way as this Government are controlling it.
  Of course, local authorities complain. They complain today and they complained in the past. Most of them know that they must live within the guidelines set by the central Government. Most of them realise that they are creatures of the House and of the Government. The complaints by some local authorities about the central Government
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  interfering in local government fall on stony ground when I read about the type of resolutions passed by some Scottish local authorities. For example, some local authorities have decided that they are responsible for defence and can declare nuclear-free zones. It is time that they realised that that is interfering. Whether or not one approves of the policy, that is the preserve of the central Government. If defence is not the preserve of the central Government, what is?
  Some authorities go even further. One local authority in Dundee is obsessed with trying to conduct its own foreign policy, finding a solution to the Arab-Israeli war on the side of the Arabs. The protests that the central Government should not interfere would be more soundly based if some Labour-controlled councils were not busy passing resolutions on defence and foreign affairs and sending ambassadors to the PLO, as Dundee has. Such councils are taking action on matters which are the preserve of the Government, whatever their colour.
  The next time a local authority complains about central Government interference—all Governments must interfere in local government expenditure—it should look in the mirror of its own minutes and ask what it is doing interfering in defence and foreign affairs.
  I was involved in local government and I am sorry to see the central Government taking more powers, but that is because of the behaviour of some local authorities.I am afraid that my right hon. Friend has no alternative but to ask the House to give him the powers that he seeks in the first part of the Bill.
  It is a pity that that part of the Bill is included. It shows that local government is acting outwith its normal convention and relationship with the central Government. It is also a pity because it obscures the rest of the Bill, which contains important reforms which will help regional and district councils to carry out their functions and help the electorate and ratepayers to understand who is responsible for what. It will mean that they will not be left confused about concurrent functions which are the responsibility partly of one authority and partly of another. It was sensible to promise in our election manifesto to set up a committee to examine that matter. The report, which was delivered to us speedily, has fully justified the setting up of that committee.
  The Stodart report recommends that most functions should be exercised by one authority or another. There might be disagreement, not just across the House but among hon. Members on the same side of the House, about which authority should excercise a particular function, but there is no disagreement about who should deal with the compound functions.
  Five Members of the House gave evidence to the Stodart committee. They were the hon. Members for South Ayrshire (Mr. Foulkes), Dundee, East (Mr. Wilson) and Dundee, West (Mr. Ross), my hon. Friend the Member for Galloway (Mr. Lang) and myself. The hon. Member for Dundee, West and I were the only Members to give oral evidence to the committee. I gave mine with the Argyll and Bute district council. Its delegation was led by Mr. Frank Spears, the chairman, and Mr. Michael Gossip the chief executive. It is gratifying that most of our arguments were accepted by the Stodart committee and the Government and put into the Bill.
  Tourism is particularly important to my constituency. Lord Stodart's recommendations on tourism are implemented in clause 8. The evidence by Argyll and Bute

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  and Strathclyde regional council to the Stodart committee was that it would be best if tourism were the responsibility of the district council. The Scottish Tourist Board took a contrary view at the time. The Stodart committee and the Government wisely decided not to accept the board's view, but to accept the other evidence.
  Tourism is desperately important in my constituency. About 10 per cent. of the bed nights spent in Scotland are in my constituency. The area is a dominant force in Scottish tourism, yet we were being submerged in an unmarketable commodity called Strathclyde. Hon. Members representing Strathclyde will be the first to agree that Strathclyde does not exactly fit the holiday poster image that we want to encourage people to come on holiday, especially when we are trying to attract people to a place so obviously part of the Highlands as Argyll. I welcome the Government's decision to make tourism the responsibility of the district council. In the last year or two years, Strathclyde has accepted de facto that tourism should be a district council function. The Bill makes that legal.
  Part III of the Bill deals with planning. I am pleased that the highway authority has not been given power of direction on planning matters. My right hon. Friend the Secretary of State no longer has that power in relation to trunk roads. It would be wrong to allow regional councils that power of direction on their roads. I am certain that observations by the trunk roads authorities and the regional roads authority to the planning committee will be taken into account. Planning permission will not lightly be given to schemes which run counter to the recommendation of the roads authorities unless there is good reason. In my experience, in many cases there are good reasons, or other planning reasons, to put aside the objections of the roads authorities.
  The Stodart report does not agree with me about the structure plan. I shall examine closely the part of the Bill that deals with structure plans. I am not convinced that the regional council and the Secretary of State should have call-in powers on planning applications. I do not see the need for both to have such powers. It would be better if the powers were exercised by my right hon. Friend, who, I am sure, would exercise them wisely and not often. I do not see why the powers should be exercisable also by the region.
  I shall study that part of the Bill carefully because the draft structure plan by Strathclyde for Argyll will involve difficulties. The majority of planning applications will be counter to the draft structure plan. That will make life complicated. There are reasons for that which I shall not examine in detail, but we should be careful about the powers and restricted use involved in structure plans. In Argyll—I imagine in all rural areas—planning cannot be done in the desk exercise manner of normal structure plans.
  The Argyll and Bute council and I made two points with which the Stodart committee did not agree. Therefore, they are not included in the Bill. The first is a small matter involving registration. We believe that registration should be a district rather than a regional function. It is interesting to note that Strathclyde agrees with us. I shall pursue that matter in Committee.
  The second matter relates to the position of Argyll and Bute within the Strathclyde region. Neither I nor the council wish to belittle the efforts that Strathclyde has made in Argyll. In many respects, services have been
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  improved, especially in the landward area, compared with what they were before reorganisation. It is equally true that the rate bills in Argyll are considerably larger than they were prior to reorganisation.
  Most of the major projects were taken over by the region from the previous authorities. Some have been undertaken by Strathclyde alone, and I pay tribute to it for that. It has undertaken water schemes on islands such as Tiree, which the old water board could not have considered financially. It has built ferry terminals at Gigha and Iona with the help of money from the EEC. It also deserves a big pat on the back for having decided to upgrade four-year schools in Lochgilphead, Islay and Tiree—it proposes to do the same in Tarbert—to six-year schools. That will he of considerable benefit to the communities involved, especially island communities.
  It is only right to pay tribute to Strathclyde for the way in which it has accepted its responsibility for the whole district, not just Argyll and Bute. I wish to read what I said to the Stodart committee, because that puts my point of view briefly:
  "Despite considerable expenditure on roads, piers, schools and water, the Region remains very unpopular. The public do not consider that Argyll should form part of Strathclyde—a region rightly dominated by Urban members and Urban problems."
  Argyll comprises about half the geographical area of Strathclyde but has nowhere near half the population. I note the presence of my hon. Friend the Member for Bute and North Ayrshire (Mr. Corrie). Therefore, perhaps I should say that it is a bad habit to call the district "Argyll". One should always call it Argyll and Bute.
  I went on to say:
  "The view which is widely held in Argyll and Bute is that local government would be improved, made more efficient, and less remote if there was only one tier of Local Government in Argyll and Bute. The District feels itself an entity of sufficient size, geographically if not in population terms, to be an all-purpose Authority. This public feeling has been strong since 1974, and if anything has increased over the years. I can see no evidence that the feeling is likely to wane."
  That is the most important part. I cannot see any evidence that the feeling that we do not fit properly into Strathclyde is likely to wane.
  Interestingly enough, that was the point made by the Stodart committee. The report said that Argyll and Bute "compelled our attention." Paragraph 33 of the report states:
  "We recognise the force of the arguments"—
  put forward by myself and Argyll and Bute district council. The report goes on:
  "The district, with its many distinctive features which we have described, lies somewhat uncomfortably within Strathclyde. To put it at is simplest, we can see that it does not 'fit'. On the other hand, we cannot fail to note the very real benefits that the district has gained from its association with the region."
  The problem faced by the Stodart committee before it decided against any change was that the financial position of an authority with such a small rate base as Argyll and Bute district council would be considerable. However, I still believe that local government is about not just money, but acceptance by the people who live in a district of an identity between themselves, their area and the local government. We do not feel that we have with Strathclyde.
  If I am selected to serve on the Committee—one does not have to be good at arithmetic to work out that I probably shall be selected—I intend to table an amendment along such lines in order to have a proper

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  debate on the subject, because it is important to my constituents and to some of the constituents of my hon. Friend the Member for Bute and North Ayrshire.
  I have a postscript about clause 51. The Government intend to disband two committees. One is the fisheries committee, set up under the hydro-electric board powers and later given powers under the electricity Acts. Originally, the committee was concerned with hydroelectric schemes and their impact on fisheries. The fact that we still have important salmon fishing in rivers used for hydro-electricity power is partially a tribute to that committee's work. Other countries, where hydroelectricity has been pushed forward, have not been so careful with their fisheries. Consequently, the salmon and sea trout do not run their rivers in the way that they do in rivers worked by the hydro-electric board.
  The hydro-electric board no longer builds dams, so perhaps, on the face of it, the fisheries committee has outlived its usefulness, but during the years it has moved to another role—considering the effects of large estuarial and open-coast power stations, especially those run by the South of Scotland Electricity Board. It has undertaken the work involved in checking, considering and organising the research into the effects on fisheries of the warm water that comes from those power stations. Whether they are nuclear, oil or coal-powered stations, the effects are much the same. They still release water at a higher temperature than the sea. Some hon. Members may know that that is not too difficult round the coast of Scotland.
  The estimated cost of the committee in 1979, which I suppose our colleague who is so against quangos would imagine it to be, was £1,800, which is not an enormous amount of money.
  Mr. Rifkind: Too much.
  Mr. MacKay: The interesting thing is that it is possible for the inspector of salmon fishing—
  Mr. Ernie Ross: The Minister said "Too much".
  Mr. MacKay: The hon. Member for Dundee, West will be amazed to learn that I also heard my hon. Friend's comment. If the inspector of salmon fishing requires an assistant to undertake the work of the committee, I hazard a guess that that will cost a little more than £1,800 a year.
  There are six members of the committee, including two biologists—Dr. Ted Needham, who is active in fish farming and is perhaps known to some hon. Members, and Dr. Peter Barnett of the Dunstaffnage Marine Laboratory in my constituency. They oversee the research about the effect of heated water being released into the Clyde estuary in places such as Hunterston. The committee highlighted problems of chlorine discharge and air gas supersaturation that had been unsuspected by either the south of Scotland Electricity Board or the Clyde river purification board. It is doubtful whether river purification boards have the necessary knowledge and manpower to replace the committee.
  For example, the committee is commissioning a study in Boddam, Aberdeenshire, about the effect that the heated effluent from Peterhead may have on wood-boring marine animals, which would have a severe effect on the hulls of wooden fishing boats. That should interest my hon. Friend the Member for Moray and Nairn (Mr. Pollock).
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  I pose the question to my hon. Friend tonight—although I do not expect an answer—that I shall pose in Committee: why should that body be abolished when it seems to have useful work to do and can do it fairly cheaply?
  I make that reservation, but I welcome the Bill. The two principal parts of the Bill are to be welcomed. The part that implements the Stodart committee's recommendation should be welcomed by most hon. Members. I welcome the other parts, but with some sadness in my heart that once again we must bring forward legislation to control local authorities which seem to feel that political dogma should be put before the interests of their ratepayers.
  7.29 pm
  Mr. John Maxton: One thing that can always be guaranteed after a speech by the hon. Member for Argyll (Mr. MacKay) is that the sale of copies of Hansard will go up. With the number of constituents that he manages to name in each of his speeches I am sure that he manages to sell a few more to each of them in person.
  I wish to take up a few points that he made, especially that of local authorities interfering in what he termed national issues such as defence. When he catches your eye, Mr. Deputy Speaker, I am sure that my hon. Friend the Member for Dundee, West (Mr. Ross) will defend the district council's attitude towards Palestine and the Palestinian movement.
  The hon. Gentleman suggests that local authorities should have nothing to do with defence. Only last week in the Western Isles his right hon. Friend the Secretary of State overrode a local authority decision and public opinion for what he called defence interests to extend the airport for NATO purposes. Does he believe that Dumbarton district council is not entitled to a say in whether extra nuclear weapons should be sited in the area? Regional authorities are by an Act of Parliament given specific duties for defence. They are the civil defence authority.
  Mr. John MacKay: They should carry them out.
  Mr. Maxton: Many are not prepared to go through the current sham of civil defence in a nuclear war. It is astonishing to hear the hon. Gentleman say that local authorities should carry out those duties, when he supports his right hon. Friend in an attempt to cut back local expenditure. Conservative Members should perhaps be grateful for that saving in expenditure.
  Mr. John MacKay: The hon. Gentleman is well aware that the councils which take that view of defence do not do so because they wish to save their ratepayers money or because of strict planning considerations. They wish to play against the House on matters concerning the defence of the realm, a responsibility which the people have entrusted to the Government. This Government, like the previous one, have decided that we should participate in NATO and make our own nuclear defence contribution.
  Mr. Maxton: If I stray too far down that path, Mr. Deputy Speaker, you will begin to worry.
  Responsibility for civil defence is given to local authorities by central Government, but many authorities believe that in the event of a nuclear war the civil defence facilities that they could offer would be a meaningless farce. They would save the lives of only a few—possibly

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  only the regional officials who would be down in the headquarters to carry on government afterwards. If the hon. Gentleman thinks seriously about the matter, he will realise that the provisions are a farce and that local authorities are entitled to take that view.
  The Bill is yet another nail in the coffin of local government in Scotland. In their manifesto the Government pledged that local government would be returned to the people after the centralised Labour Government of between 1974 and 1979. They pledged to free local democracy and give local government the freedom to choose. When the Government introduce Bills to control local finance, they argue that they should interfere as they provide a portion of the money. That may be fair enough, but they have also introduced other Bills to control local government. The Tenants Rights, Etc (Scotland) Act took away local authorities' ability to control their housing policy. The Education (No. 2) Act took away their ability to control completely their education policy. The Government are eroding local government power not only through finance but also by direct legislation.
  As a result, rates are increasing massively, not only in the so-called spendthrift Labour controlled authorities. In the constituency of the Under-Secretary of State, the hon. Member for Renfrewshire, East (Mr. Stewart), in the district of Eastwood the average domestic rate payment has risen by 79 per cent. since the Government came to power. In another local authority close to Glasgow—surprisingly, in the constituency of my hon. Friend the Member for Dunbartonshire, East (Mr. Hogg)—which can hardly be said to be Labour controlled, Bearsden and Milngavie, it has gone up by 79 per cent. In the Tayside region it has gone up by 89 per cent.—the same increase as in the Strathclyde region. Although no action has yet been taken against Strathclyde, many Conservative Members would consider it a spendthrift Labour-controlled authority, with all the faults that they attribute to such authorities.
  Bearsden and Milngavie has the highest average domestic rate payment per household in Scotland. I accept that it is a wealthy area. Eastwood, again a wealthy area, has the second highest. One problem for both districts is that they are far too small to carry out the proper functions of a district council. I hope that the Committee will deal with the Wheatley proposal, from which the reorganisation of local government in Scotland came. The services in the suburban areas around Glasgow feed on the Glasgow ratepayer. Rutherglen park, a large park in the Eastwood district, belongs to and is paid for by the Glasgow district council and its ratepayers.
  It is time that we came back to the Wheatley recommendations and brought Bearsden and Milngavie, Eastwood and one other authority, whose name I cannot think of at the moment, into the Glasgow district, which should include all those who work and live in the surrounding areas. The areas that are pure dormitories for the Glasgow working area should be included in the district.
  If the Under-Secretary serves on the Committee he will persuade his hon. Friends not to accept the proposal. Eastwood is the most Conservative area certainly in the West of Scotland, and he knows that if the provision went through, his electors would not return him at the next election. However, the proposal makes sense, and I hope that my hon. Friends will pursue it in Committee.
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  The Minister and his hon. Friends shed crocodile tears for the poor ratepayers in Scotland who have to pay out extra money, which goes to spendthrift local authorities who waste it. The phrase "excessive and unreasonable" is actually included in the legislation.
  We would not object so much if the Government set an example to local government when forcing cuts on it. They should examine their own tax increases and expenditure. The figures show that in Scotland the average family man with two children on average income has, since the Government took office, suffered a rise in his tax bill from 41·9 per cent. to 46–8 per cent. of his income. His rates bill has risen from 2·3 per cent. to 2·6 per cent. of his income. The Government are grabbing more money while condemning local government for raising rates.
  Last December the Financial Times said that if the Government followed the example of local government in controlling expenditure, the country might not he in such a mess. Government and Scottish Office expenditure has risen faster than local government expenditure. It is too much for Government Ministers to say that local authorities are nasty and rotten because they have raised rates. If the Government wish to do something about the unfair burden of rates by spreading them over the population as a whole, the Opposition might consider that favourably. They cannot claim that the rates burden is unfair because of local government. Local government does not decide whether there should be a rating system. The increase in rates is lower than the increase in Government taxation. The Government must seriously consider that matter.
  The Government fail to appreciate that, to some extent, the cuts that they are forcing upon local government expenditure are forcing up Government expenditure. As a result of the Chancellor of the Exchequer's statement last week, the average council house rent may rise by £2·50 per week. Many council tenants are unemployed because of the Government's economic policies, and many more may become so in future. They cannot afford the increase. They will apply for a rent and rate rebate, which will come from the national exchequer. Therefore, national expenditure will rise. The rent and rate rebates have the lowest take-up of all social security payments. Many people who cannot afford to pay the increased rate will find themselves in arrears and perhaps even evicted. Other organisations such as the social work departments will have to help them. That transfers the expenditure from the district authority to the regional authority. Thus, there is a roll-on of expenditure.
  We know that further cuts will be forced upon local authorities, which will cause redundancies in local government work forces. Glasgow district council claims that it will have to declare 1,000 redundancies. We understand that the Government will probably allocate only £75 million to Glasgow instead of the £102 million that it requires for its housing capital expenditure programme. That will cause a roll-on effect in private industry. Building companies will have to declare redundancies because they will not have work from local authorities. Many private companies depend on local authorities for their bread and butter money, upon which they build to make their profits. Far from saving public money, the cuts will force local authorities and private companies to declare redundancies. The Government will have to pick up the tab for that through unemployment and social security benefits. It is time that the Government

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  learnt about the correlation and interconnection between public and private expenditure, which is so closely entwined that the Government's economic theory based on a separation of the two is complete and utter nonsense.
  If the Government continue on their present path, there will be unpleasent consequences for Glasgow. The leader of the council, Mrs. Jean McFadden and the treasurer, Mr. Bob Gray, claim that Glasgow's total budget of £298 million will have to be increased by £45 million simply to keep pace with inflation and to maintain services at their present levels. Services have already declined to levels that many people consider unacceptable. To raise the £45 million the council will have a choice of either increasing council house rents by 60 per cent.—which would push many tenants into the hands of the Government—or increasing rates by 50 per cent., which the Government would consider to be unacceptable. It could follow both courses. I believe that the council is working towards a 24 per cent. increase in both rents and rates. As it does not wish to put a higher burden on council tenants or ratepayers, it will have to cut £8 million from the service budget, resulting in about 1,000 redundancies. There will be a severe reduction in weekend cleaning in the city's streets. Some public toilets will be closed and standards of security in the city's museums may be endangered, causing risk of theft. Less grant will be available for the arts. The Mitchell library and other lending libraries will suffer reduced hours. Some public halls may be closed. The Bill refers to leisure activities provided by local authorities. If the cuts continue there will be no leisure activities.
  The ratepayers and electors of Glasgow will face a dismal future if the Government insist on cuts of this kind and if they have the power to ensure that local authorities implement them. This is a disgraceful Bill and I shall take considerable pleasure in voting against it.
  7.50 pm
  Mr. John Corrie: Unlike the hon. Member for Glasgow, Cathcart (Mr. Maxton), I welcome the Bill. I am surprised that he did not manage to welcome parts of it, because he spends a good deal of his summer holiday on the island of Arran in my constituency. Much of the Bill affects rural areas and will in small ways help the running of local authorities in areas such as Arran.
  In many ways it is a great shame that the Stodart proposals are overshadowed by clause 1, which I accept is contentious, but they are no less important. I shall therefore concentrate on some of them. I had hoped that there would be some consensus on much of the rest of the Bill—something that is fairly rare in the House—but it seems that that is not to be. Every Opposition Member who has spoken so far has opposed the Bill, although we have not yet heard how SNP or SDP Members feel about it. Perhaps we shall hear from them before 10 o'clock.
  Mr. MacKay: Or perhaps we shall not.
  Mr. Corrie: Or, as my hon. Friend the Member for Argyll (Mr. MacKay) says, perhaps we shall not.
  Dr. J. Dickson Mabon: The hon. Gentleman may hear from the SNP, but he will certainly not hear anything from the SDP, other than what
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  my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) said earlier and what I have said on many occasions, which is that we do not like the Bill.
  Mr. Corrie: I thank the right hon. Member for Greenock and Port Glasgow (Dr. Mabon) for clarifying the position.
  It is fair to say that disquiet has been expressed on both sides of the House about the results of reorganisation. I say quite openly that if I had been in the House during the period 1970 to 1974 I should have fought very hard for a one-tier authority for Bute and Ayrshire, with its common interests and common problems. There is little in common between a crofter on the isle of Arran and a city dweller in the centre of Glasgow, except that both are in the same region and pay the same rate poundage. There is certainly no comparison in the services that they receive. One gets all, while the other gets nothing. One thing is clear, however. The escalating costs of local authorities are caused partly by reorganisation. The blame for that lies with both major parties in the House, because there was a change of Government and the reorganisation spanned both periods of office.
  I have heard it said that there are mutual benefits to be derived from the presence of cities in a large administrative area. After eight years of reorganisation, I can assure the House that my constituents in Largs, Bute, Cumbrae and Arran are hard pressed to find any. They believe that it is not the regions that live off the prosperity of cities, but the other way round. I constantly hear constituents whose rate bills have quadrupled since 1973 complaining that this is because we went into Strathclyde and they have little extra to show for the higher rates. Most of the criticism has been directed at Strathclyde, because of its sheer size and diversity of interests. Other, smaller regions have worked reasonably well. I pay tribute, however, to the work of the councillors and officials of Strathclyde. They have done a remarkable job in running such a large region and have always been enormously helpful when I have raised problems with them.
  It is no use looking back, however. The Stodart report suggests that there should be no change to all-purpose or most-purpose authorities, and the Government have accepted that. Indeed, I think that most people accept that it is too soon for yet another upheaval in local government. Circumstances might have been different if there had been a Scottish Assembly in Edinburgh. Changes might have taken place.
  The Government have accepted more than 60 of the Stodart committee's conclusions and the House should welcome at least some of them. There were certainly some grey areas, which needed clearing up, in industry, tourism, planning and leisure and recreation. I shall comment on the treatment of some of those matters in the Bill.
  First, I agree that it would have been wrong to deprive district councils of their powers to provide factories and mortgages for industral purposes or to change the powers at present available to them for industrial development. In the struggle to promote employment, districts should have every incentive available to them to promote their areas. I therefore ask the Minister whether districts, in conjunction with regions, will be able to promote outside their areas—for instance, by being part of a delegation in promotion ventures if invited to do so by regional councils. I accept that regions, in conjunction with the SDA, should

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  undertake overseas promotion. That should be carefully co-ordinated, especially as it will simplify the work of the new "Locate in Scotland" unit, because it is from overseas that we must seek to attract new jobs.
  I pay tribute once again to Cunninghame district council, which has worked untiringly to get the enterprise trust going in Stevenston, providing both financial help and manpower assistance. That effort is now bearing fruit. Thanks to the work of the district officers, many new jobs have come to the area.
  In general, however, I am apprehensive about district councils alone having comprehensive responsibilities for leisure and recreation functions and for countryside matters where applicable. Two points arise here. I assume that there will have to be a large shift in resources from regions to districts to help pay for such facilities. Leisure and recreation will be among the biggest growth areas in the next 20 or 30 years. Whether we like it or not, whichever Government are in power—and I emphasise that—there is bound to be a large number of people unemployed, and they must have something to do.
  Secondly, what will be the position with regard to marine nature reserves along the coast? I can find no mention of this in the Bill. Will this continue to be a regional responsibility, or will the districts have some authority to deal with it?
  Mr. Maxton: The Bill refers to nature reserves.
  Mr. Corrie: The Bill mentions nature reserves on land, but I could find no reference to the marine areas. I therefore wonder whether the reference to nature reserves on land is intended to cover marine areas as well.
  Clause 13 refers to contributions from district councils for the maintenance or improvement of harbours for sporting or recreation purposes. Unfortunately, the clause states only that they "may" contribute. I wonder what incentive there is for such work to be undertaken. One of the fastest growng sports in the West of Scotland is that of sea angling and sea fishing. Numerous small harbours along that coast, particularly on the islands, are desperately in need of repair due to storm damage. Will those small harbours receive help as a result of the Bill? The improvements are becoming urgent as storm damage wears the breakwaters away.
  That leads naturally to the subject of tourism. We must be careful to get this right. With changes in society, tourism should have become one of Scotland's biggest growth industries. Admittedly we have all the disadvantages in terms of weather, but that must be made up by good organisation to encourage people not only from overseas but from the rest of Britain to come to Scotland for their holidays.
  In that context one can accept a pyramid of command, with the British Tourist Authority in conjunction with the Scottish Tourist Board promoting Britain abroad, while the Scottish Tourist Board sells Scotland within Britain itself. The promotion of tourism calls for enormous cooperation between districts, regions, tourist officers and hoteliers to get it right, because every district is competing against the districts alongside it, although they must also depend upon one another to pass tourists through. There may therefore be much duplication of expenditure between districts if there is no collaboration in selling package and touring holidays. Is the Minister satisfied that the kind of co-operation that there has been in the past year will continue?
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  What will happen to regional staff who lose their jobs? Will redundancies be the responsibility of the region, or of the district? Will there be a major adjustment of funds between the regions and the districts, as the regions will clearly have more and more responsibility?
  Many people from the regions ask why the regions should contribute anything to projects over which they will have no control. Here again, incidentally, I think that tourism in the Highlands has been such a tremendous success because of the amount of work done by the Highlands and Islands Development Board in coordinating it.
  There are many smaller matters upon which it is worth commenting. Clause 19 takes away the power of a region to contribute towards the expenses of community councils. There seems to be total disillusionment among community councillors about their use or worth in many areas. Apathy has taken over to a great extent because community councillors feel helpless in their attempts to do anything that does not cost money. It is time to examine the situation. Most of the councillors work on a non-political basis and try genuinely to help the community.
  On the lighter side, one never ceases to marvel at the sort of things for which we legislate. Clause 24 provides for clocks for public purposes. Provision is made to maintain, illuminate or remove such clocks, having made provision for them. Who has been looking after the clocks for the last eight years if legislation is now required for this purpose? This is perhaps a timely reminder of the incredible amount of legislation of all kinds that passes through the House.
  Clause 26 gives powers to provide and maintain roadside seats on any footway, perhaps for weary councillors after they have been given yet more legislation to digest.
  I welcome the Bill, which has much to support and commend it. I support what my hon. Friend the Member for Argyll said in relation to clause 51 about the abolition of fisheries committees. These have done good work on hydro-electricity development. I have recently seen figures for the runs of salmon in the river Dee in the constituency of my hon. Friend the Member for Galloway (Mr. Lang). In the early 1960s, 12,000 fish a year were running up the river. The effects of disease meant that by the 1970s the figure was down to 300. However, thanks to the work of the fisheries committee, the number of salmon running through the hydro dam each year is now again into the thousands. This is perhaps a point to which my hon. Friend the Member for Argyll and I will return in Committee.
  Part I undoubtedly gives the Secretary of State more power to take selective action against authorities when he is satisfied that their plans encourage excessive and unreasonable expenditure. It must be a surprise to many people outside the House to know that an Act of 1966 is to be amended. This will no doubt please ratepayers, who will receive a repayment under the Bill. There is an urgent need, however, to change the whole system of raising local government revenue and to get away from the inequities of the present rating system. Until that change is achieved, there will be no relief for hard-pressed ratepayers. Legislation must be introduced as soon as possible. The Bill goes some way to help. I welcome it for the reasons I have given.
  8.2 pm
  Mr. Ernie Ross: The hon. Member for Bute and North Ayrshire (Mr. Corrie) said that there was much about the Bill that he commended. There are few Opposition Members and few people in Scotland who agree. Combined with the actions taken nationally by the Government, this Bill means that working people will pay more for less. Living standards are chopped yet again. The Bill is intended to give the Secretary of State more powers to take away the powers of democratically elected local authorities. There is very little in it for working people.
  The government are raising prescription charges, dental charges and national insurance contributions and cutting social security in real terms. The highest paid are hit least and the people at the bottom are asked, at the end of the day, to pay the bill. The roots of the Bill lie in the failure of the Government's economic policy and the determined attempts of the Prime Minister to carry on cutting public expenditure whatever the consequences. As recently as last weekend, a further group of economists indicated that if she continues on that course the country will slide further and deeper into crisis.
  The Bill means the destruction of local democracy and the government of people at local level by remote control rather than by democratically elected men and women. If the Bill is passed, local government will become nothing other than a rubber stamping by the Scottish Secretary of decisions dreamt up by an unelected, unrepresentative Civil Service heirachy in the Scottish Office that seems determined to grab power from democratically elected local authorities.
  By introducing the Bill the Secretary of State is announcing that he and his civil servants know better than councillors who are not only elected democratically by their constituents but in most cases live in the wards affected by their decisions. They live in the wards that they represent, unlike the Secretary of State and his civil servants. Those councillors are best placed to express the needs of their areas. They know how much should be spent and what should be the level of rates.
  The advice given to the Secretary of State shows that there is little need for the Bill. None of the elected organisations wishes to see it. Nor does COSLA. The Secretary of State was advised by his civil servants. In a written answer on 19 October the Secretary of State informed me that 18 deputy secretaries and undersecretaries in the various Scottish Office departments who advised him on the Bill had been educated at fee-paying schools. The Civil Service Commission has just published the results of last year's recruitment programme. They show that 60 per cent. of the successful applicants for the administrative class were graduates of either Oxford or Cambridge. These two universities represent only 5 per cent. of all university graduates. Fifty per cent. of all places at Oxford and Cambridge go to pupils from fee-paying schools. The same report shows that 50 per cent. of all successful applicants were educated at fee-paying schools. This shows the type of advice on which the Bill is promoted.
  The dominance of the product of fee-paying schools in the top ranks of the Civil Service means that it is highly unlikely that these people know or understand the lives of ordinary people. I challenge the Minister to ask the Secretary of State to say whether he and his fee-paying school friends in the Scottish Office know better than
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  district councillors, democratically elected, how often bins should be emptied and how long people should be forced to remain in houses that require modernisation but cannot be modernised because of cuts in rate support grant. This is essentially what the Bill is about. People who know nothing about the needs of the average Scottish family exercise even greater power over the life of that family.
  Many hon. Members have referred to the Stodart report. The hon. Member for Argyll (Mr. MacKay) mentioned that both he and I gave both written and oral evidence to the committee. I am only sorry that some of the evidence given by the Dundee district council and myself has not been used as guidance on what to include in the Bill. I support the comments by the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) that the cities at least—this certainly applies to Dundee district authority—should become most-purpose authorities. I support those hon. Members who argue that this proposal might be introduced in Committee.
  Prior to regionalisation, Dundee corporation provided far more effectively for the needs of the people of Dundee. Since regionalisation, Tayside region has been determined to drag down the level of services provided by the previous corporation, which it had established over many years, to the unacceptable level that exists in Tory-controlled burghs that make up the Tayside regional council. If an effort had been made to bring the burghs up to the level of services provided by Dundee corporation and to continue to improve services, no one within the Dundee district would have complained too much. All that has happened is that while Dundee provides almost 50 per cent. of the rates, very little has been provided in return to the Dundee district by Tayside region in terms of the extension of services. Before I gave evidence to the Stodart committee I contacted many community councils in my area and only one supported the existing arrangements. Although they have a non-political makeup, they reflect the areas that they represent and many are Tory-controlled areas. However, they supported the idea of the Dundee district authority being a most-purpose authority.
  The Dundee district council, including the Tory opposition, unanimously opposed the existing arrangements and highlighted the shortcomings that exist in the present arrangements and structure. I hope that we shall be able to discuss that in Committee and hear from the Government that they intend to do something about it this year.
  One argument advanced by the regional council of which we were conscious was that if the Dundee district were removed from the Tayside region, it would no longer be viable as an authority. The Tayside region has a population which is 10 times greater than Shetland, the Orkneys or the Western Isles and each of those councils is able to administer its own education and social work services. The Tayside region, with Dundee withdrawn and becoming a most-purpose authority, would remain a viable unit.
  The industrial development powers will be withdrawn to some extent from the district council and given to the region. Like many hon. Members, I disagree with the Government's decision to adopt that part of the Stodart report and to vest in the regional council the major responsibilities for industrial development. I am concerned about clause 5, which allows regional councils to carry out industrial promotion. That will prove

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  disastrous for Dundee because the powers will pass into the hands of the Tories in the Tayside region. I argue that the Tories have no concern for the plight of the Dundee people, who are savaged by an unemployment rate of over 15 per cent. The region will use the new powers to attract incoming industry away from Dundee and into the Tory heartland of Tayside, and that will simply help to accelerate the deindustrialisation of Dundee.
  I can cite the experiences of my Labour colleague, Bill Roberts, when a member on the Dundee district council responsible for industry and development, in his attempts to ensure that the Tayside region was fair to Dundee in its industrial promotion work. It reached the stage where we both had to visit the SDA and the SEPD to ensure that the Dundee district authority's industrial development unit was concerned and involved in and informed of the Tayside region's work on promotion of industry in the area. With its special development area status, the Dundee district council is better placed than the region to explain the existing skills, experiences and situations in Dundee. That is not just our opinion; the National Plan for Scotland in 1966 recognised the special factors relative to Dundee as a manufacturing centre on Tayside. I hope that at some stage during the Bill's passage we shall be able to convince the Government that the powers should be returned to the district authorities.
  There is little support for the Bill in Scotland. The Secretary of State knows full well that COSLA is adamantly opposed to the Bill and put its finger on why local government has become an obsession with the Government. Its critique of the Government's economic policy stated:
  "Local authorities are not prepared to be made the scapegoats for Central Government as it attempts to deflect responsibility for the failure of its economic policies."
  The French Socialist Government are embarking on a programme to devolve power back to the French people through local government. That matches the needs and enthusiasm of the people. If our Government were more determined to give that power back to localities, the Scottish people would respond enthusiastically.
  The Bill will do nothing for the serious unemployment in Scotland and Dundee. In a written parliamentary answer, the Scottish Office Minister responsible for industry informed me that on 12 November 1981, 937 young people aged 18 and under registered as unemployed at the Dundee job centre had never experienced employment. He told me that there were 18,271 young people under 18 in the same situation throughout Scotland. In that same answer he told me that Dundee unemployment had increased, from May 1979 to November 1981, from 8·4 per cent. to 15·4 per cent.—an increase of 85·7 per cent.
  I can think of no better reason for voting against the Bill. It is a despicable measure that will create even poorer services at a local level, more unemployment and the greatest friction between local and central Government that we have seen for many years. I am sure that many hon. Members will gladly go into the Lobby tonight to defeat the Bill.
  8.14 pm
  Mr. Alex Pollock: In many ways this has been a most remarkable debate. It has included accusations from the Opposition of Conservative Members
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  being confused and of talking humbug. I hear a faint echo of that pathetic cry still coming from the few Opposition Members still here.
  The hon. Member for Berwick and East Lothian (Mr. Home Robertson) was particularly scathing. I felt that if I had ever heard a parliamentary kettle calling a parliamentary pot black, it was when I heard his speech.
  It is interesting to note that the tapes tonight showed that the speech of my right hon. Friend the Secretary of State for Scotland was greeted by Labour jeers. I do not think that you were in the Chair at that time, Mr. Deputy Speaker, but I assure you that if there were any jeers, they were few.
  I am not surprised that the Opposition have seen fit to impose a three-line Whip to get their so-called supporters anywhere near the Lobby at the appointed time. It is remarkable that one Opposition Member told us that Scottish Labour Members were ready to mobilise the whole of Scotland to join them in their outrage. We have heard pretty halfhearted outrage today.
  I was pleased to have an assurance that the Bill, in conjunction with the Civic Government (Scotland) Bill, will be the last part of the Government's legislative programme on local government reform. The only qualification that I make to that welcome is that the Government should reconsider their attitude towards the status of Moray and its district council.
  The Government will recall that submissions were made to Lord Stodart suggesting that Moray might be given most-purpose status. Indeed, that point was given a sympathetic hearing in the report—I am referring to paragraph 29—when the committee said:
  "We have examined Moray's case with care. The nub of it is that, if any district in Grampian is to be given all- or most-purpose status, Moray is the logical choice since it has 'the population, skills, resources and all other requirements to meet such a role'. Moreover, its withdrawal from Grampian would be likely, among all the constituent districts, to have 'least effect on the overall viability of the region'. Given the experience of the islands authorities, it can certainly be contended that Moray could `go it alone'. In general, however, it does not seem to us that Moray's circumstances—be they geographic, demographic, economic or social—so distinguish the area from the great majority of other districts as to justify most-purpose status."
  In other words, Moray appeared to win the argument, but, unfortunately, it was not thought feasible to allow it the status that it sought. I recognise that it is unlikely that the Government will rethink the matter at this late stage. It is a decision that I have to accept with some reluctance.
  I move from that request to some clauses of the Bill. Clause 5 deals with industrial promotion. I am pleased that district councils are to be engaged in industrial promotion—although it is a somewhat limited role that the Government intend to assign to them—but I am a little puzzled by the operation of industrial promotion at district level. If I read clause 5 correctly, it seems that within its own area a district council can undertake any activity conducive or incidental to such promotion. Outside its own area, either in another part of the United Kingdom or abroad, it can only advertise or help in funding a larger project.
  Looking at the definitions appearing later in the clause, we find that "promotion" includes various things, including, in subsection 4(c), what is called "carrying on correspondence." That is where I am a little puzzled. Will the Minister say whether that means that a district authority is not entitled to correspond with a potential developer outwith its area? If that reading is correct, it

