Sitting of 17 December 1981

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRAYERS
  MESSAGE FROM THE QUEEN

    ZIMBABWE (GIFT OF A SPEAKER'S CHAIR)
    The Vice-Chamberlain of the Household reported Her Majesty's Answer to the Address, as follows:
    I have received your Address praying that I will give directions that there be presented on behalf of your House a gift of a Speaker's Chair to the House of Assembly of Zimbabwe, and assuring me that your House will make good the expenses attending the same.
    It gave me great pleasure to learn that your House desires to make such a presentation and I will gladly give directions for carrying your proposal into effect.

  PRIVATE BUSINESS

    HUMBERSIDE BILL [Lords] (By Order)
    Order for Third Reading read.
    To be read the Third time upon Monday 21 December.

Oral Answers to Questions
  NATIONAL FINANCE

    Currency
    Mr. Greville Jannerasked the Chancellor of the Exchequer if he is yet in a position to announce the introduction of the new coins into the United Kingdom currency.
    The Economic Secretary to the Treasury (Mr. John Bruce-Gardyne): I refer the hon. Member to the answer given on 31 July to my hon. Friend the Member for Romford (Mr. Neubert) when it was announced that the 20p coin would be issued for general circulation in June 1982, and the £1 coin in April 1983.
    Mr. Janner: As the value of the pound is falling rapidly day by day, what does the Minister expect to be the value of the pound coin by the time that it is issued and by the Christmas after that?
    Mr. Bruce-Gardyne: I hope that I can draw from that question the conclusion that the hon. and learned Gentleman will support the Government in their determination to bring inflation under better control.
    Mr. Pawsey: Has my hon. Friend received any representations from the Automatic Vending Association of Britain, especially about the possibility of counterfeiting of the new coin?
    Mr. Bruce-Gardyne: I understand that the design of the new coin has been discussed with the manufacturers of vending machinery, who are satisfied with it at present. If my hon. Friend has any problems about that I hope that he will let me know.
    Mr. James Lamond: Would it not be better to bring forward the introduction of the £1 coin as members of the public will need several of them when they pay their new Underground fares following the House of Lords decision?
    Mr. Bruce-Gardyne: I regret to have to tell the hon. Gentleman that the Royal Mint cannot introduce the coins any more swiftly than at present planned. They will be a convenience to the public when they come into circulation.
    Mr. J. Enoch Powell: On a point of order, Mr. Speaker. Should not the custom of the House be preserved that Ministers answer questions from the Dispatch Box?
    Mr. Speaker: That is our custom, and no doubt it will be followed.

    National Insurance (Employers' Surcharge)
    Mr. Richard Wainwrightasked the Chancellor of the Exchequer what is his estimate of the present annual cost of reducing employers' national insurance surcharge by two percentage points.
    The Chancellor of the Exchequer (Sir Geoffrey Howe): On the basis of the economic assumptions recently published in the report of the Government Actuary on the Social Security (Contributions) Bill 1981, the full year cost of reducing the rate of national insurance surcharge by two percentage points would be about £2·3 billion.
    Mr. Wainwright: Is the Chancellor of the Exchequer aware that that reduction in revenue would be dwarfed by the increased buoyancy of the revenue following such a reduction, because the removal of that handicap to British industry has been estimated to produce, after two years, at least 200,000 more jobs, about a 1½ per cent. increase in the gross domestic product and a reduction of the retail price index by about 1 per cent.?
    Sir Geoffrey Howe: The arithmetic is by no means as easy or as encouraging as the hon. Gentleman suggests. I recognise why so many in business would like to see the surcharge reduced, but I must bear in mind the total revenue yield, which is now £3·8 billion. The case for any reduction would have to be weighed in the light of the circumstances in which I consider it.
    Mr. Eggar: Will my right hon. and learned Friend confirm that a reduction in the surcharge would be the single most effective way of assisting industry? Will he confirm also that industry is in need of assistance?
    Sir Geoffrey Howe: My hon. Friend will need no reminding of the extent to which we recognise the case for assisting industry by the reduction as far as is possible of the costs, burdens and charges that fall upon it. I have received many representations to that effect concerning the national insurance surcharge, but not all of them point in that direction. The representations will have to be considered in the light of the total revenue when the time comes to do that.
    Mr. Shore: I am not confirming the arithmetic of the hon. Member for Colne Valley (Mr. Wainwright), but the

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    Chancellor must be aware that British competitive costs have declined by about 40 per cent. since the national insurance surcharge was last increased. In the interests of the competitiveness of the economy and the increase in demand that would undoubtedly follow from a reduction of the order of magnitude that has been indicated, does not the right hon. and learned Gentleman agree that he should give further and more urgent consideration to such a modest proposal?
    Sir Geoffrey Howe: The right hon. Gentleman should be well aware that by far the largest cause of the reduction of the competitiveness of British industry since 1975 has been the doubling of unit labour costs.
    Mr. Shore indicated dissent.
    Sir Geoffrey Howe: The exchange rate of the pound, about which the right hon. Gentleman is gesticulating, stands close to the level at which it stood when the Government took office. Overwhelmingly the dominant cause was the substantial rise in unit labour costs. If the right hon. Gentleman feels so strongly about this issue, what a pity it was that his Government, who introduced the surcharge, increased it and increased national insurance contributions, adding to the burden of British industry by no less than 5 per cent.
    Mr. Marlow: Will my right hon. and learned Friend care to say, if the national insurance surcharge were reduced, how much of that would go into reducing industry's costs and how much of that would go into increasing wages?
    Sir Geoffrey Howe: That factor is one of the reasons why not all the representations that I receive are to the effect that tax relief should take the form of reductions in the surcharge. Whatever is done to the tax burden, it is crucial that those on both sides of industry should continue to reduce the costs that are imposed by rising unit labour costs.

    Investment Income
    Mr. Geoffrey Johnson Smithasked the Chancellor of the Exchequer what would be the cost to the Exchequer of allowing the first £5,000 of investment income of people over 65 years to be treated for taxation purposes as if it were a pension.
    The Chief Secretary to the Treasury (Mr. Len Brittan): The first £5,500 of anybody's investment income, regardless of age, is already treated in the same way as a pension or any other kind of earned income. The cost of adding an extra £5,000, for those over 65, to the existing investment income surcharge threshold of £5,500 would be about £110 million in a full year.
    Mr. Johnson Smith: I am grateful to my right hon. and learned Friend for that reply. Will he continue to bear in mind the needs of those whose income, when they are over 65, comes not from inheritance or from pensions, but from their savings? Will he acknowledge that there is a special need to index the rate of taxation?
    Mr. Brittan: The investment income surcharge requires consideration constantly. For that reason, for the reason given by my hon. Friend, and for many other reasons, the threshold for the elderly was doubled in 1979 from £2,500 to £5,000.

    Economic Policy (Incentives)
    Mr. Leightonasked the Chancellor of the Exchequer if he is satisfied with the level of incentives provided by his economic policy; and to what extent the incentives policies outlined in his Budget of June 1979 have been modified.
    Sir Geoffrey Howe: The Government remain committed to continue the improvement of incentives that began in the 1979 Budget. Further progress must depend upon the likely balance between tax revenue and public expenditure.
    Mr. Leighton: Does the right hon. and learned Gentleman recall that he assured us that his original incentive Budget would release the energies of what I believe were called entrepreneurs? I am indebted to the Library for the information that current output of British manufacturing industry is 16 per cent. less than it was in May 1979. Is that intentional? Does it mean that his policy is a success, or a failure?
    Sir Geoffrey Howe: Marginal rates of tax, especially for entrepreneurs, were reduced substantially in my first Budget. Had that not been so, people would have been contemplating a dispiriting prospect now. The hon. Gentleman might care to remember that industrial and manufacturing output have been rising for the past four months. The output of manufacturing industry in the third quarter was 2½ per cent. up on the second quarter. Industrial production in the past three months has been up by 1½ per cent. on the previous quarter. All those factors are pointing in the direction of the continued growth of national output.
    Mr. Archie Hamilton: Does my right hon. and learned Friend agree that the greatest incentive that could be given to British industry would be to bring down interest rates? Does he accept that that is the best way of controlling public expenditure and not running up large Government borrowing?
    Sir Geoffrey Howe: I am certain that my hon. Friend is right to draw attention to that fact. The reduction of interest rates is something to which industry attaches importance. In considering the size of the borrowing requirement that is likely to produce such a reduction, one has to take account of revenue and expenditure.
    Mr. Straw: The Chancellor is correct to say that the tax burden for the very rich has lessened. The man on £595 a week is now £25 a week better off because of the right hon. and learned Gentleman's tax changes. However, does he agree that for the majority of the British people on average or below average earnings the income tax burden has risen, and that for the lowest paid families on half average earnings the burden has almost doubled under this Government? Will the right hon. and learned Gentleman say where that increased burden was contained in his election manifesto?
    Sir Geoffrey Howe: Once again the hon. Gentleman overlooks, as his right hon. and hon. Friends so often do, the increase in earnings that has taken place alongside every other change. Earnings, on average, rose by 57½ per cent. over the past three years, while the rise in prices was just over 50 per cent. In most types of household disposable income after payment of income tax and national insurance contributions has kept ahead of prices.