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  would seem to be a rather bizarre dividing line to draw. It also puzzles me how such a divide could be effectively enforced. Perhaps we can explore this question in greater detail in Committee. I should like the Government to try to answer this query at a convenient time.
  Clause 8 deals with tourism. Here I support what was said by my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) about the promotion of Scottish tourism abroad. We certainly do not want to encourage duplication of effort, but if the British Tourist Authority is to take the lead in promotion abroad, I hope that we shall regularise the extent of Scottish Tourist Board involvement in any such ventures. Perhaps that should also apply to any local authority whose area may be particularly affected by a promotional scheme.
  I am very pleased that the Government have seen fit to help the viability of district councils by giving them a clear role in discharging tourism functions. Perhaps I might correct one observation by my hon. Friend the Member for Argyll (Mr. MacKay), who listed various people who had given evidence to the Stodart committee. Inadvertently, I am sure, he omitted to refer to the final two names on the list—my hon. Friend the Member for Banff (Mr. Myles) and myself. We both met the chairman in London.
  In regard to the tourist functions, my reading of clause 8 suggests that what the Government are trying to do is to expand what I might call the Highlands and Islands Development Board model to other parts of Scotland, which would entail a strong involvement and direction by the Scottish Tourist Board. At this stage I am not entirely sure that this is necessarily the universal way forward for every district.
  By all means let the Scottish Tourist Board be actively engaged with the British Tourist Authority in overseas promotion, but let us be careful that we do not take steps that would needlessly involve the Scottish Tourist Board in national promotion, where its role might not be so effective. For example, with the tourist industry in Moray, the trade is definitely primarily based on the United Kingdom. I accept that the Scottish Tourist Board could be an effective umbrella for any kind of scheme empowered under clause 8, but at the same time there is at least the prospect that if the Scottish Tourist Board took too dominant a role it could, perhaps, get forward planning horribly wrong.
  If not enough tourists are coming from other parts of the United Kingdom, it does not necessarily follow that the answer is to look abroad to replace those tourists. It may simply be a question of improving the marketing arrangements. I am by no means convinced that the Scottish Tourist Board will have a monopoly of wisdom about that. Therefore, I hope that the Minister will give us an assurance that the intention of clause 8 is that we are to have only a certain degree of control from the Scottish Office, after consultation with the Scottish Tourist Board. Indeed, I suggest that the Secretary of State should consider using such powers as clause 8 would give him as default powers only. If the district authority in question shows itself unable to work effectively with local tourist interests, by all means let the Scottish Office step in—
  Mr. George Foulkes: Liven it up.
  Mr. Pollock: —but I hope that it will not be too keen to come forward to draw up the schemes proposed in clause 8.
  I hope also that we shall be told by the Government whether they interpret clause 8 as being wide enough to allow a promotional levy to be imposed if that were thought desirable by the various tourist interests involved. I trust that the clause will allow local authorities that have expertise and good ideas about promoting tourism to form joint liaison committees, with the responsible end of the trade free from unnecessary interference from the Government and willing to work with the Scottish Tourist Board, but not necessarily under it.
  Clause 19, which deals with an entirely different matter—the powers of local authorities to assist community councils—is of some importance in Scotland. Regional authorities are no longer to be authorised to make any kind of financial contribution to the workings of local community councils. I wonder whether that is a wise move. From my experience, certain community councils feel very frustrated by their lack of financial teeth. Some see themselves as surrogate royal burghs and are locked in almost permanent conflict with the new type of local authority structure, which they have never liked, since they wanted the old burgh structure to remain.
  Mr. Foulkes: Name names.
  Mr. Pollock: If the Government take away any possibility of the regional council providing funds the problem will be exacerbated, because the community councils will feel even more dependent upon the district authority, which they too often regard as their enemy. Will my hon. Friend tell us the reasoning behind the clause?
  Mr. Home Robertson: Does the hon. Member agree that it would be more appropriate for community councils to be financed by the Government rather that by local authorities, since they are statutory bodies with statutory duties?
  Mr. Pollock: I am not necessarily persuaded by that observation. Certainly the Government could make a contribution, but the important point is that we do not want the money to come only from district level, which is often the level with which the community councils are in conflict. However, these matters can be explored at some length in Committee by those who are selected to serve. I dare say that I may be among them.
  I wish the Government well in what they are trying to do. It is unfortunate that many sensible measures in a very good Bill have been overshadowed by the rather phoney attack on the early parts of the Bill from the rump of the Labour Benches, but I am sure that the people of Scotland will realise the value of the measure, which can do only good.
  8.32 pm
  Mr. Jim Craigen: The most important aspect of the Bill is part I. The rest of it may be interesting, but it is largely wrapping around the essential package that the Government are proposing in the Bill to curb the powers and wherewithal of local authorities. The Bill lacks one thing—honesty about the true purpose of the Government's intention.
  Mr. Foulkes: Like the Government themselves.
  Mr. Craigen: The Bill purports to help ratepayers, but it will do exactly the opposite. In his speech, the Secretary

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  of State talked of completing the legislative changes set in motion by the reorganisation of local government in the last decade to enable the Government to get on with the job. What job does the Secretary of State have in mind for the local authorities? Is it to close down more schools in the evening, so that youth clubs, old-age pensioners and other groups are unable to meet? Is it so that libraries may be closed more frequently during the week, or that swimming pools may be closed in the morning? Is it to raise rents yet again by £2·50? Is it to raise rates? Obviously, there is no intention to reduce the rates in line with the increases in the cost of living.
  One purpose would seem to be to produce more redundancies within the local authority sector. I was astounded by the reply that I received the other day from the Secretary of State for Employment that redundancies during the first nine months of 1981 were almost as great as the total number of redundancies in Great Britain in 1979 and 1980. That is the measure of the employment problem.
  If the Government want to do something to help the local authorities in Glasgow, let them reduce the present high level of interest rates. The city treasurer in Glasgow, Councillor Robert Gray, who is one of my local district councillors, points out that a 1 per cent. variation in interest rates would save Glasgow £1,750,000. That is the sort of attack that we should like from the Government. An attack on interest rates would considerably help local authorities now.
  It has been pointed out that Glasgow needs £45 million next year to maintain services without any improvements. The city authorities have been looking at various retrenchment measures on existing services. I understand that they have devised a scheme that could reduce expenditure by £7 million or £8 million—a 5 per cent. cut—without any compulsory redundancies. However, on the basis of £38 million that they would still have to find, there would be a 40 per cent increase in rates. If that £7 million or £8 million saving could not be made, there would be a 50 per cent. increase in rates. If that saving were spread, there would be a 28 per cent. increase in rent levels and a 28 per cent. increase in rate levels in the city.
  All that is in addition to the many pressures that most families are having to face. We are talking not simply about rent and rates. Their disposable incomes are being reduced constantly by the Chancellor of the Exchequer. Only last week he announced that there is to be an increase in employees' national insurance contributions. We know that there is to be de-indexation for those who do not pay national insurance contributions because they are not in jobs, but their unemployment benefit is to be reduced. Apart from rent and rates increases, the prices of gas and electricity have risen. The cost of living generally has risen under this Government.
  The Secretary of State referred to the previous Conservative Government's reorganisation of local government having reduced the number of authorities to 65 as though it was a great master stroke. I suspect that this Administration, with their financial policies, will go down in history as the Government who reduced local authorities to corporate local quislings. Councillors can be elected and can occupy seats in the council chambers, and only as long as they do what the Secretary of State tells them will they be able to do anything. That is serious.
  Mr. Foulkes: Is my hon. Friend aware that the Secretary of State was afraid to accept a challenge from me to appear at a public debate in Tarbolton in his constituency during the by-election to defend his policies on local government? He was unable to be present and, as a result, I am glad to say that the Labour candidate won.
  Mr. Craigen: Few of us can keep up with my hon. Friend in his efforts to be the Scot of the Year, but nothing surprises me about the Secretary of State for Scotland.
  If the Government intend to run Scottish local government as badly as they are currently running the central Government, we have much to fear. Let us look more closely at the guidelines that the Secretary of State keeps talking about, because they are now becoming almost mandatory. How does the Scottish Office implement the detail of the guidelines? That is important. The local authorities may fix their rates, but the Secretary of State has the power to fix lower rates. The right hon. Gentleman may amend the rate that a local authority has fixed. If he does, the local authority may have to conduct a re-rating exercise with all the consequential costs that would involve.
  It was interesting to hear the Secretary of State say that the Stodart review was one Tory election promise which had been kept. It must be one of the few, because many folk are wondering what happened to all the talk about incentives and tax cuts that they heard before the general election. We have had tax increases, but we have had precious little incentive, other than the fact that more people are now out of work. I do not regard the Government's promise as an essential matter in the great vista of what is required in Scottish local government.
  I make one comment on the Stodart report, and it relates to the proposal to transfer the powers and duties under the Food and Drugs (Scotland) Act 1956, with certain exemptions. Most consumer organisations are completely opposed to the suggestion in clause 18. The administration of legislation relating to food standards, advertising and labelling is an integral part of trading standards legislation. The change will require many retailers to seek advice from two authorities—the district and the regional authorities. Trading standards legislation requires the use of expensive sampling, testing and analytical facilities. We shall end up with a duplication of functions. Moreover, there is no evidence that most people in the field regard the existing procedures as all that unsatisfactory.
  The Government seem determined to screw up Scottish local government as much as they have messed up the management of the United Kingdom economy.
  8.42 pm
  Mr. Albert McQuarrie: I refer first to clause 8. I cannot understand why my right hon. Friend has decided to shift the control of tourism from the regional councils to the 37 district and islands councils, bearing in mind especially the efficient way in which most of the regional councils have been carrying out their tourism function.
  I draw the attention of right hon. and hon. Members to the example of Grampian council, because it covers my constituency. Grampian has one of the largest tourist areas as it stretches right up into Moray. In this connection, I cannot agree with my hon. Friend the Member for Moray and Nairn (Mr. Pollock) that the district councils would be at an advantage in handling tourism. The regional council

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  has the operation in being, and it is ludicrous now to propose having 37 district councils running tourism, with the additional staff that would be required. At a time when we are trying to cut the cost of local government, we are introducing a measure that will greatly increase the number of staff and result in a loss of efficiency.
  Bearing in mind the number of regional councils that have built up the strength of their tourism in the years since reorganisation, it would be quite wrong to transfer responsibility for it. I should like to know why my right hon. Friend feels it necessary to take away the powers from the regions.
  My hon. Friend the Member for Moray and Nairn said that he would like to see the Scottish Tourist Board take more interest in what was going on, in liaison with the British Tourist Authority. If that is the true position, the Scottish Tourist Board has one or two lessons to learn. In one of its recent reports it said that there were no castles in the Grampian area. There are more castles in Grampian than in any other county in Scotland. The same Scottish Tourist Board said that there were no golf courses in Fife. I ask the representative of the Scottish Tourist Board to tour Fife to see some of the well-known golf courses there.
  My right hon. Friend should reconsider the proposal to transfer tourism from the regions to the districts. What is proposed would be a retrograde step. I hope that my right hon. Friend will have a second look at the matter, and it would not be a bad idea for him to take the example of Grampian in doing so.
  I suggest that a drafting amendment be made in Committee to clause 10, which makes islands and district councils responsible for the provision of caravan sites in accordance with the Caravan Sites and Control of Development Act 1960, although they will retain their powers to provide sites for gipsies. Might I suggest that we do not refer to the travelling people as gipsies? It would be most welcome if the term "gipsies" were removed from the Bill and replaced by the words "travelling people".
  Clause 18 was mentioned by the hon. Member for Glasgow, Maryhill (Mr. Craigen). I entirely agree with some of his comments. It is clear that the dual responsibility between the region and district will cause considerable confusion. The Scottish Consumer Council and the Retail Consortium said in a memorandum to Members of Parliament that it would mean that the organisations controlling the marketing of food would increase from 12 regions and islands to 62 regions, districts and local authorities. The consumers and the shopkeepers or factories would not know where they stood.
  I ask my right hon. Friend to reconsider the clause. The present system of enforcement has been built up as a national co-ordination mechanism, using the Local Authorities Co-ordination Body on Trading Standards and the Scottish Food, Agriculture and Medicines Joint Liaison Group. That has greatly assisted in the whole question of food standards and inspection of food. The provisions in the Bill will cause great problems for consumers.
  The current system of food standards, labelling and advertising under the control of the larger local authorities has existed for many years and is much preferable to what my right hon. Friend proposes. Moreover, that would be in line with what is done in England and Wales. That is
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  better than having a separate arrangement for Scotland. I therefore hope that my right hon. Friend will give these matters further consideration.
  8.49 pm
  Mr. Tam Dalyell: I hope that the Secretary of State for Scotland and my right hon. Friend the Member for Glasgow, Craigton (Mr. Milian) will acquit me of discourtesy in not having been here for the opening speeches. I had a long-arranged official visit in my capacity as science spokesman to Newcastle polytechnic. That polytechnic had gone to great trouble, and I did not wish to cancel my visit.
  I wish to comment on clauses 4 and 6, to address myself quietly to the Secretary of State for Scotland, and to put the problem this way. When I was first elected as a Member of Parliament, there were complaints in 1962 and 1963 from South Queensferry, Bo'ness and Linlithgow in the northern part of the West Lothian constituency, that those areas did not have many of the new schools, community centres and many other facilities that they thought were their due. The reason was simple. Any approach to the old West Lothian county council—a good county council—simply met with the same response. Jimmy Boyle and Peter Walker, the then convener, asked what they could do. They pointed out that, given the coming of the British Motor Corporation, they must provide houses, schools and drains and concentrate all expenditure on making provision for BMC at Whitburn, Blackburn, Bathgate and round that area. That is the background
  I shall ask a general question about clauses 4 and 6. Given that background, is it right that local authorities—I shall not wander into the wider issues—that have spent all that money should not be consulted about the disposal of assets? In 1967, major road improvements were undertaken, including the re-alignment of the B792 between Guildyhaugh toll and Blackburn, two major interchanges outside the British Leyland plant and a bridge and dual carriage way on the A8. They were all constructed for the then BMC.
  The construction of a new sewage works at Blackburn was necessary, caused to a major extent by the British Leyland plant, the population expansion and the accompanying ancillary industrial development. A new pumping station had to be provided at Mosside, Blackburn and a link sewer was laid from the British Leyland plant to that pumping station and, thereafter to the sewage works. Houses were erected at Murrayfield, Blackburn, principally to accommodate the Glasgow overspill population and incoming workers to the British Leyland plant. Major site works had to be undertaken in advance of house construction. New distribution pipes for the water supply to the British Leyland plant had to be laid. Special waste disposal arrangements had to be made for the plant. That plant and the population expansion necessitated improvements to the cleansing depot at Blackburn and the construction of a refuse incineration plant. Because of the population expansion in the area two new primary schools and two new senior secondary schools were built at Blackburn and other schools were built at Whitburn and Bathgate. In addition, 120 acres of the Whitehill estate were built at the direct instigation of the Board of Trade.
  Those are the details. I hope that the Secretary of State will pay attention, because I must extend the argument from the particular to the general. Should drains laid,

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  sewers constructed, pumping stations planned, waste disposal units worked out, homes built, schools inaugurated, roads renovated, site works excavated, cleansing depots opened, refuse incineration revised and tunnels tunnelled be considered as of no account, in the sale of assets when, to a greater or lesser extent the expense for such items has fallen on local ratepayers?
  I do not wish to wander on to the problems of Linwood, but the same issue can be raised in relation to what has happened in the constituency of my hon. Friend the Member for Renfrewshire, West (Mr. Buchan). Therefore, the problem is not unique. I am grateful for the Secretary of State's courteous attention because he can shorten my speech if he is prepared to answer the following question. Is the Scottish Office prepared to make available to the Comptroller and Auditor General's Inquiry and to the Audit Department—as I understand the Department of Industry and British Leyland are—any papers that it holds? This is not the occasion to taunt the Secretary of State if he is not prepared to answer, but it would be extremely courteous of him to comment. If he is prepared to follow the Department of Industry—which, I understand, has given its promise today—and British Leyland in giving full access to Scottish Office records to the Comptroller and Auditor General, that would be a great step forward.
  Mr. Younger: I am grateful to the hon. Gentleman. I appreciate that he would have given me notice of that question if he had had time. I shall examine what he says carefully and give him an answer as soon as possible.
  Mr. Dalyell: That is a reasonable reply. Access by the most heavyweight auditors in the public service is of great importance.
  What must be understood from that carefully worded speech last Monday is that whatever might be taken out of it, and no matter which phrases are quoted out of context, the feeling this weekend in Bathgate was intense. The Secretary of State nods his head. He can understand that the air must be cleared.
  In a reply the Under-Secretary of State for Industry said:
  "BL has made the decision to sell its tractor interests, and a purchaser has been identified, on a commercial basis, and it would not be appropriate for the Government to be involved."
  I dispute that philosophy. My right hon. Friend the Member for Craigton was deeply involved in the affairs of Linwood and Bathgate. Since when has there been a change in policy? I am not sure that it is entirely a party matter, but an important policy decision is involved.
  In the terms of the Bill the local authorities who have given so much money might say that, even if it were unrealistic for them to be consulted, at least the Government, as guardians of the public purse, should be consulted. I received a reply from the Department of Industry which stated:
  "Government funding of BL is provided for the company's investment and restructuring programmes generally. Details of other public investment in BL tractor production—for example, by way of regional development grants—are not available except at disproportionate cost. It is for the company to reveal the amount of investment in any particular activity, and the improvements which this has provided."—[Official Report, 26 November 1981, Vol. 13, c. 445–6.]
  Local authorities are trying to gain some estimate. Mr. David Morrison of the West Lothian council and his predecessor now retired, Mr. John Calder, have given me
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  reasonably accurate figures. Is it really possible, with all the information available to Government, that there cannot be a fairly rough estimate of how much public money has gone into a major plant? There is a strong feeling that the people who have contributed most are the British taxpayer and the people of the area. Surely in the corpus of knowledge in the Scottish Office there must be some rough idea of how many millions of pounds have been poured into the plant.
  That brings us back to last Thursday, a week ago. I was genuinely taken aback when, courteously, my right hon. Friend the Member for Craigton and I waited until a certain point in the Secretary of State's speech when we simply said "Leyland". The Secretary of State went on, having not heard me properly, to say "Mr. David Andrews, whoever he may be."
  That revealed that apparently the Scottish Office had no proper consultation on a matter of vital industrial interest. If the Secretary of State made a slip of the tongue and if we had the wrong end of the stick, let us be told. If there were consultations I should welcome an interruption now because I should like the matter to be cleared up. If there were consultations between the Leyland top management and Ministers, or their most senior advisers, before the events of Friday week, let us be told, because that would be helpful. I should give way immediately to the Under-Secretary if he wished to put us right.
  I am slightly alarmed that I am not being asked to give way because I have asked a fairly simple question that should be answered. I interpret the absence of a reply as an indication that Scottish Office Ministers were not in contact with the top management at Leyland. That point must be brought to the attention of the Comptroller and Auditor General and the Audit t epartment.
  My right hon. Friend the Member for Huyton (Sir H. Wilson), the longest—serving Chairman of the Public Accounts Committee since the war, with whom I discussed the matter in some detail, said that it was the job of the Audit Department to follow the scent of public money wherever it may lead. Not only dribbles but vast amounts of public money are involved. We are talking not about some minor institution but about what Lord Ryder called only two years ago one of the jewels in the Leyland crown. No one complains about the quality of the product.
  The Secretary of State for Industry said today, in vexed terms, that I should not have made the speech that I did. From the accounts of what the right hon. Gentleman said this afternoon, he took my remarks slightly out of context. We are dealing with complex issues, so I suppose that no politician can complain about being taken slightly out of context, but I worded my speech with considerable care and it was not as apparently was made out by the Secretary of State for Industry. He talks about ordinary commercial transactions. Surely some say in "ordinary commercial transactions" is due to those who have coughed up much of the money. In this case local government has coughed up much of the money.
  I asked the Secretary of State today whether
  "he has given any encouragement to British Leyland as part of the privatisation policy of Her Majesty's Government to prepare parts of British Leyland vehicles as packages for sale in optimum condition."
  The right hon. Gentleman replied that
  "My right hon. Friend the then Secretary of State for Industry said in his statement of 26 January 1981 announcing the Government's approval of BL's 1981 corporate plan, that the Government supported the BL board's intention of creating

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  viable businesses and of attracting private capital into them. That situation has not changed. It has also long been BL's policy to dispose of its mainstream businesses, and we agree with this policy."
  If the Government believe that the tractor building operation by the only remaining British-owned, volume tractor producer is not a mainstream business—[Interruption.] I give way to my hon. Friend the Member for Coventry, North-East (Mr. Park) if he wishes to intervene. Throughout these agonised days, as a former convener of a major motor works, he has been extremely helpful to me.
  Mr. George Park: Does my hon. Friend agree that when the corporate plan was put to Government and accepted, built into it—so a denial of knowledge is no good now—was the disposal of Bathgate?
  Mr. John MacKay: On a point of order, Mr. Deputy Speaker. I attended the debate until about 8 o'clock, at which time I went out to dine. When I left the Chamber we were discussing the Local Government and Planning (Scotland) Bill. I do not seem to have returned to that Bill. We are miles away from its clauses.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. It is a wide open debate on the Second Reading. I am listening very carefully and I hope that the hon. Member for West Lothian (Mr. Dalyell) will relate his speech to the provisions of the Bill.
  Mr. Dalyell: I have not been out to dine. Quite frankly, the problems of British Leyland are more important than my dinner.
  My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) is due to speak at 9.5 pm. If the hon. Member for Argyll (Mr. MacKay) believes that major factory closures, apparently undertaken without the prior knowledge of Government, are not matters of immediate and desperate concern to local authorities, who have put in vast amounts of their own money and attracted vast amounts of Government money, is not pertinent to the Bill, all Opposition Members would disagree with him. We believe that the relationship between local authorities, industrial payments and the disposal of assets, leading to unemployment rates of nearly one in four—[Interruption.]
  I do not know why the hon. Member for Argyll laughs. At my surgery in Armadale on Saturday, and again when I spent many hours at a sale of work in Bathgate in the afternoon, person after person expressed his worries to me. They are the same worries as are expressed about Linwood, Coventry and many other areas. It is those worries that lead me to raise the subject in such detail, a matter for which I make no apology.
  9.5 pm
  Mr. Donald Dewar: As my hon. Friend the Member for West Lothian (Mr. Dalyell) knows, I, too, am interested in British Leyland, as in my constituency I have the Albion truck plant. The points that my hon. Friend made in his characteristically persistent fashion are extremely relevant to the state of West Central Scotland, to the local authorities there and to everyone else who lives in the area. He need make no apology for raising the matter.
  I am grateful to the Secretary of State for Scotland, who took the problem seriously and said that he would reply in
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  writing soon. I look forward to seeing the answer. I appreciate that the right hon. Gentleman believes that it is a major issue, whatever may be the attitude of the hon. Member for Argyll (Mr. MacKay) and of some of his hon. Friends.
  I recognise that in a way this has been an anti-climatic day for members of the Stodart committee. [HON. MEMBERS: "Hear, hear."] When the sheep have stopped baaing, I shall explain exactly what I mean.
  The members of the committee have laboured long and hard to produce a worthwhile report full of interesting and relevant recommendations, but inevitably those recommendations have to some extent been swept away by the pressure of argument about the first part of the Bill, which has roused justified anger throughout Scotland, particularly among those connected with or knowledgeable about local government. The anger has been heightened by the disastrous financial prospects for local government which have become all too clear in the past few days. A grim and dreary winter lies ahead, and the responsibility for that lies squarely on the desk of the Secretary of State.
  We shall not have time in this debate to deal with all the Stodart recommendations in detail, although I hope that there will be time to do justice to them in Committee. I wish to mention only one or two, even if in somewhat shorthand form. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) referred to clause 18, which deals with the transfer to district authorities of certain powers under the Food and Drugs (Scotland) Act 1956. From the lobbying and the meetings the Minister will be aware that there is already a lively debate on the issue and that a broad alliance, if I can call it such, of the Scottish Consumer Council, the Retail Consortium and the Institute of Trading Standards Administration, has come together to persuade hon. Members—on what is not really a party issue—that the proposals in the Bill do not make sense.
  I accept the prima facie case against splitting weights and measures, trade description and food labelling, which are to remain with the region, from food and drugs matters. Despite the fact that Stodart recommended it, it is not clear that the realignment makes sense and will lead to improved efficiency and economy. I give notice that we shall look at the matter in considerable detail in Committee.
  Clause 45 deals with a fag-end from the Tenants' Rights, Etc. (Scotland) Act. Again, as my right hon. Friend the Member for Craigton made clear, in Committee we shall vigorously oppose the suggestion that there should be a transfer of discretion from local government to the Lands Tribunal. We do not like the machinery and we do not like the concept in the Act, but leaving that aside for the moment—if we accept that it is on the statute book—the job of the Lands Tribunal is to expedite conveyancing or to arbitrate if there are disputes. It should not be invited, as a judicial body, to take on board the discretion allowed to local authorities under the Act to vary the amount of discount in special cases. That is another departure from the powers that should lie with local government. We shall want to examine that matter in great detail.
  The points about the rating of outside plant, provided for in clause 3, have been well made. I expect that the Minister will think about them. No doubt the Under-Secretary also will have something to say. We do not object in principle to the idea that the apparent anomaly

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  between England and Scotland should be eradicated and that rating of outside plant should be put on the same basis as it is south of the border. Paragraph 9 of the explanatory and financial memorandum states:
  "The provisions relating to the valuation of plant and machinery (Clause 3), and any orders made thereunder, will not lead to any increase in public expenditure, although orders may be made which will lead to a redistribution of the rates burden."
  In plain English, that appears to mean that the Government intend that the shortfall—in some areas it will be a considerable shortfall—from the derating of outside plant and machinery will fall upon the remainder of the ratepaying community, whether industrial or domestic. That is wholly and universally unacceptable to every area that will be affected. The Government must reconsider, or they will create—yet again—a genuine financial crisis in local government.
  I wish to raise a matter that is not included in the Bill, although I had hoped that it would be. As far back as 13 January this year, the Minister said that he was considering whether the quinquennial revaluation should take place in 1983 and whether he should use his powers under the Local Government (Miscellaneous Provisions) (Scotland) Act 1981. He said that he would let us know in a matter of weeks or, at most, months. We have now reached a farcical stage. The staff in the assessor's department have no idea whether they should be doing the essential work that should be in hand if the quinquennial revaluation is to take place. The Minister coyly shelters behind silence and refuses to explain the position.
  I understand that the Conservative Party may have made pledges about rating reform that it will find hard to implement. However, the Minister must tell us what is happening with the quinquennial revaluation, and he must do so this year. I would like him to tell us now. Otherwise, the assessor's department will be left in a hopeless state of confusion through no fault of its own.
  I wish to deal with one or two of the points made in the debate. Obviously, there will be a series of debates in Committee on the proposals for attracting industry and the intention that that should be left to regional councils. I recognise the caveat about the building of advance factories and the advertising of factories of which regional councils are the landlords. The provisions as drawn are restrictive and will lead to a great deal of annoyance, irritation and frustration, especially in the larger district councils in Scotland. It is a persistent theme of the Government's local government legislation that there is a far too restrictive concept. Even the regions, if they wish to be active in that area, must ask the Secretary of State for his permission. That is a "Big Brother" attitude that we can do without. The Secretary of State, in one of his unhappy lapses into phrase-making, said that he hoped that local authorities would reap the harvest fruits of promotional activities. We all wish them to reap the harvest fruits, but their chances of doing so will be limited if we put them into the straitjacket that is presently envisaged.
  Exactly the same point about restrictions arises on clause 8, which deals with tourism. The hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) said that he understood that we could not go as far as Stodart suggested and that it would be impossible to give more Scottish voice to the promotion of the tourist industry abroad. In Committee, we shall ask exactly why we cannot give impetus to the selling of Scotland in the tourist area.
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  The same point arises in relation to the Locate in Scotland Bureau. I hope that I am right in assuming that the Secretary of State is currently fighting hard to ensure that the Scottish Development Agency's offices in North America will survive in coming years.
  These are issues which will arise and to which we shall wish to return. I say right away—I make no apologies for doing so—that part I of the Bill worries the Opposition most. It is another example of the Government's overwhelming enthusiasm and ability to restrict, curtail, cabin and confine local government in Scotland. Local government will be pushed into a position where its room to manoeuvere and independence will be radically restricted.
  I can remember—perhaps it is a sign of increasing age—the themes of yesteryear when Conservatives were the great champions of local democracy and independence. Sometimes we heard rather pompous speeches about local councils being peopled with sturdy Hampdens and independents. While Conservative Members recognised an unfortunate insistence by people to vote Labour in Scotland, at least they had the courage of their convictions to say that people had a right to elect local representatives to control local affairs. That is rhetoric that, understandably, we seldom hear from the Conservative Benches today. There was just a whisper of it from the hon. Member for Edinburgh, West—a faint echo in the distance—when he spoke of the "freedom of the people" It is extremely difficult to deal in that type of rhetoric in view of the provisions of the Local Government (Miscellaneous Provisions) (Scotland) Act 1981 and the Bill before the House today. There is no more important area of democracy than local government.
  Attempts were made—the Secretary of State was at it again tonight—to suggest that the 1981 Act dealt with relaxations of control. That is an empty farce, brass neck of the most perverse sort. Local authorities have been told that they will have greater freedom to allow the sale of methylated spirits and to charge more for cremations. There are a few minor and archaic matters of that type. On the other side, the local authorities have been stripped of all the essential financial powers that mark local democracy if local democracy is to mean anything. Despite the laughter and frivolity of the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), I believe that part I of the Bill is a further example of the arbitrary, damaging and essentially unnecessary legislation that has been foisted on local government by this set of Ministers.
  I shall examine the origins of part I of the Bill, because that is relevant to what we are considering. It has, of course, its typically amending legislation. It is an opaque piece of legislation in which complexity has been piled upon complexity. Its origins are in the Local Government (Miscellaneous Provisions) (Scotland) Act and the power which the Secretary of State took to claw back, at his whim, from the rate support grant of any local authority during the course of the financial year. The trouble was that the grand design unveiled in that legislation was unworkable.
  At a very late stage in the Bill—on Report—the Minister came hurrying forward with two important provisions which he had forgotten in his confusion when the Bill was originally cobbled together. It was only on Report that the power to reduce the rate poundage and a block on borrowing powers to make up a shortfall were introduced. If it has worked at all—and in a sense the

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  Minister is right in saying that it has—it has been at enormous cost to the fabric of local government and to trust between central and local government and to the great disadvantage of the ratepayers. It worked only because of the late patching by the Minister on Report.
  Having got it together in a kind of way, the Secretary of State and his hon. Friend the Under-Secretary of State the hon. Member for Pentlands were not satisfied. The great machismo exercise of being beastly to local government demanded more. We had the flirtation with the referendum. The Secretary of State will recall that he told COSLA that he had made up his mind to go ahead with the referendum in Scottish legislation, presumably as some kind of back-up power for the Local Government (Miscellaneous Provisions) (Scotland) Act. Then, as we all recall, the universal opposition throughout the Scottish community drove him from that position. He turned, he scuttled and he ran—and the referendum died the death. Conservative Members may laugh, but that is exactly what happened.
  Having scuttled from the referendum, the Secretary of State then came up with the mechanism included in part I of the Bill. This has been presented to us as a technical change, a tidying-up mechanism about which we should not get too excited—merely a matter of forcing a repayment to the ratepayers. That is how it is presented, but the Secretary of State is taking power directly to set the rate poundage for an individual local authority despite the opposition of elected local councillors who wish a different rate policy to be followed.
  One may argue about individual cases and whether councillors are right or wrong. One may argue that if you, Mr. Deputy Speaker, or any other hon. Member had been a councillor on a specific local authority, a different decision would have been reached. That is a legitimate area for dispute. But if I or anyone else in the position of a local councillor would have done something different, it is no excuse—indeed, it is a total non sequitur—to say that local government should therefore be overridden by the central Government and that, merely because the Government disagree with what local councillors are doing, they should destroy the power of local councillors to act responsibly in the name of the electors to whom they are responsible. Yet that is what we are invited to contemplate in this legislation.
  I find it almost impossible to understand how some of the speeches that we have heard in the course of this long debate could possible have been made. Early in the debate, the hon. Member for Dumfries (Sir H. Monro) told us that part I of the Bill was a measure to protect ratepayers, and that theme has been constantly reiterated by other Conservative Members. Let us consider the protection involved and what the results of its operation have been and are likely to be.
  I take one example. It is not the only one. If the present Ministers continue in office, there will probably be more. Let us assume that a local authority has not paid back to the ratepayers money forced from them due to a threatened clawback in rate support grant. We have been told that the failure to pay back to the ratepayers is morally indefensible and politically reprehensible. Indeed, in a recent debate, the hon. Member for Edinburgh, South (Mr. Ancram), the chairman of the Scottish Conservative Party, described it rather picturesquely as "robbery". In a sense, I am
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  prepared to accept that term, because the proceeds of robbery, if such it be, are now in the hands of the Secretary of State for Scotland.
  During the debates on the miscellaneous provisions legislation and subsequently, the local authorities were told that they had the choice of paying or not paying back to the ratepayers. That was specifically defended as part of the Government's plans. They then made the great mistake of exercising that choice in a way that Ministers did not like, and it was promptly taken from them.
  But it was not a choice. The choice was represented by the hon. Member for Argyll, who sometimes seems not to know the meaning of the English language, as paying back to the ratepayers or to the Chancellor. There was no choice about paying the Chancellor. The Chancellor viciously clawed the money from them. He removed it forcibly from the local authority and has kept it in his Treasury. It has not been left with the local authority at all. Our contention is that if it is morally reprehensible that the £30 million has not been paid back, it is for Ministers to ensure that it is repaid, perhaps in terms of next year's rate support grant, to Lothian or to any other authority in that position. It is nothing less than hypocrisy to suggest otherwise.
  I have listened carefully to the arguments advanced by the Government. The real reason, it seems, why the Government will not pay back the money in their possession is that the wicked and irresponsible councillors of the Lothian region would promptly spend it on services in the interests of the ratepayers. The Government may dispute that that is wise. They may disapprove of such action by the Lothian region. I should have thought that there were ways round the problem if they were so worried. To take things at their worst, from the Government's view, what would happen if the £30 million was wasted on keeping nursery schools open, keeping bus fares low or improving social work services?
  The "unfortunate" Lothian ratepayers are told that they would be forced to have better services for £30 million. The offer by the Government, as a means of protection for the ratepayers, is that they will not get the payment in their pockets or the services for which they have paid. They will be left with nothing. Yet the Government have the cheek to say that they are protecting the ratepayers. The Government have the money. They should make it available, perhaps for lower rates next year or for better services. In either respect, the ratepayers of Lothian or any other authority would then be getting something. As it is, they are being robbed by the Government.
  I wish to deal with one other definition of the term "protection of the ratepayers". The cry is heard that during the last two years rates have spiralled by amounts above 30 per cent. When my right hon. Friend the Member for Craigton made that basic point self-evident, a piping cry was heard from the Secretary of State for Scotland "Whose fault was that?" I shall tell the right hon. Gentleman. It was the right hon. Gentleman's own fault. Those high rates have been forced on Labour, Conservative, and independent authorities by his unreasonable guidelines and by the fact that he has been constantly cutting, in a manner that cannot be justified, the level of support for local authority services in Scotland.
  Looking at the signs and portents for the year ahead, there is nothing to be complacent about. It is difficult to compare figures because of the difference in the accounting base. It is, however, known that no proper provision has been made for inflation. It is known that

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  local authorities will face clawbacks from last year and the previous year for times when the books are closed and the money has been spent. It is known that the rate support grant is coming down by 21½ per cent.
  I know of no responsible or impartial person who does not accept that, due to Government policies, a third year of very substantial rate rises will be forced upon local authorities by the Government, whose supporters have the cheek to prate about the protection of the ratepayers. The hon. Member for Pentlands comes forward with bland and sometimes, I am afraid, weasel words. He was reported in the Glasgow Herald as saying that if local authorities moderate their expenditure, guidelines can be achieved without any problems. I stress the words "moderate" and "without any problems". No one believes that. I do not believe that the hon. Gentleman, to be fair to him, believes it either.
  I notice, for example, that Mr. Fitzgerald, the chairman of COSLA and a well-known member of the Conservative Party, drew attention in the same newspaper to the situation in Tayside—a Conservative-controlled authority. Mr. Fitzgerald rightly said that Tayside had tried hard to obey the Government's dictates and guidelines. Looking at the news that is now known, he had to say, sadly, that Tayside will find things very difficult indeed. Mr. Fitzgerald is to be congratulated on his mastery of the understatement. It will be very, very difficult indeed.
  I refer to the Edinburgh district council because it has already been referred to by more than one hon. Member. The hon. Member for Edinburgh, West said that he was glad that the district council would get responsibility for more recreation facilities under the Stodart provisions. Why should he be glad? On Saturday The Scotsman stated that a private agreement had been reached among Conservative councillors and that £7½ million would have to be cut next year in order to meet the targets forced on the Secretary of State by the Treasury. According to The Scotsman, which is probably well informed, the cuts will be found "in leisure and recreation". For example, the shopping list includes the almost complete closure of the King's theatre, cutting 33 per cent. of the festival grant, closure of the Commonwealth pool except for afternoons, the virtual ending of all putting and tennis, the closing of half a dozen libraries and the loss of about 400 jobs.
  We hear that the hon. Member for Edinburgh, South is worried about his home town's capital city status. The hon. Member for Bute and North Ayrshire (Mr. Corrie) told us that leisure and recreation would be the biggest growth industry. Under Tory control of the Edinburgh district council, which is whipped on by the financial prejudices of the Secretary of State, leisure and recreation will be almost killed if the propositions are put into effect.
  Lord James Douglas-Hamilton: Is the hon. Gentleman aware that no decision has been made to close any facilities in Edinburgh? All that is under consideration is a variety of options, and no final decision has been made.
  Mr. Dewar: Goodness gracious me! If we had more time I would invite the hon. Member for Edinburgh, West to give me his selection from the hit list—the shopping list—that has been drawn up. Many of the targets will be victims of what has been enforced by the Under-Secretary of State for Scotland on his constituency in Edinburgh.
  I accept that there can be difficulties in local authority terms for any Government, and that any Government,
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  have a right to vary their contribution. However, I do not believe that what we are now seeing can possibly be justified. The hon. Member for Moray and Nairn (Mr. Pollock) abused us for being half-hearted in our opposition and incited us to be outrageous. That is not sensible advice. I prefer to try to win with the argument and he should not try to tempt us to desert rational argument for outrage. If that is what he wants from the Opposition he is a very unwise man.
  Within the House rules, in Committee, on Report, and on Third Reading, we shall protest that the Government are enforcing high rates and poorer services on local government. That can be put right, but I must warn Conservative Members that the damage being done to the structure and morale of local government is very real. Local government will become irresponsible if it is stripped of its essential power to rate to meet local needs and to answer for that to the electorate. That is the crux of local democracy and is exactly what has been struck at by the legislation.
  The problems could be prevented if Conservative members had the smeddum to stand up for their principles and what they believe in. However, I am afraid that we shall not see that. They could dissuade Ministers from their thrawn and determined attempts to damage local democracy in Scotland. I hope that they will do that before it is too late.
  9.33 pm
  The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): There are 59 clauses in the Bill and four schedules. To judge by the Opposition speeches during the debate, it would appear that they are more or less happy with at least 57 of the clauses and all four schedules. Their hostility, opposition and indignation have been directed at one modest little clause. The House should remember what this modest little clause is about. It will do something that others have striven to do—unite the parliamentary Labour Party. Not only will it unite the Labour Party but it will take the Liberal and Social Democratic Parties with it. This modest little clause provides that if money is raised from the ratepayers, and if the local authority is unable, because of a decision by this House under existing legislation, to spend that money the money will go back to the ratepayers. If the Opposition had their way they would be able to insist that in certain circumstances the money went to the Government and the Treasury instead. That is the implication of clause 1. Nothing that the hon. Member for Glasgow, Garscadden (Mr. Dewar) and his hon. Friends have said to obfuscate the issue conceals that basic fact.
  The right hon. Member for Glasgow, Craigton (Mr. Millan) is often said to be an aspirant Treasury Minister. I never expected him to be aiding the Treasury in this Parliament in the way in which he and his hon. Friends appear to wish to do.
  The hon. Member for Garscadden said that his proposals are logical if one wishes to defend local democracy. I simply say to him that he reminds me of something that was once said about Sir John Simon—that he has a logical mind: he starts from a false premise and unerringly moves to the wrong conclusion.
  I shall deal in more detail with the case made by the Opposition against clause 1, but I begin by addressing certain remarks to what is, arguably, the much more

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  important part of the Bill—part II, containing the provisions dealing with the recommendations of the Stodart committee.
  The Stodart committee's recommendations were widely accepted by the public and the bulk of local authorities. It is very much in the interests of all concerned that my noble Friend Lord Stodart will be able to take part in the debates in the other House on the recommendations that he and his colleagues, from all parties and all parts of Scotland, have put forward.
  As has been mentioned during the debate, the basic proposition that has been put forward by the Stodart committee, and accepted by the Government, is that the various areas of concurrency that exist, and have existed in the local government structure since the reorganisation of local government, should, for the most part, be removed and the responsibilities concentrated in one or other areas.
  One matter about which a substantial number of hon. Members have spoken is industrial responsibility, industrial promotion and industrial development. The House will be aware that while the Government accepted the vast majority of the Stodart recommendations, we did not think it right to accept the recommendations on industrial development, because the vast majority of district councils have been doing an excellent job on industrial development, and as a consequence the work that they have been doing has been recognised as important to their local economy. The Government do not wish to do anything that would in any way inhibit local authorities from carrying on with their industrial development work.
  Mr. Dalyell: When talking about industrial development, may we take it that the Minister has the authority to say that on the Leyland issue the Scottish Office will open its files to the Comptroller and Auditor General?
  Mr. Rifkind: I am replying to a debate on the Local Government and Planning (Scotland) Bill, and I intend to confine my remarks to the Bill. [HON. MEMBERS: "Answer."' I know that most hon. Gentlemen may not be terribly interested in the Bill, although they have decided to oppose it tonight, but—
  Mr. Foulkes: Oh, come off it.
  Mr. Rifkind: —that is the matter to which I intend to reply.
  The one significant area for which the districts will no longer have responsibility is the promotion of industry overseas. I think that the vast majority of people who have considered this matter will accept that there would be a risk of substantial confusion if representatives of both regions and districts were overseas promoting the same cause, thereby confusing potential investors, without any legitimate interest in the local Scottish economy.
  The hon. Member for Garscadden said that the requirement to obtain consent from the Secretary of State for overseas promotion by regions could lead to serious problems. I give the hon. Gentleman an assurance that has been given before. This requirement for consent will be applied in the most flexible and reasonable fashion. It is not meant to be an inhibition on promotion overseas by regions. It is, rather, intended to ensure the proper co-ordination of their activities, and that is in the interest of the regions and of the Scottish economy as a whole.
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  The question of tourism has been raised by a number of hon. Members, including my hon. Friends the Members for Edinburgh, West (Lord James Douglas-Hamilton) and for Dumfries (Sir H. Monro). The Scottish Tourist Board already can, informally, through negotiations and discussions with the British Tourist Authority, achieve what my hon. Friends have sought and thereby be involved in overseas activities. But it would not be possible to give the sort of specific power envisaged to the Scottish Tourist Board without giving comparable powers to the English and Welsh tourist boards. While that might be desirable in the view of some people, it would be a much more radical change, involving the likely departure of the British Tourist Authority, and that is not something to which some hon. Members have properly addressed their attention.
  My hon. Friends the Members for Edinburgh, South (Mr. Ancram) and for Edinburgh, West made a familiar case for seeking all-purpose or most-purpose status for the city of Edinburgh. It has been acknowledged by the hon. Member for Dundee, West (Mr. Ross), and by my hon. Friends the Members for Moray and Nairn (Mr. Pollock) and for Argyll (Mr. McKay) that there are other parts of Scotland that seek a similar change in the responsibilities of their own local authorities. The very fact that we have had these suggestions from several hon. Members representing different parts of Scotland, illustrates the conclusion that the Government themselves came to when we determined the criteria of the Stodart committee. We decided that it would be impossible to give serious consideration to the creation of an all-purpose authority unless one were prepared to consider again the complete reorganisation of local government, so shortly after the first.
  As a former member of the old Edinburgh town council when it was an all-purpose authority, I freely concede that Edinburgh—and, no doubt, other cities—could, if it so determined, properly fulfil all the responsibilities of an all-purpose authority. I have no doubt that Edinburgh and Glasgow in particular could fulfil that administrative function. It may also be a possibility for other areas and cities.
  Hon. Members on each side of the House have to recognise that one could not conceive of the retention of the existing regions if the cities, which for many of them are the heart of their areas, were removed from those regions. I accept that certain of my hon. Friends from the city of Edinburgh might view with some equanimity the possibility of Lothian council relinquishing its regional functions. I am sure that they will also accept that it would not be a proper basis from which to embark on another reorganisation of local government. Therefore, we had to conclude—and I hope that the House will agree—that this was not a proper basis on which to consider a substantial change.
  Mr. Maclennan: The Government are apparently shortly to produce a consultative paper on the financing of local government and are reviewing the whole question of rates. Why are the Government repeating the mistake that was made in the 1970s of considering the reform of the financing separately from the structure of local government? Would it not make more sense to go into these things at the same time?
  Mr. Rifkind: There is a theoretical attraction in the idea that somehow one can produce a massive study and

  667
  document and reform both the structure and financing of local government simultaneously. There is no reason in principle why one should not hope to be able to do that. However, the hon. Gentleman himself should appreciate that they are two separate issues. Conclusions on structure do not necessarily determine the proper financing of local authorities. While there is no objection in principle to the matters being considered simultaneously, there is equally no necessity to do so, and I certainly do not believe that progress on one should be delayed to consider the other.
  The Government have fully accepted the Stodart committee's recommendations on recreation and leisure. Most hon. Members accept that often concurrency of responsibility for recreation and leisure has led to an unnecessary and undesirable competition between regions and districts, each offering comparable services to the locality in a way that does not make the best use of the resources. That has created problems. The concentration of leisure and recreation in one authority is a principle that has been widely accepted.
  My hon. Friend the Member for Dumfries, the right hon. Member for Craigton and several other hon. Members referred to the problems of community centres and education. The Government have approached this matter in a flexible way, and community centres—particularly those that involve community education—will continue to have the involvement of regional councils. We fully appreciate that where there is an education or social work content in the activities of a community centre it is right and proper for the region to continue to be involved.
  Several hon. Members referred to clause 3 and to the provision to allow for the derating of external plant and machinery. I emphasise that clause 3 is not a decisive clause in itself. It simply provides an order-making power for the Secretary of State, and any order would require the affirmative resolution of both Houses.
  As my right hon. Friend said, we are involved in discussions with the local authorities concerned, with industry and with other interested parties. I freely accept that if the decisions were implemented in a bald fashion, with no other changes taking place, there would be substantial financial problems for a small number of authorities in which a large proportion of the premises are situated. To some extent these authorities might benefit from an increase in their resources element entitlement, but that would not in itself solve the problem to which the hon. Member for West Stirlingshire (Mr. Canavan) and others referred.
  As the hon. Member for Garscadden appreciated, there are various ways in which one could consider dealing with the problem, either by rearranging the problem within the industrial sector—if one wished to preserve the industrial to domestic ration of rating liability—lor by other ways that are presently under consideration. The Government have come to no firm conclusion at this stage on the proper way in which one should pursue the matter. I assure the hon. Member for Dunfermline (Mr. Douglas) that we do not intend to come to a conclusion or to present an order to the House until all the other implications of such a change are fully known and understood.
  Mr. Dewar: I accept that there may be a number of ingenious permutations whereby the load can be
  668
  distributed among the other ratepayers. We want a clear commitment that a large part of the burden will be carried by the Exchequer, and not placed on the ratepayer.
  Mr. Rifkind: We are dealing with an anomaly within the rating system. In removing an anomaly, only in certain circumstances would it be appropriate to expect the national Exchequer to finance something that resulted from the distribution of rating liability among the authorities. We shall have further opportunities to consider this matter.
  Mr. Douglas: If I understand the Under-Secretary correctly, he bases his case on the removal of an anomaly. I suppose that the Government, in removing that anomaly, base their case on a certain principle. Is that principle that no local authority that has gained revenue from industrial premises will suffer loss of revenue as a result of the Government's decision to ameliorate rates in relation to the petrochemical developments?
  Mr. Rifkind: I am not able to give the specific and unqualified guarantee that the hon. Gentleman seeks, but we accept that one cannot simply derate the premises and do nothing else. There must be other consequential changes to ensure that the problems identified by the hon. Member for Dunfermline do not arise.
  Mr. Millan: The Minister has said that there are a number of different ways of dealing with the derating question, but in the explanatory and financial memorandum there is no provision for any Government contribution. We have been asking today whether there is to be a Government contribution.
  Mr. Rifkind: I have already said to the right hon. Member that because we are dealing with an anomaly of distribution of rating liability within the local authorities, it is highly improbable that there will be any Government contribution. [Interruption.] Labour Members quote from the Bill, which says that there will be no Government responsibility, and then they express astonishment when I confirm that fact. Labour Members take some persuading, even when something appears on the face of the Bill.
  I deal next with the rather predictable remarks of the right hon. Member for Craigton about the announcements on rate support grant that were made last week. He suggested that the high rates increases that we have seen over many parts of Scotland in the last year have been the consequence, not of any local decisions taken by high-spending local authorities, but entirely of Government policy on the rate support grant.
  Mr. Millan indicated assent.
  Mr. Rifkind: The right hon. Gentleman confirms that view.
  I have some very interesting information for the right hon. Gentleman. If he were correct, it would require some explanation. When we compare what has happened in the last year to the rates in the various regions with what has happened in the major cities that dominate those regions—and in three of the four regions there is a different political control of the major city compared with that of the regional council—we see some dramatic differences.
  In Grampian region, controlled by the Conservative Party, the rates increase for the current year was 11·9 per cent. In Aberdeen, the major city of that region, controlled

  669
  by the Labour party, the figure was 43·5 per cent. In Lothian region, controlled by the Labour Party, there was a rates increase of 49·3 per cent. In Edinburgh, the major city of that region, contriolled by the Conservative party, the rates increase was 15·4 per cent. In Tayside, a Conservative-controlled region, the rates increase was high, at 36·4 per cent., but in Dundee, the major city of that region, controlled by the Labour Party, it was 150 per cent.
  The only part of Scotland where the rates increases in the region and in the major city of the region were comparable were Strathclyde and Glasgow, where in both cases the rates increases were 37 per cent.—and both are controlled by the Labour Party. Therefore, there is the extraordinary coincidence that although they are both under the same Government, both under the same rate support grant and both have the same grant percentage, at the end of the day the rates increases are virtually double in Labour-controlled areas.
  Mr. Dewar: Does the hon. Gentleman agree that he is playing with the statistics in order to get out of a difficulty? If he takes into account such matters as council house rent policy, for example, he will get a very different picture and part of the explanation that he is seeking. Does he really challenge the universal view of local government in COSLA, irrespective of political persuasion, that the Government have been putting a totally unreasonable squeeze on local government finance? To deny that is to fly in the face of the full facts and all experience.
  Mr. Rifkind: The hon. Gentleman cannot escape the fact that he has just heard, which is that in every Conservative-controlled authority the rates increases were less than half those of the Labour-controlled authorities.
  When the hon. Member for Craigton gave his celebrated interview with The Scotsman a few days before the rate support grant settlement was made, he was asked what he would do if he were Secretary of State dealing with high-spending local authorities. He was asked:
  "How would the former Scottish Secretary of State set about the task of ensuring that local authority spending did not jeopardise the Government's overall economic strategy?"
  The right hon. Gentleman replied:
  "Central Government must try to persuade councils to work within certain parameters".
  Very good, we all try to persuade them. The right hon. Gentleman was then asked what happens if persuasion does not work. He was candid, and said:
  "Central Governments already have effective weapons which they can use to try to influence the level of council spending, like reducing the percentage of rate support grant."
  Last Monday the right hon. Gentleman advised us to reduce the percentage grant. On Wednesday we accepted his advice, and on Thursday he complained about it.
  Mr. Millan: That is, of course, absolute rubbish.
  Will the hon. Gentleman answer the question that I asked earlier today? The response that the Government get from local authorities depends more than anything on the reasonableness of the request that they make. What we have been saying for the last two and a half years, and what we are now saying, is that the Government have made unreasonable demands of local authorities and that they are in no position to meet them. That is why we are getting
  670
  these massive rate increases. Will the hon. Gentleman therefore answer the question that I asked him this afternoon?
  South of the border, local authorities in England are being asked to reduce their real expenditure by at least 4 per cent. next year. I believe that it will be nearer 7 per cent. What is the reduction that the Government are demanding of Scottish local authorities in their real expenditure in 1982–83? Will he at last come clean and tell the House?
  Mr. Rifkind: The right hon. Gentleman is anxious to avoid commenting on his own recommendations given two days before the Government accepted his advice. He cannot escape that consequence.
  When we are dealing with the decision of the Opposition to vote against clause 1—[Interruption.] I am dealing with the Bill, which is not what the right hon. Gentleman is interested in—[Interruption.]
  Mr. Deputy Speaker (Mr. Bryant Godman Irvine): Order. It is convenient if the Chair can hear something.
  Mr. Rifkind: When, last year, we provided for local authorities the right to reduce their rates as an alternative to losing rate support grant, we were told by the Opposition that this was an unworkable policy and one that could not be achieved. Yet we found that one local authority, Renfrew district council—a Labour authority—repaid £1 million to its ratepayers and as a consequence did not lose a penny of rate support grant.
  Mr. Dewar rose—
  Mr. Rifkind: No. I am sorry. If the right hon. Member for Craigton had not taken five minutes to make an intervention, I should have had time to give way to the hon. Gentleman.
  We now face the situation that about £30 million which could have gone back to Lothian ratepayers, and which would have been worth not less than £43 to every ratepayer, was not paid. As a consequence, Lothian regional council has to accept the sole responsibility for that decision.
  Labour Members have argued that the basis of their opposition to clause 1 and the requirement to reduce rates in the interests of the ratepayer is their defence of local democracy. They argue that they believe in local democracy and that that is why they ask the House to vote against these measures. It is rather ironic that today of all days, when they put forward proposals in favour of local democracy, should be the day when a local candidate of the Labour Party, chosen by his local party, has been repudiated on the diktat of the party leader in party headquarters.
  Mr. Dewar rose—
  Mr. Rifkind: I am happy to give way to the hon. Gentleman about that.
  Mr. Dewar: I had no idea that the Minister was so desperate to find a diversion from the facts. He has three minutes. Will he answer my right hon. Friend's question? He must know the answer. He can give it in a short compass. What is the real reduction that has been demanded in local authority spending for next year? We demand to know.
  Mr. Rifkind: Last year, when we said what the relevant expenditure would be for 1981–82, we also said

  671
  that for 1982–83 there would be a further 2 per cent. cut. The effect of last week's announcement is that we are not proposing that further 2 per cent. cut. The Opposition have seen the figures, and they may wish to bear them in mind.
  We are delighted that the Labour Party, the Liberals—
  Mr. Douglas: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to mislead the House by suggesting that in England there will be a cut and that in Scotland there will not be?
  Mr. Rifkind: We are delighted that the Labour Party, the Liberals, the Social Democrats and perhaps the Scottish National Party will be voting against clause 1, because the country will know, as the House knows, that it is not the other 57 clauses that concern them. So determined are they to ensure that ratepayers will not benefit when a local authority cannot reduce its expenditure that they will march in a solid phalanx against these measures.
  We are delighted to put forward the proposals, which will benefit the ratepayer, which will be popular in Scotland, and which will be recognised as a real contribution to helping the problems of the hard-pressed ratepayer. I am happy to commend the Bill to the House.
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 301, Noes 244.

  Division No. 15]

  [10.00 pm

  AYES

  Adley, Robert

  Cadbury, Jocelyn

  Aitken, Jonathan

  Carlisle, John (Luton West)

  Alexander, Richard

  Carlisle, Kenneth (Lincoln)

  Ancram, Michael

  Carlisle, Rt Hon M. (R'c'n)

  Arnold, Tom

  Chalker, Mrs.Lynda

  Aspinwall, Jack

  Channon, Rt. Hon. Paul

  Atkins, Robert(PrestonN)

  Chapman, Sydney

  Atkinson, David(B"m"th, E)

  Churchill, W.S.

  Baker, Kenneth (St. M"bone)

  Clark, Hon A. (Plym'th, s'n)

  Baker, Nicholas (N Dorset)

  Clark, Sir W. (Croydon S)

  Banks, Robert

  Clarke, Kenneth (Rushcliffe)

  Beaumont-Dark, Anthony

  Clegg, Sir Walter

  Bell, Sir Ronald

  Cockeram, Eric

  Bendall, Vivian

  Colvin, Michael

  Bennett, Sir Frederic(T'bay)

  Cope, John

  Benyon, Thomas(A'don)

  Cormack, Patrick

  Benyon, W.(Buckingham)

  Corrie, John

  Best, Keith

  Costain, Sir Albert

  Biffen, Rt Hon John

  Cranborne, Viscount

  Biggs-Davison, Sir John

  Critchley, Julian

  Blackburn, John

  Crouch, David

  Blaker, Peter

  Dean, Paul (North Somerset)

  Body, Richard

  Dickens, Geoffrey

  Bonsor, Sir Nicholas

  Dorrell, Stephen

  Boscawen, Hon Robert

  Douglas-Hamilton, Lord J.

  Bottomley, Peter (W"wich W)

  Dover, Denshore

  Bowden, Andrew

  du Cann, Rt Hon Edward

  Braine, Sir Bernard

  Dunn, Robert(Dartford)

  Bright, Graham

  Durant, Tony

  Brinton, Tim

  Dykes, Hugh

  Brittan, Rt. Hon. Leon

  Eden, Rt Hon Sir John

  Brooke, Hon Peter

  Elliott, Sir William

  Brotherton, Michael

  Emery, Peter

  Brown, Michael(Brigg & Sc'n)

  Eyre, Reginald

  Browne, John (Winchester)

  Fairbairn, Nicholas

  Bruce-Gardyne, John

  Fairgrieve, Sir Russell

  Bryan, Sir Paul

  Faith, Mrs Sheila

  Buchanan-Smith, Rt. Hon. A.

  Farr, John

  Buck, Antony

  Fell, Anthony

  Budgen, Nick

  Fenner, Mrs Peggy

  Bulmer, Esmond

  Finsberg, Geoffrey

  Burden, Sir Frederick

  Fisher, Sir Nigel

  Butcher, John

  Fletcher, A.(Ed'nb'gh N)

  672

  Fletcher-Cooke, Sir Charles

  MacKay, John (Argyll)

  Fookes, Miss Janet

  Macmillan, Rt Hon M.

  Forman, Nigel

  McNair-Wilson, M.(N"bury,)

  Fowler, Rt Hon Norman

  McNair-Wilson, P. (New F'st)

  Fox, Marcus

  McQuarrie, Albert

  Fraser, Rt Hon Sir Hugh

  Madel, David

  Fraser, Peter (South Angus)

  Major, John

  Fry, Peter

  Marland, Paul

  Gardiner, George(Reigate)

  Marlow, Antony

  Gardner, Edward (S' Fylde)

  Marshall, Michael(Arundel)

  Garel-Jones, Tristan

  Mates, Michael

  Gilmour, Rt Hon Sir Ian

  Maude, Rt Hon Sir Angus

  Glyn, Dr Alan

  Mawby, Ray

  Goodhew, Victor

  Mawhinney, Dr Brian

  Goodlad, Alastair

  Maxwell-Hyslop, Robin

  Gorst, John

  Mayhew, Patrick

  Gow, Ian

  Mellor, David

  Gower, Sir Raymond

  Meyer, Sir Anthony

  Grant, Anthony (Harrow C)

  Millen, Hal(B"grove)

  Gray, Hamish

  Mills, Iain(Meriden)

  Greenway, Harry

  Mills, Peter(West Devon)

  Grieve, Percy

  Moate, Roger

  Griffiths, E.(B'ySt.Edm'ds)

  Monro, SirHector

  Griffiths, Peter Portsm'th N)

  Montgomery, Fergus

  Grist, Ian

  Morgan, Geraint

  Grylls, Michael

  Morris, M. (N'hampton S)

  Gummer, John Selwyn

  Morrison, Hon C. (Devizes)

  Hamilton, Hon A.

  Morrison, Hon P. (Chester)

  Hamilton, Michael (Salisbury)

  Mudd, David

  Hannam, John

  Murphy, Christopher

  Haselhurst, Alan

  Myles, David

  Hawkins, Paul

  Neale, Gerrard

  Hawksley, Warren

  Needham, Richard

  Hayhoe, Barney

  Nelson, Anthony

  Heath, Rt Hon Edward

  Neubert, Michael

  Heddle, John

  Newton, Tony

  Henderson, Barry

  Normanton, Tom

  Heseltine, Rt Hon Michael

  Onslow, Cranley

  Hicks, Robert

  Oppenheim, Rt Hon Mrs S.

  Higgins, Rt Hon Terence L.

  Page, John (Harrow, West)

  Hogg, HonDouglas (Gr'th'm)

  Page, Richard (SW Herts)

  Holland, Philip(Carlton)

  Parkinson, Rt Hon Cecil

  Hooson, Tom

  Parris, Matthew

  Hordern, Peter

  Patten, Christopher (Bath)

  Howe, Rt Hon Sir Geoffrey

  Patten, John (Oxford)

  Howell, Rt Hon D. (G"ldf"d)

  Pattie, Geoffrey

  Howell, Ralph (N Norfolk)

  Pawsey, James

  Hunt, David (Wirral)

  Percival, Sir Ian

  Hunt,John (Ravensbourne)

  Peyton, Rt Hon John

  Irving, Charles(Cheltenham)

  Pink, R. Bonner

  Jenkin, Rt Hon Patrick

  Pollock, Alexander

  Jessel, Toby

  Porter, Barry

  JohnsonSmith, Geoffrey

  Prentice, Rt Hon Reg

  Jopling, Rt Hon Michael

  Price, Sir David (Eastleigh)

  Joseph, Rt Hon Sir Keith

  Proctor, K. Harvey

  Kaberry, Sir Donald

  Pym, Rt Hon Francis

  Kellett-Bowman, Mrs Elaine

  Raison Timothy

  Kershaw, Sir Anthony

  Rathbone, Tim

  King, Rt Hon Tom

  Rees-Davies, W. R.

  Kitson, Sir Timothy

  Renton, Tim

  Knox, David

  Rhodes James, Robert

  Lamont, Norman

  Rhys Williams, Sir Brandon

  Lang, Ian

  Ridley, Hon Nicholas

  Langford-Holt, Sir John

  Ridsdale, Sir Julian

  Latham, Michael

  Rifkind, Malcolm

  Lawrence, Ivan

  Rippon, Rt Hon Geoffrey

  Lawson, Rt Hon Nigel

  Roberts, M. (Cardiff NW)

  Lee, John

  Roberts, Wyn (Conway)

  LeMarchant, Spencer

  Rost, Peter

  Lennox-Boyd, Hon Mark

  Royle, Sir Anthony

  Lester, Jim (Beeston)

  Sainsbury, Hon Timothy

  Lewis, Kenneth(Rutland)

  St. John-Stevas, Rt Hon N.

  Lloyd, Ian (Havant & W'loo)

  Shaw, Giles (Pudsey)

  Lloyd, Peter (Fareham)

  Shaw, Michael (Scarborough)

  Loveridge, John

  Shepherd, Colin(Hereford)

  Luce, Richard

  Shepherd, Richard

  Lyell, Nicholas

  Shersby, Michael

  McCrindle, Robert

  Silvester, Fred

  Macfarlane, Neil

  Sims, Roger

  MacGregor, John

  Skeet, T. H. H.

  673

  Smith, Dudley

  Viggers, Peter

  Speed, Keith

  Waddington, David

  Speller, Tony

  Wakeham, John

  Spence, John

  Waldegrave, Hon William

  Spicer, Jim (West Dorset)

  Walker, Rt Hon P.(W'cester)

  Spicer, Michael (S Worcs)

  Walker, B. (Perth)

  Sproat, Iain

  Walker-Smith, Rt Hon Sir D.

  Squire, Robin

  Wall, Sir Patrick

  Stainton, Keith

  Waller, Gary

  Stanbrook, Ivor

  Walters, Dennis

  Stanley, John

  Ward, John

  Steen, Anthony

  Warren, Kenneth

  Stevens, Martin

  Watson, John

  Stewart, A. (E Renfrewshire)

  Wells, John (Maidstone)

  Stewart, Ian (Hitchin)

  Wells, Bowen

  Stokes, John

  Wheeler, John

  Stradling Thomas, J.

  Whitney, Raymond

  Tapsell, Peter

  Wickenden, Keith

  Taylor, Teddy (S' end E)

  Wiggin, Jerry

  Temple-Morris, Peter

  Wilkinson, John

  Thatcher, Rt Hon Mrs M.

  Williams, D.(Montgomery)

  Thomas, Rt Hon Peter

  Winterton, Nicholas

  Thompson, Donald

  Wolfson, Mark

  Thorne, Neil(IlfordSouth)

  Young, Sir George(Acton)

  Thornton, Malcolm

  Younger, Rt Hon George

  Townend, John(Bridlington)

  Townsend, Cyril D, (B'heath)

  Tellers for the Ayes:

  Trotter, Neville

  Mr. Anthony Berry and Mr. Carol Mather.

  van Straubenzee, Sir W.

  Vaughan, Dr Gerard

  NOES

  Abse, Leo

  Davis, T. (B'ham, Stechf'd)

  Adams, Allen

  Deakins, Eric

  Allaun, Frank

  Dempsey, James

  Anderson, Donald

  Dewar, Donald

  Archer, Rt Hon Peter

  Dobson, Frank

  Ashley, Rt Hon Jack

  Dormand, Jack

  Ashton, Joe

  Douglas, Dick

  Atkinson, N. (H'gey,)

  Douglas-Mann, Bruce

  Bagier, Gordon A.T.

  Dubs, Alfred

  Barnett, Guy (Greenwich)

  Duffy, A. E. P.

  Barnett, Rt Hon Joel (H'wd)

  Dunnett, Jack

  Beith, A.J.

  Dunwoody, Hon Mrs G.

  Benn, Rt Hon Tony

  Eadie, Alex

  Bennett, Andrew(St"kp"tN)

  Eastham, Ken

  Bidwell, Sydney

  Edwards, R. (W"hampt"n S E)

  Booth, Rt Hon Albert

  Ellis, R.(NE D'bysh're)

  Boothroyd, Miss Betty

  Ellis, Tom(Wrexham)

  Bottomley, Rt Hon A. (M'b'ro)

  English, Michael

  Bray, Dr Jeremy

  Ennals, Rt Hon David

  Brocklebank-Fowler, C.

  Evans, loan (Aberdare)

  Brown, Hugh D. (Provan)

  Evans, John (Newton)

  Brown, Ronald W. (H'ckn'y S)

  Ewing, Harry

  Brown, Ron(E'burgh, Leith)

  Faulds, Andrew

  Buchan, Norman

  Flannery, Martin

  Callaghan, Rt Hon J.

  Fletcher, Ted (Darlington)

  Callaghan, Jim (Midd't'n & P)

  Foot, Rt Hon Michael

  Campbell Ian

  Ford, Ben

  Campbell-Savours, Dale

  Forrester, John

  Canavan, Dennis

  Foster, Derek

  Carmichael, Neil

  Foulkes, George

  Carter-Jones, Lewis

  Fraser, J. (Lamb'th, N'w'd)

  Cartwright, John

  Freeson, Rt Hon Reginald

  Cocks, Rt Hon M. (B'stol S)

  Garrett, John (Norwich S)

  Cohen, Stanley

  Garrett, W. E. (Wallsend)

  Coleman, Donald

  George, Bruce

  Concannon, Rt Hon J. D.

  Gilbert, Rt Hon Dr John

  Cook, Robin F.

  Golding John

  Cowans, Harry

  Graham, Ted

  Cox, T. (W'dsw'th, Toot" g)

  Grant, George(Morpeth)

  Craigen, J. M. (G'gow, M'hill)

  Grimond, Rt Hon J.

  Crowther, Stan

  Hamilton, James(Bothwell)

  Cryer, Bob

  Hamilton, W. W. (C'tral Fife)

  Cunningham, Dr J. (W'h'n)

  Hardy, Peter

  Dalyell, Tam

  Harrison, Rt Hon Walter

  Davidson, Arthur

  Hart, Rt Hon Dame Judith

  Davies, Rt Hon Denzil(L'lli)

  Hattersley, Rt Hon Roy

  Davies, Ifor (Gower)

  Haynes, Frank

  Davis, Clinton (Hackney C)

  Healey, Rt Hon Denis

  674

  Heffer, Eric S.

  Park, George

  Hogg, N. (E Dunb't'nshire)

  Parker, John

  Holland, S.(L'b'th, Vauxh'll)

  Parry, Robert

  Home Robertson, John

  Pavitt, Laurie

  Homewood, William

  Penhaligon, David

  Hooley, Frank

  Pitt, William Henry

  Howell, Rt Hon D.

  Powell, Rt Hon J.E. (S Down)

  Howells, Geraint

  Powell, Raymond (Ogmore)

  Hoyle, Douglas

  Prescott, John

  Huckfield, Les

  Price, C. (Lewisham W)

  Hudson Davies, Gwilym E.

  Race, Reg

  Hughes, Mark (Durham)

  Radice, Giles

  Hughes, Robert (Aberdeen N)

  Rees, Rt Hon M (Leeds S)

  Hughes, Roy (Newport)

  Richardson, Jo

  Janner, Hon Greville

  Roberts, Albert(Normanton)

  Jay, Rt Hon Douglas

  Roberts, Allan(Bootle)

  John, Brynmor

  Roberts, Ernest (Hackney N)

  Johnson, James (Hull West)

  Roberts, Gwilym (Cannock)

  Johnson, Walter (Derby S)

  Robertson, George

  Jones, Rt Hon Alec (Rh'dda)

  Rooker, J.W.

  Jones, Barry (East Flint)

  Ross, Ernest (Dundee West)

  Kaufman, Rt Hon Gerald

  Rowlands, Ted

  Kerr, Russell

  Ryman, John

  Kilroy-Silk, Robert

  Sever, John

  Lambie, David

  Sheerman, Barry

  Lamborn, Harry

  Sheldon, Rt Hon R.

  Leadbitter, Ted

  Shore, Rt Hon Peter

  Leighton, Ronald

  Short, Mrs Renée

  Lestor, Miss Joan

  Silkin, Rt Hon J. (Deptford)

  Lewis, Arthur (N'ham NW)

  Silkin, Rt Hon S. C. (Dulwich)

  Lewis, Ron (Carlisle)

  Silverman, Julius

  Litherland, Robert

  Skinner, Dennis

  Lofthouse, Geoffrey

  Smith, Rt Hon J. (N Lanark)

  Lyon, Alexander (York)

  Snape, Peter

  Lyons, Edward (Bradf'd W)

  Soley, Clive

  Mabon, Rt Hon Dr J. Dickson

  Spearing, Nigel

  McCartney, Hugh

  Spriggs, Leslie

  McDonald, Dr Oonagh

  Stallard, A.W.

  McElhone, Frank

  Steel, Rt Hon David

  McGuire, Michael (Ince)

  Stoddart, David

  McKay, Allen (Penistone)

  Stott, Roger

  McKelvey, William

  Strang, Gavin

  MacKenzie, Rt Hon Gregor

  Straw, Jack

  Maclennan, Robert

  Summerskill, Hon Dr Shirley

  McMahon, Andrew

  Taylor, Mrs Ann (Bolton W)

  McNamara, Kevin

  Thomas, Dafydd (Merioneth)

  McTaggart, Robert

  Thomas, Jeffrey(Abertillery)

  McWilliam, John

  Thomas, Dr R. (Carmarthen)

  Magee, Bryan

  Tilley, John

  Marks, Kenneth

  Torney, Tom

  Marshall, D(G'gowS'ton)

  Urwin, Rt Hon Tom

  Marshall, Dr Edmund (Goole)

  Varley, Rt Hon Eric G.

  Marshall, Jim (Leicester S)

  Wainwright, E.(Dearne V)

  Martin, M (G'gowS'burn)

  Walker, Rt Hon H. (D'caster)

  Mason, Rt Hon Roy

  Watkins, David

  Maxton, John

  Weetch, Ken

  Maynard, Miss Joan

  Wellbeloved, James

  Meacher, Michael

  Welsh, Michael

  Mellish, Rt Hon Robert

  White, Frank R.

  Mikardo, Ian

  White, J.(G"gow Pollok)

  Millan, Rt Hon Bruce

  Whitehead, Phillip

  Miller, Dr M.S.(E Kilbride)

  Whitlock, William

  Mitchell Austin(Grimsby)

  Willey, Rt Hon Frederick

  Mitchell, R.C. (Soton Itchen)

  Williams, Rt Hon A.(S'sea W)

  Molyneaux, James

  Wilson, Gordon (Dundee E)

  Morris, Rt Hon A. (W"shawe)

  Wilson, Rt Hon Sir H.(H'ton)

  Morris, Rt Hon C. (O"shaw)

  Wilson, William (C"try SE)

  Morris, Rt Hon J. (Aberavon)

  Winnick, David

  Moyle, Rt Hon Roland

  Woodall, Alec

  Mulley, Rt Hon Frederick

  Woolmer, Kenneth

  Newens, Stanley

  Wright, Sheila

  Oakes, Rt Hon Gordon

  Young, David (Bolton E)

  O"Halloran, Michael

  O"Neill, Martin

  Tellers for the Noes:

  Orme, Rt Hon Stanley

  Mr. James Tinn and Mr. Joseph Dean.

  Palmer, Arthur

  Question accordingly agreed to.
  Bill read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  LOCAL GOVERNMENT AND PLANNING (SCOTLAND) [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That for the purposes of any Act of the present Session to make further provision as regards local government and planning
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  in Scotland, to abolish as regards Scotland certain powers of entry and advisory committees and to amend the Tenants' Rights Etc. (Scotland) Act 1980, it is expedient to authorise the payment out of moneys provided by Parliament of any administrative expenses attributable to the said Act of the present Session incurred by any Government department, and any increase attributable to the said Act of the present Session in the sums payable out of money so provided under any other Act.—[Mr. Rykind.]