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    Even for a household on 50 per cent. of average earnings, with two children, the fall has been only 0·3 per cent. in real disposable personal income after taking account of child benefit and family income supplement.
    Mr. Jay: Were the economic consequences of the 1979 Budget the ones that the Chancellor intended?
    Sir Geoffrey Howe: Had we not taken the action that was embodied in the 1979 Budget to reduce the massively accelerating growth of public expenditure and to reverse the heightening burden of income tax on the earnings of the British people, we would not have begun the recovery that is now taking place.

    Chancellor (Statement)
    Mr. Horamasked the Chancellor of the Exchequer what representations he has received on his statement of 2 December.
    Sir Geoffrey Howe: As is usual on these occasions, I have received comments and representations from a variety of sources.
    Mr. Horam: Has the Chancellor noted the CBI's view in its reaction to his mini-Budget, in which it points out that the result of it will be an extremely sluggish growth in output next year with no fall in the underlying trend of unemployment until the next general election? In these circumstances why does the right hon. and learned Gentleman continue to resist providing some help for industry, especially when capacity utilisation is still extremely low and when the PSBR, in real terms, is low for a recession?
    Sir Geoffrey Howe: As I have said on a number of occasions, there was no mini-Budget on which industry could pass such a judgment. The House received a presentation of the public expenditure plans for next year, and we shall have to come to a judgment when we consider the Budget as a whole.
    Mr. Archie Hamilton: Will my right hon. and learned Friend confirm that unemployment is likely to fall as a result of people being employed in small businesses that are not members of the CBI?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to the importance of small businesses as the generators of additional employment. That is why my right hon. Friends and I have introduced no fewer than 72 different measures for the encouragement of small businesses.
    Mr. Shore: In the light of continuing representations on public expenditure, will the right hon. and learned Gentleman give some new and special consideration to the effect on the elderly of this unusually severe winter weather, which will inevitably impose upon them extremely high fuel costs? He will know that the special heating allowance scheme is available only to pensioners over 70 years of age. Will he give urgent consideration to making a special increase in heating allowances for all categories of need during this winter? Will he consider again the Christmas bonus as one possibility—or a post-Christmas bonus—of assisting many who are being seriously affected by this appalling winter?
    Sir Geoffrey Howe: The whole House shares the right hon. Gentleman's concern for old people—
    Mr. William Hamilton: The Government have a funny way of showing it.
    Sir Geoffrey Howe: However, on the experience of only the first few weeks of the winter it is difficult to conclude, statistically or otherwise, that it is likely to be different from any other winter. The right hon. Gentleman should take account of the fact that the Government are maintaining the Christmas bonus and that the previous Government suspended it for two years.

    Corporate Taxation (Spare Capacity)
    Mr. Lathamasked the Chancellor of the Exchequer whether he will take into account in formulating proposals for corporate taxation the level of spare capacity at which British industry is currently operating.
    Mr. Bruce-Gardyne: In formulating the forthcoming Budget my right hon. and learned Friend the Chancellor of the Exchequer will take full account of the position of British industry.
    Mr. Latham: As, in view of the level of unemployment, industrial capacity and consumer demand are clearly not satisfactorily balanced, will my right hon. and learned Friend endeavour, in preparing his Budget, to make further progress towards honouring Conservative promises about lower taxation?
    Mr. Bruce-Gardyne: The Government would like to make further progress towards lowering taxation in next years's Budget, but it depends on progress in controlling expenditure and the problem of financing the borrowing requirement which will emerge from that Budget.
    Mr. Skinner: Is not the main reason why the Chancellor cannot fulfill Conservative pledges to cut taxation and give pensioners more simply that the Government's unemployment policy is costing them well over £12 billion, according to the Manpower Services Commission, which is a greater sum than the PSBR? Would it not make good business sense to cut the number on the scrap-heap and thus have more money to take the measures that we should like the Government to take for pensioners and so on?
    Mr. Bruce-Gardyne: The Government are as keen as anyone to see unemployment reduced, but it will come not from so-called reflation but only from the restoration of the competitiveness of British industry, with which we are making great progress.
    Mr. Heddle: When formulating the Budget proposals, will my hon. Friend consider that the service sector, at least as much as the manufacturing sector, is capable of playing its part to reduce unemployment? Therefore, will he consider extending the industrial buildings allowance facility not only to the manufacturing but to the service sector?
    Mr. Bruce-Gardyne: My right hon. and learned Friend would entirely agree that the service sector has a vital role to play in economic recovery, but I ask my hon. Friend to await his Budget Statement.
    Mr. Robert Sheldon: Does the Minister agree that one way in which our capacity is being reduced is by firms closing and selling machinery to others in more successful countries? Is he aware that in Tameside, an area of small manufacturing companies, in the past two years one in four

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    firms has closed, which shows that the Government have done more damage to industry than any other force, internal or external?
    Mr. Bruce-Gardyne: I am afraid that what did most damage to industry was the enormous growth in earnings that took place during the period when the right hon. Gentleman had a hand in our affairs and which was quite unconnected with improvements in output and had to be taken out of profits. That is what we are paying for today. I remind the right hon. Gentleman that we have provided small and start-up businesses with the most generous tax package available anywhere in the world.

    Inflation
    Mr. Knoxasked the Chancellor of the Exchequer what is the current rate of inflation.
    Mr. Parryasked the Chancellor of the Exchequer, further to his statement of 2 December, when he expects inflation to be reduced to single figures.
    Sir Geoffrey Howe: The latest figures for the annual rate of increase in the RPI are for the 12 months to October 1981, when the increase was 11·7 per cent. The figures will worsen slightly over the next couple of months, mainly because of the effect of the lower exchange rate on the price of imported raw materials and fuel, but we can expect further progress in reducing the rate of inflation during next year.
    Mr. Knox: As an advocate of monetarism, how does my right hon. and learned Friend square his forecast of an inflation rate of 10 per cent. over the next 12 months with the very much faster increase in sterling M3 over the past 16 months, especially as he does not envisage a substantial increase in output over the next 12 months?
    Sir Geoffrey Howe: As my hon. Friend knows, sterling M3 is not the only monetary aggregate to which we pay attention. If I guess rightly, my hon. Friend would be among those more likely to complain about the tightness than the laxity of monetary policy, which is likely itself to produce a continuing fall in inflation.
    Mr. Parry: In view of the Chancellor's disastrous record over the past two and a half years and his miserable reputation as a Scrooge, will he do us a favour by resigning before Christmas?
    Sir Geoffrey Howe: I have no intention of doing any such thing. I intend instead to remind the hon. Gentleman that, by comparison with the record of the previous Government, the rate of growth in prices in our first three years in office has in each year been significantly lower.
    Mr. Richard Wainwright: As the Chancellor always insists on the key importance of the public's inflationary expectations, why did he take measures in his recent public expenditure statement to aggravate the already disappointingly high rate of inflation?
    Sir Geoffrey Howe: I have taken the action necessary to ensure that the proper resources are available in the national insurance fund to meet the liabilities—largely the increase in pensions—that the fund will have to meet and to ensure that those who can are paying a reasonable contribution to the cost of their housing.
    Mr. Whitney: Can my right hon. and learned Friend estimate the effect on the rate of inflation of the economic panaceas being peddled by those who do not have the responsibility for dealing with the hard economic realities?
    Sir Geoffrey Howe: I believe that all those who peddle such panaceas acknowledge that they are likely to have an adverse effect on inflation, but in almost every case they seriously underestimate it.
    Mr. Robert Sheldon: Leaving aside monetarist claptrap, is not inflation being controlled by high unemployment, which results in low pay settlements? If unemployment falls, as sure as night follows day, pay settlements will increase. How will the Chancellor control inflation then?
    Sir Geoffrey Howe: In Opposition, as in office, I hope that the right hon. Gentleman will continue to insist on the importance of moderate and sensible pay settlements, instead of looking forward apparently to the development of the opposite. I pay little attention to the rest of his observations. He talks of monetarist claptrap, but throughout his time in office he stressed the importance of a monetary policy, so that indicates the extent to which he cast aside his reputation.

    Government Expenditure
    Mr. Marlowasked the Chancellor of the Exchequer whether he expects, in any future year, to reduce Government spending in real terms against the previous year's spending.
    Mr. Brittan: Our plans for public expenditure in 1982–83 are at approximately the same level in real terms as the 1981–82 plans. I must ask my hon. Friend to await the White Paper, which will show our plans for the whole of the survey period up to 1984–85.
    Mr. Marlow: Will my right hon. and learned Friend tell the House that, whatever the outcome of the pay negotiations in the coal industry, the real level of Government expenditure in the industry this year will not be increased? Will he confirm that that which is down for revenue expenditure will be for revenue expenditure, and that for capital for capital expenditure, and that there will be no mish-mash between the two? Will he assure the House that if wages are so increased the Government will not bring forward any more money, and if the price of coal increases they will facilitate the import of cheap coal?
    Mr. Brittan: The external financing limits for the NCB have been set, published and announced in every possible way to all concerned. If the developments that my hon. Friend fears occur the consequences will be serious, but I hope that moderation and good sense will prevail, as they so often do.
    Dr. Bray: How can the Chief Secretary do anything about public expenditure in real terms when his officials and the Chancellor have just been telling the Treasury Select Committee that public expenditure planning is now in cash terms? What are the implications of the unpredictability of prices for real spending for the employment of teachers and public sector workers generally?
    Mr. Brittan: I hear from behind me an hon. Friend saying that the hon. Gentleman is getting into a muddle.