  Employment Protection
  10.15 pm
  The Under-Secretary of State for Employment (Mr. David Waddington): I beg to move,
  That the draft Transfer of Undertakings (Protection of Employment) Regulations 1981, which were laid before this House on 26th November, be approved.
  The regulations implement the European Community directive on the approximation of the laws of member States relating to the safeguarding of employees' rights in the event of transfers of undertakings, businesses or parts of businesses. They are made under the enabling power in the European Communities Act 1972. They have been a long time in the making, and implementation of the directive is now overdue. The first draft of the regulations was published under the previous Administration in June 1978. The Presidency was a British Presidency when the regulations were born. I do not believe that we could have delayed much longer in carrying out our Community obligations.
  The regulations have two main provisions. First, when there is a change of employer they provide for an automatic transfer of the employees along with the business. I emphasise the words "a change of employer", which mean where the identity of the employing company changes. The regulations do not apply to a change of ownership where only the controlling shares in the company change hands. Hon. Members will appreciate that at present, if a business is sold as a going concern, the contracts of employment are normally brought to an end. That will no longer be the case.
  Secondly, the regulations provide for recognised trade unions to be given information concerning the transfer by both the buyer and the seller and to be consulted about any measures that the buyer or seller intends to take in connection with the transfer.
  The regulations are complicated, and it may be helpful if I go through them in turn. Regulation 1 provides that transfers taking place on or after 1 May 1982 will be covered. As the information and consultation requirements relate to a period prior to each relevant transaction, they will be brought into operation three months earlier, on 1February 1982.
  Regulation 2, dealing with definitions, is important because, as the House will see, the regulations following the directive do not apply to undertakings that are not in the nature of commercial ventures. Regulation 3 defines the scope of the regulations and makes it clear that they do not apply when all that is being transferred is the shareholding in a company. They apply only where there is a legal change of employer and where, immediately before the transfer, the undertaking is situated in the United Kingdom.
  Mr. Douglas Hogg: Can my hon. and learned Friend clarify regulation 3? Can he tell me whether the transfer has the effect of providing that a period of employment before the transfer counts towards a claim for redundancy or unfair dismissal? Further, is the contract of employment from the original employer simply transferred to the subsequent employer?
  Mr. Waddington: The regulation is concerned with contractual rights. One has only to look at the Employment
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  Protection Act to see that already on such a transfer rights to redundancy payments are preserved. If a new employer takes on the employees of the transferor company for the purpose of redundancy payments, the whole period of employment is aggregated.
  Regulation 3(5) makes it clear that the right of a seaman to be discharged if his ship ceases to be registered in the United Kingdom is not affected.
  Regulation 4 is the product of a great deal of discussion and deals with the fascinating subject of hiving-down. A receiver or liquidator appointed to a company will obviously consider whether a part of the concern might be viable. If he reaches that conclusion he will often transfer the viable part to a wholly-owned subsidiary of the company with a view to its sale as a going concern.
  Essentially, the liabilities remain with the original company, and a clean package, free from liabilities, can be offered to a potential purchaser. The employees continue to be employed by the original company, but their services are hired out to the hived-down company until that company is sold or wound up. If it is sold, the employees are dismissed by the original company and the purchaser of the hived-down company offers re-engagement to those whom he requires for carrying on the business.
  One can see the problems that would have arisen had the effect of the regulations been to bring about a transfer of employees to the hived-down company and how unattractive hiving-down would have become to liquidators. Where no purchaser was found the employees who had become employees of the hived-down rather than of the original company would have had claims against the hived-down company and that would have had the effect of advancing their claims against those of creditors who would have come before them if no hiving-down had taken place—that is, those who had appointed the receiver. The creditors, therefore, would have seen the practice as against their interests and might even have had a claim against the receiver for acting in a way that was likely to prejudice them.
  However, hiving-down clearly is a useful practice which can avoid the breaking up of whole businesses and can save jobs. Therefore, great efforts were made to find a solution, and regulation 4 treats the hiving-down operation as a suspended transfer, which becomes a transfer for the purposes of the regulation only when a purchaser has been found. Immediately before a purchaser takes control of a hived-down company either by buying the company or buying its shares, the operation becomes a transfer caught by the regulations. The employees' contracts are then automatically transferred, and the information and consultation provisions also come into operation.
  Regulation 5 provides that the contract of employment of the employee is automatically transferred from the buyer to the seller. All rights, powers, duties and liabilities under or in connection with the contract are transferred to the new employer, except for criminal liability and liabilities for occupational pensions rights, which are dealt with quite separately under regulation 7.
  Regulation 5(5) provides that that does not affect the employee's right to resign, but he will have a remedy in law only where he resigns because of a substantial change in his working conditions. He will have no remedy if he

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  resigns only because the identity of his employer has changed, unless he can show that the change in all the circumstances is a significant change to his detriment.
  It is somewhat difficult to find examples of where such a change could be significantly to the employee's detriment. When I asked those who advise me to give examples, the only ones that they could think of were examples of new employers running off with their employees' wives or murdering their fathers. We wish to close any possible gaps.
  Regulation 6 provides that a collective agreement made by the transferor with the union will have effect as if made by the transferee. As the regulation is made without prejudice to section 18 of the Trade Union and Labour Relations Act 1974, which provides that a collective agreement will be presumed not to be legally binding unless so specified by the parties, there is nothing to prevent either side from renegotiating or ceasing to observe any such agreement.
  Mr. Teddy Taylor: Is that not a desperately important and significant change in the law? Does it not mean that if there is a transfer of ownership, the firm taking over another firm—which may have been in trouble because of bad trade union practices—must take over all wage and procedure agreements and be legally liable for any consequences? Does not the Minister think that that is a massive change in the law for British companies? What on earth is it doing in a regulation?
  Mr. Waddington: The short answer is that it does not have that effect. Because of what some may think to be a strange quirk in the law, a collective agreement is not enforceable unless the parties specifically state that they wish to be legally bound. We are in the strange position of honouring the words of the directive through the regulation, but as collective agreements are not enforceable in law—because they are never, in practice, stated by the parties to be legally binding—I can allay my hon. Friend's fears. It is a strange result of our being liable to implement directives. I assure my hon. Friend that as collective agreements are not binding on the parties unless so stated there is no reason for him to fear that a transferee will find himself saddled with wage, procedure or other agreements that he does not like, because he can at once repudiate them.
  Mr. Taylor: If I took over a company owned by one of my hon. Friends, and that company had an agreement to pay its employees an additional £6 per week from 1 January, is my hon. and learned Friend seriously saying, despite the regulation that states that there is an obligation to take over agreements, "Do not worry about the agreement; you can tear it up and not pay the £6"?
  Mr. Waddington: My hon. Friend knows perfectly well that I am not saying that. I am saying that the reality of industrial power may be different from the strict law. Whereas one company may take over another and say that it is not strictly bound by an agreement made by the previous employer, it would be hard put to escape the consequences of wage bargaining carried on by the previous employer. All I am saying is that the regulation makes no difference in practice, because the position under the present law does not give rise to actions in the courts, and the new position dealt with in words in the
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  regulations will not give rise to action in the courts because collective agreements in Britain are not enforceable in law.
  Mr. Taylor: Why have the regulation at all?
  Mr. Waddington: As a result of the activities of the right hon. Member for Deptford (Mr. Silkin) and others, who signed the directive at Strasbourg, the Government have an obligation to put into the form of regulations the obligations that were taken on by a previous Government. That is the simple answer. I assure my hon. Friend, who no doubt will speak later, that a change of Government does not automatically enable the successor Government to shed legal obligations assumed by the previous Government.
  We are therefore implementing now what may be thought a nonsensical bargain—or perhaps a good bargain—struck by the previous Government. It is our obligation now to put into regulations a Community obligation assumed as long ago as 1977 and 1978.
  Mr. Douglas Jay: Is the Minister saying that the House has no power to negative this provision if it so wishes?
  Mr. Waddington: Of course I am not saying that for one moment. I am sure that the right hon. Gentleman did not expect me to agree with that proposition. I am merely saying that a previous Government assumed this obligation and we are now tabling the regulation giving effect to it.
  Mr. Douglas Hogg: I can quite understand that we have assumed certain obligations, but is my hon. and learned Friend recommending the regulations or not?
  Mr. Waddington: I am recommending them with a remarkable lack of enthusiasm.
  Mr. Hogg: In that case, let us vote against them.
  Mr. Waddington: I am not recommending that.
  Mr. Michael Grylls: Reverting to trade union agreements, my hon. and learned Friend referred to collective agreements not being enforceable. What would be the position of a closed shop being taken over in this way?
  Mr. Waddington: I do not think that the question of the closed shop need come into the debate. The closed shop relates to an agreement entered into by a specific employer and his employees. Here we are talking about collective agreements affecting a trade, industry, or whatever. Perhaps I may continue my explanation of the regulations and return -to these matters later.
  Regulation 7 follows the directive by excluding occupational pension schemes from the regulations. Employees' rights established up to the point of transfer are protected to some extent by existing legislation, which is the responsibility of the Secretary of State for Social Services.
  Regulation 8 provides that where the transfer or a reason connected with the transfer is the reason or principal reason for dismissing an employee, that dismissal shall be deemed to be unfair. The normal provisions governing unfair dismissal, qualifying periods, and so forth, continue to apply in cases where employees are dismissed because of the transfer. Where, however, the dismissal is due to an

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  "economic, technical or organisational reason entailing changes in the workforce of either the transferor or the transferee before or after a relevant tranfer",
  the dismissal will be regarded as having been fair, provided that the employer satisfies the tribunal that he acted reasonably in treating the economic, technical or organisational reasons as a sufficient reason fix dismissal.
  Regulation 9 provides that a trade union recognised by the transferor is recognised by the transferee, but makes it clear that the transferee is in exactly the same position as the transferor, and any recognition bestowed can, of course, be withdrawn and any agreement may be varied or rescinded.
  Regulation 10 places a duty on the employer to inform and consult, and regulation 10(2) provides that he must inform the recognised union representatives of the legal, economic and social implications of the transfer for the affected employees. The term "union representatives" is our interpretation of the term
  "representatives of the employees provided for by the laws or practice of the Member States".
  The words
  "legal, economic and social implications"
  come straight from article 6.
  Sir Charles Fletcher-Cooke: I am very interested in this regulation and this statutory instrument that my hon. and learned Friend says does not matter very much. Since we have no binding agreement, the fact that the obligations are to be forcibly transferred again does not matter, because there are no obligations. Nevertheless there seems to be an obligation in regulation 10(2) which says:
  "Long before a relevant transfer … the employer shall inform those representatives."
  That seems to be an obligation that stands upon its own. I should like to know the sanction if the employer, for good reasons or bad, by ignoring the regulation or through his inability to observe it, does not so inform the representatives.
  Mr. Waddington: The sanction is two weeks' wages in respect of each of the affected employees. I am trying to find the passage that appears later in the regulations. I shall be able to inform my hon. and learned Friend later precisely where it falls. The Government took the view that there could not be an obligation without a sanction, and therefore imposed this sanction.
  There is no mention of a sanction in the directive. The words "long enough" were the best that the Government could do with the wording "in good time" in the directive. There was need for some flexibility. It would have been dangerous to lay down a given number of days. "Long enough" seemed preferable to "in good time" to fulfil the intention of the directive.
  Sir Charles Fletcher-Cooke: Both are pretty awful.
  Mr. Waddington: On consultation, the regulation uses as a model the redundancy handling provisions of the Employment Protection Act 1975. Regulation 10(6), which provides some guidance on what is involved in consultation, follows the wording of section 99(7) of the 1975 Act. Regulation 10(7) provides the employer with the same defence of special circumstances for any breach of his obligation to inform and consult as is provided in
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  section 99(8) of the 1975 Act. In other words, the draftsmen, wherever possible, have followed the wording of previous employment protection legislation.
  Regulation 11 enables trade unions to present a complaint that they have not been informed or consulted. Where it finds the complaint well found, the industrial tribunal—I come now to the point that I was unable to find a few moments ago—will make a declaration to that effect and may order compensation to a maximum of two weeks' pay to be paid to the affected employees.
  Any more would provide a substantial burden on an employer with a great number of employees, particularly as compensation may be awarded to all affected employees and not simply those who have been transferred. It is hard to see how an obligation can be imposed without having some sort of sanction for a breach.
  Mr. Teddy Taylor: Is the Minister saying that under the regulation, if passed, I can buy a business but if the tribunal concludes that I did not consult the employees adequately beforehand I can be asked, out of the blue, to pay every employee two weeks' wages? Does the Minister think that it is right for this sort of provision to be contained in regulations coming before the House after 10 pm?
  Mr. Waddington: We are following the model set in the Employment Protection Act and we are saying that the industrial tribunal is the body responsible for imposing a sanction if there is a breach of the obligation—just as it is responsible for imposing a sanction if due notice is not given, under the 1975 Act, of an intention to declare redundancies.
  Mr. Taylor: Will my hon. and learned Friend, the Government or anyone else be giving tribunals or employers guidance on what constitutes adequate consultation?
  Mr. Waddington: That is the sort of problem with which tribunals have to deal almost every day of the week. It is impossible for the Government to lay down strict criteria. It is better to follow the existing machinery and leave it to the good sense of tribunals to consider what has happened, relate that to the obligations in the regulations, and decide whether there has been compliance. If my hon. Friend wants us to provide that a certain form of consultation must take place within five days and another form must take place within 10 days, let him say so. Surely it is far better to leave such matters to the industrial tribunal.
  Regulation 12 provides that any agreement that proposes to exclude or limit the operation of the regulations shall be void, and regulation 13 excludes people working abroad and dock workers, the latter because they have their own arrangements affording equivalent protection.
  Regulation 14 makes some consequential amendments to the relevant employment legislation in the United Kingdom, the effect of which will be that the transferee will not be required to give employees completely new written particulars of terms and conditions of employment, provided that there is no change in those particulars. Of course, he will have to alter the employee's written statement to reflect the change of employer.
  Let me summarise the main effect of what we are doing. At the moment, when there is a transfer of a

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  business, an employee's contract of employment is normally brought to an end. From 1 May it will automatically be transferred to the new employer. It is a major change in principle, but in practice it will be nowhere near as far-reaching as some have assumed.
  In reality it will matter little where the responsibility for the employee's contract of employment lies, since any shift in that responsibility will be reflected in the purchase price of the business. The business will usually be a profitable one—
  Mr. Taylor: Why?
  Mr. Douglas Hogg: What about Times Newspapers?
  Mr. Waddington: My hon. Friends can make their own speeches. Perhaps the arguments do not appeal to them, but if they hear me out they will see the thinking behind the regulations.
  It will usually be the intention of the new employer to re-engage the old work force.
  Mr. Taylor: Oh!
  Mr. Waddington: I wish that my hon. Friend would await what I have to say. If the new employer thinks that he will not require the old work force and will have to make some redundancies for economic, technical or organisational reasons, he will pay less for the firm than he would otherwise have been minded to do. Alternatively, the original employer may have made some redundancies before the transfer, to make the business more saleable. He will get more on the sale but will have had to spend money in order to get that greater sum. From the business man's point of view, it is as broad as it is long.
  Mr. Hogg: I do not like to interrupt, but my hon. and learned Friend seems to have forgotten that the industrial tribunal has the power to order the employer to re-engage or reinstate. In those circumstances an employer would not be able to shift labour in the way that my hon. and learned Friend has suggested.
  Mr. Waddington: I invite my hon. Friend to examine what is said in the regulation, which provides that a person may declare somebody redundant for economic, technical or organisational reasons. That is what he can do now.
  As I say, if the obligation to make the redundancy payments is to rest on the purchaser of the firm, the purchaser will pay that much less for the firm. If the obligation to make the redundancies to make the business more saleable is to rest on the transferor, it follows, as night follows day, that the transferee will be minded to pay more for the firm. One way or the other, if the object of the exercise is to have a firm that is more viable because it has fewer employees, either the original employer will have to pay for the redundancies or the new employer will have to pay for them. On reflection, that is not very much different from the present situation.
  Mr. Taylor: The Minister said that the transfer was of an undertaking. That is mentioned in regulation 3. Precisely what does "undertaking" mean? For example, could it possibly refer to a local authority cleansing department being privatised, or must it be a private business?
  Mr. Waddington: It certainly does not have to be merely a private business. In the European Community
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  context, "undertaking" implies commercial or economic activities. According to Cunningham in "The Competition Law of the EEC",
  "The word 'undertaking' is not defined in the Treaty. It is wide enough to cover all legally recognised types of economic unit … such as an individual carrying on a business, partnerships, companies, corporations established by charter, statutory bodies, local"—
  Mr. Hogg: It is defined in regulation 2.
  Mr. Waddington: Perhaps my hon. Friend will bear with me for a moment.
  Regulation 2 says that an "undertaking"
  "includes any trade or business but does not include any undertaking or part of an undertaking which is not in the nature of a commercial venture."
  I thought that my hon. Friend the Member for Southend, East (Mr. Taylor) wanted me to try to spell out how that definition got into the regulations, and as the word "undertaking" appeared inthe directive, I was trying to help my hon. Friend by telling him the reason for the word "undertaking" being in the directive, and what the word "undertaking" in the directive means. According to a learned author, it means what I have just been saying. Cunningham continues, referring to
  "local authorities carrying on a business, charities which are trading"—
  but not charities which are not trading—
  "co-operative societies, and so on."
  In other words, it is very similar to a profit-making body. It is a body that is engaging in business. It is not a body that is not engaging in business.
  The other main change is to require employers to give trade union representatives certain information connected with the transfer and to consult trade union representatives about any measures that may be taken in connection with the transfer. There is, understandably, anxiety about placing an additional statutory burden on employers at present, but in the interests of good industrial relations many employers contemplating a transfer of business are probably already doing something very much along these lines.
  As there will be no dismissal on a transfer covered by the regulations, an employer will no longer have an obligation, under the redundancy handling provisions, to consult recognised trade unions about what amounts to technical redundancies—that is, dismissals that are by virtue solely of a transfer, and where all employees are to be taken on by the new company. From 1 May 1982 employers will be freed from this obligation.
  In all the circumstances, I commend the regulations to the House.
  10.49 pm
  Mr. Harold Walker: Deciding how to respond to the proposals contained in the draft statutory instrument has been a difficult task, involving some mind searching and heart searching—mind searching because of the complexity and technical nature of some of the provisions, and heart searching because the provisions are mainly beneficial to employees.
  In reaching our view we have had to take account not only of the substance of the regulations but of the way that the Government have proceeded in bringing them before the House. As the Minister said, the regulations seek to give effect to the terms of EEC directive 77/187—the so-called acquired rights directive. The Minister also

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  acknowledged that there had been an earlier draft with the same purpose and with the same title—drawn up by the Labour Government in 1978—which fell because of the intervention of the general election the following year.
  The revised draft now before the House contains a number of additions to and a number of major changes from the earlier draft. Most of them seem to be aimed at weakening the previous proposals, most of them appear to dilute the benefits that the EEC directive sought to give to workers, and none of them has been introduced after consultation with the TUC or any single trade union representing the workers to whom they apply.
  In reply to the TUC, and in defending the absence of consultation, the Secretary of State for Employment brushed off the complaints of the trade unions by saying that the EEC Commission was pressing him hard to implement the directive. But two and a half years ago the Secretary of State inherited a finalised draft that he could immediately have put before Parliament. Had he wanted to look again at what was then proposed, he had two and a half years in which to do so.
  In a terse note to the TUC, the Secretary of State said that he has taken full account of the comments received by the Labour Government. Putting aside for a moment the impropriety of such a statement, the earlier draft was made in the light of those representations, and the changes that have been made now, to which I have just referred, can mean only that the Secretary of State has deliberately turned his back on the views that were then expressed by the TUC and others. If that reflects the attitude of the Secretary of State to the process of consultation, and if it reflects the importance that the Secretary of State attaches to the view of the TUC on legislation which bears directly on the interests of the members, it bodes ill for the future of industrial relations.
  I come now to the substance of the regulations, and in particular the changes introduced, compared with the earlier draft to which the Minister referred. Industrial Relations Legal Information Bulletin No. 195 of 20 October 1981 said:
  "In terms of its likely practical impact, this is one of the most important pieces of employment legislation in recent years."
  How long that claim may be valid depends very much on what the Secretary of State chooses to inflict on industrial relations in the weeks and months that lie before us. It is important, therefore, that Parliament should get it right. Unfortunately, the butchered version that we have before us appears to have suffered from political prejudice—and the interests of the Government's friends in the City—to the detriment of the spirit and intention and, indeed, the words of the EEC directive which gave birth to those regulations.
  For example, we see at the outset that the explicit power to extend the scope of the regulations to territorial waters and the continental shelf has been dropped. That may be mere drafting. Perhaps it is explicit in the regulations that they so apply in any case. Perhaps the Minister will tell us. Article 1 of the directive appears to require that it should be so.
  In regulation 2 a number of interpretations have been redefined, not only in a more restrictive way, but to give such terms as "employee" and "contract of employment" a meaning sufficiently different from that which applies elsewhere in employment legislation, with the inevitable
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  likelihood of ambiguity and confusion, not least in the courts. The hon. Member for Southend, East (Mr. Taylor) raised a point about the word "undertaking". I should like to put his point in a different way. Why has the word "undertaking" been given a more restrictive meaning here than in the 1978 draft regulations? The TUC has already pointed out to the Government that excluding from the scope of the regulations undertakings that are not
  "in the nature of a commercial venture"
  could lead to the exemption of a wide range of employment, including, for example, the Property Services Agency, British Telecommunications, the Ordnance Survey, and so on.
  Regulation 5 provides protection for a worker's contract of employment in the event of his firm being taken over or merged. The 1978 draft declared that an employee's rights arising from the employment contract would be transferred to the new employer, and it provided that any other rights otherwise arising in connection with his employment would also be transferred. Presumably those additional words were deliberately included then—as they should have been—and equally deliberately, no doubt, they have now been dropped. The Minister has not told the House, but we are entitled to know why they were dropped and what will be the effect of the change.
  One likely effect is that certain rights that are often implied terms of employment—for example, equal pay and sex discrimination rights provided by a statute—may not now be regarded as transferred, or at least they will be the subject of legal controversy.
  Mr. Frank Hooley: If those rights are guaranteed by statute, they remain guaranteed. Surely the transfer can have no effect against the statute.
  Mr. Walker: I make no pretence of having legal knowledge of these matters, but I understand from people who are better qualified than I that the contrary may be the case.
  The Minister will know that in this connection the TUC raised a further point. Under the original draft, the new employer would have been jointly and severally liable with the old employer in respect of any claim by the transferred employees, whereas under these proposals, employees' rights against their old employer are transferred to the new employer. That deprives employees of any ability to make claims to industrial tribunals against their former employers or to sue them in the courts.
  The Government replied in the most extraordinary terms when the point was drawn to their attention by the TUC. The Secretary of State said in his letter to the TUC:
  "It was thought that such a provision would be ultra vires the enabling power in section 2(2) of the European Communities Act 1972."
  If there is any weight in that point, why were the 1978 proposals so drafted? I was not the Minister responsible at the time and I had nothing to do with the matter. Why did the Government's draftsmen and advisers—they are still the same people—include in the draft a form of words that the Government now say is ultra vires?
  The second limb of article 3(1) of the Act specifically seems to invite the words that the Government have rejected. It states:
  "Member states may provide that, after the date of transfer within the meaning of article 1(1) and in addition to the

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  transferee, the transferor shall continue to be liable in respect of obligations which arose from a contract of employment or an employee relationship."
  Are we really being told that the United Kingdom Parliament cannot legislate beyond the protections laid down by the EEC? Article 7 of the directive states that the right of any member State to introduce or apply more favourable provisions is not affected.
  Regulation 8 deals with dismissals of employees arising out of transfers. That has also caused anxiety. The regulation states that dismissal shall be unfair
  "if the transfer or a reason connected with it is the reason or principal reason for"
  a person's dismissal. However, the exclusion from that safeguard of dismissal for, as the Minister said an "economic, technical or organisational" reason has caused considerable concern to trade union officers.
  As the TUC has said, the provision introduces major ambiguities into the law on unfair dismissals during transfers, since the new provisions will need to be interpreted alongside the existing unfair dismissal provisions. The TUC adds that the regulation unnecessarily introduces complexity and the lack of definition of the new qualification creates further doubt about the law.
  It is no less a cause for concern that apparently, the specific new grounds that would justify and make fair a dismissal apply equally to an employee who has not been transferred but who is nevertheless affected by the transfer in either the transferor's or transferee's employ. In other words, a large conglomerate that is making yet another killing can—for vague, open-ended, and ill-defined, "economic, technical or organisational" reasons—dismiss an employee or employees elsewhere within its commercial empire who may have believed that their company's further acquisition had little to do with them, and may even have been totally unaware of it.
  Let us consider the hypothetical case of a large engineering group, such as Tube Investments Ltd., which might take over a small engineering firm in Belgium. Because the firm that has been taken over has a well-equipped tool room, Tube Investments Ltd. might instantly—and apparently legitimately, as a result of the provisions—dismiss toolmakers at some remote subsidiary in the United Kingdom.
  Mr. Douglas Hogg: That cannot be.
  Mr. Walker: The hon. Gentleman may say that, but he should consider regulation—
  Mr. Hogg rose—
  Mr. Walker: I hope that the hon. Gentleman will forgive me if I do not give way, but I still have a few more pearls to cast before hogs. If the hon. Gentleman looks at regulation 8(3) he will see that I am reflecting those provisions. I very much doubt whether the result was any part of the intention of the EEC directive, yet it seems the possible effect of the Government's proposed regulations.
  While on the subject of dismissals, I must press the Minister on yet another point—the submission of claims to industrial tribunals by workers who have lost their jobs as a consequence of a merger or takeover. The 1978 draft apparently left the position that the tribunals hearing complaints that arose from such situations should apply the usual two tests: first, was the dismissal unfair; secondly,
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  had there been unfair selection for redundancy? These regulations would seem to eliminate the second test of unfair selection.
  The regulations then provide that where an employer claims an "economic, technical or organisational" reason for dismissal, the industrial tribunal must consider this as "some other substantial reason" for the purposes of the unfair dismissal provisions of section 57(1)(b) of the Employment Protection (Consolidation) Act 1978.
  It has been put to me that the right has hereby been removed from an employee to claim that he had been dismissed for redundancy reasons in the circumstances dealt with by the regulations, and that far from strengthening protection for employees, they are to be deprived of an existing safeguard.
  I draw the attention of the House to the provisions of article 6 of the EEC directive. It sets out in detail the obligations to inform and carry out consultations with representatives of the employees affected by the transfer, or who may be affected by measures connected with it. In view of my recent remarks, I hope that the Government will make it clear that the article may apply much more widely than to the employees who appear to be directly involved, particularly in large groups or conglomerates.
  More specifically, article 6(2) of the directive states:
  "If the transferor or the transferee envisages measures in relation to his employees he shall consult his representatives of the employees in good time on such measures with a view to seeking agreement."
  I am in favour of that. I hope that the House, too, is in favour of it. If we had had such a statutory provision we might have avoided the helicopter hooliganism at Laurence Scott Electromotors Ltd. at Openshaw. Where in the regulations is that provision of the directive? There was such a provision in the earlier draft, but it has been dropped. Why? The absence of such a provision makes it doubtful whether the regulations satisfy the directive's requirements.
  In view of the time I resist the temptation to pursue some of the other disquieting features of the revised regulations, but I must comment on two other matters. The first applies to regulation 4, with which the Minister dealt in detail. That regulation legitimises and gives respectability to hiving-down. Apparently that is a complex device used by receivers, usually with the effect of lining the pockets of asset-strippers and other fly-boys in the City. I have spent a long time trying to grasp the implications of that regulation. Understanding still eludes me.
  I have seen the Secretary of State's reply to the TUC. I understand what he has to say. First, he vigorously defends hiving-down. He says that he does not agree that it is against employees' interests. He argues in his letter to the TUC that regulation 4 protects the interests of employees when hiving-down occurs. The Secretary of State is either contradicting himself or is trying to have it both ways.
  The letter states that regulation 4 is the
  "result of informal discussions with officials of the European Commission."
  My information confirms that such discussions took place and that they arose from the Commission's deep disquiet about hiving-down and the intentions of the United Kingdom Government, as reflected in the regulations.
  I understand that the reason why the House has had to wait for so long for the regulations is that the Commission

  689
  felt that the provision on hiving-down could not be reconciled with the spirit and intention of the directive. I hope that the Minister will comment on that.
  The Secretary of State's letter says that the regulations will not apply where an insolvent company is to be wound up with the consequent loss of all jobs. I thought that one of the purposes of hiving- down was to fillet the saleable parts of a company from the unsaleable part or parts, reorganise them into separate companies, sell off the profitable pieces and let the rest, with any unwanted employees, go down the drain.
  Surely that is what happened in the Brentford Nylons case in 1978 when Lonrho, the unacceptable face of capitalism, took it over. After hearing that case argued before the employment appeals tribunal, Mr. Justice Phillips was sufficiently concerned to say that
  "when amending legislation is under consideration attention ought to be directed by those responsible to the problems which arise in such cases."
  The Government and their Ministers are responsible. Can the Minister say, hand on heart, that in the regulations the Government have responded to that plea? Are they confident that regulation 4 not only responds to the plea but fully satisfies the directive's requirements? I am bound to say that my answer would be "Definitely no".
  One other matter on which I feel bound to make some comment is that of the redress that will be available where an employer fails to carry out his duty to inform and consult under regulation 10. Again, the Minister dealt with that as the regulation spells it out.
  As in the 1978 draft, trade unions are given the right to make a complaint to an industrial tribunal and for awards to be made to the employees affected. However, unlike the 1978 draft, which placed no upper limit on the amount of compensation that could be awarded, the proposals now before the House limit the amount of compensation to two weeks' pay for each employee. It then diminishes that paltry sum by stipulating that any compensation that is awarded will be offset against any projected award made under the redundancy consultation provisions in the Employment Protection Act 1975 or against any employer liability for breach of contract during the period of the protective award.
  From their own indifference towards consultation with the trade unions and the TUC, and now from this derisory penalty for employers who fail to carry out the statutory obligations, we may judge the Government's attitude towards consultation and information generally as an ingredient in good industrial relations. Perhaps it is not merely indifference. Perhaps, for their own obscure reasons, the Government are bent on provoking the trade unions by treating them with derision and contempt whenever the opportunity presents itself.
  At the outset of my remarks I commented on the difficulty faced by Opposition Members in determining how best to respond to the regulations. However, two matters are clear. First, these proposals have been weakened and diluted from those proposed by the previous Government, to an unacceptable degree. Secondly, there are serious doubts about whether these proposals satisfy the requirements of the acquired rights directive. Certainly they are difficult to reconcile with the spirit and general
  690
  intention of that directive. No less important is the fact that they fall short of what experience in recent years has demonstrated to be necessary in such matters.
  I believe that the Government should take away the proposals and revise them in the light of what has been said not only in the debate but by critics and the trade union movement. If they are prepared to do that, Opposition Members may find themselves more able to respond in a warm and welcoming manner. In the absence of any such undertaking, I must ask my right hon. and hon. Friends to demonstrate the unacceptability of the regulations by joining me in the Lobby against them.
  11.13 pm
  Mr. Michael Grylls:As my hon. Friend the Member for Southend, East (Mr. Taylor) said this evening, it is strange that the proposals are in the form of a statutory instrument. If this sort of thing is to be done at all, it is better done in the form of primary legislation, which the House can consider in more detail and at greater length.
  I speak in the debate more in sorrow than in anger—sorrow that a Government who have gone a long way down the path of the demands of businesses and those who wish to see more jobs and have asked for a policy of deregulation to take place right across the spectrum, are now going in exactly the opposite direction and starting to regulate and introduce a new Employment Protection Act, with all the damage that the first one did in destroying jobs. It is sad, because many Conservative Members felt that during the past two and a half years much progress had been made in simplifying the Employment Protection Act 1975, especially as it affected smaller employers and encouraged people to start new businesses.
  How could a small trader who was contemplating passing on his business work his way through the 12 pages of the statutory instrument, possibly comparing it with the earlier directive agreed under the Labour Government in 1977—as did the right hon. Member for Doncaster (Mr. Walker)—to decide whether he could transfer his business? The regulations open up a minefield for the smaller business man, who does not have the time or professional advice to find his way round them.
  I fear that if the legislation is introduced we shall have fewer new businesses. If we make it more difficult to transfer a business—which is part of the free flow of market forces—we must not be surprised if we have fewer businesses. Passing on a business may be part of the process of improving businesses. Alternatively, people may wish to retire and pass on the business to the new generation.
  With great respect to my hon. and learned Friend, to come before the House with such legislation displays—perhaps only in the Department of Employment—a total lack of understanding of the small business man's psychology. The complication of the law puts people off.
  Consultation took place three years ago, but it is sad that there has been no new consultation this summer. The right hon. Gentleman fairly said that there had not been further consultation with the TUC, but neither has there been with the organisations that represent smaller and medium-sized businesses—the unincorporated businesses. Organisations such as the Institute of Directors and the Small Business Bureau, with both of which I am connected, have not been consulted; neither have the other

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  organisations representing smaller firms. That is a bad mark. Suddenly to come forward with draft regulations on the eve of a recession, after such a long time, is extraordinary.
  When the Government are attempting to restore a fairer balance between industry and trade unions it is sad to note that these measures appear to increase the statutory power of trade unions, as they will have to be consulted more and more. I do not believe that the Government are there to do that.
  My right hon. Friend the Secretary of State for Employment has gone on record expressing the Government's opposition to the new statutory employee consultation requirements stemming from the proposed EEC Vredeling directive. However, the regulations lay the ground for precisely such a development. They appear to be going directly against the expressed views of my right hon. Friend on employee consultation.
  I wish to ask about the famous regulation 8(2), which provides that
  "an economic, technical or organisational reason entailing changes in the workforce"
  would obviate having to take on the employee. Those are odd words, and I do not believe that they appear in other statutes. What do they mean? If a new employer taking over a business decides that he can run it more efficiently with fewer people, by introducing automation, for instance, or if, like the French, he wishes to run it as a family business, is that covered under the regulation?
  I attach the greatest importance to the productivity element. If the regulation encourages overmanning and restrictive practices, because the agreements would be passed on and would have to be honoured by the new owner of the business, that is dead against what the Government really want to do and would remove many of the benefits to a new employer of transferring a business.
  Mr. John Ward: Does my hon. Friend agree that the Minister has been saddled with the matter by the previous Labour Government and is doing his best to make a bad job of it? Would it not be better to withdraw the proposed legislation and rewrite it? It appears that my hon. and learned Friend the Minister is saying "The Government have been saddled with it; we do not like it, and we have watered it down as far as possible". Should not the Government withdraw the wretched legislation immediately and think again?
  Mr. Grylls: My hon. Friend has anticipated my remarks. He is absolutely right. I wish to offer my hon. and learned Friend the Minister a tantalising way out. He heavily implied his distaste for the legislation. It must be disagreeable for a Minister to introduce legislation that he does not like. We must help my hon. and learned Friend in his difficulty. One escape route would be for him to withdraw it. Another, if that proves too much, would be to do what the Government did, quite rightly, two years ago in the Employment Act 1980, when they changed the unfair dismissal provision to exempt all businesses of up to 20 employees for the first two years. If all small businesses of up to 20 employees were exempted from this legislation, it would be a great help. The smaller businesses find it difficult to understand such complicated laws. It is yet another difficulty that operates against their starting business.
  What reaction did my hon. and learned Friend receive when he discussed the legislation with the Minister
  692
  responsible for small businesses, who is an effective Minister in that area? It makes nonsense of his job if a Minister in another Department introduces legislation that will damage the interests of smaller firms. It clearly shows the need for someone in the small firms division of the Department of Industry to fulfil the advocacy role of reviewing any new legislation to determine its effect on small firms. We must do that if we are to create the right climate for small business.
  It would be better for my hon. and learned Friend to withdraw the legislation now—which would please the Opposition, although for different reasons—and reconsider it. Let us consider how, by further negotiation with the EEC, the potentially damaging legislation can be further blunted. That would save much damage to the small business community, which all sides of the House say they want to protect.
  11.23 pm
  Mr. Michael Martin: The first few regulations give the impression that they are being introduced to protect the work force on the transfer of business. Having read all the regulations, it is clear to me that they give no protection to either the employer or the work force. The regulations provide that a tribunal cannot consider the problems if there are economic, technical or organisational reasons for a dismissal. Any new employer could drive a horse and cart through that loophole. The Government are performing an exercise in introducing absolutely useless regulations. Even if an employee wins his case at a tribunal, it can recommend only that he be re-engaged. At the end of the day, an employer can pay a sum of money to get rid of an employee.
  As my right hon. Friend the Member for Doncaster (Mr. Walker) said, the regulations provide only the bare minimum. Surely we could have built on the regulations.
  It is sad that when firms are taken over or contracted many of the early casualties are those who have served three years of their apprenticeships. The regulations should protect apprentices who have to serve only a few more years.
  When employment protection legislation was introduced, it could have been argued that in many instances part-time workers were in employment for pin money. Given the present economic situation, it cannot be said that those workers—especially females—are interested only in earning pin money. Employment protection legislation gave little protection to part-time employees and the Government should have considered their position before introducing the regulations. In many instances a part-time worker has to be with a company for about 10 years before he can present his case to an unfair dismissal tribunal.
  The regulations will give respectability to the unscrupulous, who I accept may be in the minority. Equipment is sometimes sold abroad following factory closures. Linwood, in the West of Scotland, once employed thousands. Former employees stood at the gates and watched machinery that they had used pass through on its way to foreign parts. That was a tragedy.
  I have worked in engineering and I have been made redundant. It is not unusual for an engineering company to have both heavy and light engineering sections. Employees if long standing can be transferred from one section to the other. If a new employer decides to close the heavy section of his new company, employees with 20

  693
  years' service in the section can be put out of the door while others with only two years' service are retained. If a worker has two years' or 20 years' service, it is an equal tragedy for the individual if he is put off, but the old argument is that the person with the longest service should have the opportunity to stay on. The regulations should have provided for that. The Government should take the regulations back to the drawing board and redraft them. Consultations should take place. Any employer who is worth his salt should be prepared to consult the trade union movement. If he is not prepared to do so, that is a recipe for bad industrial relations.
  11.28 pm
  Mr. Teddy Taylor: It is interesting that no one has supported the regulations, including my hon. and learned Friend the Under-Secretary of State. My hon. and learned Friend said, in effect, that unfortunately he had to introduce the regulations because a previous Labour Government signed a directive a few years ago and there was no option but to proceed. They are not being introduced because they will improve industrial relations or make Britain a happier or wealthier country. It is an outrage.
  Mr. Harold Walker rose—
  Mr. Taylor: This shows clearly the change in our system of democracy. We are tonight discussing and probably voting upon regulations that no one believes in, that no one thinks will do any good, and that almost every speaker agrees will do a great deal of damage to our industry. We are doing so only because a Labour Government signed a directive a few years ago leading to this regulation, which implements some but not all of that directive.
  Mr. Harold Walker: Of course, the Council of Ministers signed the directive. It was then subject to ratification in this House. It was debated here. Hon. Members on both sides of the House had the opportunity to vote at that time, but they decided to endorse it without a Division and without criticism.
  Mr. Taylor: The directive is not a law; the regulations are. I am sure that the right hon. Gentleman accepts that the regulations are accepted by no one. Nevertheless, the Minister says that we should implement them, simply because of the EEC's decision.
  To avoid any doubt about that, let me quote from a letter written by my right hon. Friend the Secretary of State to the Institute of Directors as recently as 23 September. The institute is deeply concerned about the regulations. The Secretary of State said:
  "We should have liked to have consulted further on the Regulations and … on the amendments which have been made to the draft since the change of Government. However, the Commission has seen fit to launch infraction proceedings against the UK for non-implementation of the Acquired Rights Directive and there was no alternative but to lay the Regulations before Parliament without delay".
  That would probably not matter if this were a minor issue, but, irrespective of our views on the regulations, we must all accept that they represent a major change in our employment law. One consideration that stands out a mile is that if there is to be a change in that law it should be made by a Bill, so that we can propose amendments.
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  Labour Members have suggested some changes that they would like. My hon. Friend the Member for Surrey, North-West (Mr. Grylls) suggested changes that he would wish for. However, we cannot change the regulations. We can say only "Yes" or "No".
  Mr. Jay: We can say "No".
  Sir Anthony Meyer: My hon. Friend is making much of the cross-party agreement on opposition to the regulations, but he is slurring over the fact that my right hon. and hon. Friends dislike them because they confer too many rights on the workers, and that Labour Members dislike them because they do not confer enough. My hon. Friend might at least acknowledge that there is that difference.
  Mr. Taylor: My attitude to this whole business is different from that of my hon. Friend the Member for Flint, West (Sir A. Meyer). He has some very strange ideas. Surely he would accept, however, that if everyone thinks, for different reasons, that these are rubbishy regulations we should chuck them out and start again. That is the only approach.
  Is my hon. Friend prepared to say that he regards the regulations as splendid? I ask him and others of my right hon. and hon. Friends whether they have studied the consequences of the regulations. Do they understand that we are conferring major new rights on trade unions—rights that are not available to non-union employees? One major change is that if, for example, one of my hon. Friends wished to buy my business and we made the transaction without adequate consultation with the work force, every employee affected would be entitled to two weeks' wages as compensation. But does it apply to all employees who are not consulted? Far from it. It applies only to employees who are members of trade unions that are represented in the company. Does my hon. Friend the Member for Flint, West suggest, therefore, that we, as Conservatives, should pass a regulation to ensure that those who are inadequately consulted should receive compensation if they are trade unionists, but get none if they are not? The most obvious consequence of that will be a new recruitment drive by the trade unions in small companies.
  Will my hon. and learned Friend the Minister justify giving this new power and form of compensation only to closed shop companies? Small firms, such as painting or engineering concerns that have no recognised trade union structure, would not be covered by the compensation scheme. Surely it is wrong for that proposal to be advanced by a Conservative Government, and surely it is contrary to the whole trend of our approach to employment law.
  A further major change is that we are creating a new concept in British employment law. It is that an employee can acquire a right to a job in perpetuity, akin to a property right, which subsists independently of the capacity of any employer to continue that employment. For example, if I take over a small business I have to take over all the employees and continue their employment as it was before, unless I can prove to a tribunal that I am getting rid of some of them as a direct consequence of that transfer for economic, technical or organisational reasons.
  Thirdly, where is the justice of the situation? If I take over a firm and am prevented by the regulations from

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  getting rid of any employees, how will that protect original employees I might have whom I might sack because of the new merger or takeover? They will have no rights.
  It seems incomprehensible that regulations should be brought forward that are unfair to employers, will create confusion for small businesses, will make it more difficult to sell small businesses, and will be desperately unfair to some employees, because those who will be protected will be those in the company being taken over and there will be no similar protection for those working for the original firm.
  Because it is late at night, and because hon. Members are fed up and want to go home, there is a danger that we shall allow a major change in employment law to slip through without a great deal of thought. My hon. and learned Friend said that he was reluctant to put through the regulations because he did not like them and that he was doing so only because of a directive signed by the Labour Government. I suggest that it is wrong in principle to bring forward a major change in employment law in regulations and not in a Bill. The regulations will make life more difficult for small businesses. They will add enormously to the powers of trade unions. They will discriminate against firms which are not unionised. Finally, they will create a new concept of employment that will give an employee a right to a job in perpetuity.
  I should be surprised if my hon. and learned Friend can find any industrial organization—the CBI, the Institute of Directors, or even the trade unions—that supports the regulations as drafted.
  We should reject the regulations. We should start again. We should not bring forward major employment law changes in the form of regulations.
  Mr. Waddington rose—
  Mr. Nigel Spearing: On.a point of order, Mr. Deputy Speaker. References have been made to the regulations, which cover 10 pages, and to a mini-Bill, and you have heard about the complexities in the speeches.
  Standing Order No. 3(1)(b) provides
  "that, if Mr. Speaker shall be of opinion that, because of the importance of the subject matter of the motion, the time for debate has not been adequate, he shall, instead of putting the question as aforesaid, interrupt the business, and the debate stand adjourned".
  In the circumstances, and in your discretion, should not that Standing Order apply?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I have re-read the Standing Order and considered the relevant issues. I do not propose to adjourn the debate.
  11.38 pm
  Mr. Waddington: My hon. Friend the Member for Southend, East (Mr. Taylor) said that major changes of this kind should not be brought into effect by regulation, but the practice of the House is to implement European directives precisely in this manner.
  I invite my hon. Friends to bear in mind what was said by the right hon. Member for Doncaster (Mr. Walker). He wants me to take the regulations away to get them toughened up. I do not think that that is the wish of any of my hon. Friends. They object to the regulations because they are too tough and need to be blunted. Therefore, there does not seem to be much common ground between the two sides of the House.
  696
  I remind the House that we are fulfilling an obligation. Some of us may not like the task that has fallen to us, but we cannot get away from the fact that we are parties to a directive, and we should have passed regulations in February 1979 to give effect to that directive. We have taken a great deal of time to try to mitigate some of the damaging effects that might have followed the passing by the House of the original draft regulations. We feel that we have made considerable improvements.
  I shall try to deal swiftly with the points raised by the right hon. Member for Doncaster. As I have said, we have applied a definition to the word "undertaking" which we believe, on the best advice, is the correct definition, bearing in mind European practice. The right hon. Gentleman's mind may be set at rest with regard to obligations placed upon employers under, for instance, the Sex Discrimination Act. All those rights of employees stand.
  The right hon. Gentleman referred to the fact that the transferor and the transferee were not to be jointly and severally liable. Article 3(1) gives a power that is not mandatory. Section 2(2) of the European Communities Act requires us through this procedure to do that which is required of us and to place in regulations those mandatory matters and burdens that are placed upon us.
  With regard to regulation 8, the right hon. Member for Doncaster and some of my hon. Friends do not like the words
  "economic, technical or organisational reason."
  They are, of course, lifted straight out of article 4. They are no invention of the Government. We are merely incorporating in the regulations the precise obligation placed on us by the directive and which by law we are bound now to put into effect through regulations.
  With regard to hiving down, I remind my hon. Friends that the fact that there is now provision in the regulations for hiving down is a tribute to the efforts that we have made while in Government to mitigate some of the more dangerous effects of the directive. We believe that we have gone a good way towards saving jobs by preserving what is a very valuable power in the hands of liquidators.
  I must tell my hon. Friend the Member for Surrey, North-West (Mr. Grylls) that of course I appreciate that people do not like to see any new burdens placed on small employers. I fully understand his feelings on this matter, but I repeat that these regulations should have been introduced as long ago as February 1979. What I said in the letter to the Institute of Directors—I think that it was I, although it may have been my right hon. Friend the Secretary of State—was no less than the truth. Infraction proceedings would have been brought against the British Government if we had not honoured the obligation that they took upon themselves as a result of the activities of the right hon. Member for Deptford (Mr. Silkin). I am not blaming the right hon. Member for Deptford, but that is a fact. It was during the Presidency of Great Britain back in 1977 that this obligation was taken on board.
  Mr. Douglas Hogg: We are told that we have assumed a burden, and I understand that. What terrible fate will befall this country if the Government's attempt to pass the regulations fails?
  Mr. Waddington: Of course no terrible fate will fall upon the Government or upon the United Kingdom, but

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  the fact remains that when a British Government take on an international obligation they are expected to honour that obligation. It is as simple as that.
  The hon. Member for Glasgow, Springburn (Mr. Martin) also mentioned the phrase:
  "economic, technical or organisational reason".
  I have explained that those words are taken straight from the directive.
  My hon. Friend the Member for Southend, East said that it was an outrage to have to implement the directive. I know his views about the EEC, but the fact remains that what we are doing today is precisely what we have had to do on many previous occasions in order to put into British law a Community obligation adopted at the Council of Ministers by means of a directive.
  The Government have done a great deal to mitigate some of the worst effects of the directive. I do not believe that it will have the drastic effect on British business that some people seem to imagine. I have already spelt out how limited will be its effect. It will not be to the prejudice of employees as the right hon. Member for Doncaster suggested. In all the circumstances, I commend once again the regulations to the House.
  Question put:—
  The House divided: Ayes 109, Noes 62.

  Division No. 16]

  [11.45 pm

  AYES

  Alexander, Richard

  Lang, Ian

  Ancram, Michael

  Langford-Holt, Sir John

  Beith, A.J.

  Lee, John

  Bendall, Vivian

  Lester, Jim (Beeston)

  Benyon, Thomas (A'don)

  Lloyd, Ian (Havant & W'loo)

  Berry, Hon Anthony

  Lloyd, Peter (Fareham)

  Blackburn, John

  Lyell, Nicholas

  Boscawen, Hon Robert

  McCrindle, Robert

  Bright, Graham

  Macfarlane, Neil

  Brinton, Tim

  MacGregor, John

  Brooke, Hon Peter

  MacKay, John (Argyll)

  Brown, Michael (Brigg & Sc'n)

  McNair-Wilson, P.(N'bury)

  Bruce-Gardyne, John

  McNair-Wilson, P. (New F'st)

  Buck, Antony

  Major, John

  Budgen, Nick

  Mather, Carol

  Butcher, John

  Maude, Rt Hon Sir Angus

  Cadbury, Jocelyn

  Maxwell-Hyslop, Robin

  Carlisle, John (LufonWest)

  Meyer, Sir Anthony

  Carlisle, Rt Hon M. (R'c'n)

  Mills, Iain(Meriden)

  Clarke, Kenneth (Rushcliffe)

  Moate, Roger

  Cope, John

  Montgomery, Fergus

  Cranborne, Viscount

  Murphy, Christopher

  Dorrell, Stephen

  Myles, David

  Douglas-Hamilton, Lord J.

  Neale, Gerrard

  Dover, Denshore

  Needham, Richard

  Dunn, Robert(Dartford)

  Nelson, Anthony

  Dykes, Hugh

  Neubert, Michael

  Fairgrieve, Sir Russell

  Newton, Tony

  Faith, Mrs Sheila

  Normanton, Tom

  Fenner, Mrs Peggy

  Page, Richard (SW Herts)

  Fowler, Rt Hon Norman

  Patten, Christopher (Bath)

  Gardiner, George(Reigate)

  Pattie, Geoffrey

  Garel-Jones, Tristan

  Penhaligon, David

  Goodlad, Alastair

  Proctor, K. Harvey

  Gorst, John

  Pym, Rt Hon Francis

  Gow, Ian

  Rathbone, Tim

  Griffiths, Peter Portsm'th N)

  Renton, Tim

  Hampson, Dr Keith

  Roberts, M. (Cardiff NW)

  Hawkins, Paul

  Roberts, Wyn (Conway)

  Hawksley, Warren

  Sainsbury, Hon Timothy

  Heddle, John

  Shaw, Giles (Pudsey)

  Hordern, Peter

  Shepherd, Colin (Hereford)

  Hunt, John (Ravensbourne)

  Speed, Keith

  Jopling, Rt Hon Michael

  Speller, Tony

  Kershaw, Sir Anthony

  Spicer, Michael (S Worcs)

  698

  Stainton, Keith

  Watson, John

  Steel, Rt Hon David

  Wells, Bowen

  Stevens, Martin

  Wheeler, John

  Stradling Thomas, J.

  Wickenden, Keith

  Temple-Morris, Peter

  Wilkinson, John

  Thomas, Rt Hon Peter

  Winterton, Nicholas

  Thompson, Donald

  Wolfson, Mark

  Thorne, Neil (IlfordSouth)

  Thornton, Malcolm

  Tellers for the Ayes:

  Waddington, David

  Mr. Selwyn Gummer and Mr. David Hunt.

  Walker, Rt Hon P.(W'cester)

  Waller, Gary

  NOES

  Adams, Allen

  Jay, Rt Hon Douglas

  Ashton, Joe

  Jones, Barry (East Flint)

  Bennett, Andrew(St'kp'tN)

  McGuire, Michael(Ince)

  Brotherton, Michael

  McKelvey, William

  Brown, Hugh D. (Provan)

  McNamara, Kevin

  Brown, Ronald W. (H'ckn'yS)

  Marshall, D(G'gowS'ton)

  Callaghan- Jim (Midd't'n & P)

  Martin, M (G'gowS'burn)

  Campbell-Savours, Dale

  Millan, Rt Hon Bruce

  Cocks, Rt Hon M. (B'stol S)

  Molyneaux, James

  Concannon, Rt Hon J. D.

  Oakes, Rt Hon Gordon

  Cowans, Harry

  Palmer, Arthur

  Craigen, J. M. (G'gow, M'hill)

  Parry, Robert

  Cryer, Bob

  Powell, Rt Hon J.E. (S Down)

  Dalyell, Tam

  Powell, Raymond (Ogmore)

  Davis, T. (B'ham, Stechf'd)

  Prescott, John

  Dean, Joseph (Leeds West)

  Roberts, Albert(Normanton)

  Dewar, Donald

  Sever, John

  Dormand, Jack

  Silkin, Rt Hon J. (Deptford)

  Douglas-Mann, Bruce

  Skinner, Dennis

  Dubs, Alfred

  Snape, Peter

  Duffy, A. E. P.

  Soley, Clive

  Eastham, Ken

  Spearing, Nigel

  Evans, John (Newton,)

  Stott, Roger

  Ford, Ben

  Taylor, Teddy (S'end E)

  Foulkes, George

  Varley, Rt Hon Eric G.

  Fraser, Rt Hon Sir Hugh

  Walker, Rt Hon H.(D'caster)

  Grylls, Michael

  Welsh, Michael

  Hardy, Peter

  White, Frank R.

  Harrison, Rt Hon Walter

  Winnick, David

  Haynes, Frank

  Home Robertson, John

  Tellers for the Noes:

  Homewood, William

  Mr. Allen McKay and Mr. Hugh McCartney.

  Hoyle, Douglas

  Question accordingly agreed to.
  Resolved,
  That the draft Transfer of Undertakings (Protection of Employment) Regulations 1981, which were laid before this House on 26th November, be approved.

  CURRENCY BILL
  Order for Second Reading read.
  Motion made, and Question put forthwith pursuant to Standing Order No. 66 (Second Reading Committees), That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 ( Committal of Bills).

  Statutory Instruments, &c.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.
  Statutory Instruments, &c.

    LANDLORD AND TENANT
    That the Rent Assessment Committees (England and Wales) (Amendment) Regulations 1981, a copy of which was laid before this House on 10th November, be approved.—[Mr. Lang.]
    Question agreed to.

  Statutory Instruments, &c.
  Mr. Deputy Speaker Mr. Ernest Armstrong): With permission, I will put the Question on the four income tax motions together.
  Motion made, and Question put forthwith pursuant to
  Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

  Statutory Instruments, &c.

    INCOME TAX
    That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Zambia) Order 1981 be made in the form of the draft laid before this House on 13th November.
    That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Yugoslavia) Order 1981 be made in the form of the draft laid before this House on 13th November.
    That an humble Address be presented to Her Majesty, praying that on the ratification by the Government of the Kingdom of Morocco of the Convention set out in the Schedule to the draft Order entitled the Double Taxation Relief (Taxes on Income) (Morocco) Order 1981, which draft was laid before this House on 13th November, an Order may be made in the form of that draft.
    That an humble Address be presented to Her Majesty, praying that on the ratification by the Government of the Democratic and Popular Republic of Algeria of the Agreement set out in the Schedule to the draft Order entitled the Double Taxation Relief (Air Transport Profits) (Algeria) Order 1981, which draft was laid before this House on 13th November, an Order may be made in the form of that draft. —[Mr. Lang.]
    Question agreed to.
    Addresses be presented by Privy Councillors or Members of Her Majesty's Household.

  Statutory Instruments, &c.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): With permission, I will put the Question on the remaining motions together.
  Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

  Statutory Instruments, &c.

    INTERNATIONAL IMMUNITIES AND PRIVILEGES
    That the draft International Rubber Organization (Immunities and Privileges) Order 1981, which was laid before this House on 19th October, in the last Session of Parliament, be approved.
    That the draft Common Fund for Commodities (Immunities and Privileges) Order 1981, which was laid before this House on 19th October 1981, in the last Session of Parliament, be approved.—[Mr. Lang.]
    Question agreed to.

  Christmas Tree (Trafalgar Square)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  11.57 pm
  Mr. Ian Lloyd: First, I declare an interest in this subject. I am one of the large number of Members who are ratepayers of Westminster and, therefore, principally responsible for the bill that I propose to discuss this evening. I need hardly add that it is not a parliamentary Bill but a bill that is presented by the Department of the Environment to the City of Westminster for a service rendered to the citizens of London and to many others besides.
  Next, I should like to make it very clear that I hope that nothing that I say this evening will be taken as implying the slightest criticism of the generosity of the Norwegian people in presenting a Christmas tree to the United Kingdom year after year, as they have done, I believe, since the end of the war. We all hope that their generosity will long continue, since it marks a strong affection and friendship between our peoples, forged in war and maintained, one hopes, indefinitely in peace.
  My purpose in raising this issue is quite straightforward. It is to draw attention to three things. The first is the example of what I believe to be grotesquely wasteful expenditure. The second is to illustrate how very difficult it is to obtain information on a subject of this kind and to persuade those responsible to do something about it. The third is to suggest to the public at large that it is not enough merely to bewail the staggering total of public expenditure. What we have to do is to take a critical look at every example that comes within our personal experience or observation. Private vigilance, as I see it, is the best defence by far that the taxpayer or the ratepayer has against public extravagance or waste.
  I should like now to set out the facts. The saga began when I observed by chance last year that the Christmas tree in Trafalgar Square was surrounded by several tiers of permanent scaffolding, on which about five men were working. That struck me straight away as an elaborate way of carrying out a simple task, and I decided to make some inquiries. Therefore, on 9 December 1980 I wrote to my right hon. Friend the Secretary of State for the Environment, drawing his attention to the scaffolding, saying:
  "I have seldom observed so conspicuous and ridiculous a waste of public money",
  and that simpler methods could be used.
  On 8 January 1981 the Under-Secretary of State for the Environment—then my hon. Friend the Member for Hampstead (Mr. Finsberg)—replied that
  "The paving in Trafalgar Square would not stand the weight of the kind of plant you have in mind and we have found from experience that the best way of putting the 650 lights on the tree and achieving a balanced appearance is by the use of scaffolding. It would be difficult to do this from a mobile crane, even if one could get one on to the site."
  He added that the work was undertaken by a private contractor and the bill paid by Westminster city council.
  On 12 January I replied saying that I found the explanation unconvincing and that I would require
  "very convincing proof that the underlying structure will not support the type of pneumatic type which is used on specialised vehicles that are to be seen in most modern cities all over the world today".

  701
  I concluded by asking for a complete cost breakdown of the whole operation.
  On 22 January my hon. Friend replied that the Department carried out the work on behalf of Westminster city council and that I should write to the leader of that council, Councillor David Cobbold, which I did.
  On 19 March the chief executive of the council replied enclosing the details that I had requested but pointing out that he had had to obtain them from the Property Services Agency, a section of the Department of the Environment. The council, he said, had no control over the work, and merely paid the bill. But Mr. Witty's letter contains some interesting information, which I will summarise.
  First, Mr. Witty said that the use of heavy vehicles on Trafalgar Square was forbidden,
  "mainly because they would damage the large stone paving slabs".
  Secondly, he said that the strength of the structure over the subway was unknown. Thirdly, he said that the Property Services Agency had found the use of scaffolding
  "to be the best and safest way".
  Fourthly, he said that it would be
  "difficult to manoeuvre a hydraulic platform close enough to the tree to rig the lights without damaging the branches".
  Fifthly, he said that the PSA was
  "required by law to provide a safe working place for the workmen"—
  something that I should have thought was obvious. Sixthly he said that the contractor and the agency each employed an average of six workmen, although seldom simultaneously. The contractor's men were there intermittently for 13 days and the agency's men for 10, with "other days off site". I worked out that this produced a combined total of 138 man-days, or 1,104 man-hours, to put some lights on a Christmas tree. That is roughly two man-hours per light.
  The bill revealed a staggering total cost of £4,457 and disclosed, first, that it cost £320 to bring the tree by road from Felixstowe; secondly, that the Square was already boarded to distribute the load; thirdly, that the scaffolding was put up—I found this almost incredible—a second time to take down the lights. I have since wondered whether it would have been cheaper simply to pull it down and replace the bulbs.
  There was one other intriguing item. The bill from the PSA, already some £1,320, was subject to a "labour surcharge" of 27 per cent., or £356, which was in its turn subject to VAT at 15 per cent. Why, one wonders, is PSA work subject to such a surcharge?
  On 25 March I replied to Mr. Witty asking for
  "a great deal more information about the nature of the restriction"
  and for the weight distribution that would be involved by using the type of vehicle that the council had and that would be used to replace light bulbs and street lamps.
  On 27 March Mr. Witty replied, with unusual promptness for this saga, that he could not give me an answer about the weight restriction in Trafalgar Square, since the Square came under the control of the Department of the Environment. Moreover, he said that the council owned no hydraulic vehicles, since it contracted the maintenance of its street lighting to the London Electricity Board. He promised to write again when he had more information on the right lines.
  On 11 May I inquired whether this information had been obtained. On 13 May Mr. Witty replied saying that
  702
  he had not heard from the PSA. Its reply was duly received on 28 May. In its letter to Mr. Witty the agency stated that it was
  "unable to give a reply concerning the vehicle weight restriction"
  and that it had
  "inquired of our Directorate of Ancient Monuments and Historic Buildings".
  That body being unable to answer, the matter had been referred to the agency's structural engineers. The letter concluded that
  "The District Works office concerned would not contemplate carrying out this work from a hydraulic platform."
  Having established that the position was very much as I had suspected, I wrote again to my hon. Friend on 9 June, confirming my view that public money was being wasted. I stated that
  "unless I can be convinced that there is no appropriate hydraulic platform which can be used within the defined weight restrictions, as yet unstated, I am not prepared to accept this answer."
  Further, I argued that the cost breakdown provided by the PSA would not stand up to critical examination by any private enterprise or organisation. At that stage I made it clear to my hon. Friend that I was not prepared to let the matter rest. That produced a considered response on 17 July, when my hon. Friend put forward a further difficulty. He pointed out that a hydraulic vehicle placed in the road in front of the National Gallery would require to be used for four days and would cost £2,700
  "even if the work could be done in half the time by using more men."
  He added:
  "The use of a platform would increase the time needed to decorate the tree."
  There were also
  "difficulties in looping the wire around the tree"
  and it would be
  "very difficult to manoeuvre a hydraulic platform close enough for this to be done without damaging the branches."
  He concluded by referring me back to Westminster city council.
  On 27 July I replied that I was not convinced. First, £600 a day struck me as a ludicrous figure for hiring a hydraulic platform. Secondly, no weight restrictions were yet known or had been stated. Thirdly, it is easy to distribute the weight of vehicles; it is no engineering problem whatever. Fourthly, it was possible to save a couple of thousand pounds that would, in any case, repair a lot of flagstones, should any be broken. I saw no reason why the wiring should not be put on before the tree was hoisted. That possibility does not seem to have been examined. I suspected that no one had ever experimented with a hydraulic platform and I could see no reason why it should be either ineffective or unsafe.
  Soon after Parliament reassembled on 22 October I asked in a written question whether the Department had received estimates for the work for 1981. The answer was "No". I also asked for details of the weight restrictions for structures and vehicles and received the following reply:
  "There are no specific weight restrictions on structures"—
  but the reply added that vehicles
  "are restricted in weight to a maximum of 30 cwt when laden and in number to a total of six at any one time".—[Official Report, 22 October 1981; Vol. 10, c. 189.]
  and that they were confined to the south-west corner of the Square.
  On 16 November, in a further parliamentary question, I decided to test whether the Department had reacted to this barrage of inquiry and criticism by commissioning an

  703
  independent study of the problem, possibly by a civil engineer, leading to proposals to reduce the absurd expenditure. The answer was unequivocal:
  "No. The current arrangements are both the safest and most economic."—[Official Report, 16 November 1981; Vol. 13, c. 34.]
  That is not quite the end of the saga. Since the Department had obviously made no inquiries of its own, believing that all was for the best in the best of all possible worlds, I contacted Levertons, a supplier of this type of hydraulic platform vehicle. Levertons, a Unilever subsidiary and an organisation of some standing, assured me, first, that it could do the job without any difficulty. It said that it could even do the job without taking a vehicle into the middle of the Square. Secondly, it said that it would do it this year free as a demonstration, without any charge to the ratepayer or taxpayer. Thirdly, it said that even if it charged normal commercial rates it could do the job for between £1,800 and £2,000, representing a saving of well over 50 per cent.
  As soon as I knew that, I advised my hon. Friend on the telephone last week and he told me that the contract for this year had already been placed. There is very little more that needs to be said, except this: in public expenditure terms the total sum involved in this exercise is small, even if it is on a most conspicuous object. But if public expenditure on all the operations covered by the PSA, on the scaffolding used on public buildings in London or throughout the United Kingdom, is subject to this type of obtuse refusal to look at new methods or new equipment, the cost for the country must run into tens of millions of pounds.
  I hope that my hon. Friend will now "read the Riot Act" where it is necessary and that I shall not have to highlight the matter again. I shall inquire, in very good time next year, whether Levertons and perhaps other organisations have been invited to tender on the basis that it should be possible to erect a Christmas tree in the middle of Trafalgar Square for well under £2,000, even in London, and even with 600 bulbs. Perhaps the Department of the Environment would even offer a prize to the brightest young men in our technical colleges or universities who can think up a scheme for doing that and saving the taxpayer or ratepayer a fortune. On that note, I wish my hon. Friend, his Department and the people of London a merry Christmas.
  12.9 am
  The Under-Secretary of State for the Environment (Mr. Neil Macfarlane): I thank my hon. Friend the Member for Havant and Waterloo (Mr. Lloyd) for his kind wishes, which I immediately reciprocate and which I shall convey to my Department. Before replying to his specific questions and points, I must congratulate him on his copious study of this problem and, perhaps, paint some of the backcloth to the seasonal tradition of Trafalgar Square.
  The whole House will know that it was in 1947 that the city of Oslo first presented a Norwegian spruce Christmas tree as an expression of good will and gratitude for Britain's help to Norway during the Second World War. This mirrored the custom during that war of bringing Christmas trees over from Norway not only for the late King Haakon but for all Norwegians exiled in the United Kingdom to help them to celebrate Christmas.
  I am glad that my hon. Friend paid tribute to that. As my hon. Friend said, now, after 35 years, the Trafalgar
  704
  Square tree has become an annual feature of the Christmas season, providing enjoyment not only for Londoners but for the many visitors to our capital. Therefore, I should like to express through the House the thanks of all for the much appreciated and continuing generosity of the people of Oslo and Norway in arranging to send a tree each year. It is a fine example of the close relations enjoyed between Britain and Norway, which extend into so many areas and I hope that the tradition will continue unsullied.
  The lighting-up ceremony provides a fitting overture to our festive season and from 11 to 24 December the tree becomes the focal point of Christmas celebrations in central London, when hundreds of our people join each evening in a programme of carol singing round the tree. The arrival of the tree is eagerly awaited by the people of London, and in truth it would be very difficult to find anyone in the country who is unaware that the Norwegians provide us with this annual gift.
  It excites public interest not only in the United Kingdom but in Norway.
  This year the tree was cut down on 20 November, in a forest just outside Oslo, in the presence of the British ambassador and a representative of the mayor of Oslo. The tree was carefully selected by the Norwegian Forestry Commission and felled by a forestry student from Oslo university. The media in Norway covered the occasion and interviewed our ambassador. The tree arrived in London at Trafalgar Square at 6 am on 1 December and was in its place, erected at 8 am.
  I come now to my hon. Friend's specific points. I look forward to attending the lighting-up ceremony on Thursday evening, the details of which are drawn up by the office of the Lord Mayor of Westminster. The official switching on of the Christmas tree lights will be performed by His Excellency the Norwegian Ambassador. Immediately after twelfth night the tree will be taken down and cleared from the Square in one day. Therefore, the tree is in position for the better part of 30 days. It is a splendid tradition and I am keen that this debate should in no way be construed as reflecting ingratitude on the part of the people of London for this annual gift from the city of Oslo.
  I am pleased that my hon. Friend does not dispute the acceptance of this annual gift and the pleasure that it brings to both adults and children alike in London and Oslo. He levels his criticism at the non-acceptance of his suggestion for the use of a hydraulic platform for the purpose of decorating or dressing the tree more economically. He maintains that that would be cheaper than the current practice of erecting scaffolding around the tree from which to decorate it. I am not convinced that he is 100 per cent. correct. While I am advised that it would be possible to place a hydraulic platform on the road in front of the National Gallery, it would require a very long arm to reach the tree, which is about 95 ft from the roadway. One would have to take into consideration the fact that there could be a greater prolongation of the disruption to traffic in Trafalgar Square while the arm was in position.
  Some years ago a permanent site was selected for the tree, having in mind the various features of the Square, and a permanent socket has now been made on the Square to receive the tree. If a hydraulic platform were brought on to the Square, it would be necessary to board in the route and the actual site of the platform so as to distribute the weight of the platform evenly. This is needed to protect the large stone paving slabs, and it could add greatly to the cost.

  705
  Inquiries made earlier this year showed that the cost of hiring a hydraulic platform for the four days needed to complete all the preparations would be about £2,700, I am told. That does not mean that we are not open to suggestions from contractors for improving efficiency in the exercise. This year a crane has been used successfully for moving the tree from its transport into a socket, instead of a trolley and gantry. We expect this to be cheaper.
  In that connection, the House will no doubt be interested to know that the contract this year for collecting the tree from Felixtowe docks, transporting it to Trafalgar Square, erecting, dismantling and disposing of the tree, and leaving the Square in a clean and tidy condition, plus the erection of scaffolding—and I emphasise than —for rigging and removal of lights amounts to only £2,540.
  Together with departmental costs incurred in decorating the tree and providing platforms for the lighting up ceremony, we expect that the final bill to Westminster city council will be between £4,200 and £4,300. That compares with £3,224 for 1977 and £4,458 for 1980. That is a reasonable figure for such a symbol between our two countries.
  My hon. Friend may say that the use of a platform would reduce the time taken to decorate the tree, but I am not 100 per cent. certain that I can accept that. The one great drawback of using a hydraulic platform is that it would not be possible for several men to work on different sides and at different levels simultaneously.
  My hon. Friend noted, from his study of the subject, that the length and weight of cable to take 600 bulbs made the decoration of the tree something of a problem, and that it would not be easy to manoeuvre one hydraulic platform close enough to the tree to loop the cable round without damaging the branches. My hon. Friend referred to that as a result of correspondence. I fear, therefore, that all this could add considerably to the time that we would need to have the platform on hire to achieve a pleasing effect.
  There is a further complication, which could prolong the hiring period. Equipment of this sort is hired for a minimum period of one day. There is no question of having a permutation of a number of hours. The hire is for one day, two days, three days or whatever number of days is required. If there were a period of rain between the time of the draping of the cable round the tree and the putting in of the bulbs, it would not be possible to check the lighting circuits until more favourable weather conditions prevailed. Meanwhile, the platform would have to be retained in case it were needed, and be brought back for the dismantling operation.
  My hon. Friend has said that a firm known to him, Levertons, would be able and willing to undertake to
  706
  supply a hydraulic platform and probably offer a very substantial saving to the taxpayer as a result. If that is so, I am sure that my officials would be glad to hear from the firm for future years. My hon. Friend suggested that this year the service would be provided free. There is no specific commitment to future years. If a firm wants to submit a tender, there is no preclusion for future years. My Department will consider a list of suitable firms maintained in the Department.
  I should point out that there is rather more involved in the contract work than the erection and dressing of the tree, as I said earlier. The overall saving may not be as great as expected. We are not talking about vast sums, but of about £4,300. I do not accept that the hydraulic platform is the answer to this. The scaffolding provides acceptably safe platforms all round the tree, and men can get in very close at different levels to the tree without damaging it. It also affords ease of access for any adjustments found necessary either aesthetically or practically when the circuits are tested.
  My hon. Friend levels the accusation that, in his opinion as a ratepayer of Westminster—as I am—the system is wasteful, but I do not believe that that is so. What we have considered during the past 12 months has saved a modest sum of money compared with the expenditure in 1980.
  Finally, I must emphasise and confirm that it is Westminster city council which pays the actual costs involved in the exercise, and the council has always professed itself more than satisfied with the service that my Department has provided over the years.
  The House will welcome the tradition, which we should continue. My hon. Friend and I see eye to eye on the continuing harmony between the people of Oslo and London in this fine symbol. When he talks about the vigilance of individuals and wasteful expenditure, I am surprised that he should raise this issue. I do not know the cost of the debate, but the cost of erecting the tree and transportation provided by the people of Oslo to Felixstowe is about £4,300. That is extremely good value.
  That does not mean that we are not open to suggestions. If my hon. Friend knows of any sources that he may wish to communicate to the PSA through my Department, the doors are always open. I hope that the House will feel that we have had an opportunity to debate this important subject. I believe that the tradition and the symbol are of paramount importance.
  Question put and agreed to.
  Adjourned accordingly at twenty-one minutes past Twelve o'clock.

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  Civil Service Dispute (Government Borrowings)
  Public Expenditure 1982–83
  Public Expenditure 1982–83
  Central Office of Information (Film Unit)
  Central Office of Information (Film Unit)
  Privatisation Measures (Capital Sums)
  Privatisation Measures (Capital Sums)
  Earnings and Taxation
  Earnings and Taxation
  National Insurance Contributions (Tax and Price Index)
  National Insurance Contributions (Tax and Price Index)
EDUCATION AND SCIENCE
  Commonwealth Students
  Commonwealth Students
  Medical Research
  Medical Research
  Inner London Education Authority (Staffing)
  Inner London Education Authority (Staffing)
  Scholarship Centres
  Scholarship Centres
  Adult Education
  Adult Education
  Further Education (Expenditure)
  Further Education (Expenditure)
  Student Grants
  Student Grants
  Schools Council
  Schools Council
  Local Education Authorities
  Local Education Authorities
ENVIRONMENT
  Shellfish Waters
  Shellfish Waters
  General Gordon Place
  General Gordon Place
  New Town Development Corporations
  New Town Development Corporations
  Land Disposal
  Land Disposal
  Rent Rebates
  Rent Rebates
  Construction Industry (Employment Protection)
  Construction Industry (Employment Protection)
  Housing Conditions
  Housing Conditions
  Construction Industry Orders
  Construction Industry Orders
  House Improvement Grants
  House Improvement Grants
  Rate Support Grant
  Rate Support Grant
  Housing Investment Programme
  Housing Investment Programme
  Housing Subsidies
  Housing Subsidies
  Urban Programme
  Urban Programme
  Hazardous Waste Materials (Imports)
  Hazardous Waste Materials (Imports)
TRANSPORT
  Bus Services
  Bus Services
  East-London River Crossing
  East-London River Crossing
  Motorways (Repairs)
  Motorways (Repairs)
  Motorway Service Stations (Overnight Parking)
  Motorway Service Stations (Overnight Parking)
  Heavy Lorries
  Heavy Lorries
  Tachograph
  Tachograph
  Port of London Authority (Corporate Plan)
  Port of London Authority (Corporate Plan)

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

Disabled People: Access Facilities
Lord Campbell of Croy: 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 have yet designated bodies to take decisions on access facilities for disabled people in new public buildings, in accordance with the legislation passed in the last Session.
The Earl of Avon: My Lords, not yet. During the debates on the Disabled Persons Bill, the Government agreed to undertake widespread consultation on this matter. Noble Lords placed particular emphasis on the importance of this consultation and we are considering now how best to reach the widest possible range of interested parties.
Lord Campbell of Croy: My Lords, while agreeing with the consultation and thanking my noble friend for his reply, I hope that these designations can be made before too long. In the meantime, will the Government ensure that no proposed new building such as a shop or a pub can evade the tests now required? Is he aware that this legislation is the result of recommendations made by the bodies which have been considering the problems of access for disabled people and that it will remain a very tangible legacy of the International Year?
The Earl of Avon: Of course, my Lords, I totally agree with my noble friend and indeed would like to endorse those sentiments. As he knows, this is a difficult subject as regards the number of bodies that have been consulted, and I am sure that his Question will have stressed the urgency of the matter and served as a stimulus.
Baroness Masham of Ilton: My Lords, is the noble Earl aware that in the last few weeks I have spoken to many bodies who do not know about this legislation? With the change of Members of Parliament and councillors, does he not think it is very necessary that there should be experts to advise—because otherwise money is wasted in doing the wrong things?
The Earl of Avon: My Lords, I am very grateful for the noble Baroness's question and of course I will make sure that her remarks are brought to the right authority. I think the difficulty is that the Disabled Persons Act contains provisions on many different aspects of access and Section 6 requires implementation by statutory instrument, but that other sections have
1198
immediate effect and therefore have greater priority. The Secretary of State for Social Services has agreed to co-ordinate a circle of advice from several departments concerned, and this will be ready soon.
Lord Segal: My Lords, in view of the fact that everyone, as he grows older, is potentially a disabled person, would not the Government be content to accept the opinion of this House on the matter?
The Earl of Avon: My Lords, I am grateful to the noble Lord for his suggestion and will think about it myself.
Viscount St. Davids: My Lords, will the noble Earl not agree that, obviously necessary as this legislation is, the inevitable result will be a Quango?
The Earl of Avon: My Lords, at the moment of course the noble Viscount is a bit ahead of the gun and I do not think that if a Quango were thought to be necessary the Government would necessarily reject it.
Lord Campbell of Croy: My Lords, is it not a fact that the original clause which was accepted by the Government, having been moved by me this summer, asks the Government to designate a body? Therefore it is expected that these will be existing bodies and so it will not be necessary for a new body such as a Quango to be instituted.
The Earl of Avon: My Lords, I am very grateful to my noble friend for that clarification.

Arts Council Grant
2.40 p.m.
Lord Jenkins of Putney: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will maintain the real value of the Arts Council's grant.
The Earl of Avon: My Lords, I am pleased to say that the Arts Council's grant for 1982–83, which was announced by my right honourable friend the Minister for the Arts on 4th December, will be increased from £80 million to £86 million.
Lord Jenkins of Putney: My Lords, is the noble Earl aware that the worst fears of the arts organisations have not been realised and that it would be churlish to deny the Minister at least two cheers for his achievement? Would he, however, ask his colleague to look again at the case of the Theatres Trust, where a grant of £15,000 has been cut to £10,000 and an intimation given that next year it may be cut to nil? Is the noble Earl aware that, while I must declare an interest as the director of that trust, it is the general view that that trust, set up by Act of Parliament, performs a very useful public service in safeguarding theatre buildings? May I ask the noble Lord whether he

1199
would not agree that it should not be denied a small grant of public money so that it may continue to fulfil this important function?
The Earl of Avon: My Lords, I am indeed grateful to the noble Lord for his two cheers. As far as the Theatres Trust is concerned, I understand that the present grant was a once-and-for-all one. While we fully recognise the difficulties which the trust faces in these difficult times we cannot undertake any continuing commitment.
Lord Cottesloe: My Lords, is my noble friend aware that in 1960 the Arts Council grant was £1,500,000 and in 1965 £3,250,000, and the fact that it has now been increased to £86 million shows that its real value has been continuously and very greatly increased, and that this should be a matter not indeed for complacency but for greater satisfaction to everybody concerned?
The Earl of Avon: My Lords, I am very grateful to my noble friend for adding the third cheer.
Lord Strabolgi: My Lords, while welcoming the increased grant, may I ask the Government whether more financial help could not be given to the national orchestras, as these are finding it very difficult to break even at present?
The Earl of Avon: My Lords, I think that that is a slightly different question. But, basically, anything in which the Government have been interested in this particular round has been increased by the same percentage.
Lord Shinwell: My Lords, is there not a great deal to be said for what my noble friend Lord Jenkins is asking? When everything seems to be going wrong, let us retain something worth while. The only proviso I would make is that, if he wants an increase in the arts grants, he must be prepared for a rejection of some of his other ideas.
The Earl of Avon: My Lords, I am not, of course, quite sure to what the noble Lord refers, but, if he is referring to what I am thinking of, I do not think the Government give a grant towards it. If I may say so to the noble Lord, Lord Strabolgi, I think that this is a question for the Arts Council itself, which actually gives to the live orchestras, rather than for the Government.
The Earl of Gosford: My Lords, does the Minister agree that, with such a disproportionate amount of the Arts Council budget going to large organisations, it would be better for these large organisations to receive some kind of direct grant, which would leave the Arts Council free to encourage regional arts associations to stimulate local authorities to look after small groups, such as individual artists and small troupes, in their own areas?
The Earl of Avon: My Lords, I think that we are in danger here of getting rather too muddled between the various and different parts of the arts grant. We
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are being asked at the moment about the Arts Council. There are, of course, other grants to the arts—to the major bodies, anyway—and very substantial grants to the regional sectors as well.
Lord Leatherhead: My Lords, may I ask the noble Earl—I do so as a former county council finance committee chairman—whether it would not be a pity if the public were placed in a position where they could criticise us for subsidising chorus girls from the rates?
The Earl of Avon: My Lords, we leave the subsidising of the live arts to the Arts Council.
Lord Jenkins of Putney: My Lords, would the noble Earl agree that at this moment it would be appropriate for me to do no more than request him to ask his right honourable friends, when the time comes, to have another look at the problem of the Theatres Trust?
The Earl of Avon: My Lords, of course I will undertake to do that.

Nuclear War: Conditions in Aftermath
Lord Jenkins of Putney: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government under what circumstances they envisage the return of capital punishment and the introduction of forced labour in the event of nuclear war.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, it would he for the regional commissioner to decide, through the commissioners of justice of emergency courts, on sentences appropriate to the offence in the prevailing circumstances, and to decide on the use of the statutory power to direct labour.
Lord Jenkins of Putney: My Lords, would the noble Lord agree that last month the noble and learned Lord, Lord Gardiner, asked a Question on the subject and that the noble Lord the Minister wrote to him in a rather unsatisfactory way? Would he agree that this matter is now de-restricted and that noble Lords who wish to know what the Government say about it are, I believe, themselves able to refer to a copy of the circular? Is it not the case that the Government must either spend thousands of millions of pounds in providing a proper civil defence or, much better, spend the money on conventional defence and abandon nuclear weapons? Will the noble Lord at least suggest to his colleagues that this last option be examined?
Lord Belstead: My Lords, I agree that I wrote to the noble and learned Lord, Lord Gardiner, a few weeks ago, as a result of a Question which was asked by the noble and learned Lord. So far as a comparison between nuclear war and conventional war is con

1201
cerned, I was not aware that the noble Lord, Lord Jenkins, was in favour of either.
Lord Shin ell: My Lords, may I ask the Minister this question: If, unfortunately, there should be nuclear war, would capital punishment really be necessary?
Lord Belstead: My Lords, there would be exceptional circumstances.
Lord Brockway: My Lords, are not these provisions rather ridiculous in the circumstances of a nuclear war? Is the noble Lord aware that the background paper of the British Medical Association says that, even in the deepest shelters which have been prepared for the administrative class, all would be choked and asphyxiated to death, and that, therefore, these provisions in nuclear war circumstances are almost obscene?
Lord Belstead: My Lords, I must say that to listen to the noble Lords, Lord Jenkins and Lord Brockway, is not really quite the way to start a Monday at the beginning of a week. I think the way I should reply to the noble Lord, Lord Brockway, is that it is necessary, in the event of war, to make provision for the administration of justice. The sensible way to go about it seems to be the policy which was the policy of the previous Government, and which remains the policy of the present Government, which is that, broadly speaking, the penalties for peacetime offences would remain, but decisions would have to be taken for exceptions in particular cases.
Lord Jenkins of Putney: My Lords, is the noble Lord aware that, without being in favour of any kind of war at all, it is possible to think that conventional war is somewhat preferable to nuclear war? Is he further aware that there are many people inside this House, as well as outside it, who take the view that the nuclear weapon is not a weapon of war at all?
Lord Belstead: Mercifully, my Lords, that question does not arise from the original Question.