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    I am inclined to agree. It is perfectly possible to plan in cash, as, indeed, we have done, which is an extremely salutory and important reform, but at the same time, if the hon. Gentlemen are concerned to know the level in real terms, it is a simple calculation to answer the question.
    Mr. Adley: Do my right hon. and learned Friend and the Treasury differentiate between public expenditure on the nation's infrastructure and public expenditure on, for instance, manufacturing industry, where on the one hand there is nobody else to pick up the money or the market, and on the other there would be people who could do so?
    Mr. Brittan: Clearly, there is a distinction. This shows that merely making the distinction between capital and current expenditure does not necessarily provide a uniquely useful tool for determining priorities.
    Mr. Shore: If the Chief Secretary cannot give the assurance sought by his hon. Friend that in any future year he expects to reduce public expenditure, does riot that mean that the whole medium-term financial strategy and the policy of cutting and reducing public spending and the public sector has been abandoned? If that is so, have not the Government been attacking main public expenditure programmes but constantly finding, as the recession increases, that any gains on that front are lost through the payment of unemployment and other slump benefits?
    Mr. Brittan: As the right hon. Gentleman's premise is false, it is not surprising that his conclusion is also false. With the renewal of growth in the economy, there is a real prospect that public expenditure will begin to fall again as a percentage of gross domestic product, and that may well happen next year.

    Open Heart Surgery Equipment (Import Duty)
    Mrs. Knightasked the Chancellor of the Exchequer what duty is payable on each heart valve used in open heart surgery imported into the United Kingdom; and under what circumstances this duty is paid.
    Mr. Bruce-Gardyne: The Customs duties chargeable in the United Kingdom are those established in the Customs tariff of the European Communities. Heart: valves are currently liable at either 8 per cent. or 9·1 per cent. according to their type, and this duty is payable on importation from most countries outside the European Community. An application for suspension of duty has recently been approved by the Council of Ministers and some heart valves will become free of duty from 1 January 1982.
    Mrs. Knight: Does my hon. Friend appreciate that his answer is only partially satisfactory? Will he confirm that the amount of duty payable is £50 per heart valve and that that is a tax on life itself? Does he accept that this is not a commodity in the normal sense of the word as it is useful only to surgeons and their patients? Will he confirm that the valves come from specially reared pigs in the United States and that if they could be produced in the EEC or in Britain no duty would be payable?
    Mr. Bruce-Gardyne: I understand that the suspension which has been announced will apply to bioprosthetic heart valves, which I believe have caused anxiety in my hon. Friend's area. Duty on those will be suspended from the beginning of next year.
    I remind my hon. Friend that Customs duties afford protection to Community producers, and it is right that
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    producers of heart valves or of any other medical supplies should have some protection, in common with most other industries. I should point out, however, that although tax is applied to medical supplies it is taken into account in the financing of the Health Service and compensated in that way.

    British Leyland (Asset Disposal)
    Mr. Dalyellasked the Chancellor of the Exchequer to what extent the disposal of assets by British Leyland will affect the public expenditure borrowing requirement.
    Mr. Brittan: That would depend on the circumstances of any particular case. The recently announced decision of the BL board to dispose of assets in Leyland Vehicles Ltd. was part of its plans to return the BL group to profitability. It results in no additional transfer of funds from the Government to BL or vice versa.
    Mr. Dalyell: What instructions has the Chancellor given to senior Treasury officials about co-operating with the Comptroller and Auditor General in his inquiries into the sale of the assets o the Leyland tractor lane at Bathgate?
    Mr. Brittan: The Comptroller and Auditor General has access to all the files relating to the Government's dealings with BL, and it is right that he should have it.
    Mr. Archie Hamilton: Does my right hon. and learned Friend agree that it is a great tragedy that there is not a far more widespread disposal of assets in BL and that it 'would be a good thing if the whole group were broken up into more manageable units? Does he further agree that it is a tragedy that such an idiotic conglomerate was stuck together in the first place?
    Mr. Brittan: It is difficut to jog back and say what might have happened if a different course had been followed in the first place.
    Mr. Stan Thorne: What proportion of the money paid for capital assets sold off reflected public investment by previous Governments in BL?
    Mr. Brittan: It is not possible to make such a calculation.

    Government Expenditure
    Mr. Adleyasked the Chancellor of the Exchequer whether, for planning purposes, he draws a distinction between public expenditure on infrastructure projects and on public holdings in manufacturing industry.
    Mr. Brittan: Yes, Sir.
    Mr. Adley: Does my right hon. and learned Friend accept that if taxpayers stopped funding BL it would stop building cars but somebody else would fill the market share, whereas if they stopped funding British Rail the railways could not be run and nobody else would pick up the tab? Does he recall using the phrase "a uniquely useful tool" in reply to me on question No. 9? Does he agree that British Rail fits precisely that description? Does he further agree that, for political and social reasons, we need a modern and efficient railway and that failure to invest therein is abject folly?
    Mr. Brittan: I seem to recall using the phrase "a uniquely useful tool", but, so far as I remember, I said that whatever we were then discussing was not such a tool.
    To answer the serious point raised by my hon. Friend, of course I agree that the consequences of ceasing to finance public services are different from those of ceasing to finance manufacturing industry in public ownership. Nevertheless, it would be foolish to deny that the consequences of ceasing to finance BL would be very serious for whole areas of this country.
    With regard to British Rail, of course I wish there to be the investment necessary to maintain an effective railway, but I want it to be financed by the increased productivity that the taxpayer may reasonably expect. That is the approach being made by the Government and I am absolutely sure that it is right.
    Mr. Woolmer: An increase in manufacturing investment would clearly be most welcome and would be given an enormous boost by an increase in demand for our products, but will the Chief Secretary consider the disastrously low level of public house building in this country? In view of the hundreds of thousands of unemployed construction workers, the millions of unsold bricks and growing council house waiting lists, how can he justify holding down public expenditure on housing?
    Mr. Brittan: One must consider housing as a whole, not just public housing. This year, private sector housing starts have increased by 40 per cent. compared with the second half of last year.
    Mr. Marlow: Will my right hon. and learned Friend confirm that infrastructure expenditure allocated to the coal industry this year and next year will not be spent on miners' pay?
    Mr. Brittan: I cannot give confirmation in quite that form. As my hon. Friend knows, the constraint operating on the National Coal Board is the external financing limit, which was recently announced for 1982–83.
    Mr. Park: Does the Chief Secretary agree that a proper activity for him and his colleagues and Treasury officials, and one which we should expect them to undertake, is to keep a close eye on assets being sold, for instance by BL, to ensure that the best possible deal is made so that public money can come back and be re-invested elsewhere?
    Mr. Brittan: I certainly agree that if public money is put into BL or any other concern, we, as custodians of that money, have a real and proper interest in what happens to it and whether it is used for re-invesment where there is a subsequent sale. We should certainly look carefully at what happens to the substantial proceeds of any such sale.

    Tax Havens and Company Residence
    Mr. Foulkesasked the Chancellor of the Exchequer when the draft legislation arising from his consultative document on tax havens and company residence will be published.
    Mr. Bruce-Gardyne: The draft legislation was published on 8 December. Copies have been placed in the Library of the House.
    Mr. Foulkes: Is the Minister aware that there is increasing concern and annoyance that money is lost to United Kingdom revenue as a result of increased tax
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    dodging by individuals and companies in both the Channel Islands and the Isle of Man? What action will the Government take to stop, or at least limit, such tax dodging?
    Mr. Bruce-Gardyne: We shall listen to the representations that we receive in the light of the draft legislation that has now been placed in the Library. If we proceed along the lines of that legislation, it will cover companies based in the Channel Islands and the Isle of Man which carry on their main operations for tax purposes in this country.

    Economic Growth
    Mr. Norman Atkinsonasked the Chancellor of the Exchequer if he has studied the precise mechanism necessary to bring about an upturn in the economy; and whether, in this connection, he now regards it as necessary to intervene deliberately in the economy to ensure that the process leading towards growth is both started and adequately funded, or whether he remains of the view that the mechanism will be self-starting.
    Sir Geoffrey Howe: The Government's policies are designed to produce a more competitive and flexible economy. There are now signs that they are beginning to succeed.
    Mr. Atkinson: May we assume from that answer that the Chancellor remains a free-market non-interventionist? Is he aware that the latest analysis of new orders being fed into manufacturing industries suggests that the total number of new orders and contracts in manufacturing for next year amounts to less than the total required to sustain even the low level of output for this year? Therefore, does the Chancellor accept that, contrary to all the optimistic predictions, it now appears that manufacturing output will drop during next year? If so, what does he intend to do about it?
    Sir Geoffrey Howe: That characteristically gloomy forecast is out of line with expectations. The hon. Gentleman should take account of and be content with the fact that manufacturing output in the third quarter of this year was up by 2½ per cent. on the second quarter; construction industry activity in the third quarter was up by 2½ per cent. on the second quarter; engineering orders this year are up by 20 per cent. on the second half of last year; and engineering export orders this year are up by 22 per cent. on last year. Those figures represent a prospect for increased growth, rather than the reverse.
    Mr. Latham: If the mechanism is self-starting, will it operate at a sufficiently fast rate to achieve the Government's objective of lower taxation? If not, will my right hon. and learned Friend give it a fiscal shove in the spring?
    Sir Geoffrey Howe: My hon. Friend knows that everyone in our party is anxious to secure reductions, rather than increases, in taxation. The precise decisions will depend upon the balance between expenditure and revenue.

    Tax and Price Index
    Mr. Dykesasked the Chancellor of the Exchequer what further use he intends to make of the tax and price index.
    Mr. Brittan: The Central Statistical Office will continue to publish the tax and price index each month. It provides a useful supplement to the information contained in the retail price index.
    Mr. Dykes: Would it not now be better either to change the inputs or to abolish the index altogether?
    Mr. Brittan: I do not think so.
    Mr. Straw: The Chief Secretary said that the TPI was a "useful supplement". Has he forgotten that the former Financial Secretary said that if we wanted a general guide to the changes in total costs facing taxpayers we should look at the TPI, not the RPI, because it is a truer guide? Since the TPI has increased by 15·2 per cent. in the last year, while the RPI has risen by only 11·7 per cent., do the Government still remain of the view that the TPI is the truer guide?
    Mr. Brittan: The hon. Gentleman has given a characteristically selective quotation from what my right hon. Friend the former Financial Secretary said. That selective quotation has been refuted at least half a dozen times. It is important for wage bargainers to concentrate not on cost of living increases, but on what employers have the ability to pay.
    Sir Anthony Meyer: What shall I tell the nurses in my constituency and other constituencies who ask why they should be held to a 4 per cent. increase when local authority manual workers have achieved an increase of double that amount and the miners appear to be going on strike to get more than three times that amount?
    Mr. Brittan: Some of those matters are still to be seen. As my right hon. Friend the Prime Minister pointed out, the consequence of any excessive increase in pay for local authority employees will be an increase in the rates, from which everyone will suffer. That cannot be sensible.
    Mr. Maclennan: Do the Government hope that the percentage increase in income next year will be below the percentage increase in prices?
    Mr. Brittan: It is not possible to give an answer to that question in that form now.
    Mr. William Hamilton: Is the Chief Secretary aware that, whatever index he uses, the irrefutable fact is that everyone earning more than £20,000 a year has been provided with incentives by the Government and everyone on average or below-average earnings has had a massive kick in the teeth?
    Mr. Brittan: That is a classic over-simplification, which fails to take account of the impact of current tax rates on the marginal rates of increase in earnings across the board at a perfectly normal level.

  PRIME MINISTER

    Nurses (Pay)
    Mr. Skinnerasked the Prime Minister if she is prepared to meet a representative group of nurses in respect of their current wage claim; and if she will make a statement.
    The Prime Minister (Mrs. Margaret Thatcher): Current wage claims are not negotiated through my office.
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    I understand the nurses want to talk about the long-term machinery for settling their pay. At a meeting last week with my right hon. Friend the Secretary of State for Social Services the staff side of the Nurses and Midwives Whitley Council again asked if I would see it. I have therefore agreed to see it tomorrow.
    Mr. Skinner: When the Prime Minister meets the nurses, will she give them a clear unequivocal commitment that their pay increase for next year will be no less than 15·2 per cent., as measured by the Government's tax and price index? Is it not a scandal that, at a time when the Government are forcing up rents to the tune of £2·50 a week, when there are many other price increases in the pipeline and when there is now the apparent conspiracy of the Law Lords and a Tory council to push up fares, nurses and other workers should be treated in that fashion?
    The Prime Minister: I have already said that I do not negotiate current wage claims. The Government have made clear the high esteem in which they hold the nurses. In the last three years there has been a 76 per cent. increase in the nurses' pay bill.
    Mr. David Steel: Does the Prime Minister agree that there is a real danger that responsible groups in our society, such as the nurses, who do not resort to strike action, will find themselves increasingly penalised until we develop a fair and comprehensive incomes policy?
    The Prime Minister: I do not believe that there is any practicable possibility of achieving a comprehensive incomes policy. I do not believe that such a possibility exists in our society. It exists only in societies where there is the direction of labour and the extinction of freedom.
    Mr. Paul Dean: Does my right hon. Friend recollect that the nurses felt badly let down by the Labour Government and that they are now hoping for better things following their meeting with her tomorrow? Would it not be easier to get a good settlement for the nurses if everyone in the health services followed the good example of the Royal College of Nursing and outlawed strike action against patients?
    The Prime Minister: I wholly agree with my hon. Friend. It would also make it easier if there were more pay for certain groups of people whom we especially value in society, and if other people did not take it out for themselves.

    Engagements
    Mr. John MacKayasked the Prime Minister if she will list her official engagements for Thursday 17 December.
    The Prime Minister: This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today.
    Mr. MacKay: Has my right hon. Friend had a chance today to check the reports that some people in Poland have been injured in clashes with the militia? Does not the Polish crisis demonstrate to people in this country and in the West the significant difference between Western democracies and the Eastern bloc countries? Should it not make those tempted by the Campaign for Nuclear

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    Disarmament argument realise that neutralism and unilateralism could lead us into the sort of pressures that we see in Poland?
    The Prime Minister: We have seen reports that two people have been killed. It is difficult to get accurate news out of Poland, especially outside Warsaw. Therefore, I cannot confirm those reports at the moment.
    As to what my hon. Friend said about the difference between a free society and a total Communist society, leading as it has done at the moment to the imposition of military law, we all understand the value of the freedom that we cherish. I hope that we shall heed the advice offered in the last part of my hon. Friend's question and always be prepared to allocate sufficient resources to defend that liberty.
    Mr. Foot: Has the Prime Minister today had a chance to study the House of Lords judgment on the GLC appeal on London fares? That judgment must now be carried out because the law must be observed, but does she agree that, if the law is observed in these terms, it will have serious consequences for travellers in London? Therefore, will the right hon. Lady take urgent steps to introduce legislation to restore the law to what many people thought it was previously—including herself as a Conservative spokes-man when the legislation passed through the House?
    The Prime Minister: I shall deal with the latter part of the right hon. Gentleman's question in a moment, because I think that he has either misunderstood the judgment or what I said, or both. I welcome the clear and unanimous judgment from the House of Lords and congratulate Bromley on having taken steps that have clarified the position for London's ratepayers. The judgment runs to about 100 pages. We shall need time carefully to consider what it says, but it is already clear that the GLC's action was a breach of the duty that it owed to ratepayers and wrong in law.
    In Opposition, I commented on the then Government's Act under which this judgment has been given. From what the right hon. Gentleman said, it sounded to me as though he thought that the judgment precluded the possibility of subsidies from the ratepayers. I do not believe that to be so. In that respect, I understand the main burden of the judgment to be that London Transport has a duty to budget and to make a reasonable effort to break even while recognising that in present circumstances it may well not do so. The London Transport budget for the previous year, set on the basis that there would be an £80 million subsidy from the GLC, constituted just such a reasonable effort, and that subsidy in itself is not unlawful.
    Mr. Foot: I appreciate that the right hon. Lady has not had time fully to study the debate in which she took part several years ago when the legislation was passing through the House. The whole question of what was economic and uneconomic was considered then, and she made no objection to the terms of the legislation that went through the House. I ask the Prime Minister urgently to consider the possibility of legislation to make this matter absolutely clear so that the House may again have the chance to pronounce on what it thinks should be a proper and fair fares policy for London.
    The Prime Minister: One must first look in detail at the House of Lords judgment before rushing into any instant solutions or action. On such an important matter a
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    period of reflection is clearly called for. This was a judgment on the law. As I understand it, the judgment does not preclude subsidies. That was the point that I was making. The judgment was concerned not with
    "the fairness of the GLC's decision to reduce by 25 per cent. the fares charged in Greater London by the London Transport Executive",
    but with
    "the legality of that decision"
    and whether it was
    "within the limited powers that Parliament has conferred by statute upon the GLC"
    —the very statute to which the right hon. Gentleman referred. Their Lordships came to the conclusion that it was not.
    Mr. Foot: It is right that we should have time to consider the matter, but will the Prime Minister undertake to give the House a chance to pronounce on legislation before chaos is caused to London fares?
    The Prime Minister: If one is considering the matter, it is as well for the consideration to precede the conclusion.
    Mr. Dobson: Then why congratulate Bromley?
    Mr. Squire: Has my right hon. Friend yet had formal notification of the change in the deputy leadership of the Labour Party?
    The Prime Minister: No, but I do not think that it makes much difference.
    Mr. Michael Morrisasked the Prime Minister if she will list her public engagements for Thursday 17 December.
    The Prime Minister: I refer my hon. Friend to, the reply which I gave some moments ago.
    Mr. Morris: Has my right hon. Friend had a chance to read the debate of 30 November on the first report of the Public Accounts Committee on the role of the Comptroller and Auditor General and to see early-day motion 132? If so, will she now rethink the Government's response to that important report of the PAC and reflect that it is right for hon. Members to have the final scrutiny of all public expenditure?
    The Prime Minister: I am aware of early-day motion 132 and of the point to which my hon. Friend has referred. My right hon. and learned Friend the Chancellor of the Exchequer is carefully considering the important issues raised in the debate. We shall let the House know our conclusions as soon as possible after the recess.
    Mr. Molyneaux: What conclusions has the Prime Minister drawn from the behaviour of Irish and other representatives at yesterday's sitting of the European Assembly?
    The Prime Minister: There was an attempt to make a speech in the Assembly that was not relevant to the matters at issue. I was there not as Head of a national Government but as President of the European Council. In any event, I wholly disagree with the comments made during that debate.
    Mr. Neubert: As a former leader of the council of the London borough of Bromley—[HON. MEMBERS: "Hear, hear".]—may I offer my right hon. Friend another opportunity to congratulate my former colleagues on the council who, by their successful court action against the