BBC External Services
2.49 p.m.
Lord Kilmarnock: 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, in view of the statement by Lord Trefgarne on 26th November (col. 918) that the Government would have wished to consult the BBC more fully on the proposed closure of certain external services, but were precluded from so doing by the short notice they were given of the Opposition's Motion in another place on 26th October, they will now undertake to return to the BBC external services management the decision how and where to apply the £1½ million saving required of them.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): No, my Lords. To do as the noble Lord suggests would cut across the Royal Charter and the Licence and Agreement under which my noble friend the Foreign and Commonwealth Secretary prescribes the hours and languages to be broadcast and other services to be performed by the external services.
Lord Kilmarnock: My Lords, while thanking the noble Lord for that reply, which I am afraid does not give me a great deal of encouragement, may I ask him this: While not disputing the Government's right, under existing arrangements, to prescribe and deprescribe the external vernacular services of the BBC, would he agree to discuss with the BBC the possibility of merging the Spanish and Latin-American services into a single Ibero-American service, in line with other major European broadcasters? Would he accept such a solution if it could be achieved at no additional cost within the framework of the overall saving required of the external services?
Lord Trefgarne: My Lords, the Government have to take their decisions in respect of which services are to be continued, the times at which they are to be broadcast, and so on, in the light of the foreign policy considerations which govern our affairs with the particular countries concerned. It was for that reason that we arrived at the decisions that we did about the service, for example, to the Spanish nation to which the noble Lord referred just now.
Lord Hooson: My Lords, does that mean the Government are unwilling to consider with the BBC perhaps the restructuring of some of their foreign services? If, for example, there were vacancies in this Latin-American service, could it not be so adapted that there would also be the beaming of some services to Spain? If restructuring is possible under the limit of the budget which the Government have set, are the Government against the BBC doing that?
Lord Trefgarne: My Lords, the foreign policy considerations to which I referred are paramount, but that is not to say that the Government would not be flexible in considering an arrangement such as the noble Lord, Lord Kilmarnock, or the noble Lord, Lord Hooson, have suggested. But there are considerable technical difficulties in the way of the proposal which the noble Lord now puts forward.
Lord Byers: My Lords, would not the noble Lord get in touch with the BBC to see what can be done? If it is not going to cost any more money, why should we not have the extra service?
Lord Trefgarne: My Lords, we are constantly in touch with the BBC on this and related matters, but I say again that there are technical difficulties in the way of the proposal which has been advanced.
Lord Strabolgi: My Lords, will the Government consult with the BBC about the transcription services as they may find, if they go into it a little more fully, that it is not quite so easy as they seem to think to do

1203
without a subsidy in competition with other countries, who subsidise theirs?
Lord Trefgarne: My Lords, that is another question, but I went into this matter very fully when we discussed the other day the Unstarred Question of the noble Lord. I do not think that t have anything to add to what I said then.
Lord Morris: My Lords, if the reason for proscribing the Spanish and Italian vernacular services is now solely a matter of foreign policy, which is different from what we have learned from Ministers in the past—that it is purely for economic reasons—would my noble friend be kind enough to say what is the reason behind this foreign policy decision?
Lord Trefgarne: My Lords, the noble Lord misunderstood what I said. The foreign policy considerations to which I referred lead us to establish a pecking order of priority of these services, and it was that reason which persuaded us to conclude that the Spanish and Italian services could not continue.
Lord Morris: My Lords, is my noble friend suggesting that Anglo-Spanish and Anglo-Italian relations are of no importance whatsoever?
Lord Trefgarne: No, my Lords, I did not say that.
Lord Kilmarnock: My Lords, will not the noble Lord agree that on 26th November at col. 918 of Hansard he said:
"We would have wished them to have consulted the BBC more fully and to have informed your Lordships in parallel"?
Will not the noble Lord agree that I am now giving him this opportunity, and will he not take it up? Furthermore, would he not finally agree that, in view of the current tensions in Spain in particular, it is particularly desirable to continue direct broadcasting to that country?
Lord Trefgarne: My Lords, I went into this matter very fully when we discussed the other day the Unstarred Question and when I answered the questions of the noble Lord in considerable detail in respect of the Spanish service. I do not think that the House would wish me to repeat all that now.

Weights and Measures Act 1963 (Dried Fruits and Vegetables) (Amendment) Order 1981
2.54 p.m.
Lord Lyell: My Lords, I beg to move that the draft Weights and Measures Act 1963 (Dried Fruits and Vegetables) (Amendment) Order 1981, which was laid before your Lordships' House on 19th October, be approved, and to speak to the draft Weights and Measures Act 1963 (Coffee and Coffee Mixtures) Order 1981, which was laid before the House on 19th October and the draft Weights and Measures Act 1963 (Grain and Farinaceous Products) Order 1981, which
1204
again was laid before your Lordships' House on 19th October.
For the convenience of your Lordships, it is my intention, unless any Member of your Lordships' House were to disagree, to move together the three orders which stand in my name. Although they cover widely varying types of prepacked foodstuffs, all of them share the common characteristic of being necessary so as to meet our obligations to the European Communities under a directive which is commonly referred to as the Prescribed Quantities Directive. More formally and more correctly, its reference is 80/232/EEC. This particular directive was adopted in January 1980. We are required to implement it within two years of that date.
Those of your Lordships who have studied this directive closely and have noted the large array of products that it covers might be surprised that the three orders which are before your Lordships House today are sufficient to discharge our obligations. This is because, as an optional directive, it merely requires member states not to prohibit the marketing on their own territories of those products included in the directive in the prepacked quantities specified in its annexes. Naturally enough, these are expressed in metric units. It does not require that only those quantities be marketed. It follows from this that where United Kingdom law currently places no restriction on the sizes in which the relevant products may be prepacked we are already in full compliance with the directive. This is the case for all of the non-food items and for many of the food items within the scope of the directive.
Your Lordships will, however, know that for most of the staple foodstuffs which are sold in the United Kingdom our weights and measures legislation has required for many years that these be prepacked only in specified and easily related sizes. These prescribed quantities are important to consumers as they enable ready price comparisons to be made between different sizes and different brands of goods. However, for most of the directive's food items we have long since anticipated the agreement that was finally reached on ranges of sizes and have already passed the subordinate legislation to permit the metric sizes in question. Only in a very few cases was agreement in doubt before the directive was adopted and it is these items that are the subject of the three orders which we are considering today.
I must stress at this stage that nothing in the directive requires us to prohibit sizes that we already allow. Specifically this means that we do not have to abandon our existing Imperial quantities. Your Lordships will be aware that it is not part of this Government's policy to compel industry by law to go metric or to seek to influence its own judgment on the timing of any change-over to metric sizes. Consequently, there will be no further compulsory metrication orders. Packers of the foods which are the subject of the second two orders will therefore have the option of marketing them either in metric or Imperial sizes, provided of course that they select sizes from the permitted ranges. The position is slightly different for the foods which are covered by the Dried Fruits and Vegetables Order. I shall come later to that point.

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Your Lordships might possibly consider it proper that I should try to deal with each order in a little more detail. Your Lordships will note from Article 2 of the Grain and Farinaceous Products Order that the foodstuffs which this order covers are concerned with such things as barley kernels, pearl barley, rice and, of course, sago, semolina and tapioca which are familiar to many of your Lordships in the eaten form every day. Not all of these are included in the directive but they are often packed and marketed by the same suppliers. Therefore it makes sense to have the same ranges of sizes for all these products, as is already required under the Weights and Measures Act 1963. The particular size of 375 grammes is not required by the directive but it has been included at the request of the trade to run in parallel with the popular existing Imperial size of 12 ounces. Further, although the existing 1 oz and 2 oz sizes have been deleted from the permitted Imperial range, they may still be marketed in the United Kingdom as the order raises from ½ oz to 75 grammes (I understand that that is in the region of 2¾ oz) the quantity below which there is freedom to pack in any size.
The title of the Coffee and Coffee Mixtures Order more readily indicates its coverage. However, I should explain that this does not include the product commonly known as "instant coffee". This particular product is dealt with by a rather different industry and was the subject of an order introducing metric sizes in July 1978. However, we are now extending prescribed quantity control for the first time to Viennese coffee; that is, coffee with fig flavouring. This and the other mixtures covered by the order have been included so as to make the total coverage consistent with separate regulations made by the Minister for Agriculture, Fisheries and Food in the previous Administration, the noble Lord, Lord Bishopston, from whom we shall be hearing soon no doubt. These particular orders define the products which may be described as coffee or coffee mixtures. This has been accepted by the trade involved in this particular brand line and other interested parties as a sensible step which avoids potential confusion.
The order also makes it clear that coffee bags are subject to the same control as coffee which is packed in the more conventional "loose" form. I understand that for these purposes we can call it the "percolator" form; the kind of beans or powder that one puts straight into a percolator or brews up in the saucepan. In this connection I have to draw the attention of your Lordships to the extracts from the Joint Committee on Statutory Instruments, copies of which are available to your Lordships.
The Coffee and Coffee Mixtures Order includes a few metric sizes not required by the directive. Some are the equivalent of existing Imperial sizes but others simply reflect market trends. More importantly, we have freed packs above 5 kg from prescribed quantity control. This makes it possible for catering packs, which I understand represent about 60 per cent. of sales in the United Kingdom, to be sold without the danger of prosecution. This arises because although the legal restriction on the sizes of these packs applies only to retail sales, the growth of cash-and-carry type stores often leads to what are essentially catering packs
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finding their way, perfectly legitimately, to the retail market.
Before I leave finally this particular order, your Lordships may care to note that attached to it, on pages 4 and 5 of the order, is a list of statutory instruments. We hope that this should be helpful to trade and other interests, as I am sure it will be very helpful to your Lordships if you wish to go right through the fascinating details to be found there, as the list shows those orders and regulations which have been made to date amending those parts of the 1963 Act concerned with either prescribed quantities or with container marking requirements. Your Lordships would be able to work out from this that it is only jam and a few related items where prescribed Imperial quantities have not been either replaced by, or supplemented by, metric quantities. These few remaining products are likely to remain in Imperial sizes for some years to come, as it would be imprudent to introduce metric sizes until agreement is reached within the European Community on what the metric range should be. I am given to understand that this is not proving easy, mainly because many of our European partners are themselves in Imperial sizes and are not sure what metric sizes would be most suitable for these particular products.
Finally, I should like to turn to the first order which stand in my name, the Dried Fruits and Vegetables (Amendment) Order. Unlike the first two orders to which I spoke—the second and third on the Order Paper—this particular order does not contain any Imperial sizes. This is for one particular and, no doubt, sound reason; it is because they were phased out by the previous Administration. What the order does is merely to add two metric sizes, 1.5 kg and 7.5 kg, included in the Prescribed Quantities Directive but not allowed for in our own existing legislation. There is of course no compulsion on the trade to use either of these sizes but this merely gives them permission and allows them to do if it is convenient.
The interests who might have some concern in these particular orders—trade, consumer and enforcement interests—have been fully consulted on all three orders in my name today. There has been a wide measure of agreement on these three orders. Existing separate marking regulations required dual marking—that is to say, a declaration of quantity in both Imperial and metric units, for the foods covered by the second and third orders on the Order Paper. This will protect consumers' interests for so long as both metric and Imperial quantities are marketed. My Lords, these orders, which I move together, are necessary to meet our obligations to the European Community, and we believe that they command a wide measure of support from trade interests and indeed from all the other interests in the country. I beg to move.
Moved, That the Weights and Measures Act 1963 (Dried Fruits and Vegetables) (Amendment) Order) 1981, laid before the House on 19th October, be approved.—(Lord Lyell.)
3.7 p.m.
Lord Bishopston: My Lords, your Lordships' House will be grateful to the noble Lord, Lord Lyell, for the way in which he has introduced this measure and for the detailed comments he has made in support of it.

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Your Lordships' House may be equally relieved that I am going to make only a few comments and pose one or two questions. It will be accepted, as the noble Lord has said, that these orders are necessary to implement our obligations under the Community regulations. I am not sure to what extent I had some responsibility in my previous life in another place, but we accept that these changes are necessary—especially to comply with the requirement that we take action within two years. They are necessary also to enable our food producers and food processors to supply the home market and especially the export market. Although the noble Lord said that this is something in which we have the freedom to proceed at the pace we require, with Imperial as well as with metric measures, in fact, especially for the export markets, the pace will be dictated or influenced by the requirements of that market, particularly among our fellow EEC members as they also go towards the implementation of the EEC regulations. This is important if we are to compete with our competitors in Europe and in other places. So the metric system will have to come in at a pre-determined pace. This is a point we note and do not necessarily disagree with.
I am very pleased that the noble Lord has said that the organisations have been consulted and I believe he has given some indication of the agreement which they have with the orders. I was going to ask what reactions resulted but apparently they were nothing to worry about. It would be interesting if the noble Lord could say whether there were representations about the cost to the industry because it does of course mean alternative packaging, weighing, processing and so forth. I should like to know if the noble Lord can give us any indication of the cost to the food industry and eventually, of course, to the consumer.
In these orders the prescribed range of metric quantities relating to pre-packaged food is specified and one wonders if there is any time limit for any producers and those in the trade to comply with the orders—or is it indefinite and a situation where one changes only to suit the demands of the trade and especially the export market? The noble Lord made a brief reference to the first report of the Joint Committee on Statutory Instruments, which had some rather critical comments to make on the draft Weights and Measures Act 1963 and Coffee and Coffee Mixtures Order. It is true, of course, that the memorandum from the Department of Trade does help to explain some of the questions raised by the committee. I quote from the committee report. They say:
"So far as coffee bags are concerned, however, it seems to the committee that what the order says is not precisely what it means. It provides that the 'contents of coffee bags shall be pre-packed only if they are made up in one of the following quantities by net weight'."
They go on to say:
"Literally that seems to contemplate the pre-packing of the contents of coffee bags independently of the bags themselves … the sense intended to be conveyed, however, as is confirmed by the memorandum of the Department of Trade, is that coffee bags may be pre-packed only if the contents of the bags in a pack are of the specified amounts".
We have the benefit of the Department of Trade memorandum. I am wondering whether, when the
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order goes out, the explanation of the Department of Trade and the explanation we have had from the noble Lord this afternoon will be quite as clear to the industry and indeed to those who have to operate the order. On the question of coffee, the joint committee had some grounds for discontent, as they say. It would he useful to know if any action has been taken to clarify the matter a little more when the order goes out to those who have to operate the order eventually. With those few comments we support the order.
Lord Derwent: My Lords, my noble friend went rather quickly and got me slightly muddled. I understood him to say that instant coffee is not coffee. What is it?
3.13 p.m.
Lord Lyell: My Lords, I hope your Lordships will forgive me springing swiftly to my feet, first of all to try to answer as many as I can of the questions asked by the noble Lord, Lord Bishopston, as well as to preclude any further real fireball from my noble friend Lord Derwent, as well as others that might come down. I hope my noble friend will permit me to try to deal with some of the points raised by the noble Lord, Lord Bishopston, and I think I may be able to reply to what instant coffee comprises or not from some fascinating footnotes to the orders which are before your Lordships.
The first major point raised by Lord Bishopston concerned export markets, and he was worried about the metric packs that the packers and indeed the food industry would be able to package in metric form. I understand, in regard to the two orders concerning coffee and grain and farinaceous materials, that until now these two substances were only permitted to be packaged in Imperial measures. The orders we are moving today will permit the trade to package these substances in metric form. I understand that the food processing and packaging industry are very keen to be able to do this. We hope that the orders settle the fears of the packaging industry.
With regard to any possible additional costs, either to the industry or to consumers, arising from these orders, no critical points have been raised with us either by the consumer interests or by the industry. I understand that we have even been praised by some organisations. There was one letter on grain and farinaceous products from the National Council of Women. I understand they raised minor points about the Imperial sizes to be retained. This point was successfully dealt with by letter from the Government. So I hope that some of the more important fears expressed by consumer interests, from this body and others, have been settled satisfactorily.
The noble Lord raised one point of what I might call criticism from the Joint Committee on Statutory Instruments. I understand that the committee produced some suggested amendments. It could be argued that the drafting could have been improved, but certainly we are satisfied, and we understand that the trade and consumer interests affected by the small minutiae of these orders are satisfied, that the meaning is clear to them. I hope that answers the fears that were raised by the noble Lord, Lord Bishopston. If I have missed any point of substance, I hope he will

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permit me to scrutinise his remarks in greater detail and write to him on those and any further points he wishes to raise.
My noble friend Lord Derwent asked me a question about instant coffee. I am given to understand that the substance covered by the orders we are discussing is coffee in beans, or ground into a form which is acceptable to percolators or other machines which will produce breakfast ready or evening ready coffee, whereas I understand that what is technically known as instant coffee is an entirely different product. I referred to instant coffee being covered by other regulations. I have one or two interpretations, and I see there is an excellent comment on carbohydrates which I think covers many of the products in instant coffee. It gives some excellent details about neutral polyhydroxyl alcohol containing carbon, hydrogen and oxygen, in which the hydrogen and oxygen occur in the same proportion as in water, but this does not include any polysaccharide which is not metabolised by man. I think these carbohydrates are the contents which are added to what we call in our non-technical way instant coffee. I have not anything more detailed to assist my noble friend with regard to the products that we call instant coffee. Given the polysaccharides and the other interesting products, I am sure my noble friend will permit me to write to him with a precise and brief definition of what we call instant coffee, as against what is more normally drunk straight from the percolator, or roasted in beans or taken in other forms.
Lord Bishopston: My Lords, before the noble Lord sits down, would he not accept that if his definition of instant coffee was put on every jar sold there would be grounds for further confusion?
Lord Lyell: My Lords, I shall not attempt to follow the noble Lord's comment. He may well find his remarks spreading far and wide beyond the normal record of your Lordships' House. We may also need spectacles and reading glasses—the hobby-horse of one or two noble Lords—to read all these products on these two, four and six ounce jars in the supermarket. Speaking for myself, I find it hard enough to decipher the metric content or the Imperial content in the jars and to decide which of the two jars gives me better value. We will certainly consider what the noble Lord has said. I will not attempt to follow his turn of phrase. I thank him for his support and beg to commend the order.
Lord Leatherland: My Lords, I think the noble Lord used the phrase "coffee roasted from the leaves". Surely it is from the beans and not from the leaves.
Lord Lyell: My Lords, I am afraid I am not able to answer the noble Lord's point without notice. If I may consult the record, I will see if the noble Lord is accurate on that point, and I may get in touch with him.
On Question, Motion agreed to.

Weights and Measures Act 1963 (Coffee and Coffee Mixtures) Order 1981
Lord Lyell: My Lords, I have already spoken at length to this Motion. I beg to move.
Moved, That the draft Weights and Measures Act 1963 (Coffee and Coffee Mixtures) Order 1981, laid before the House on 19th October, be approved.—(Lord Lyell.)
On Question, Motion agreed to.

Weights and Measures Act 1963 (Grain and Farinaceous Products) Order 1981
Lord Lyell: My Lords, I beg to move the third Motion standing in my name on the Order Paper.
Moved, That the draft Weights and Measures Act 1963 (Grain and Farinaceous Products) Order 1981, laid before the House on 19th October, be approved.—(Lord Lyell.)
On Question, Motion agreed to.

Common Fund for Commodities (Immunities and Privileges) Order 1981
3.20 p.m.
Lord Trefgarne Lord Trefgarne rose to move, That the draft order laid before the House on 19th October be approved.
The noble Lord said: My Lords, I beg to move that the Common Fund for Commodities (Immunities and Privileges) Order 1981 be approved. With your Lordships' permission, I will speak at the same time to the International Natural Rubber Organisation (Imminities and Privileges) Order 1981. These orders, which are made under the International Organisations Act 1968, were laid before Parliament on 19th October.
The purpose of the first order is to confer on the Common Fund the immunities and privileges which the organisation's members are required to grant under the terms of Chapter 10 of the Common Fund Agreement. As many of your Lordships may know, the formation of a Common Fund for commodities was proposed at the United Nations Conference on Trade and Development at Nairobi in 1976. Subsequent negotiations led to agreement on a treaty text in 1980 which we signed in December that year. The agreement will come into effect when it has been ratified by 90 states which between them provide the necessary contributions to the two accounts which comprise the fund. The deadline for this is the end of March next year. So far 69 states, including 47 developing countries, have signed the agreement, and 12 of these have ratified. One of our partners in the European Community, Denmark, has already ratified the agreement. Others will do so as they complete the necessary formalities. For our part this order will complete our own procedures, allowing the United Kingdom to ratify the agreement.
The fund will support the operations of the international commodity organisations which associate themselves with it. Commodity organisations which operate buffer stocks and meet other requirements could draw on the first account of the fund. An

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example is the International Natural Rubber Organisation which is the subject of the second order before your Lordships. To do this, the individual commodity organisation must deposit with the fund one-third of the amount of money required to finance its buffer stock. It can then draw on this sum as it needs it. If it needs more, it can borrow from the fund against the security of guarantees from its own members and warrants for the stock it has acquired. The fund in turn will provide these loans either from the unused cash deposited by other commodity organisations, or borrow, if necessary, from the commercial market. The first account of the fund is therefore intended to provide a reserve of finance to reduce the direct cash contributions by the members of the individual commodity organisations.
The fund will also operate a second account, financed by voluntary contributions, to pay for other measures such as research and development which will be carried out by individual commodity organisations. So far no organisations which would draw on the second account only have been established, though there is a possibility that the negotiation of an international jute agreement may be concluded in the New Year, and discussions on tropical timber are making steady progress. The Government have made a voluntary pledge of £4.3 million to the second account. We expect that this sum and the paid-in part of our assessed contribution to the first account will be required during the first four or five years of the fund's operations.
The Government have welcomed the creation of the fund, and have invited the organisation to site its headquarters in London. The Dutch and Philippine Governments have issued similar invitations, but no decision has yet been taken. Should the fund not establish its headquarters here, then clearly the effect of the orders we are considering will be slight. It will however facilitate such activities as the fund might engage in here—like placing contracts or arranging meetings. But if the fund sets up its headquarters here, as we very much hope, then the effects of this order are such as to treat the fund on all fours with other comparable international organisations.
I now turn to the second draft order before your Lordships which concerns the International Natural Rubber Organisation. This is one of the international commodity organisations which is expected to associate with the Common Fund. The organisation is to operate a buffer stock to help to stabilise the price and supply of natural rubber, thereby benefiting both producers and consumers of this important commodity.
We and 28 other countries brought the International Natural Rubber Agreement into force provisionally in October last year. In order to bring the agreement into force definitively it must be ratified before the end of this year by countries who between them account for 80 per cent. of both production and consumption of the world's natural rubber. Enough producing countries have now ratified and the target for consuming countries will be met when we and our partners in the European Community join the United States and other consuming countries which have already
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done so. The making of the order will enable us to do this.
The headquarters of the organisation is situated in Kuala Lumpur. Unlike the Common Fund Agreement, the natural rubber agreement requires that we do no more than accord legal personality to the organisation. The order does no more than that. Its effect will, therefore, be very much more limited than the order for the Common Fund. The United Kingdom would very much welcome the opening of a branch office in London by the organisation. In that event, the approval of Parliament would, of course, be sought to any order conferring immunities and privileges on the office and its staff.
I very much hope, therefore, that your Lordships will also approve this second draft order, thereby signifying your Lordships' recognition of the important work to be performed by the International Natural Rubber Organisation. I beg to move the first motion standing in my name on the Order Paper.
Moved, That the draft Common Fund for Commodities (Immunities and Privileges) Order 1981, laid before the House on 19th October be approved.—(Lord Trefgarne.)
Lord Brockway: My Lords, as one who over the years has urged support for the Common Fund both from Labour Governments and Conservative Governments without much success until recently, I should like to welcome the decision of the Government, inadequate though it is.
3.28 p.m.
Lord Davies of Leek: My Lords, having heard the Minister's clear exposition, I think that, to save the time of the House, I shall reply to both orders because from looking at them and from where they originate there can be no doubt that the noble Lord and the other side of the House will get full support for the order that is being moved.
I turn first to the rubber agreement. As one of the people who worked for many, many months on the commodity agreements—and we had the opportunity of calling on people, discussing the matter with various persons and digesting papers—it is of paramount importance that, so far as the commodity of rubber is concerned, we do not once again see, as some of us saw in the 'thirties, the tragic collapse of rubber agreements. It is fascinating to notice that if we look at the countries that are included in both these Common Fund agreements we find that, despite what we sometimes hear referred to as powerful warlike talk, the exigencies of economics and the necessity of people learning to live together force into committees men with many opposite points of political view.
It is good to see the Socialist Soviet Republics and the United States on both papers. In the one case there were 170 nations and in the other there were 50 nations which sat together to discuss the vital problems of the allocation of necessary supplies throughout the world for mankind. I pay tribute to all the Governments concerned—there happens to be a Government of a different political colour at present—for their constructive work of bringing together to fruition the Common Fund.
If noble Lords wish to look at it further—and I shall

1213
not quote from it and take up the time of the House—the agreement establishing the Common Fund for Commodities, which was discussed in New York in 1980 and 1981, is Cmnd. 8192. The Natural Rubber Agreement is Cmnd. 8018. I shall assume that this House would not like to me read out chunks of it, for noble Lords can read it for themselves, but I simply want to add what I would call a little caveat. Before I go into the matter of immunities and privileges, the idea of buffer stocks has been discussed for many years. All that we on both sides of the House can do is hope that we find a successful solution to this problem of the distribution, consumption and reasonable price of natural rubber.
Do these two orders imply an extension of the Diplomatic Service? They will probably involve the provision of staff for services. I see that the noble Lord, Lord Trefgarne, is shaking his head and I am glad of that, but if the organisation comes to London, as he says, there may be problems in that direction. I shall not take a long time, but I should like to raise one or two matters.
The Common Fund will be negotiating not only with Commonwealth countries but with foreign countries and, from time to time, with diplomatic missions; and policy objectives will be needed in order to administer the fund. Britain has varied and wide overseas relations, and not many men in the street realise that, according to the official handbook for this year, Britain 1981, we had diplomatic relations with 150 countries and 20 of these have special treaty relations and special immunities. Despite our economic and social problems at home, it is often forgotten that British development assistance is providing for more than 130 countries. In itself this fund will mean that for the British taxpayer there will be a need for taxation to meet these obligations to the underprivileged, and the British Government, whatever party may be in power, must have continuity of foreign policy.
As the world is growing smaller, immunities and privileges grow; through modern, sophisticated and instantaneous communications—teleprinters and satellites—the smallness of the world is making these immunities and privileges grow. It would be interesting to know how many organisations have immunities and privileges. Before this noble House passes this order, can the noble Lord briefly tell the House what those immunities and privileges really mean?—because from time to time one has seen in the press criticisms of the privileges that some people retain. Nevertheless, it is recognised that in an increasingly interdependent world the attainment of overseas objectives and the ability to exert influence in support of them can be provided only through international co-operation. If we are to have that international co-operation, at times it is absolutely necessary for immunities and privileges to exist to cover those important discussions and the people who take part in them.
Will many organisations, like the International Monetary Fund and the Export Credits Guarantee Department, also be involved? There is a criss-cross of responsibilities; sometimes there is overlapping. Can it be avoided? Those of us who have experienced discussions at international conferences both here and elsewhere often believe that an overlapping and a waste
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of effort take place. This is no criticism of the Government, but life has become so complex that it is time to reconsider the number of international organisations that are increasingly growing in the need to build up a civilised system of society.
This fund has grown out of the second Lomé Convention, as noble Lords will see if they look at the White Paper; and I promise not to read it. This not only brings in the Commonwealth, but it will ultimately bring in the North-South dialogue or the Brandt Report, and the ACP countries—Africa, the Caribbean and the Pacific areas—and Asia. At the Venice Summit in June 1980 these points were discussed. A number of commodities are exempt from terrific increases in taxation. When this fund is established—we use the phrase, Stabex, meaning to stabilise exports—in many cases it is liable to help areas (in particular areas which have been exploited for phosphates and very rare and important minerals) to obtain an economic price and value for their natural resources.
I see that I have been speaking eight minutes, which is quite enough on an important and agreed order like this. Without taking up too much time of this noble House, I simply want to say that we, on this side, congratulate the Government on pushing this forward, and in this direction it would be churlish of me not to give them more strength to their elbow for establishing these funds as being a concrete process towards better international understanding and thereby helping the underprivileged nations.
3.37 p.m.
Lord Trefgarne: My Lords, I am greatly obliged to the noble Lord, Lord Davies of Leek, for his general reception to these two orders. I shall simply take the points that he raised with me. I understand that there are 26 international organisations which enjoy these privileges in London at the present time. That excludes the Commonwealth Secretariat, which is perhaps not quite in the same class. There are 11 high officers, as they are called, of those organisations who enjoy certain personal privileges with regard to their official acts, and 1,071 other officers.
The general policy of Her Majesty's Government in regard to privileges and immunities of international organisations is that they should be granted primarily on a basis of functional need. The principle of the independence of the organisation and the equality of its member states, in particular that no state should derive undue fiscal advantage from the funds of the organisation, are also important considerations. Your Lordships may well feel that it would not be appropriate for me to go into further detail on the general principles on this specific order, but I hope that I have said enough to set the noble Lord's mind at rest.
On Question, Motion agreed to.

International Natural Rubber Organisation (Immunities and Privileges) Order 1981
3.38 p.m.
Lord Trefgarne: My Lords, I beg to move.
Moved, That the draft order laid before the House on 19th October be approved.—(Lord Trefgarne.)
On Question, Motion agreed to.

Slaughter of Animals (Amendment) Bill [H.L.]
3.39 p.m.
Lord Houghton of Sowerby: My Lords, I beg to move that this Bill be now read a second time. This Bill is a somewhat improved version of the Bill that I introduced in the last Session, which was not proceeded with owing to pressure of business, and I am very grateful to the noble Baroness the Leader of the House for facilitating the Second Reading of the Bill so early in this Session. The Bill deals with the slaughter of animals for food and, broadly stated in a sentence, it restricts the export of ritually-killed meat to animals which have been pre-stunned under the conditions of the Slaughterhouses Act 1974 and corresponding Acts for Scotland and Northern Ireland. It does not propose to amend the law of the domestic situation in any way.
A short brief on this Bill has been circulated to a number of noble Lords by the RSPCA, and I am very grateful for their help and support in this matter. My case is that the exceptions which have been granted for many years from the observance of our general laws of slaughter to the Jewish and Mohammedan communities were never intended and never envisaged as being a licence for export, but that they have become a licencee for export. This Bill proposes to put curbs upon it.
I think it should be said that the record of Governments on the humane slaughter of animals is quite deplorable. Parliamentary history shows that our present laws on humane slaughter came about by the dogged persistence of a small group of Members of both Houses of Parliament who sponsored Private Member's Bills when Governments were apathetic, when farmers were indifferent, and when the meat trade was concerned about the look of the Sunday joint.
The history begins, as noble Lords would expect, with a Bill applicable only to Scotland; the Slaughter of Animals (Scotland) Act 1928. I have to mention this particularly because that Act, although it applied then to Scotland, laid the foundations of the subsequent legislation and incorporated the principles, and I think revealed the intentions behind them, and they were clearly stated at the time of the legislation in 1927–28. Slaughter in licensed slaughterhouses by licensed slaughtermen and by more humane methods became compulsory, although to begin with not all food animals were covered by it, and of course in those days they did not have the most modern equipment for the purpose. But it was then, in the 1928 Act applicable to Scotland, that the position of the Jewish community was dealt with. It was decided in another place, and by Parliament eventually, that the Jewish community should be excepted from the provisions of the Act. That was done to avoid deep offence to Jewish members of our society.
Then later on in the proceedings on this same Bill in Scotland the question of Mohammedans was raised. Mohammedans were brought into the Scottish Bill because of the lascars in the crews of ships constantly in Scottish ports, and it was estimated that there were about 1,000 lascars on board ships in Scottish ports most days of the year. They had apparently been in
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the habit of killing animals according to the Mohammedan method on board ship in Scottish ports, but, as the Act proposed to make that unlawful and brought all slaughterings ashore into licensed slaughterhouses, provision had to be made for the Mohammedans who were at any time in Scottish ports. The second exception was therefore made for animals slaughtered by Mohammedans for the food of Mohammedans in the 1928 Act.
It is part of my case that the exceptions granted in Scotland in 1928 and repeated in English law in 1933, and continued in the substantive Act of 1957 (1958 for Scotland) and in the consolidated Acts of 1974 for England and Wales and 1980 for Scotland, were intended to meet the needs of Jews and Mohammedans respectively in this country and were never contemplated as extending to export. Although at every subsequent stage in the progress of legislation through Parliament the religious exceptions came under repeated criticism, they were confirmed by subsequent Acts and they were allowed to rest where they had been all along and had become accepted.
The 1933 Act laid down more firmly the intention of Parliament to protect animals from unnecessary suffering by imposing the humane killer on all slaughtering of cattle and calves in licensed slaughterhouses, and making a mechanical electric stunner compulsory wherever electric power was available. While there was no enforced protection for sheep and lambs, the 1933 Act gave an option to local authorities to include them, which 85 per cent. of local authorities did.
Then the seal of permanence and of acceptance of the present law was laid down in the 1957 Act, and the 1958 Act for Scotland. As I pointed out, the subsequent legislation, the more recent legislation, consisted of consolidation measures. The 1957 Act, and the 1974 consolidated Act, stopped all private slaughtering. All animals had to come to licensed slaughterhouses. All slaughterers had to have licences issued by local authorities, including those permitted to slaughter under the exceptions provided in the law, and these exceptions have survived time, experience, and criticism. They were put there and they stayed there to meet the requirements of the two communities concerned, but they were neither put there nor can they claim to stay there to supply customers anywhere and everywhere, yet that is what the Minister has said is permitted under the present law, and what the Government have no proposals to change.
Allow me to remind the House exactly what the statutory provisions are.

"(i) animals to be killed instantaneously by means of a mechanically operated instrument; or,

(ii) by pre-stunning by mechanically operated, or electrical means so as to render the animal insensitive to pain until death supervenes; or

(iii) by such other means as may be prescribed by Regulations",

under the Act. Such regulations have been issued, for example, to authorise the use of carbon dioxide as an anaesthetic for pigs under regulations issued in 1958. The Act excludes from these provisions animals slaughtered,

"(a) by the Jewish method for the food of Jews and by a Jew duly licensed … by a Rabbinical Commission [the composition of which is set out in a schedule to the Act]; or

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(b) by the Mohammedan method for the food of Mohammedans and by a Mohammedan".