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    GLC, have brought relief to millions of hard-pressed ratepayers throughout London? Is she aware that if commitments allowed her to contribute to the debate on my Private Member's motion tomorrow on communications in London, when we shall have five hours to examine the implications of this historic decision, she would be very welcome?
    The Prime Minister: I congratulate my hon. Friend on having been a leader of Bromley council and on having the powers of prophecy to have secured a debate on communications in London tomorrow on a Private Member's motion. I am sure that it will be an interesting debate. My constituents will be just as interested in it as other London constituents, but I hope that my hon. Friend will understand if tomorrow I do not attempt to catch Mr. Speaker's eye.
    Mr. Bidwell: As a Londoner and a member of the Select Committee on Transport, may I tell the Prime Minister that her references to breaking even are out of line with the running of public transport in any major Western European city? Is she aware that this judgment will be greeted with widespread dismay by thousands of ordinary London folk?
    The Prime Minister: The House of Lords clear and unanimous decision was that the GLC had acted outside the rule of law that protects citizens against the arbitrary exercise of power.
    Sir William Clark: Will my right hon. Friend today take an opportunity to read the main article in the Daily Mail, which lists all the many encouraging signs that the economy is picking up? Does she not think it better that we should advertise our successes than continue to talk gloom and doom?
    The Prime Minister: Yes. I wholly agree with my hon. Friend. I note that improvements in the economy are not welcome to the Opposition. Clearly, they prefer the gloom and doom to continue. Things are improving considerably. I heard my right hon. and learned Friend the Chancellor of the Exchequer give some figures. More recent figures show that overtime working in manufacturing is considerably up; hours lost through short-time working are considerably down; industrial production is up; manufacturing production is up; and the latest cyclical indicators released today provide increasingly strong evidence that a turning point occurred in the economic cycle in the second quarter.[interruption.]Unemployment for the last two months has been slightly down. I should have thought that Opposition Members would welcome a reduction in the last two months. Hon. Members will also be aware that it has been usual, for all the last years of the decade, for there to be a sharp increase in unemployment between December and January, because of the weather.

Greater London Council (House of Lords Judgment)
Mr. Norman Atkinson: On a point of order, Mr. Speaker. You will be aware that there is widespread opinion, no doubt throughout London, that the recent House of Lords judgment will be considered by their Lordships to be an extra-parliamentary political instrument which they have used in order to further the politics of the Conservative Party—[Interruption.]
Mr. Speaker: Order. It is very difficult for me to hear what the hon. Gentleman is saying. Perhaps I may say to him that I have had notice of an application under Standing Order No. 9, and I have listened to the exchanges during Question Time, and I have looked at the Order Paper in regard to the debate tomorrow. Therefore, it does not sound to me as if the hon. Member has a point of order on which I can rule within our Standing Orders.
Mr. Neil Carmichael: Further to that point of order, Mr. Speaker—
Mr. Speaker: Order. It was not a point of order.
Mr. Carmichael rose—
Mr. Speaker: On a new point of order—Mr. Carmichael.
Mr. Carmichael: It is on the same point, Mr. Speaker, the point you made yourself—
Mr. Speaker: Order. There can be no point of order on that, as I understand it. If the hon. Gentleman thinks that our Standing Orders have been broken, perhaps he will draw my attention to the matter.
Mr. Carmichael: Perhaps I may seek your guidance, Mr. Speaker. I understand that tomorrow's debate is about London. Therefore, there will be opportunities to raise the question of the decision of their Lordships. But this decision affects many areas other than London. Would it be in order for hon. Members outwith London constituencies to contribute to the debate and still have—
Mr. Speaker: Order. I shall be making my position quite clear about tomorrow's debate later this afternoon, in a short while.
Mr. Ivan Lawrence: On a point of order, Mr. Speaker. Is it not completely out of order for an hon. Member to make the accusation that a judgment of the courts is politically motivated, as the hon. Member for Tottenham (Mr. Atkinson) has just done?
Mr. Speaker: Order. In this House we try to respect the judiciary, as we expect the judiciary to respect us. I think that we can leave the matter there.
Mr. Norman Atkinson: Further to that point of order, Mr. Speaker—
Mr. Speaker: Order. I hope that we shall not pursue the matter of the judiciary and this House this afternoon, because it is the judgment that we are interested in. To criticise the motives of people in the judiciary would be as much out of order as it would be to accuse hon. Members of dishonourable or unfair motives.
Mr. Laurie Pavitt: On a point of order, Mr. Speaker. I seek your guidance on the advice that you have given about the debate to take place tomorrow, in which many of us wish to participate. Obviously the point that has arisen today is bound to be of interest tomorrow. May we be guided as to whether the Government Front Bench will deal with not only transport and communications questions but also legal advice?
Mr. Speaker: Order. I must ask the House to await the correct time, which will be when the application under Standing Order No. 9 is made. The hon. Member will then have his opportunity.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. This is a matter on which I think you ought to rule, as you seem to want the House not to refer to the question of the Law Lords and their decision. I understand that, and the point that I want to make—
Mr. Speaker: Order. To help the hon. Gentleman—and to save us having a clash—as long as he understands that he is not free to criticise the motives of the judges—
Mr. Skinner: I am not doing that, Mr. Speaker.
Mr. Speaker: Then it sounds as though we shall get on better than I thought.
Mr. Skinner: I think that the point that you should clarify, Mr. Speaker, is this. Whilst it seems that from the Opposition Benches a reference to the Law Lords' decision being politically connived is wrong, the Prime Minister, in an earlier contribution, laid great stress upon the way in which this matter was dealt with politically in the first instance by a Tory-controlled council and went out of her way to congratulate that council. I think that there should be even-handedness on both sides.
Mr. Speaker: Order. It is always very important in this House to be even-handed, and I have no doubt that, if and when a debate takes place, there will be both defence and criticism of both local authorities involved. That is entirely different from an attack on the motives of judges in reaching their decision.

Business of the House
3.37 pm
Mr. Michael Foot: Will the Leader of the House state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Francis Pym): The business for next week will be as follows:
MONDAY 21 DECEMBER—Proceedings on the Consolidated Fund Bill.
TUESDAY 22 DECEMBER—Proceedings on the Hops Marketing Bill [Lords].
Remaining stages of the Currency Bill.
Until about seven o'clock, there will be a debate on the situation in Poland, followed by a debate on the situation in the Middle East, which will arise on a Motion for the Adjournment of the House.
WEDNESDAY 23 DECEMBER—It will be proposed that the House should meet at 9.30 am., take Questions until 10.30 am., and adjourn at 3.30 pm until Monday 18 January 1982.
Mr. Foot: Perhaps I may put three questions to the right hon. Gentleman. First, will he make sure that we have an early debate, when we return from the recess, on the youth training scheme, about which the Government made an announcement this week?
Secondly, on Tuesday we shall have the next set of unemployment figures. Since the Prime Minister was referring to the matter a few minutes ago, may we have an assurance that the "Secretary of State for Unemployment" will make a statement to the House on Tuesday about the figures so that he can be properly cross-examined about them?
Thirdly, on the question to which reference has already been made about the House of Lords' ruling in regard to the Greater London Council, the Opposition would like to make it clear that any discussion about this matter on Friday would be quite unsatisfactory as a proper way of dealing with this question, and that what we expect the right hon. Gentleman to do is to rearrange the business so that we can have a full debate next week on the serious implications of this matter in preparation for what we believe is the only proper way of dealing with it—for the Government to introduce legislation. If the Government are to introduce fresh legislation when we return soon after the Christmas recess, the House should give its guidance on this important matter in a debate next week. I ask the Government to give time for that.
Mr. Pym: I am sure that the House would welcome a debate on the youth training scheme. I will certainly keep the right hon. Gentleman's representations in mind. I should have thought that it was a suitable subject for a Supply day debate, but if a day can be found in Government time, so be it.
Last month's unemployment figures will be announced on Tuesday in the normal way. I shall not give an undertaking that my right hon. Friend the Secretary of State for Employment will make a statement in the House on that subject. It would be right for the announcement to be made in the usual way.
As regards the judgment that was made only this morning, it is clear from what my right hon. Friend the Prime Minister said that tomorrow's debate will certainly
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not be the end of the matter. The Government will give proper consideration to the judgment, as, no doubt, will the Opposition. After that process has been completed we can review the matter again, but I am not prepared to rearrange the business for next week. We cannot say how long the consideration will take, either on the Opposition side or on the Government side.
Mr. Foot: I thank the right hon. Gentleman, but I wish to press him on two of those matters. He says that the unemployment statement will be made in the usual way, but the unemployment figures facing the country are unusual. They are the worst since the end of the war and, therefore, I urge that the Secretary of State should come to the House to make a statement on the subject on Tuesday.
On the House of Lords judgment on GLC fares, tomorrow's debate will be irrelevant to the problem. We are asking for a proper, orderly debate on a major decision of great importance and we believe that the only proper course for the Government is to prepare legislation in one form or another and that the House should have the chance to give its views beforehand. Unless the right hon. Gentleman wants to be partly responsible for the chaos that will occur in London Transport if we do not get a chance of settling the matter properly beforehand, he should arrange for us to debate it.
Mr. Pym: The unemployment figures will be announced in the usual way. The Secretary of State for Employment has made a number of statements and has spoken in debates in the House recently. No doubt such debates will arise again. I think that the announcement will be made in the right way.
On the right hon. Gentleman's second point, I think that the right course is for the judgment to be properly considered on both sides of the House. Obviously that will not be done by tomorrow. No one suggested that it could be, and nor should it be. The Prime Minister and the Secretary of State for Transport and others will consider it, and when the process has been completed on both sides of the House we can consider how best to proceed.
Mr. Edward du Cann: Has my right hon. Friend seen early-day motion 132, which proposes an extension of the remit of the Comptroller and Auditor General and thereby greater parliamentary accountability?
[That this House approves the Report of the Committee of Public Accounts on the Rôle of the Comptroller and Auditor General (1980–81, H.C. 115); and, in view of the all-party criticism of the Treasury response in the Debate on 30th November 1981, urges the Government to reconsider the views expressed in its White Paper (Cmnd. 8323) and to introduce legislation to allow proper accountability to the House of Commons.]
The motion has been signed by the remarkable number of 252 Members and I do not doubt that many more names will be added, because the House feels strongly about the matter. Did my right hon. Friend hear the admirable reply of the Prime Minister to my hon. Friend the Member for Northampton, South (Mr. Morris) a few moments ago? Will he arrange for a statement to be made on the matter as soon as the House resumes its business after the Christmas Recess?
Mr. Pym: Yes, as soon as possible. My right hon. Friend the Prime Minister gave a forthcoming answer and