I must draw the notice of your Lordships to the difference between the conditions and qualifications of the slaughtermen for Jews and Mohammedans respectively. While the Mohammedan, like the Jew slaughtermen, must be granted a licence by the local authorities, the Jewish authorities at the highest level insist upon proper training and expertise in their method of slaughter. Mohammedans are subject to no comparable test of qualification so far as I am aware. This is an anomaly which the Bill does not deal with, and perhaps it should. At any rate, the Board of Deputies of British Jews feel quite strongly about this, and if your Lordships give the Bill a Second Reading I have no doubt this matter could be discussed in Committee.
Perhaps I should mention that the Moslem method of slaughter is now permitted for a much larger community than that of the Jewish faith. Home consumption of halal meat is rising with the expanding Moslem population, which is now probably well over 1 million. That is quite apart from exports. There is bound to be a conspicuous rise in the quantity of meat produced from animals slaughtered under the exception given to Mohammedans for use of their own method of slaughter. That is perhaps an additional reason why the Mohammedan method of slaughter, and qualifications for it, should come under closer examination.
To return to the main purpose of the Bill, I wish to make it plain that it does not ban exports. The Bill requires meat for export, except for the destinations mentioned in the Bill, to be pre-stunned under the option of the conditions of the Act. The Moslem method would not, I am advised, accept instantaneous death, but unconsciousness till death is apparently not ruled out under the Mohammedan religious laws. Some companies have already been able to accept contracts for exports subject to the pre-stunning condition, and I would hope that might become acceptable as a general rule. The export problem—I have to be quite honest about it—is a Mohammedan problem and it is there that we must look for the solution.
I wish to be clear on another point. My case for the Bill does not rest on the comparative humaneness of the several methods of slaughter. I decline to be drawn into that argument; others may not. In fact, from the press cuttings I get, there is a good deal of controversy about ritually slaughtered animals anyway, but I am not in that argument. There is no perfect method of killing. There are many complaints about the methods which are obligatory under the Act: inefficiency, defective equipment, incompetent slaughter—men and the horrors of the conveyor line are all blamed for causing unnecessary suffering. What may be wrong with our methods of slaughter should be put right.
My case is that the Act lays down the preferred methods of slaughter chosen by public opinion and Parliament over many years to be the law of the land. There are no options available to any but the two religious groups. That is the fact and I draw no inferences from that to the detriment of other methods of slaughter. I have no need to. Exclusions from
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the obligations of the law imposed on every other section of the people and on all other religions clearly occupy a special place in our understanding and respect. By the same token, I say that those who gain from that understanding and respect should show the same to us who are not of their persuasion and who may resent, as I do, having the compact to which we came in 1928, and hold solemnly to this day, turned to a wider purpose than we intended. If the religious communities concerned are to be spared what is unacceptable to them, as they are under the law, then the rest of us are entitled to be asked to be spared what is unacceptable to us. We have to live together, and there is little sign that these reciprocal feelings exist in relation to the current volume of exports of animals killed under the Mohammedan method.
That brings me to my final plea to the House. I ask that we should be saved from the social disturbance and bitter feelings now prevalent in areas where so-called ritual slaughter is being brought into the environment against the will of a substantial section of the people locally. I do not know whether the Minister reads his press cuttings and whether he is fully informed of the controversy raging in about 16 towns in England, Scotland and Northern Ireland at the present time over the proposed introduction of slaughterhouses for halal meat production.
"Row over ritual killing", Glasgow; "Ritual slaughter storm grows", Worcester; "Ban religious slaughter: MP" and "Veterinary Association and ritual slaughter" are some of the headlines, and I Will not weary the House with the accumulation of press cuttings on this subject. As I said, about 16 cases are current. I know of one or two where local opposition has been removed, or at least minimised, by an agreement of the halal meat company to pre-stunning when using the slaughter-house for their method of slaughter. But the position appears to be beyond the control of local authorities and deep divisions are unavoidable. Halal meat companies come to where disused slaughterhouses can be restored for their purpose without further planning permission being required. So far as I know, there has not been a single case where planning application was necessary, and had it been necessary it would certainly have gone to a public inquiry.
The number of slaughterhouses in this country in current use has been falling, and it is the disused slaughterhouse which is taken as the base for the new development, and for that, all that is necessary is a fresh licence, which the local authority has little option but to grant without being accused of withholding a licence unreasonably. The attempt of one authority to secure by—law powers to regulate the method of slaughter in its area failed because although the local authority passed the necessary resolution for by—law purposes, it was not confirmed by the Secretary of State. One wonders why, in these days of democracy and consultation with the people, there cannot be more local option in controversial matters of this kind. Why confine local option to drink in Wales? There are other opportunities for it.
I do not want to introduce any bias into the discussion, but I feel I must point out that the directors of the meat companies concerned are not all British subjects; they have no claim on the tolerance of our people in this matter, and I emphasise again that I take

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my stand on the law as it was intended to be, as Parliament has continued it, and I believe we must now come to Parliament to ask for some check to be imposed on the misuse of concessions granted for one purpose which are now being diverted as well to another.
Governments are ready enough to close loopholes elsewhere, and there are many cases where it is alleged that provisions of legislation passed years ago are being distorted, abused and exploited, and amending laws should be introduced. The Government themselves feel that the immunities granted years ago to trade unions have been stretched far beyond the original intention and they are introducing a Bill to correct that. But on this matter we get the reply that if the meat is destined prima facie for the religious communities concerned, no matter where they are, export is permitted under the present law.
If literally that is so. then I think that morally it should cease to he. If that is what the Act means, can we not look at what Parliament intended and amend the law accordingly? That is what the Bill does. It draws the line at Britain becoming the halal slaughterhouse of Western Europe. ft says that if Mohammedans will agree to pre-stunning, they can export to whom they like, so long as they are Mohammedans. But we cannot permit a growing export trade to shelter behind the immunity granted to Mohammedans out of respect for their religion and the good will towards them as fellow citizens.
I realise that, as nearly always in these circumstances, there are huge vested interests rapidly growing up: trade, capital investment, employment. I know that in many people's minds these are the real issues today. But I must keep on saying that the Bill interferes with no trade or commercial interest so long as it is conducted under the conditions imposed on the rest of the British people. As it is, this unhappy development is straining race relations in areas hitherto free from any tension, and I say categorically that race relations work both ways.
The happiest outcome would be for those concerned to adjust their trade to meet substantial public opinion; otherwise, the law should step in to end a potential source of social disharmony. I think that we should stop it somehow. Even if the Ministry of Agriculture is not concerned with the social aspect of this matter, the Home Secretary surely is. I ask your Lordships to send the message to those who will listen by giving the Bill a Second Reading and my case for it your approval. My Lords, I beg to move.
Moved, That the Bill be now read 2a.—(Lord Houghton of Sowerby.)
4.3 p.m.
Lord Hooson: My Lords, the shortness of the Bill raised hopes that this might be a very short debate, but the noble Lord who has just sat down has obviously devoted a great deal of time and attention to his speech as he has devoted a great deal of time and attention to writing and speaking on these subjects, and one sympathises with his viewpoint. But I am bound to say that when I received the Bill and the supporting memorandum, two questions came to my mind: first, was the Bill really necessary; and, secondly, was it wise? I must say that my tentative answer to
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both questions was, no; but I believe that I listened with an open mind today to the noble Lord, Lord Houghton of Sowerby, to see whether he could persuade me to the contrary. I must say that following a speech in which one learnt, very interestingly, the history of the development of slaughterhouses in this country, I simply cannot see the need for the Bill.
We are today a multicultural society, and that sense of multiculture is reflected in, among other things, the exceptions provided in the consolidated Slaughterhouses Act 1974, which the noble Lord has quoted. As he rightly pointed out, we had very early on recognised the distinctive Jewish view of slaughter, and in time we came to acknowledge a similar view as Mohammedans, though in a different way, of course. Therefore, we expected those two minority cultures (as they were) within our community from the requirement of our Slaughterhouses Act, and it seems to me that it was a very sensible thing to do.
Since that time no doubt the Mohammedan element in our community has grown a good deal, and it is likely to grow more in the future. They have their own slaughterhouses in different parts of the country, and I cannot see that they would need, or that there would ever be a case for saying they would have to have, a planning permission distinct and separate from that usually obtained for normal slaughterhouses. After all, a Mohammedan slaughterhouse or a Jewish slaughterhouse has to be licensed, and is open to inspection in exactly the same way as is one of our slaughterhouses. A Mohammedan or Jewish slaughterhouse is not itself physically different; what are different are the provisions for the slaughter.
When I ask myself the question, is the Bill necessary? it seems to me that the RSPCA and the noble Lord would be much keener on animals being slaughtered in licensed slaughterhouses in this country and exported as carcases, rather than their being exported live. That is what I have understood their viewpoint has always been. Whereas we in the West may disapprove of the Jewish method of slaughter or the Mohammedan method of slaughter, and if it was left to our personal choice, no doubt we would resort to and advocate the pre-stunning method, is it not much better to have the animals that are exported to those countries exported in carcase form, having been slaughtered in this country according to the cultural ritual?
The noble Lord is well aware of the fact that these days a number of people have raised the question that he did not wish to deal with—I am not criticising him for not dealing with it—of whether the pre-stunning method is in fact as painless a method as we in this country have accepted it to be. Grave doubts have been expressed on that matter.
It appears to me that, with the development within our country of very considerable minority cultures of this kind—they have the throughput in their abattoirs, as we have in ours—in a way it is inevitable that an export trade would develop. I imagine that the export trade is relatively small, probably quite small, and it seems to me that on balance it is wise not to interfere; I do not think that it is necessary to do so. From our point of view in this country, holding the views that the majority of us hold, it is probable that we

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would like to see our sheep slaughtered in licensed slaughterhouses here, rather than exported live.
4.7 p.m.
Lord Nugent of Guildford: My Lords, I have listened with interest and sympathy to the noble Lord, Lord Houghton of Sowerby, supporting a good cause, as usual, and doing it with his customary vigour and enthusiasm. Let me say immediately that when we fasten our minds on it, the whole subject of slaughterhouses is inevitably distressing, however the animals are killed. I can well remember years ago being conducted around the Chicago stockyards. That made a tremendous impact on my mind, and as a result of it I seriously considered becoming a vegetarian because, as all of us do, I dislike seeing animals killed and animals in large numbers being prepared to be killed. This is a very unattractive, horrid subject. Of course, the logic of vegetarianism is such that if you are really to succeed, you would have to give up drinking milk or eating eggs. You cannot have milk without slaughtering bobby calves, you cannot have eggs without slaughtering the day-old cockerels, and therefore you would be very restricted in your way of life. I think that we in the Western world in the main are not prepared to face that.
However, I sympathise with the noble Lord in his interest and his concern to try to reduce pain and suffering in the slaughterhouse. I make the point solidly that anyone who knows anything about a slaughterhouse knows that it is a very unattractive place, however the animals are killed, however carefully they are killed.
The noble Lord inveighed against the records of past Governments. But the fact today is that slaughterhouses are carefully controlled, they are licensed and inspected by local authorities, and if anything is wrong or incorrect in terms of hygiene or practice, it is very quickly picked up and corrected. If it is not, the slaughterhouse would lose its licence. So the general conditions today are such that we can at least be sure that this business is done as efficiently and humanely as possible.
But there is the exception for the domestic market, for domestic consumption, which the noble Lord accepts, of ritual slaughter for the Jewish community and the Moslem community. He accepts—and I think the noble Lord is quite right to do so, in the attitude of tolerance which is common to all of us— that these religious communities have strong feelings about these methods, and therefore these exceptions should be allowed although they conflict somewhat with our own ideas about the most humane way of slaughtering.
The noble Lord's point is solely to deal with the export of animals slaughtered by the ritual process—in other words, without stunning—and this is, as he rightly says, mainly concerned with the Moslem community, because there is not much export that I know of for the Jewish community. I understand there is already a significant trade, as the noble Lord has said, in the export to North Africa and to the Middle East of animals that have been ritually slaughtered; and, of course, inevitably certain slaughterhouses arc tending to concentrate on this particular demand. But the logic of prohibition (which the
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noble Lord, Lord Hooson, has already picked up) would be that these countries are still going to get supplies of meat, and, therefore, if the animals are to come from here, they would have to be exported live, and the export of live animals, however well it is done, is a pretty rough business.
However well they are shipped, it is a miserable business for the animals; and I am sure the noble Lord, Lord Houghton, would not wish to see that. If these animals are going to be slaughtered, they are much better off to be slaughtered here, they really are. To condemn them to being shipped abroad, spending several days in a ship—not a very good ship, as a rule—is really adding to their suffering; it is certainly not reducing it. Alternatively, the countries concerned may be able to get their supplies from somewhere else, but, again, the overall degree of pain and suffering for the animals involved will not be reduced. So the logic here is that the noble Lord's admirable purpose of reducing pain and suffering for animals, if they are to be slaughtered for human consumption, is not going to be achieved; it is only going to be diverted to some extent, and possibly, indeed, it could be increased.
I am sure the noble Lord, with his great experience of public administration, sees the logic of these arguments. It really is irrefutable. The noble Lord makes the point that the law did not intend to provide the exception for an export market. Even if that argument were sound—and the Act says nothing about it either way—it is a natural development in the world as it is today, with supplies of all sorts moving freely about, that a certain amount of this ritually-slaughtered meat should go for export. I do not think there is any great vested interest involved that I know of; it is just a normal movement of trade.
So much for the arguments. But if there is a case here, which the noble Lord has made out, that the trade is growing to an extent that is causing serious local disturbance, would it not be better to wait for the report of the Farm Animal Welfare Council, who are studying the whole question of the operation of slaughterhouses and will he reporting, I understand, next year? Then we shall have an expert, objective report before us which would help to guide us as to whether new legislation is needed, whether some restriction or some control should be established here. This new creation, the Farm Animal Welfare Council—and I congratulate my noble friend and his right honourable colleagues on setting it up—is a valuable body set up to cover just such sensitive, difficult problems as this. I would have thought that the right plan for all of us in dealing with this particular matter is not to legislate in a hurry now but to wait until we have all the facts before us, and then we can decide whether legislation is really needed.
It is normally the practice of this House, and certainly my own personal inclination, to give a Second Reading to a Private Member's Bill so that it can go to a Committee. But, here, this simple one-clause Bill does only one thing, and that is to prohibit the export of these ritually-slaughtered animals. I just cannot agree with that: there is simply not the evidence to support it at present. When we know that we are going to get an expert report in the next year or less—and perhaps my noble friend will be able to tell us when we shall get it—surely the right thing to do is not to proceed with

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this Bill but to wait until we get that report and then look at the matter again. I most earnestly hope that the noble Lord, Lord Houghton, will not press the Second Reading of this Bill to a Division, because I am afraid that if he does I shall have to go in the opposite Lobby to his.
Lord Donaldson of Kingsbridge: My Lords, before the noble Lord sits down, would he agree with me that the real evil of all slaughtering is not the act of slaughter but the driving of an animal, which has been happy on a farm for two or three years, perhaps, into a lorry, out of a lorry and on to a queue at the end of which animals are being killed, whether after being stunned or by being turned upside down and having their throats cut? The last stage is a 15-second affair. The thing which is really bad is the whole process leading up to it, whether it is done after stunning or by ritual slaughter.
Lord Nugent of Guildford: Yes, my Lords, I entirely agree with the noble Lord, Lord Donaldson. Having been a farmer for most of my life, I accept that farming is a process of creating life and destroying it. The process of sending animals to market, whether they be chickens, pigs or whatever they are, is an odious one; but it is part of the process of feeding the community, and one has to accept it. It is the total process, and especially when the animals are being driven into the slaughterhouses, which is most objectionable. I sympathise with the noble Lord; I feel just the same about it. On the other hand, if we need to eat meat to keep alive one has to accept the logic of it.
4.17 p.m.
Lord Somers: My Lords, this is a very short and simple Bill, but, I feel, a very necessary one. The noble Lord, Lord Hooson, questions whether it is necessary. I take exactly the opposite view. It has become necessary, as we heard from the noble Lord, Lord Houghton, because of changing circumstances. The export of these ritually-slaughtered animals has increased enormously; and I do not think that it is right that animals that have been slaughtered by, after all, a method which we allow only on tolerance should be exported for the sake of money-making.
As to the question of pre-stunning and the Moslem method, there is some uncertainty as to whether or not the Moslems object to pre-stunning. Some years ago, I remember, the Imam of Woking said that they had no objection to it at all. I think that is worth looking into if we wish to go on exporting this meat. Possibly we could make some regulation by which only pre-stunned carcasses were sent. But, apart from that, I think this is highly necessary because there is no doubt that, human nature being what it is, the moment any opportunity for making money offers itself, conscience too often goes to the winds. I think that this is unfortunately one of those cases, and I therefore sincerely hope that the House will give this Bill a Second Reading.
4.20 p.m.
Lord Brockway: My Lords, my first word must be one of gratitude to my noble friend Lord Houghton of Sowerby for introducing this Bill. It is characteristic
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of him and of the many contributions he has made to this House. I think that perhaps he ought to be known as "Lord Houghton for Animal Welfare" Fifty years ago I was a member of an all-party delegation to examine the methods of slaughter. I think it was in the year 1930. I remember it as vividly as though it were yesterday. We saw both the gentile and the Jewish methods of slaughter. The gentile method was that of stabbing a calf in the neck. The animal writhed as though in pain for several minutes; but I was assured that the brain had been destroyed and that this writhing was only a physical reaction. I hope that that was true.
Lord Somers: My Lords, I am sure that the noble Lord would wish to make it clear that that method is now entirely outlawed in this country.
Lord Brockway: My Lords, I was describing something that happened 50 years ago. The Jewish method was to push cattle into a barrel, the barrel to revolve, the beast's neck hanging out. The neck was then slit and the blood poured out. Both methods were utterly distasteful and we then recommended that there should be stunning of all animals before they were put to either of these two methods. Subsequent legislation agreed to that.
I do not think that there is any doubt, despite what has been said during this debate, that the original intention was that this method should apply universally. It was not applied to exports. This Bill quite generously recognises Jewish feelings on this matter and the feelings of the Mohammedans who have so largely grown in numbers in this country since those years; and it recognises that slaughter in this country both by the Jewish method and the Mohammedan method should be maintained. It also agrees that there should be no changes in methods of slaughter for animals for our dependencies and on aircraft and on ships. The concessions made in this Bill seem to me to be very generous.
May I say a word about the Mohammedan community, of which I have some knowledge. I would strongly urge that there should be discussions with the leaders of the Mohammedan community. I know for a fact that the most progressive elements in Islam accept the stunning method. These elements are very strong in North Africa, to which our exports very largely go. I believe that, in discussions with the Islamic community, it would be found that they would agree to the stunning method.
I want to express my appreciation for the introduction of this Bill; because it reflects my philosophy—could almost say my religion—and my belief in identity with all life and particularly with the animal kingdom so near to us in creative evolution. I have been a vegetarian for 75 years—and I think I am a pretty good advertisement for it. I think it indicates clearly that eating flesh is not necessary either for health or long life. I am not asking all of your Lordships to be converted to that belief, but I am asking you to support this Bill which will do so much to prevent cruelty to the animals who are slaughtered.
4.25 p.m.
Lord Mishcon: My Lords, with your Lordships'

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permission I intervene in this debate. My name is not on the list but the appropriate notice has been given to both Front Benches. I wonder whether, with your Lordships' usual tolerance, I may make a short intervention as a Member of your Lordships' House who is proud to be a member of the Jewish faith. I think that it is interesting that your Lordships should have such an intervention, especially after the speech that has just been made by a beloved figure among us, my noble friend Lord Brockway. He referred graphically, and, I am sure, quite truthfully, to something that he saw 50 years ago. I should hate your Lordships to be left with a feeling that the great faith of which your Lordships are the inheritors in many cases should have been indulging in something which looks like a cruel method of slaughter of animals. Kindness to animals and the removal of all threat of pain to animals has been and is a principle, and, indeed, a dogma, of my faith; for it is the faith that preached that if you find your enemy's ass or ox by the wayside and if it is overladen, it is your duty, even though that man is your enemy, to help the ox or ass and to see that it is not overladen.
My Lords, if I may say so, I object to the phrase "ritual slaughter" applied also to the method of slaughter which has been the ancestral tradition and doctrine of the Jewish faith. For example, I wonder how many of your Lordships know—and I am sure that my noble friend Lord Brockway wishes the House to be kept up to date—that before anybody is allowed to slaughter an animal according to the Jewish tradition, he has to have a period of training of some six years in order to ensure that he is skilled and that the method of slaughter is absolutely humane. I wonder whether your Lordships are aware—and I had to make this intervention after my noble friend's speech— that objective scientists, at the request of the Jewish community, have looked at their method of slaughter and that expert, independent and objective scientists have said that in their view it is the most humane method; and more humane—and this has been said—than pre-stunning which so often unfortunately results in mistakes being made before the animal is rendered unconscious so that the animal accordingly suffers a great deal.
My Lords, I made that intervention because I thought that I ought to. May I now turn to the Bill itself. Nobody who has known my noble friend Lord Houghton of Sowerby can ever doubt his good intentions in regard to anything which deals with cruelty to animals. I found myself in some difficulty when reading this Bill to see the logicality of it. I wondered what people would feel who were reading this Bill outside the United Kingdom. It would look as though something which, it is inferred, is less than kind by way of a method of slaughter is permitted in the United Kingdom but that you dare not export—you have to use another method—to anywhere in the world apart from the dependent territories; meaning thereby that you have to be more considerate when exporting than when you are doing something in the United Kingdom. This seems to me to be somewhat of an illogicality.
The noble Lord, Lord Houghton, also referred to another matter which I think I ought to emphasise: all of us, if we show true tolerance and understanding of our fellow human beings, respect the genuine religious
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faith that they hold. I bow to nobody in this House in my respect for the Moslem religion which has existed for many centuries and has known many glorious eras of cultural gifts to the world and to civilisation.
It is a fact—and I utter this with that respect in my voice—that whereas one community, the Jewish community, has to have all this supervision within its faith, continual inspection of the slaughterers and their methods, insists upon the instruments that arc used being inspected at least once a year—but much more often during the year—and does have to be licensed under the Act by the Rabbinical authorities to see that all this happens, this is not at the moment a requisite of the Moslem community which now numbers something like 1½ million in this country today. I would have thought that it was sensible—but that has nothing to do with this Bill—to have discussions with the religious leaders of the Moslem community to see, among other things dealt with in the debate this afternoon, whether the similar situation of licensing by their own religious authorities and exercising supervision and care, should not take place within their midst as it does with such emphasis, control and care by the Jewish community.
Having said that, your Lordships will have realised thst I find myself somewhat out of sympathy with this Bill, but never out of sympathy with the principles which, quite obviously, encourage the noble Lord to bring the Second Reading before the House today.
4.33 p.m.
Lord Bishopston: My Lords, I am sure that we are all grateful for the opportunity of hearing my noble friend Lord Mishcon, who has just spoken from a particular interest; also the comments made by the noble Lord, Lord Hooson, and the noble Lord, Lord Nugent of Guildford, to which I may refer a little later; and of course the noble Lord, Lord Somers, the brief intervention of the noble Lord. Lord Donaldson of Kingsbridge, and the comments of my noble friend Lord Brockway.
We have had a debate which so far has spread widely over the various interests concerned. The main tribute must go to my noble friend Lord Houghton for bringing the Bill forward and for the dedicated work which he has put in over many years in the field of animal welfare. Of course today we are dealing with a subject which can have very deep and emotive undertones because we recognise that any method of slaughter is distressing, for it must result in the death of an animal.
However, having said that, we have to recognise that it would be misleading and indeed unjust for it to be thought that those like my noble friend who are particularly identified with the work of animal welfare societies, are greater in their compassion. I am sure that he would be the first to say that the compassion he feels is shared with the industry, with the farmers, producers, processors and with the consumers. The whole nation is concerned about animal welfare. I recognise this because three years or so ago, when I was Minister of State for Agriculture, I had a phone call at my home in Newark at about 11 o'clock on a Saturday night. I was asked to go to Fishguard to rescue 900 animals which were on a stricken vessel

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which had caught fire and were knee-deep in water. I recognised then the concern that we all have and I was pleased to have that opportunity, although I would not have suggested at the time that going to Fishguard was the best way to spend a Saturday night. But we all have this concern.
What is required on these occasions is objectivity and clear thinking and at the same time being sensitive about the effects on animals. We must all seek to know and recognise what is likely to be cruel and what is not. This is a matter which has engaged the attention of Parliament and the nation for many years. I was rather doubting the assertion by my noble friend that we have a deplorable record of lack of concern for animals because over many years parliamentary debates and legislation have reflected a concern not only of MPs, Members of your Lordships' House and officials, but, as I said a moment ago, of a wide cross-section of our society, consumers and many others.
The matters which we now have in mind have been before Parliament between 1932 and last year. I think that my noble friend claimed that the measure passed in 1932, the first of the three Acts mentioned in the Bill, was designed to deal with a limited market of Jews and Moslems in this country. Mention has been made of others. It was not intended that the export trade generally should benefit from the concessions, as they were, of the three Acts which have been mentioned.
The Bill makes reference not only to the slaughter measure of 1932 but also of course to the most recent Act of 1980. So this House and the other place have considered the relevance of the conditions of the 1932 Act as recently as 1980 in a very different situation, as my noble friend has averred. It would be right to assert that there is a continuing concern. The factors which my noble friend has mentioned about the changing situation must have been taken into account last year when the Bill went through the various Committee stages in both Houses. So there have been reviews.
It would be misleading and wrong to claim that a lot of changes have been made, and Parliament and the nation have shown little concern. There was the 1964 Brambell Report; the report which Professor Roger Brambell issued to my noble friends Lord Peart and Lord Ross of Marnock, who respectively were Minister of Agriculture and Secretary of State for Scotland at the time. There were the recommendations of the 255-page report of the departmental committee on experiments on animals under the chairmanship of Sir Sydney Littlewood, which reported in 1965. That was not quite the matter that we are dealing with today but nevertheless was concerned with animal welfare. There was a review which led to the setting up of the Farm Animal Welfare Advisory Committee which was the forerunner of the FAWC mentioned by the noble Lord, Lord Nugent. That was set up in 1967. Later there was the Farm Animal Welfare Committee, as it became, in 1979, a body which is still active and to which I shall refer at the end of my comments.
Of course, there is the most recent report, the first report from the Agricultural Committee, Session 1980–81, on animal welfare in poultry, pig, veal and
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calf production. That is in two volumes. The minutes of evidence in Volume 2 alone cover 478 pages. That shows the extent of general concern for animals. I should like to stress—not only for your Lordships but also for the wider public—that successive Governments, Ministers and Members of both Houses have been very much concerned.
The present law requires the pre-stunning of food animals slaughtered in the United Kingdom. Exemptions are permitted on religious grounds, as we have been told, for Jews and Mohammedans. The RSPCA and my noble friend Lord Houghton assert that these exemptions were intended, as I said a moment ago, to meet the needs of the Jews and Mohammedan communities resident in the United Kingdom, but only resident in the United Kingdom, apart from the provisions for supplies to the associated territories and also for victualling on ships and aircraft. It has been said that no one envisaged at that time that, as they put it, the law would be exploited to allow the rapidly expanding export trade in carcases to the Middle East and North Africa.
There have been many reviews of the ritual slaughter laws since that of 1932, referred to in the Bill. There were reviews of the Acts in and 1974 and the most recent was in 1980; so we have been very much aware of the changing circumstances and we have been sensitive to the problems and needs of animal welfare aspects which are so important.
I mentioned a moment ago the Farm Animal Welfare Committee. It is important that the House should be aware that we have a standing committee which is in session all the time, looking at these matters. We do not depend upon matters coming before Parliament for various reasons owing to great gaps in sensitivity and lack of concern. There is a continuing concern. The advisory committee was set up in 1967 and one of the recommendations of the Brambell Committee was that a statutory Farm Animal Advisory Committee should be set up to advise Ministers. That was done in July 1967 with the Farm Animal Welfare Advisory Committee established by the agriculture Ministers in Great Britain to advise them on matters pertaining to the welfare of livestock on agricultural land.
In 1979 the Government felt that a different kind of body with wider terms of reference and with a membership which would equip it to deal with farm animal welfare matters over a much wider range should be formed. There was therefore established, in July 1979, the Farm Animal Welfare Council and the Council's advisory body, whose members are appointed by the Ministers on the basis of individual merit and suitability, who have a wide range of private interests and a common desire to improve the welfare of farm animals. So there is this important body and I shall be making a recommendation regarding that at the conclusion of my remarks.
The Farm Animal Welfare Council is staffed by 23 members, I believe, and they include a wide range of people—a professor of anatomy, a farmer of 3,000 acres of hill land, a director of a company of nutrition consultants, a management consultant, the chief veterinary officer of the RSPCA, dairy farmers, the principal of the West of Scotland Agricultural College, a director of the Universities Federation for Animal Welfare, a writer and lecturer on animal welfare, a partner in a

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veterinary practice, an executive director of the RSPCA since 1978—and one could go on. These are the people with a watching brief, a constant concern and the ability to report to Ministers on aspects about which the House should know.
I want to comment on the Bill, because I think it would he helpful to my noble friend when he winds up to reply to questions which may be engaging the minds of some noble Lords and indeed of those who have spoken. The Bill includes the restriction that animals ritually slaughtered in the United Kingdom should be for food for Jews and Mohammedans respectively for consumption in the United Kingdom. The food would he also for consumption in British dependent territories. These include, as I am sure your Lordships know—here I am indebted to Schedule 6 to the British Nationality Act which was passed only a few weeks ago—Anguilla, Bermuda, British Antarctic Territory, British Indian Ocean Territory, the Cayman Islands, the Falkland Islands, Gibraltar, Hong Kong, and so on. These are the territories to which the Bill says meat can go. I will not read the full list.
Clearly we have to ask the question: why cannot this meat go into the EEC? I should like to ask the Minister when he replies to say whether there are any difficulties about banning exports of ritually-slaughtered meat from this country to the EEC and to other countries, except for British dependent territories, although we can import meat which has been so slaughtered from other places. Perhaps we might be told why it can be sent to Bermuda but not to Brussels, to the Falkland Islands and not to France and to the Cayman Islands and not to the Commonwealth. These are genuine questions which require some answer, and it would be helpful if my noble friend could say why he has restricted the area of exports. Clearly he is anxious that the range of export areas should not be extended beyond what was originally intended, despite the fact that the House considered the matter as recently as 1980, and to ascertain whether we are right in saying that we can ban inter-Community trade in this way.
Obviously when one mentions trade and exports one ought to be quite clear about any action that is not in conformity with animal welfare requirements as laid down; I am sure we would all say that this is not justified by what is thought desirable from a financial, economic or trade point of view. My noble friend made it quite clear in his introduction of the Bill, I think, that he was not claiming that ritual slaughter was a second-rate method of slaughter. He was fair enough to say that he would not like to make comparisons between one form of slaughter and another. Certainly, I, having been a Minister myself and visited abattoirs and slaughterhouses, have—and I think I speak for all of us—a dislike for any sort of slaughter in any way. I think that my noble friend claims—and many of us would agree—that this ritual method of slaughter is not in any way less humane than any other, but having accepted the principle that that is so, but would claim that we should nevertheless restrict the area to which the meat goes.
It is difficult to see that is wrong regarding the extent to which these principles are put into practice. We have to ask ourselves several questions. For example, is it possible to restrict ritually-slaughtered animals to
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the food of Jews and Mohammedans only? Is it possible or desirable to restrict the consumption to those two groups within the United Kingdom and the British Dependent Territories, and the categories mentioned in the Bill, ships and aircarft being victualled in the United Kingdom, and not to export elsewhere? Also, if we do export to those areas in the British Dependent Territories, how can we be sure that the meat sent is not taken to a depot there and then exported somewhere else, so that the aim of the measure is reduced or defeated?
Another question on which I hope the Minister will comment is whether we can apparently flout our obligations to the EEC by not exporting to Community countries. And another question concerns our own export trade. I believe that the noble Lords, Lord Hooson and Lord Nugent, asked whether, if we are not going to export ritually-slaughtered animals generally, the markets we are at present supplying would be filled by other people. While I would have some confidence about the enforcement of methods in this country, over which we have control, one may raise a query about the way in which slaughtering is done by any method in some other countries. When it comes to the export of animals, if you are not going to export carcases in any form, then the alternative is to supply those markets to which we formerly exported with live animals. I mentioned just now my experience on a Saturday night, when 900 cattle were awash off Fishguard on their way to another country—albeit not from this country—and the conditions under which cattle sometimes have to travel. So there is that point about whether we export live cattle and the conditions of slaughter when they get to their destination.
There is also the query about what will be the effect on our slaughterhouses. We all know that the abattoirs and slaughterhouses in this country are, indeed, facing what the Farmers' Weekly called last week "bleak prospects" They said:
Britain's slaughtering industry is plunging deeper into crisis and plant closures are inevitable".
I want to say, once again, that if the method is wrong there is justification for concern here. But this is not so, because the principle of slaughter has generally been accepted. However, it can have a very serious effect upon our own industry.
I pose these questions, because my noble friends on this side of the House will be voting as they think fit. For my part, before finally deciding, I should like to have the comments of my noble friend and the observations of the Minister on some of these questions which are relevant to this situation. Having tried to put the "pros" and "cons"—and my noble friend has put the "pros" very well, indeed—so that the House may consider most of the facts, I want also to be constructive, because, if the House does not give the Bill a Second Reading, I should like to think that there is no void or vacuum in which our concern can float around, or whatever it does in vacuums. We should certainly like to know that that was not the end and that there were some alternatives which we could press for.
I referred at length to the Farm Animal Welfare Council, which is in business all the time and is continually reviewing matters of animal welfare. I should like to suggest that they might look at this

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matter. I understand that the Farm Animal Welfare Council has been conducting a three stage review of Welfare at animal slaughterhouses. The first, a study of poultry slaughterhouses, has been completed and a report was submitted to the Minister of State on 23rd October, which I understand should be published in the new year. Secondly, a study of slaughterhouses for red meat animals is at an early stage and a report will be submitted to the Minister in due course—probably, in the second half of 1982.Of most relevance and importance is the fact that the council will, subsequently, make recommendations relating to the provisions for ritual slaughter of both poultry and red meat animals. Here is something which I am sure the whole House will agree should be a matter for review and, indeed, the council have already taken it on board. But there are also one or two other points on which we ought to check. Apart from the fact that this would enable the FAWC to have regard to the objectives of the Bill, and to the concern expressed by everyone here and, I am sure, by many outside, we ought to have a look at some of the points raised by noble Lords here today.
Instead of extending present legislation, it might be better to see how the existing legislation can he improved. I have in mind the need to consider whether licensing should be introduced and enforced for both Jewish and Mohammedan methods of slaughter. My noble friend Lord Mishcon made a point about the six years' qualification for anyone concerned with Jewish slaughter. He could have said much more about the smoothness of the instruments, and the methods used and actions taken to ensure that unnecessary pain and suffering are not experienced. So we need to look at the possibility of licensed operators and to carry out discussions not only with Jewish authorities, but with Moslems as well. I am sure that they would co-operate on this and, if the Moslems did not demand the exact methods of ritual slaughter and were prepared to accept pre-stunning, that would take away some of the force of my noble friend's argument.
There might be a need for a wider commission, such as the Rabbinical Commission which is so concerned with Jewish slaughter. Another aspect which needs looking at is the matter of checks and inspections and the enforcement of legislation, because it is no good having any legislation unless there is enforcement of it. It may well be that some of the so-called cuts in public spending can be a greater threat to animal welfare, it adequate checks are not made and that is what we shall be pressing for as an early priority.
I apologise to noble Lords for saying so much, and there is still more that one could say. But those are some of the questions which will be engaging the minds of noble Lords as we wind-up this debate, and am sure that my noble friend will have an opportunity of making comments then. I have asked certain questions. I have put forward what, I hope, are constructive proposals in order to allow my noble friend Lord Houghton to satisfy our doubts. We do not, of course. doubt the motives behind the Bill, which are to ensure the greatest safeguard for animals well-being, and which we all share. I hope that my suggestions will bring more organisations into the wider discussion
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under the umbrella of the FAWC or, if necessary, by other means.
As I am speaking for the opposition, I will say that my noble friends will vote as they think fit, but I think that they will be helped by replies to some of the points that I have raised. I am sure that they would wish me to end by thanking my noble friend Lord Houghton of Sowerby for the service which he has, again, given to us and to the nation. If as a result of this Bill, whether it receives a Second Reading or not, some on-going action can follow from the suggestions which I and other noble Lords have made. that will he to the benefit of animals generally.
4.57 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Earl Ferrers): My Lords, we have listened this evening to a number of most interesting speeches on what is a very sensitive subject. One never ceases to learn things when one listens to your Lordships' debates, and one of the things one learned this afternoon was that the noble Lord, Lord Brockway. has been a vegetarian for some 75 years. The noble Lord is a unique and remarkable example of many things, and, indeed, he is a remarkable example of the efficacy of the diet of the vegetarian. I notice that the noble Lord, Lord Shinwell, is in his place, too, and he is also a remarkable example of a great many things. Whether he is, with the noble Lord, Lord Brockway, also an example of the efficacy of the diet of the vegetarian, I would not know. But the noble Lord, Lord Brockway, nevertheless, said that he would not necessarily wish to inflict—if that is the right word—the diet upon others.
It comes with little surprise to me that the noble Lord, Lord Houghton, decided to introduce this Bill, because it is very similar to a Bill which he introduced in the last Session, but which we did not have the advantage of debating. This is another example of the deep and commendable concern which I know the noble Lord has for the welfare of animals, and which he has demonstrated on a great many occasions. I hope that, when I come to outline the Government's attitude on this matter, I shall not be considered as criticising in any way the motives of the noble Lord or those who share his views.
I agreed so much with my noble friend Lord Nugent, when he said that nobody likes slaughterhouses, whatever the method. This is abundantly true. I recently visited a very modern slaughterhouse, which was efficient, clean and humane. I did not enjoy the experience and am bound to say that I did not enjoy my lunch afterwards. But I should like to emphasise at the outset that the Government are concerned that proper measures should be taken to safeguard the welfare of animals. That is why, shortly after we took office, as the noble Lord, Lord Bishopston, said, we set up the Farm Animal Welfare Council in order that the Government should receive independent and expert advice on a wide range of animal welfare issues. One of the issues which they are considering is welfare at the place of slaughter. This report will be taken into account when it is published.
The question of practices in red meat slaughterhouses is now being considered by the council. It is clearly an important question and the Government will give

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most careful consideration to any recommendations which the council may make. I am sure that as part of their review the council will be considering the provisions in the slaughterhouse legislation which relate to the use of religious slaughter methods. When the council have completed their report on the subject, your Lordships may well wish to give it further consideration. I would therefore make the general comment—I agree with my noble friend Lord Nugent of Guildford—that in the light of this review which is being undertaken by the Farm Animal Welfare Council this is not perhaps the most opportune of moments to be considering amendments to this particular form of legislation.
The noble Lord, Lord Houghton of Sowerby, asked whether I knew full well the controversy which is generated by the legislation which permits animals to be slaughtered by religious methods, subject of course to the avoidance of unnecessary suffering which is part of the legislation. No one who holds a ministerial responsibility for agriculture could fail to be aware of that controversy, and I acknowledge it. I know, too, that many people hold sincerely to the view that slaughter by these methods without prior stunning involves more suffering than other methods. Equally I know that to many members of the Moslem and Jewish faiths the tenets of their religion make stunning before slaughter unacceptable.
It is not particularly appropriate today to embark on a discussion of the extent of the suffering which may or may not be involved in the religious methods. It is enough to record that there is a divergence of view and of interest. I would only say that when it has discussed the problem in the past Parliament has always taken the view that the evidence on the question of possible suffering is inconclusive, and that in the interests of religious tolerance the right to use the religious method should be available to those communities who require it. The law of course specifically requires that no unnecessary suffering should be caused to animals which are slaughtered in this way. In those circumstances, I would ask your Lordships to consider whether there would be sufficient justification for altering these provisions relating to slaughtering methods which over the years have been found to be broadly acceptable.
It is, I believe, relevant to make these general comments on the question of religious slaughter even though the Bill will prevent these methods being used only when the meat is for export from the United Kingdom. But I have little doubt that if Parliament were to accept the principle of the amendments which this Bill seeks to make to our present law it would be seen to be expressing a view on the desirability of religious slaughter in general. This would, I believe, be regarded with alarm by the religious groups concerned in this country, even though they may not themselves be affected by the ban on exports.
It would also be asked—and this is indeed a pertinent question to which the noble Lord, Lord Mishcon, addressed himself—why Parliament had concluded that religious slaughter was all right if the meat was for consumption in this country but all wrong if the meat were going for export. It is, in logic, a non sequitur. I know that the noble Lord, Lord Houghton of Sowerby, is trying to secure amendments to the
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law which he believes have a chance of being accepted even though they do not go as far as he himself would wish. I commend him for this. It is a reflection upon his substantial political and parliamentary experience. But the fact remains that the discrimination which the noble Lord seeks to make in his Bill boils down to the ultimate destination of the meat. In reality and in logic, the religious slaughter should be either acceptable or unacceptable. The ultimate destination of the meat should, I suggest, be immaterial.
It would in some ways be curious if Parliament were to permit animals to be slaughtered by this method, controversial though it may be, in order to satisfy the legitimate requirements of those who hold certain religious affiliations, but yet to confine such products to the United Kingdom only and to prevent us supplying them to those of a similar faith who live outside the United Kingdom. In terms of global animal welfare—and presumably it is animal welfare which is the motivating force behind the Bill—it achieves nothing. The same number of animals in total will be subjected to ritual slaughter, whether or not this Bill becomes law. The only difference is that if it does become law the slaughtering will take place in different countries, with possibly less strict hygiene and enforcement procedures than we have.
It may be helpful to refer to the provisions of the licensing of slaughterhouses and slaughtermen, because this is important. Under the Slaughterhouses Act 1974, no private slaughterhouse may be operated without a local authority licence. Provided that the local authority are satisfied that various requirements, notably the provisions of the regulations of 1977 concerned with slaughterhouse hygiene are met, or will be within a reasonable period, they are obliged to issue a licence to any applicant. No special or additional licence is required for a slaughterhouse in which religious slaughter is to take place. in addition, all slaughtermen must hold a valid licence which is issued by a local authority under the Act. To obtain such a licence a slaughterman must he at least 18 years of age and be, in the opinion of the local authority, a fit and proper person to hold one. A Moslem slaughter-man requires only the normal licence, although Jewish slaughtermen must also be licensed by the Rabbinical Commission. A licence may be refused if the applicant has failed to comply with any conditions of a previous licence or has been convicted of certain offences relating to the humane treatment or slaughter of animals.
The noble Lord, Lord Somers, and the noble Lord, Lord Brockway, thought that stunning ought to be acceptable as part of ritual slaughter. It would be inappropriate for me to comment upon whether or not that is suitable from the point of view of those who hold certain religious faiths, but my understanding is that the Jewish opposition to stunning is based on the view, handed down from the early prophets, that an animal must be alive and healthy and have suffered no injury at the time of slaughter. Some Moslem groups, but not all, also believe that stunning is inconsistent with their religious beliefs, as handed down in the Koran.
If we were to accept this Bill, I am bound to tell your Lordships that amending the law in this way would be likely to lead to considerable difficulties of enforcement. In order to enforce the provisions