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my right hon. and learned Friend the Chancellor of the Exchequer is considering the important points raised in the recent important debate. As soon as possible after the recess there will be a full response to those points.
Mr. John Silkin: Is it not time that the right hon. Gentleman, as a practical Leader of the House, considered the farce of having Question Time on the day of the Adjournment debates before a recess? Few hon. Members are in the House on such occasions and they do not take Question Time as seriously as they might. Could not the arrangements be altered so that we do not have questions on Wednesday?
Mr. Pym: There might be a good deal of support for that. [HON. MEMBERS: "NO."] There would, of course, be others who would wish to continue the practice. Luckily for me, I do not have responsibility for taking that decision. It is a matter for the House, but the right hon. Gentleman's proposition could and, I should have thought, should be considered in the appropriate way—[HON. MEMBERS: "NO."]—at some moment in the future.
Mr. Sydney Chapman: With reference to the Green Paper on alternatives to the domestic rating system published yesterday, will my right hon. Friend give a commitment that there will be a debate in the House as soon as possible in the new year and certainly before the consultation period expires at the end of March? I am sure that he agrees that the House should be able to give its preliminary views on that important matter.
Mr. Pym: I shall wish to seek an occasion for such a debate, but not, I think, early in the new year. It would be helpful to have a wider public discussion first, but at some point I should like to arrange a debate on that important and big issue.
Mr. Christopher Price: Does the Leader of the House understand that the House of Lords judgment in the GLC case goes far beyond the issue of transport and the case of the GLC and Bromley? Judgments made about local authorities that incur surcharges can affect immediately every local authority in England and Wales. Is the right hon. Gentleman aware that such a judgment, which has the effect of virtually changing the law, must be debated in the House at the earliest possible moment? Tomorrow's debate will be inadequate for the purpose. May we have a debate on the subject before Christmas?
Mr. Pym: The judgment refers, I think, to London ratepayers, but in so far as it may have wider implications, and the hon. Gentleman's opinion may be right, that adds force to what I have said about proper consideration being given to the judgment in the first place.
Mr. Norman Atkinson: It is a political judgmentt.
Mr. George Cunningham: In considering whether we should have a debate on London Transport in Government time, will the right hon. Gentleman bear in mind who was the Conservative Party's representative when the Transport (London) Bill went through the House in 1969? Does he remember that it was the present Prime Minister and that the deputy spokesman for the Conservative Party was the present
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Secretary of State for the Environment? Does he know that both of them spoke in those debates in a sense that made it clear that they recognised that subsidies could be provided for London Transport? Is he aware that one of the present senior Government Whips explicitly said that a democratically elected local authority ought to be able to use its money in any way it pleased in that respect? Will the right hon. Gentleman bear that in mind when deciding whether there should be a debate in Government time?
Mr. Pym: I have not even looked at the judgment, but I heard my right hon. Friend the Prime Minister say that there was no question of its not being possible for a local authority to subsidise transport; but that was not the point at issue. However, it underlines the fact that the judgment must be studied carefully before any further steps are taken.
Mr. Peter Emery: My right hon. Friend will have seen that the Minister who replied to the private notice question yesterday said that he believed that nearly all those who had had their electricity supply disconnected would have it reconnected by today. It now appears that there may be 5,000 or more people whose supply will not be connected before the weekend. If that is the case, will my right hon. Friend consider drawing the matter to the attention of the Secretary of State for Energy and asking him to consider making another statement tomorrow?
Mr. Pym: I shall certainly draw those representations to the notice of my right hon. Friend the Secretary of State for Energy. I cannot promise a further statement, but I certainly share my hon. Friend's concern about the extraordinary inconvenience and hardship that a number of his constituents and others in the South-West must be suffering.
Mr. Joel Barnett: With reference to the early-day motion mentioned by the right hon. Member for Taunton (Mr. Du Cann), may I address a question to the Lord President in his role as Leader of the House rather than as a member of the Government? Does he accept that more than 250 signatures to the motion and the speeches made in the recent debate are a clear expression of the view of the whole House? Will the right hon. Gentleman, in his capacity as Leader of the House, ensure that the views of the House are not only brought to the attention of the Government but are brought back to the Floor of the House so that the Government may have the opportunity of introducing the appropriate legislation?
Mr. Pym: I thought that I had answered previous questions on this subject as Leader of the House. I certainly intended to do so. I note what the right hon. Gentleman says. It is right that views expressed on both sides of the House in that important debate should be considered carefully by the Chancellor of the Exchequer and the Treasury. That process is in hand and we shall report on the conclusions after the recess.
Mr. Kenneth Lewis: My right hon. Friend will be aware that certain of his colleagues on the Government Front Bench seem convinced that the economy is picking up. Is he also aware that some hon. Members believe that considerable encouragement could be given to this process if some capital projects were brought forward by the Government? Is he further aware that a project in which he could be inolved would be a start

457
in 1982 on the phased development of the Bridge Street site, to extend facilities for the House, which was stopped at the beginning of this Parliament?
Mr. Pym: Were there to be such a capital programme, some hon. Members, I believe, would support my hon. Friend's view that work should go ahead on the site. However, other hon. Members might feel that there were more important uses to which those resources could be put. I shall keep my hon. Friend's request in mind. What is most important is the help that can be given to our manufacturing and productive industries.
Mr. Donald Coleman: I may not have heard properly, but I wonder whether the Leader of the House, for the convenience of hon. Members, would say when we shall debate the motion for the Christmas Recess.
Mr. Pym: I expect that the motion will be debated on Monday.
Mr. Ivan Lawrence: Will my right hon. Friend, with his great influence in these matters, do something about he horrible smell of eggs and bacon that pervades the Chamber every day?
Mr. Pym: If the source can be traced, I am sure that we shall try to stop it.
Mr. James Wellbeloved: Will the Leader of the House think again about a debate on the GLC issue? It is vital to make clear that what is at issue is not the right of the GLC to provide a subsidy but the responsibility that it exercises in providing that subsidy. Will the right hon. Gentleman bear in mind that it is vital to have a debate so that Mr. Livingstone and his Marxist friends on the GLC—[Interruption.]—and some of them here—can be made aware that what is unacceptable to Londoners is his irresponsible attitude and that what he needs to do is to exercise responsible management of London's affairs?
Mr. Pym: I have nothing to add to the replies that I have already given.
Mr. Ivor Stanbrook: Apart from any debate on the House of Lords judgment, will my right hon. Friend bear in mind that one urgent legislative need to follow that judgment is a Bill of Indemnity to protect those persons who have acted apparently unlawfully in the belief that they were acting lawfully? Is he aware that this may be a matter of great urgency in individual cases? Will the Government give serious consideration to introducing early legislation to deal with this point?
Mr. Pym: I do not know about legislation. I am sure that the point that my hon. Friend raises will come into the consideration of the judgment.
Mr. Bruce George: Next week the House will debate the violation of human rights in the Middle East and in Poland. When will hon. Members debate an issue over which we have more control—the violation of human rights in Canada? When will there be debate on a Canada Bill? Will the Leader of the House give an assurance that those hon. Members who seek to oppose parts of the Bill will be given ample opportunities for debate and for the tabling of amendments?
Mr. Pym: In due course I shall present a Canada Bill to the House.
Mr. John Stokes: Will my right hon. Friend find time in the near future for a debate on an important publication, "Social Trends" issued the week before last by the Central Statistical Office, which shows that, while there has been a marked rise in living standards during the past 10 years, there has been a marked decline in moral standards?
Is it wise for the House to debate affairs in Poland? Is it not the case that, deeply as we feel about events in Poland, we have no power over that country and no responsibility for what goes on there?
Mr. Pym: It sounds to me as though the first subject raised by my hon. Friend would be appropriate for a private Member to raise.
Events in Poland are of the greatest importance and concern to the West. Although we do not have any direct control, we have a great interest in those events It is very much to meet the wishes and desires of hon. Members that a debate has been arranged to provide an opportunity for hon. Members to express views on the dramatic and important developments in Poland.
Mr. K. J. Woolmer: May I draw the right hon. Gentleman's attention yet again to the important multi-fibre arrangement negotiations in Geneva and remind him that the protocol governing the arrangement expires on 31 December? Is he aware that by next Wednesday either an agreement will have been reached or 600,000 workers in the industries affected will be left in complete uncertainty about what is to happen? Does he not agree that a statement should be made next week, or at the earliest opportunity after the House returns from the Christmas Recess?
Mr. Pym: A number of questions were raised on this matter last week when I said that negotiations were continuing. They are still continuing. The situation in relation to those negotiations is, shall I say, somewhat fluid, to the extent that I do not think that anything useful can be added to the two statements that have been made? I have discussed the matter with my right hon. Friend the Secretary of State for Trade. If events in Geneva between now and 23 December develop in a manner that warrant a statement, or if my right hon. Friend thinks that one would be helpful, he will make it.
Mr. John Wilkinson (Ruislip-Northwood): Will my right hon. Friend review the workings of the Select Committee system, as instituted at the beginning of this Parliament? Will he consider, in particular, the reappointment of a Select Committee on Nationalised Industries which would span departmental responsibilities, because these industries are immune from scrutiny by Back Benchers and their financial performance has been one of the most depressing features of the current economic situation?
Mr. Pym: Almost every hon. Member has an interest in these Committees and is following their work, which is comparatively new, with great interest. If the House so wished, in due course it would be possible to make some changes. I believe that the general wish is that they should continue more or less as they are for the moment.
I do not think it is true to say that the nationalised industries do not fall within the remit of Select Committees. They do. The only difference is that various nationalised industries come under the purview of different

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Departments instead of all being rolled together in one. The House may eventually wish to revert to the previous arrangement, but at the moment I do not detect any desire to do so.
Mr. Bob Cryer: Is the Leader of the House aware that he should understand the wide-ranging nature of the House of Lords decision? Is he aware that hon. Members need a statement at the earliest opportunity, because the Law Lords have changed the law? How will the decision, for example, affect the excellent transport scheme of South Yorkshire and the decision of the Labour-controlled West Yorkshire metropolitan county council to give increased support to the transport services in West Yorkshire so that people begin to make more use of public transport? These matters are still not clear. A statement and a debate are urgently needed.
Mr. Pym: The Law Lords have passed judgment upon the existing law. I think that the right hon. Gentleman the Leader of the Opposition was among those who acknowledged this at once. I do not believe that the hon. Member for Keighley (Mr. Cryer) is on to a good point.
Several Hon. Members rose—
Mr. Speaker: Order. I propose to call those hon. Members who have been rising to put questions from the start of these exchanges.
Mr. Tony Marlow: I wish to pursue a point raised by my hon. Friend the Member for Hornchurch (Mr. Squire) with the Prime Minister. As my right hon. Friend the Leader of the House will no doubt have come across an important statement by the right hon. Member for Bristol, South-East (Mr. Benn), and as, from time to time, the right hon. Gentleman the Leader of the Opposition will obviously not be in attendance—[Interruption.]
Mr. Speaker: Order. I do not need advice from either Front Bench when this sort of point is being put. I hope that the hon. Gentleman has a question relating to next week's business.
Mr. Marlow: In the event of the Deputy Leader of the Opposition not being her next week, would my right hon. Friend say—
Mr. Speaker: Order.
Mr. Greville Janner: Has the attention of the Leader of the House been drawn to another remarkable decision, this time by the Court of Appeal in the case of Westminster City council v Ray Allan Ltd., when the court held that one could hold a closing-down sale and stay open, and put goods at reduced prices in a shop without ever having had them at the higher price in that branch at any time? As the Trade Descriptions Act clearly needs urgent amendment, and as the season of sales has arrived, will the right hon. Gentleman undertake at least to speak to his right hon. Friend the Minister for Consumer Affairs and ask her to consider making a statement now for the protection of consumers in another sector that is threatened by a decision of the court?
Mr. Pym: I assume that the hon. and learned Gentleman has done so himself, but I am quite prepared to pass his representations to my right hon. Friend.
Mr. Peter Bottomley: If the debate on the repercussions of the House of Lords judgment is delayed until the new year, will my right hon. Friend say when there is likely to be a statement about what happens to ratepayers who have paid the supplementary rate, what should happen to those who have not paid, and at what stage ratepayers will know whether they will have to pay for the subsidy during the period when London Transport's action has been held to be illegal? I should welcome a debate on the judgment next week or in the new year, because there are many elderly people in my constituency who cannot get the advantage of reduced underground fares because there is no underground in the constituency and because old-age pensioners already travel free on the buses?
Mr. Pym: I fully accept what my hon. Friend says, but at the moment the answer is "No". Clearly the matter will be considered, and no doubt in due course my hon. Friend will receive an answer.
Mr. Dennis Skinner: Will the Leader of the House or the Secretary of State for Energy be making any statement about miners' pay, and on the fact that on the Robin Day "Question Time" programme the other night he sought to be somewhat helpful in getting further negotiations going with the intention, presumably, of providing further moneys which would naturally come from the Government? As the right hon. Gentleman made those relatively helpful statements, will he assure the House that what he said on the programme is Government policy, and make sure that his statement is brought to the attention of the rest of the Cabinet so that the matter may be resolved and miners may receive their justified wage award?
Mr. Pym: The negotiations must proceed, and I am sure that everyone hopes that they will reach a satisfactory conclusion.
Mr. Andrew Faulds: Speaking as a Member who represents a constituency in the West Midlands, and following the representations made by several of my colleagues, including my right hon. friend the leader of the Opposition, may I ask the Leader of the House to reconsider his earlier replies and accept that there is an urgent need for a debate before Christmas on the implications for local authorities throughout the country of the House of Lords judgment on transport policy.
Mr. Pym: I have nothing further to add to what I said in answer to a number of questions that have been put to me on that subject during the last half hour.
Mr. David Winnick: As the Government now support trade unionism, at least in Poland, will they show good faith and avoid accusations of double standards by not proceeding with the proposed Bill on trade union legislation which is aimed against trade unions in this country? Has the Leader of the House seen the comments of TUC leaders after meeting the Secretary of State for Employment?
Mr. Pym: The hon. Gentleman knows that he is misrepresenting our views about trade unions. The answer to his question is "No". We have seen the remarks made by the TUC. My right hon. Friend will bring forward a Bill in the new year to improve the arrangements relating to trade unions and industrial relations.
Mr. Ioan Evans: I accept that the Leader of the House has commented several times on the decision of the Law Lords on the GLC, but does he realise that it has wide repercussions and relates not only to London? For example, it has been said that as a consequence of the decision old-age pensioners may lose their travel concessions. Will he clear up that and other matters? If he cannot bring forward the amending legislation on Monday, will he at least make an interim statement and allow the House to debate the matter before the Consolidated Fund Bill?
Mr. Pym: If it is true that the judgment has immense ramifications, that is all the more reason to take time to consider it properly. The idea that conclusions should suddenly be reached and then presented to the House would be utterly wrong. I am sure that the hon. Gentleman will wish to consider the implications, as will all other hon. Members.
Mr. Peter Hardy: The Leader of the House will have observed, and may have quietly participated in, the Government's gyrations in connection with their arrangements for local government finance, which no doubt we shall debate when the legislation is brought before us. Does the right hon. Gentleman agree that we should also be given time in the House—and fairly soon—for debates, not only about the system referring to the document already mentioned in these exchanges, but about the fact that so far in this Session we have not had the usual debate on the rates for 1982–83? Hon. Members usually have ample opportunity before Christmas to consider that matter. When the arrangements are announced in the new year, will they be as calamitous as they were the last time that a Conservative Government deferred the announcement, in 1974?
Mr. Pym: There will be a debate on the rate support grant when we return after the Christmas Recess.
Mr. Alfred Dubs: May I press the Leader of the House on a point that I put to him last week? A few weeks ago the governors of two prisons wrote letters to the newspapers. In one of them the governor of Wormwood Scrubs said that he was the manager of a large penal dustbin. Since then—this is confirmed in today's
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newspapers—a letter has gone from the Home Office to prison governors warning them that if they complain publicly about prison conditions they will have to resign. Surely that is a major departure from the professed Home Office policy of more openness in prison administration. Is not the House entitled to a statement about that policy before we adjourn?
Mr. Pym: I understand that the reply I gave last week was correct—in other words, that what has occurred between the Home Office and the prison governors is normal practice. I shall convey the hon. Gentleman's remarks to my right hon. Friend the Home Secretary.
Mr. Stanley Cohen: In view of the rather critical comments about nationalised industries by the hon. Member for Ruislip-Northwood (Mr. Wilkinson), who regrettably has left the Chamber, will the Leader of the House be prepared to provide time so that some of us may discuss the accountability of nationalised industries, as opposed to the private sector, and defend some of the unjust criticisms that have been made against nationalised industries?
Mr. Pym: I do not know that I can provide time, but I know that there is a general interest in that subject and in the way in which nationalised industries are brought to account. I cannot undertake to provide time in the forseeable future for a debate.