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effectively it would be necessary to keep a track of all meat which is produced by religious methods as opposed to more conventional methods after it had left the slaughterhouse in order to ensure that it was not exported. This would be particularly difficult in view of the fact that each local authority is responsible for enforcing the slaughterhouse legislation in its own area, and it is not at all clear that local authorities would have the resources available for enforcing adequately this additional piece of legislation.
The noble Lord, Lord Bishopston, asked whether we would be in conflict with the European Community law if this Bill came into operation. I am bound to tell your Lordships that we would be in some considerable difficulty in relation to the European Community law if these amendments were passed because they would be held, or they could be held, to constitute a restriction on exports of a kind which is prohibited by Article 34 of the Treaty of Rome.
This is of course a Private Member's Bill and the House must make up its own mind about it. I have merely endeavoured to explain to your Lordships the difficulties which the Government see if this Bill were to become law. I hope that your Lordships will take account of the reservations I have expressed together with all the other relevant factors which your Lordships will doubtless wish to consider when coming to a judgment on the Bill.
5.11 p.m.
Lord Houghton of Sowerby: My Lords, I am very grateful to those noble Lords who have taken part in this debate. It is, of course, a difficult subject, but somebody has to deal with difficult subjects if they are important in the minds of the public. There is not the slightest doubt that, up and down the country, this matter is becoming of increasing concern and of increasing controversy. Far from being inopportune, it is probably opportune for your Lordships' House to consider a state of affairs which, if it is allowed to continue, will only get worse. I am afraid that this is my considered judgment after studying this matter very closely.
The noble Lord, Lord Hooson, said he did not think this Bill was necessary, or at least he questioned whether it was necessary. When is it necessary to check something which in the opinion of many is a misuse of statute law? When is that point reached? When the alleged loophole gets too big to ignore? When public opinion is too restive to be quietened by indifference? How does one define the point of necessity? I think that is a matter of judgment, and I would say that the longer that some of these loopholes are allowed to continue the more difficult it is to close them without serious harm to considerable vested interests.
This position has not developed so far that it would be really difficult to impose this curb upon the export trade. Of course, if the noble Lord, Lord Hooson, is aware, as I am sure he must be, of what has been going on in the Isle of Anglesey regarding the slaughterhouse there, he will know that if the compromise reached in the Isle of Anglesey prevailed generally where these slaughterhouses are being set up, there would be no need for this Bill. In the Isle of Anglesey, although the local authority lacks the statutory powers,
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it has written into the licence a condition that pre-stunning shall be observed in that slaughterhouse. That condition has been voluntarily accepted by the meat company concerned. The local authority realise that they have no means of statutory enforcement of the condition they have written into the licence and which the meat packing company has accepted. This is the uneasy state of affairs, when a compromise has to be reached with no enforcement on one side and purely voluntary acceptance on the other, and the matter rests on mutual good will and confidence. Even that would be better than continuing the situation elsewhere, where exports are going on, much to local indignation, of animals which have not been pre-stunned.
I have all the papers here about the Isle of Anglesey case. I have here the papers about the Belfast case, where the meat company said that they were unable to get customers in Libya to accept pre-stunning. The Belfast City Council, after inspecting the slaughterhouse, decided that they would invoke in the licence the condition that no contracts were to be accepted unless pre-stunning of the animals was agreed to. There is another arrangement, which was come to by the local authority and the meat company. If we had this Bill on the statute book, it would regularise much that is being attempted in these various areas at the present time.
If this Bill is given a Second Reading, I believe that it will have a very favourable influence upon conditions and negotiations now taking place between local authorities and meat companies in different areas. I believe it would also give a reassurance to many of the objectors locally who feel that, without pre-stunning, they cannot accept the intrusion into their local environments of a large-scale method of slaughter which they find unacceptable. This Bill would have a favourable influence on those discussions and negotiations. If your Lordships were to reject the Second Reading of this Bill, I believe it would seriously prejudice the discussions which are taking place in different parts of the country at the present time. I believe that for your Lordships to express an opinion on this matter in the sense of this Bill would be of great advantage in overcoming some of the difficulties which are still going on locally.
When I am asked to wait for something I say, "Wait for what, and for how long?" This is now an ongoing thing. Every month brings a fresh application because the slaughterhouses are there and the trade is increasing. There is big money in it. This trade is in the hands of half a dozen people. These are not just little slaughterhouses serving the local community; they are not that kind of business at all. We are talking about big business and the export trade to the Middle East and to North Africa. Exports to the EEC are not in it—they are not in it! They are all going to Libya and to the North African and Middle East countries. I do ask your Lordships to pause before regarding this Bill as unacceptable in principle at this particular moment. I think that it would be a very bad day for us if we were to reject the principle of this Bill. No one has challenged my contention that Parliament never intended nor envisaged this situation right throughout the piece, for the simple reason that this development is so recent. It really stems from the time when the Middle East

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countries acquired new wealth and were able to go abroad for increased standards of living which they felt they should have.
I listened carefully to the reference made by the noble Earl, Lord Ferrers to the Farm Animal Welfare Council. Unless I am wrong, and the Minister can correct me if I am, what will not be referred to the Farm Animal Welfare Council is the principle of the exceptions granted in a statute law ever since 1928, to the Jewish and Mohammedan communities in this country. That is so fundamental to them on religious grounds that I am quite sure no Farm Animal Welfare Council would be given a reference to re-examine the exceptions. I think the Farm Animal Welfare Council might well examine the point I mentioned in the course of my speech earlier; namely, the qualifications of the slaughterers who are allowed to slaughter according to the Mohammedan method. I pointed out that the stringency of the conditions imposed by the Jewish community upon their slaughterers does not find any comparable standards of qualifications in the Mohammada slaughterers. That could well be referred to the Farm Animal Welfare Council. But make no mistake about it, the principle that I am dealing with, the principle that we have put in the legislation since 1928, will not be tampered with by the Farm Animal Welfare Council—it is too important, too controversial, too political. So, with great respect, I do not think we need wait for the Farm Animal Welfare Council to deal with any matter which relates to the vital point of the exceptions.
The Minister said that there is the element of discrimination between the exception methods of slaughter and the statutory method of slaughter when one decides to impose a condition according to the destination of the meat; he says that it is the destination of the meat that brings in this discriminatory restriction upon the ritual slaughter method. He is applying the logic which I am sure prevails in his department on a subject to which logic was never applied in the first place and to which logic cannot be applied now. It was not logic that granted these exceptions; it was the violence that would have been done to religious opinion had they been withheld. It was knowing that the tolerance of the British people towards communities of other persuasions required that every respect should be paid to their religious views and practices. And that is a feature of British administration. That was conceded in all the circumstances, and for the numbers that were involved; it was conceded as being fair and reasonable and making for social harmony. Had there been 20 halal slaughterhouses in Britain at that time Parliament would have had to take a different view. I do not believe that these concessions would have been granted in the circumstances they were had today's conditions prevailed then. This is a development out of earlier conditions which was never contemplated, and I think we are as free to deal with what we find now as they were to deal with what they found then.
I do not apply logic to this. I apply judgment. political judgment related to the condition of the British people, our problems of a so-called multiracial society. our desire to have harmonious relations with communities not of our religious faith or of our culture. And here there has to he give and take; there has to be
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reciprocity. There have to be concessions to one deeply felt opinion and concessions to another deeply felt opinion. That is what this Bill is about. It is little to ask, if it is permissible, as I suggest it is, that where pre-stunning is permissible it should be observed, because that is the law of England. And if the British people desire to impose a modified exception in certain circumstances, none is going to say that is discrimination, surely, and none is going to say that it is unreasonable either. That again is what this Bill is about.
The question has been raised of whether, if there were no restraint upon exports, animals would be exported live. I must say that the Bill does not restrain anything if the pre-stunning condition is acceptable; that is the issue here. If the law of the land can be observed in regard to exports. no matter whether they are ritually slaughtered or not, then that applies to everybody and there is no discrimination. But if animals were not to he exported dead on account of the conditions of this Bill, would they be exported live? Where to? Noble Lords know that licences are necessary for the export of live food animals for slaughter or for further fattening. The question of their destination arises again. I hope it is not suggested that we should go the way of Australia. and convert oil tankers into sheep transports with 20,000 and 30,000 sheep on board for a trip to the Middle East. I hope that is not being suggested as the likely alternative to the modest conditions of this Bill. When one from New Zealand caught fire with about 20,000 sheep on board that disaster was so appalling to the New Zealanders that they decided not to do it again. Was that discrimination or just plain commonsense and humanity?
I do not myself regard the exporting of animals live to the Middle East as a serious proposition. I have taken as firm a stand as anybody on curbing the transport of live animals across the Channel to Europe, and I am not for a single moment willing to lend myself to any measure which I thought would increase that trade. But as for the conditions in our own slaughterhouses, I hope noble Lords bear in mind that the transport of live animals to Europe in the first instance was due to the American judgment that our slaughterhouses were not good enough for them. Live animals were exported to Europe to meet the needs of the American troops in Europe and they did not like the look of our slaughterhouses. So that we cannot really say that by exporting animals live they will necessarily have a worse condition of slaughterhouse there than they would have here. However, I do not think that that is an alternative which we need seriously consider. I profoundly hope the Government would not feel that if eventually a Bill of this kind were passed they would be obliged to open up the export of animals live from this country to the Middle East.
The question of enforcement has been raised by the noble Lord, Lord Bishopston, and by the noble Earl, Lord Ferrers. There are difficulties about enforcement of the law as it is; there is no doubt about that. We have to do our best with it. There would be difficulties of enforcement because there might be difficulties of identity. But bear in mind, my Lords, that local authorities are already reaching agreement with the meat companies in certain areas on exactly the lines of this Bill. So they are evidently going to overcome problems of enforcement. What they are going to do

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is to rely on the integrity of those with whom they have reached agreement. So I think enforcement difficulties will be no greater here than they are at the present time. I do not want to go into a lot of detail about what the difficulties of enforcement are now, but there are obviously some, and anybody who knows anything about it knows what they are. My noble friend Lord Bishopston cannot, I think, have been at the party meeting when I explained this Bill.
Lord Bishopston: I was.
Lord Houghton of Sowerby: I am afraid I did not think his long speech very helpful. Anyway, I must not grumble about my Front Bench. He raised the question of why the British dependent territories are in the Bill. It is a quite simple explanation. There is a small export trade of kosher meat to Gibraltar and it seemed to me that a satisfactory way of dealing with that was to include in the Bill an exception for British dependent territories.
Well, there we are. I think I must ask your Lordships to give this Bill a Second Reading. It is so important a matter and the crisis is so closely upon us at present that I think your Lordships should register an opinion upon the principle of the Bill. I think that, for good or ill, your Lordships' judgment is called for and I sincerely hope that it will be for good, because I believe that the message that this House could send out this afternoon to all concerned would be of great benefit to them in the difficult public attitudes and negotiations which lie ahead on individual cases up and down the country. Therefore, I hope profoundly that your Lordships will give the Bill a Second Reading.
On Question, Whether the Bill be now read 2a?
Their Lordships divided: Contents, 23: Not-Contents, 80.

DIVISION NO. 1

CONTENTS

Aylestone, L.

Howie of Troon, L.

Bacon, B.

Listowel, E.

Beswick, L.

Malmesbury, E.

Brockway, L.

Melchett, L.

Collison, L.

Northfield, L.

Craigavon, V.

Ross of Marnock, L.

de Clifford, L.

Rugby, L.

Denington, B.

Somers, L. [Teller.]

Gosford, E.

Spens, L.

Gregson, L.

Taylor of Mansfield, L.

Houghton of Sowerby, L. [Teller.]

Underhill, L.

Whaddon, L.

NOT-CONTENTS

Airey of Abingdon, B.

Cooper of Stockton Heath, L.

Alport, L.

Cottesloe, L.

Ampthill, L.

Cullen of Ashbourne, L.

Ardwick, L.

Daventry, V.

Auckland, L.

Davidson, V.

Avon, E.

Denham, L.

Balogh, L.

Donaldson of Kingsbridge, L.

Birk, B.

Drumalbyn, L.

Blease, L.

Ebbisham, L.

Caccia, L.

Eccles, V.

Campbell of Croy, L.

Elton, L.

Colyton, L.

Enniskillen, E.

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Ewart-Biggs, B.

Nugent of Guildford, L. [Teller.]

Ferrers, E.

Fraser of Kilmorack, L.

Nunburnholme, L.

Gladwyn, L.

Orkney, E.

Glasgow, E.

Portland, D.

Glenkinglas, L.

Rochdale, V.

Gormanston, V.

St. Davids, V.

Hailsham of Saint Marylebone, L.

Saint Oswald, L.

Salisbury, M.

Hampton, L.

Sandys, L.

Henley, L.

Sempill, Ly.

Holderness, L.

Sharples, B.

Home of the Hirsel, L.

Sherfield, L.

Hooson, L. [Teller.]

Shinwell, L.

Hylton-Foster, B.

Skelmersdale, L.

Killearn, L.

Stamp, L.

Kinloss Ly.

Stone, L.

Kinnaird, L.

Strabolgi, L.

Long, V.

Sudeley, L.

Lyell, L.

Terrington, L.

Mackie of Benshie, L.

Teviot, L.

Macleod of Borve, B.

Teynham, L.

Mancroft, L.

Thorneycroft, L.

Marley, L.

Trefgarne, L.

Mersey, V.

Vivian, L.

Mishcon, L.

Wakefield, of Kendal, L.

Morris, L.

White, B.

Mottistone, L.

Willoughby de Broke, L.

Norfolk, D.

Young, B.

Resolved in the negative, and Motion for Second Reading disagreed to accordingly.

Libyan Government: Assassination Allegations
5.39 p.m.
Lord Paget of Northampton Lord Paget of Northampton rose to ask Her Majesty's Government whether they will make a statement on the allegations that the Government of Libya is promoting assassinations outside Libya contained in the "Panorama" programme "Trading in Terror", broadcast on BBC on 23rd November.
The noble Lord said: My Lords, during the debate on the Queen's Speech I drew attention to the role of assassination in Moslem ideology and to the various sects throughout the whole history of the Moslem religion which had arisen as assassin sects—their rise, their influence and their eventual destruction. On 23rd November last, "Panorama" put on a programme in which they described in very great detail specific instances where Colonel Gaddafi was engaging and employing murder tutors to operate in camps which he provided to train assassins whom he was sending or who belonged to other terrorist organisations that he was supporting. I was not particularly interested in where those murder tutors came from. I think that with the security organisations of many great states on both sides, any state that went in for assassination would have little difficulty in recruiting tutors in the art of murder. I do not think it matters very much where they come from. What does matter is that here is a state officially instructing and officially using assassins for its purpose.
Libya claims to be a democracy. Like my friend Mr. Wedgwood Benn, Colonel Gaddafi claims to implement democracy in the most absolute way—through direct people's democracy. But at that point he goes further than my friend, because he draws the conclusion that this entitles him, as of right, to

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liquidate all Libyans who disagree with him. There have been leaders other than Gaddafi who have taken this view. But where he is exceptional is that he claims, as of right, to do his murdering in other people's countries without regard to their sovereign rights. That, I think, puts him in a very different class.
Since March 1980—that is, in the last 18 months, is it? —he has successfully murdered 12 people in Europe: in Italy, in Germany, in Greece and two in Britain. He has attempted to murder a number of others. He has murdered a large number in the Middle East, and those murdered in the Middle East have not by any means all been Libyans. Now he is said to have sent an assassination gang to America to murder President Reagan. I have no idea at all whether or not that is true. All one can say is that on his record it is not in the least improbable.
Apart from sending his assassins, he claims the right to support, train and arm terrorists of any terrorist organisation. Oddly enough, he does not seem to be in the least interested in the ideology of the terrorist organisations that he supports. For instance, in Italy he has trained and armed people of both the Red Brigade on the extreme Left and the neo-fascists on the extreme Right. There are Italians from both those wings under training to murder in his camps. In these camps you will find Japanese from the Red Army; you will find Germans from the BaaderMeinhof organisation; you will find IRA members from Ireland. Among his graduates are the murderers of Lord Mountbatten.
What are we to do about a state that behaves in this way? What are the powers to do? Our contribution so far seems to me to be quite extraordinary. Apparently, it is to set up another assassin state. The noble Lord, Lord Carrington, has announced his approval of the setting up of a PLO state. Let there be no doubt at all about this. The PLO is a classical assassination society. It accepts assassination as a means and a duty and its members take on and accept that duty. It has formed a territorial base in the Lebanon and it maintains autonomous armed camps from which it sends its assassin groups. It has permitted many, many more murders than Libya. Apart from 750 murdered in Israel and 3,500 maimed, in Europe over the last 12 years it has murdered 281 people, 85 per cent. of whom have been gentiles.
It is also running and maintaining in the Lebanon assassination training camps. Unlike Gaddafi, apparently it is interested in ideology, because it is training the extreme Rightists, neo-Nazis and Turks, and among their graduates is the man who attempted to assassinate the Pope. These are very dangerous people and they are the people with whom the noble Lord, Lord Carrington, is proposing to negotiate. I find his reason interesting. He is doing it in search of peace. He says that he will go to Arafat and negotiate with him the pursuit of peace. What a weasel word is this "peace". Peace—it was the slogan of all the appeasers; Laval, Chamberlain, Petain—they all spelt "appeasement" with a "c"; they were all for peace. So did the American police chief the other day who was found to have negotiated with the gang leader a peace upon the basis that the gang leader agreed to confine his depredations to his neighbour's patch. He said that he did it for peace and quiet.
What is Peace? Peace is not the empty firmament; it is not a vague, floating abstract. Peace is a relationship—a relationship between human beings. It is a difficult relationship; it is an unnatural relationship and, above all, it is an unstable relationship. It can be maintained only by a resolute police force, and that applies both in the domestic and the international fields. But there is this difference between the two. Domestic law is based on subjection. Our laws are the obedience which we owe to our sovereign. That sovereign may be a king, a president or a committee. But it is based on the obedience of a subject to the sovereign.
However, in the international sphere there is no sovereign. International law is based upon agreement, and those agreements are based upon one fundamental agreement, which is that each will respect the sovereignty of the other. Those who reject that agreement, who proceed to challenge the other state's right to protect its citizens and to operate within its own territories, become outside the law and become international outlaws. We have seen instances of this. It is the case with pirate states. States which indulge in piracy, or which give shelter in their harbours or, indeed in their airfields to pirates are outside the law of nations. An instance was the Barbary pirates; Oliver Cromwell played a very prominent part in the suppression of those pirates.
Then there are the land pirates—people who raid into their neighbours' territories or give bases or support to those who do. The Mandists of the Sudan provided an instance where this happened, and we suppressed the Mandists. Again Amin in Uganda is the latest example of what one would call a "land pirate" state, going across and invading, and sending people to invade, neighbouring territories. Well, Tanzania destroyed the regime there, and sent her troops to do so. I do not think anybody in the international field doubted her right to do so. Assassin states again fall into this category, for they fundamentally reject the sovereignty of their neighbours. Such states are outlaws. They have no rights and no protection in international law. There is no legal inhibition as to what methods the powers may adopt against Libya.
Now France, it is very broadly rumoured, has gone for assassination. It is said that France has certainly planned to send assassins to see if they can get Colonel Gaddafi. I do not know the truth of this and it is certainly something that I would strongly disapprove of, partly because I think that it is quite wrong for a great power to accept the methods of such powers as these, but secondly for the reason that I think it would be quite futile. I base this really on a passage in Froissart when he was talking about the Crusades, where the assassin states were of course this very thing. He said:
"Neither the assassins pay tribute to the Knights of the Temple or of the Hospital. Nor do they pay tribute to the assassins, and it is for this reason, that each of them knows that if they succeeded their enemies would immediately appoint another to the command, and that therefore assassination of the leaders of these bodies would he but a waste of assassins".
I think that is broadly true with regard to Libya. Gaddafi would immediately be replaced. He might even be replaced by another Gaddafi who is at present occupied in an executive command of the murder squads. No, the only thing that civilisation can do with this sort of state is to disarm it. And the methods

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necessary to disarm them must be taken. Can we do it? Libya has a population about the size of Glasgow, and a good deal more primitive. She has a lot of arms. She has collected them rather like a child collects conkers, but a lot of conkers are not very much use because you can only man about one at a time, and that is much the same kind of difficulty that Libya is in.
Libya has 435 combat planes. A lot of them are very modern indeed. That is a big air force for this part of the world. It is two-thirds that of Israel. But what about pilots? There are Russians. But Russians in our experience have very strong instructions that they are not to take part in operational flying. They are there to teach. They had a number of Pakistanis. Most of them were Pakistanis at one point, but now Libya has quarrelled with Pakistan. We just do not know who are their pilots, or whether these planes take off. Then in support of them they have 5,000 air force personnel. That is their whole air force. It works out at about 12 to a plane. Israel has 50, and they are backed by an extraordinarily well-trained reserve. We have over 100. Again, they have very little in the way of airfields suitable for any war purpose. I do not think it would take the Fifth Fleet very long or very many strikes to carry out this most proper exercise in practical disarmament. I think we should encourage them to do so, and give them all support.
Again, so far as the Libyan army is concerned there is this plethora of modern armaments. There are 2,500 tanks. They are in the desert. A lot of them have been in the desert for a long time. A lot of them have not moved for a long time. We know all this. There has been some improvement of late months because they have taken to covering some of them with tarpaulins. But people who served in the desert know what happens to tanks left in those conditions.
We have also seen Libyan troops on their borders with Egypt, in Chad, in Uganda. They have been singularly unimpressive. Again we can see very little sign of the sort of infrastructure built up by a military country. This I think is particularly significant because Russia has obviously had no objection to supplying weapons for hard currency, but if she were in the least interested in Libya as a possible field where Russian troops might possibly be deployed she would have seen to it that there was an infrastructure to receive them. She has not. So therefore any idea of a Russian intervention in Libya I think is quite an imaginary bogy.
I believe that if, the air force having been dealt with, Egypt were prepared to accept the job of taking and administering these provinces, she would have minimum difficulty in moving in and assuming control. I believe that she is the most stable nation in the Middle East, but it would greatly add to the stability of that area if Libya, which is really an invented country dug up from the war—it never really existed as a country—were added to Egypt, carrying with it a good place for Egypt on the councils of OPEC. That makes a much better looking Middle East.
So far as the PLO is concerned, I believe that they must be disarmed. That is the only answer. At present they are being fed by UNWRA in their camps. International force, whether it be Western or general, must take over those camps, administer them, control
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them and keep them out of mischief. Then one could organise resettlement in countries where they are acceptable as citizens and where they would accept citizenship. Part of Israel may apply in that.
So far as Israel is concerned, she cannot leave the Jordan line. She could not be a stable state if she did. She could not be a defensible state if she did. The Jordan line is essential to Israel's security and stability, and you cannot have a stable Middle East without a secure and stable Israel.
Intervention. Against these assassins I think intervention is necessary, and one must face up to it. Of course it would be called imperalist and colonialist. I do not think we should worry unduly about that. More conservative elements in the Middle East are very scared at what they have seen happening all around them. The Middle East respects strength. Frankly, that is why they always got on so well with the Germans. The stability that would come from a resolute West that made it clear that it would take no nonsense would, I believe, after a very short time, be not unwelcome in the Middle East, which would be thankful for a stable situation which they have for so long lacked.
6.1 p.m.
The Marquess of Salisbury: My Lords, I congratulate the noble Lord, Lord Paget, on that distinguished speech which was delivered with his customary skill. I agreed very much with the general tenor of his remarks. It has been a well worthwhile exercise on his part to raise this subject after the Panorama programme, which received such wide publicity, had raised the points with which he dealt. This subject has been raised many times before. There have been hints in various aspects of the media about it, but there had been no definite contribution to prove what had been going on until the Panorama programme was produced.
It appears, as the noble Lord pointed out, that there is a network of terrorism operating throughout the world. It seems to be a fairly loose network, because while there are interrelated factors and connected ones, there does not seem to be a centrally controlled operation, for not only are the terrorists' activities separate and operated in different directions and for different reasons, but there appears to be no link to tie them together. Notwithstanding that, there seems to be a thread running through the operations with a central organisation for training terrorists, recruiting operators and distributing arms and equipment and so on.
It appears—this was confirmed by Panorama—that the Libyans are centrally effective and may even be the kernel of the operation. What is not clear to the ordinary person like myself, who is dependent for the most part on what he reads in the newspapers, is who is involved and what exactly is going on. I propose therefore to put my remarks very much in the form of questions, in the hope that my noble friend Lord Trefgarne will be able in some degree to provide answers.
For instance, how much inter-relationship is there between the IRA and the Libyans? The noble Lord, Lord Paget, drew attention to this aspect, but how far does it go? Is it the provision of arms, training and equipment, or is there even greater co-operation?

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Do they work together, for instance, in attacks on and murders of British diplomats abroad, attacks on our embassies and on our politicians at home? What relationship has there been with the Welsh Nationalists? I understand that before the referendum on possible independence there was some contact between the Welsh Nationalists and the Libyan authorities. I wonder whether that came to anything or indeed whether that relationship still continues.
There have been attacks on Arabs and dissident Libyans in this country without significant results in arresting them. Was the murder of the Bulgarian journalist by means of an umbrella part of one of these operations? I believe he was not the only person in that department of the BBC to meet a premature end. Are such activities controlled or assisted by Libyans operating here or further afield? These are questions which we should be asking ourselves in view of the information that has been afforded to us recently.
What contact is there, or known to exist, between Libya and Russia'? Perhaps it is of a limited kind with, say, the KGB or some other agency. There seems to be some relationship and, as the noble Lord pointed out, the Russians have provided a considerable amount of equipment to the Libyans. Does it go much further than that? We know that part of the overall strategy of the Russians is to cause the utmost disruption in the West, and terrorism is obviously an important arm in that sort of operation.
The noble Lord, Lord Paget, dealt with the Middle East, and he did so in a debate on foreign affairs on 10th November. From all he said, it would appear that there is a pattern to the policy of assassination. How much of it is by direct contact and how much by imitation, as a result of it being seen to succeed, I do not know, but in the uncertain state of the world, assassination is becoming a regular feature. It is worth noting that in the recent decade the West has thrown up three prominent and outstanding leaders—the Pope, President Reagan and President Sadat—and in each case an attempt, one successful, has been made to eliminate them. That must be to the advantage of the Eastern bloc, although on the face of it there is no direct relationship between the assassination and the Eastern bloc. It seems almost too much of a coincidence that these three great leaders should have been attacked. And it does not apply only to the leaders; as has been pointed out, a great many others, further down the scale, have suffered the same fate.
Have Her Majesty's Government any knowledge of these events, of whether there is co-ordination and whether it comes from Libya? If it does, surely some action is required to be taken to deal with it before the situation gets completely out of hand. We are, naturally, particularly interested in what happens in this country, and I would ask whether the Government have any information to substantiate the claim in the Panorama programme that the Libyan Embassy is used as the centre for these undercover operations, what I understand is known as a people's bureau. There have been suggestions that it is used as a staging post for terrorists, that it is a centre for monitoring or controlling the operations in this country. If so, we should take steps to ensure that it does not continue.
To conclude on a general note, until recently it was very rare indeed for criminals in this country to
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carry guns. Nowdays it is all too common. Not only guns, but explosives and other weapons, too. Our subject tonight covers only one facet of this law-lessness, but it is nevertheless an important one and in the ever-increasing state of law-lessness which exists in this country, it is one which threatens every law-abiding citizen, who is in danger either of attack or of being fortuitously involved in one of these terrorist operations. I suggest that this situation is totally unacceptable, and if it is true that any foreign embassy is acting as a centre for such operations, immediate steps should be taken to bring that situation to an end and, if necessary, it should be closed. I hope that we shall be able to hear from the noble Lord, Lord Trefgarne, when he replies, not only that the Government are fully alive to the situation, but that they intend to take the necessary steps to ensure that it does not continue.
6.10 p.m.
Lord Gladwyn: My Lords, my name is not on the list of speakers, but I thought I ought to say a few words before the noble Baroness, Lady Llewelyn-Davies of Hastoe, rises and I have given her notice that I intend to do so. I speak for the reason that I now feel that the matter raised by the noble Lord, Lord Paget of Northampton, is an extremely grave one, and one which we simply cannot push under the carpet. It must be considered at some stage, and therefore I feel that some words from these Benches would not come altogether amiss. I propose in any case to speak only for a minute or two.
I did not see the "Panorama" programme, but read the transcript of it in The Listener over the week-end. The evidence there of the installation by Colonel Gaddafi of a large centre for encouraging assassination all over the world is possibly acceptable, but depends, I think, on deserters from the CIA, and we ought to be very careful before we take it as being absolutely literally true, because such characters might be guilty of a certain exaggeration. However, whatever view we come to on the centre, there is no doubt that Colonel Gaddafi has been encouraging assassinations—the ones referred to by the noble Lord, Lord Paget—over the last 18 months, of Libyans to whom he objects in other countries. This is of course possible, and I do not know what, if anything, we can do about it.
If there is any truth in the idea that he has sent an assassination squad to America to murder the President, that is something so outrageous that one can hardly bear to think about it. He has, I believe, repudiated this allegation, and that is all to the good. But if an attempt were made on the life of the President, nobody knows what would happen. The situation, now grave, would become even graver.
I believe that if the whole matter has not been discussed in the European Economic Community it should be so discussed in that body and subsequently no doubt in NATO. I do not know whether any action is possible, but, if it were to be taken, obviously it would have to be taken multilaterally by a number of states acting together. The noble Lord, Lord Paget, referred to the suppression of the Barbary Coast pirates in the 17th century. That was perfectly true, and, so far as I remember, Admiral Blake, acting on the instructions of Cromwell, went and suppressed

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a nest of these pirates, with a good result for a period of years. But, my Lords, we are not living in the 17th century, and I doubt whether we now have that independence in our foreign policy from which we were able to benefit some 300 years ago.
I repeat: I am sure that the Government are taking this matter extremely seriously and I hope that they will give us some assurance that not only Colonel Gaddafi but also terrorism generally, which has been referred to by the noble Marquess and by the noble Lord, Lord Paget—indeed the whole question of how to cope with terrorism all over the world—will soon be the subject of intensive discussion in the European Community, and, I suggest, NATO, too.
6.14 p.m.
Lord Beswick: My Lords, I wonder whether I may intervene for just one minute, and I shall restrict myself to what I actually saw, or thought I saw, in the programme. It caused considerable disquiet, but to my mind, at any rate, the disquiet was not limited to the allegations about Libya itself. The position of some members of the CIA was ambiguous, to put it mildly. No doubt these matters will he ventilated in the law suits which I understand are now proceeding in the United States of America.
I should like to ask the noble Lord who is to reply a question. There was a suggestion of some connivance or co-operation in related activities in the United Kingdom between CIA members—some retired and some conceivably not retired—and official British agents. That is the impression that was given in the programme, and I give the noble Lord who is to reply the opportunity of saying that there is absolutely no foundation in that suggestion.
6.15 p.m.
Baroness Llewelyn-Davies of Hastoe: My Lords, my noble friend Lord Paget of Northampton, of whom, if I may say so, the House is very fond—and I hope he will not think me presumptuous—is highly intelligent, and, I am sure, a man of temperate habits, but he does, occasionally, use very intemperate language. My noble friend tonight referred to what he had said in the debate on the Queen's Speech, and I think that I must say at once that no one on this side of the House could possibly agree with my noble friend's recommendation that the only way to deal with people like Colonel Gaddafi is, as he suggested, "to exterminate them". We cannot agree with that kind of thinking or argument.
My noble friend has made a very powerful and indeed far-ranging speech, but his Question is to ask for a statement from the Government about the "Panorama" programme "Trading in Terror". Those of us who saw the programme, or who have read the transcript, found every aspect of it profoundly alarming and indeed revolting, and we very much look forward to hearing how the noble Lord the Minister will reply.
I do not myself propose to make a speech about the Middle East. Despite what some noble Lords have said, I think that it is improper to do so under the terms of this Unstarred Question. But the supreme irony of the situation, as we see it, is that Colonel Gaddafi, an extreme Islamic leader, has been able to
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purchase vast quantities of Soviet arms, as my noble friend has said—and very sophisticated arms at that—mainly through the sale of oil to the West. So some of those arms, which the whole House was horrified to hear might be used against President Reagan, might well have been paid for by the West.
In this connection, I know that many noble friends on this side of the House are disturbed by the action of the Midland Bank in giving a loan of £2,300,000 to Colonel Gaddafi, without apparently any stipulation as to its use, at such a disturbed and disturbing time. And for the bank's spokesman to say,
"Politics have nothing to do with it—it was a purely commercial decision",
seems at best naive. It is not only the Americans and the West generally who are alarmed. As the London Times said last month, many African States are also alarmed by the 5,000-strong so-called "Pan African Legion" composed of political exiles from black African countries currently being trained in terrorism in the Libyan camps.
It seems to us on these Benches that, with all the potential dangers rife in the Middle East and their serious implications for world peace, everyone concerned should try to treat this situation with wisdom and restraint. The indignation, and indeed fury. of the United States' reaction to potential threats against their President and their Administration are wholly understandable. But we on this side would deprecate the two suggestions which we read in the Daily Telegraph this morning of how to react—they were quoted from an American paper. Talk of a blockade of Libyan food imports or, worse still, a United States air strike against the Libyan camps is not helpful. Despite what my noble friend has said, and here I totally agree with the noble Lord, Lord Gladwyn, the only way to cope with terrorism is by international consultation and, if possible, action.
I do not want to say more. The problems of many Middle Eastern countries are economic, rather than military. The world should concentrate on getting adequate aid to countries such as Egypt and Sudan, rather than supplying them with vast packages of arms—and there I agree with my noble friend. We hope that the Government will urge on the United Nations and the United States, and will indeed follow the advice themselves, that the IMF and other world agencies should be geared in this direction. At present the IMF mainly offers loans under conditions of such draconian austerity that they contribute to the poverty and inevitable unrest in the poorer countries in this volatile and dangerous area of the world. It is that situation which exacerbates violence and breeds support which, notwithstanding the incredibly complex political problems, could otherwise be turned into peaceful directions.
6.21 p.m.
Lord Trefgarne: My Lords, it is, unhappily, the case that relations between the United Kingdom and Libya have not always been smooth. As recently as May and June of last year Her Majesty's Government were obliged to take certain steps with regard to a number of Libyan diplomats in London. This was made necessary because the activities of the gentlemen concerned were incompatible with their status as diplo

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mats. Indeed, I repeated two Statements in your Lordships' House at the time which related to these events. I will not recount the details of what occurred, but your Lordships will recall that we successfully sought the withdrawal of four Libyan officials early in May, and we expelled the then head of their mission in London in the following month.
I cannot say that since then our relations have become entirely normal. However, it is possible to point to a constructive dialogue with the Libyan Government which I believe bodes well for the future. The present Libyan mission in London is called a People's Bureau, and we accord to the head of it the status of Chargé d' Affaires. We understand that this meets the wishes of the Libyan authorities. Our own mission in Tripoli is of course an embassy in the normal sense, and is staffed to an appropriate level. Our ambassador, Mr. Edes, is accredited in the normal way.
I think your Lordships may find it useful if I now outline the present policies of Her Majesty's Government towards Libya. I have just referred to the problems we encountered after the events of last year, when two Libyans were killed in London. We made it clear to the Libyan authorities at the time that we wished to maintain good relations with Libya but that our relations could not improve unless the campaign of harassment ended immediately. We have since sought, and received, assurances at a high level that there will be no repetition of the events of last year.
We have long been a major trading partner of Libya. We take little Libyan oil, and the trade balance is therefore well in our favour. The Libyan market holds out major opportunities, and we know that the Libyans are keen that more British firms should tender for work in Libya. We have in the past few weeks received as an official guest in Britain the Libyan Secretary for Heavy Industry, Mr. Omar Muntasir, who held talks with British Ministers and officials and visited a number of British firms. We hope that our relations will develop in such a way as to make further such exchanges possible.
I turn now to the "Parorama" programme which the noble Lord has referred to in his Question and, indeed, in his speech tonight; and his concern has been echoed by other noble Lords and the noble Baroness. Her Majesty's Government are not, of course, responsible for the programme, nor its content. Allegations concerning contraventions of United States law are for the authorities of that country, and not for me. However, I should like to make it clear that I know of no evidence that British law has been broken as described. If BBC officials and others concerned with that programme have such evidence, doubtless they will bring it to the attention of the police. Suggestions that the British authorities were turning a blind eye to illegal activities are, of course, without foundation.
Equally, I reject the suggestion put forward by the noble Lord, Lord Beswick, that there is some sort of collusion between the British security services and Messrs. Wilson and Terpil (I think their names are) who were referred to in the programme.
Lord Beswick: My Lords, will the noble Lord make it clear that the suggestion was not mine? It was in the programme to which I referred.
Lord Trefgarne: My Lords, I accept that that was a possible interpretation of some of the items in the programme, and, of course, I equally reject it on that basis. I want to turn now to some of the other points made during the course of discussions this evening. First, my noble friend Lord Salisbury asked in particular about the crimes that took place in this country in the early part of 1980. I earlier reminded your Lordships of the Statements I made in May and June 1980 about the action that the Government took at that time, but your Lordships may recall that since then three people have been convicted of murder and sentenced to life imprisonment for these crimes.
Since then we have lost no opportunity to make clear to the Libyan authorities at every level available to us that it is an absolute condition for the development of our relations that there should be no repetition of these climes. We have insisted that relations can develop only where there is mutual respect for the sovereignty and law of the other party. The Libyans have told us that they understand the damage done to their own interests by events in the past, and they have given us assurances that there will be no repetition of them in the future. Naturally, we have paid great attention to these assurances and to Libyan actions since they were given, and I am certain that the Libyans are under no misapprehension about our position.
My noble friend also referred to the possible connection between the forces in Libya and the murderers of the late Lord Mountbatten. We have no reason to believe that members of the IRA, for example, arc being trained in Libya; neither do we have any evidence to connect Libya with the murder of the late Lord Mountbatten, or with attacks on British politicians or British embassies. We know of no evidence to connect Libya with Welsh Nationalists; nor with the death in London of the Bulgarian broadcaster, to whom my noble friend also referred.
The noble Lord, Lord Paget, suggested some fairly forthright proposals in connection with the destruction of the Libyan forces. I think his proposals were really aimed at the Americans, but may I say this? Although we do not agree with Libyan policies we must accept that Libya is a sovereign state, and we respect her right to self-determination. We would naturally reject any suggestion that force might be used against Libya.
As to the connection between Libya and the USSR, it is a well-known fact, as more than one noble Lord, I think, has suggested this evening, that Libya buys most of her arms from the Soviet Union, and the relationship appears to satisfy both of them. The Libyans have access to Soviet weapons and the Russians presumably gain much needed hard currency. But there is little evidence to suggest, although foreign policy objectives of Colonel Gaddafi and Moscow may sometimes coincide, that either side is interested in a closer political relationship. Nor is there evidence of Libyan involvement in President Sadat's death. Although Libyans have always made known their opposition to Camp David and welcomed Sadat's death, nonetheless relations between Libya and Egypt, although tense after Sadat's death, appear to have improved a hit since.
I think my noble friend Lord Salisbury referred to the possibility of the People's Bureau as a centre of

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terrorism. I should say that we have been given assurances by the Libyans that there will be no repetition of the terrorist acts in the United Kingdom and we have accepted those assurances. We do not, of course, agree with all the policies followed by the Libyan Government. This is true of many Governments with whom we have relations. But our relations are such with Libya that we are able to speak frankly when we disagree with their policies or activities, and we shall continue to do so. As I have made clear, we made known last year our opposition to the Libyan involvement in Chad, and we have been pleased to see in recent weeks that the Libyan Government have acceded to a request by the transitional Chadian Government that their troops be withdrawn. This move has also been welcomed by the Organisation of African Unity, who are organising a peace-keeping force to replace the Libyans.
My Lords, we do not believe that the way to make our views known would be to boycott or isolate Libya. We believe it to be more effective to encourage the Libyans to adopt acceptable policies by maintaining a dialogue with the Libyan Government and trying to develop as near normal relations as possible.
Baroness Llewelyn-Davies of Hastoe: My Lords, one can understand about keeping open channels of communication; but is it necessary at this juncture for our banks to donate to Libya some £2¼ million—money which is badly needed for investment in industry here?
Lord Trefgarne: My Lords, that is a specific matter for the Midland Bank and I suggest that inquiries should be addressed to them. The Government have no particular control over the Midland Bank or any other bank.
My Lords, I cannot pretend that everything is as we would wish it in our relations with Libya. But I hope I have made it clear that while we must, and shall, ensure that foreign diplomats working here shall do so in accordance with our laws and, we hope, proper norms of civilised behaviour, we none the less seek the best relations we can having regard to all the circumstances. So far as Libya is concerned, we have noted and accepted the recent assurances to which I have referred, but we look to the authorities in that country to ensure that those assurances remain valid. Provided this is done, we may look to an improvement in Anglo-Libyan relations in the future with reasonable hope and confidence.

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