Rev. Canon John Baker
Mr. Speaker: The House will be aware that the Rev. Canon John Baker, who has been Speaker's Chaplain since April 1978, is the bishop-elect of the diocese of Salisbury. Next week, when we rise for the Christmas Recess, Canon Baker will take our prayers for the last time.
On behalf of the House and on my own behalf, I wish to express to Canon Baker the deep gratitude that we feel for his devoted service to the House during his period as Chaplain. Canon Baker has not spared himself in strengthening Christian fellowship in this House. We extend to him our prayers and good wishes for the new responsibilities that he will undertake in the historic see at Salisbury.

Greater London Council (House of Lords Judgment)
4.8 pm
Mr. Albert Booth: 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 judgment in the House of Lords in the case of the London borough of Bromley v the Greater London Council".
The issue is specific in so far as it requires the termination of a London fares policy put before the voters of London in a manifesto that elected members, on gaining office, have implemented. It is further specific in that the judgment will limit and qualify the meaning of section 3 of the Transport (London) Act, which provides grants for any purpose only in so far as those grants apply to fares policy.
The matter is important, because it will require the GLC to repay a precept that it has already collected and to levy a further precept to meet a deficit arising not only from its own fares policy, but from that of its elected predecessor. The matter is also important because it will probably bring about the most massive reductions in transport services in our capital city, which is already seriously congested.
The matter is urgent because consideration has already been delayed by an extensive legal process, which has rendered the issue sub judice in the House. It is also urgent because the issues raised need correction within the existing financial year. In addition, the matter is urgent because elected members of the GLC and officials who, until now, have acted in pursuance of the policy, believing it to be legal, are now held to have acted illegally. The House must redress that situation. Finally, the matter is urgent because the interpretation by the other place of the Transport (London) Act is now such as to deny the voters of London their democratic right to choose which fares policy they want their elected body to operate.
Mr. Speaker: The right hon. Member for Barrow-in-Furness (Mr. Booth) gave me notice before 12 o'clock this morning 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 judgment in the House of Lords in the case of the London borough of Bromley v. the Greater London Council".
There have been many exchanges in the House this afternoon on this question and hon. Members are aware that a debate will take place tomorrow on London Transport—[HON. MEMBERS: "Oh".] I know that the House is aware of that, because I have heard references to it. I am prepared for the debate to be wide enough to cover anything relating to the judgment. I shall ensure that the five-hour debate tomorrow will be wide enough to cover the whole spectrum of the issue raised this afternoon.
I listened with anxious concern to the right hon. Member for Barrow-in-Furness and to the remarks made by the Leader of the House, the Prime Minister, the Leader of the Opposition and other right hon. and hon. Members. As the House knows, under Standing Order No. 9 I am directed to take account of the several factors set out in the Order, but to give no reason for my decision. I am trying to be as helpful as possible to the House. However, after
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careful consideration I must rule that the right hon. Gentleman's submission does not fall within the provisions of the Standing Order and, therefore, I cannot submit his application to the House.
Mr. Michael Foot: On a point of order, Mr. Speaker. In your latter remarks, Mr. Speaker, you followed the precedent—which I fully respect—of telling us that you would not give the reasons for your judgment. Indeed, if you were to do so, we should become involved in considerable complications. However, in the earlier part of your remarks, you referred to tomorrow's debate and I understood the implication to be that that debate, in some respects, affects the issue. Indeed, I cannot understand why you referred to it unless it does affect the issue.
In those circumstances, it is right for us to say—in reference not to your final judgment, but to your earlier remarks—that a discussion of the matter in such terms is unsatisfactory to the Opposition. A debate under Standing Order No. 9 would give us the right to vote, if we so wish, on an effective matter. In addition, we all know that a fresh debate on a Friday, announced on a Thursday, would be a strange occurrence, particularly if it were to involve a vote.
We may have to raise an application to adjourn the House under Standing Order No. 9 again on Monday, because this matter is extremely important. It is in the interests of the House and of those affected by the judgment that the matter should be cleared up as speedily as possible. Therefore, I hope that the House will not interpret your words, Mr. Speaker, as meaning—in any way—that we subscribe to the view that tomorrow's debate is any substitute for the type of debate that we seek.
Mr. Speaker: I was trying to be helpful to the House, because the urgency of the matter had been stressed so much. I thought that tomorrow would be sooner than Monday. However, I understand and accept what the right hon. Gentleman has said. I shall try to be helpful to those who wish, tomorrow, to raise the matter. However, my ruling stands.
Mr. Foot: Further to that point of order, Mr. Speaker. I am not contesting your ruling. Of course, it is true that Friday comes before Monday. We all understand that, and I accept that part of your judgment without any qualification. However, we believe that we have the right to seek a debate on a matter of urgency and to seek that debate afresh on Monday, if we are denied it now. Tomorrow's debate is no substitute for the debate that we are asking for.
Several Hon. Members rose—
Mr. Speaker: Order. The House must take note that the Leader of the Opposition has given notice that he will renew the application for a debate under Standing Order No. 9 on Monday. Therefore, I hope that no other hon. Members will try to raise points of order on my ruling. Perhaps I was wrong to be as generous as I have been about tomorrow's debate. I was trying to help hon. Members.
Several Hon. Members rose—
Mr. Anthony Fell: On a point of order, Mr. Speaker. I hope that you will forgive me for raising this point with you, Mr. Speaker, but I had always understood that there was no question of arguing, in any respect, about a ruling that you had given on an application under Standing Order No. 9. For about three minutes, the

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Leader of the Opposition has not only argued, but has made the points that he will raise when he seeks leave to move the Adjournment of the House under Standing Order No. 9 on Monday. That is a most extraordinary way of arguing the case for raising a debate under Standing Order No. 9 and of getting round your ruling.
Mr. Speaker: I am much obliged to the hon. Gentleman. He is absolutely right. When I give a ruling under Standing Order No. 9 that ruling is not pursued. The House will be aware that I have always allowed extra latitude to the Leader of the Opposition. That is why I extended the courtesy. Otherwise, I should have intervened much earlier. However, the courtesy stands the House in good stead.
I should tell the House that I shall not take any more points of order that have anything to do with the ruling. I have given my ruling on today's application.
Several Hon. Members rose—
Mr. Speaker: I shall not take any other points of order on this.
Mr. J. Grimond: On a point of order, Mr. Speaker. While not in the least questioning your ruling—
Mr. Speaker: Order. May I tell the right hon. Member for Orkney and Shetland (Mr. Grimond) that I shall take a very poor view of things if he returns to the subject on which I have refused to take any further points of order.
Mr. Grimond: Further to that point of order, Mr. Speaker, I merely seek further elucidation about tomorrow's debate. I understand that that debate will be confined to London. However, the ruling of the other place has considerable implications, which go beyond London. For example, Scottish local authorities have constantly been told by the Government that if they wish to subsidise local transport, it is up to them. During tomorrow's debate, will it be in order to raise the wider question of local authority subsidisation of local transport?
Mr. Speaker: I have already told the House that I—or whoever is in the Chair—will be as tolerant as possible during tomorrow's debate and will allow wide references to be made within the ambit of the motion.
Mr. Christopher Price: On a point of order, Mr. Speaker. I am concerned about the possibility of a Bill of indemnity. After a previous High Court ruling my hon. Friend the Member for Nottingham, West (Mr. English) ultimately succeeded—after some difficulty—in pointing out that after such a judgment it might be necessary quickly to indemnify those who innocently stood in immediate danger.
Mr. Speaker: I did not interrupt the hon. Gentleman because he knows that that is a matter for the Government and not for me. It is for the Opposition to raise that matter at the proper time. I cannot rule that a Bill must be introduced; that is not within my powers, as well he knows. I hope that tomorrow, when I shall be in the Chair, every opportunity will be given to hon. Members. That is without prejudice to the application that the Leader of the Opposition has indicated he will make on Monday.

BILL PRESENTED

  OIL AND GAS (ENTERPRISE)
  Mr. Secretary Lawson, supported by Mr. Secretary Whitelaw, Mr. Chancellor of the Exchequer, Mr. Secretary Younger, Mr. Secretary Jenkin, Mr. Secretary Biffen, Mr. Secretary Howell, Mr. Hamish Gray, Mr. John Moore and Mr. David Mellor, presented a Bill to make further provision with respect to the British National Oil Corporation; to abolish the National Oil Account; to make further provision with respect to the British Gas Corporation; to make provision for and in connection with the supply of gas through pipes by persons other than the Corporation; to make further provision about licences to search for and get petroleum; to repeal and re-enact with amendments sections 2 and 3 of the Continental Shelf Act 1964; to extend the application of the Mineral Workings (Offshore Installations) Act 1971 and the Offshore Petroleum Development (Scotland) Act 1975; to amend the Miscellaneous Financial Provisions Act 1968, the Petroleum and Submarine Pipe-lines Act 1975 and the Participation Agreements Act 1978; and for connected purposes:
  And the same was read the First time; and ordered to be read a Second time upon Friday 18 December and to be printed [Bill 40.]

Orders of the Day

  Social Security (Contributions) Bill
  Considered in Committee.
  [MR. BERNARD WEATHERHILL in the Chair]

Clause 1

  INCREASE IN CONTRIBUTIONS
  Question proposed, That the clause stand part of the Bill.
  4.22 pm
  Mr. J. W. Rooker: I rise to oppose clause 1 standing part of the Bill. I hope that the Government are not too surprised to see the Order Paper not littered with the amendments that it had last year. We make no apology for that, and I trust that we shall not be subject to any accusation by Conservative Members that we are seeking to amend the Bill, or any part of it, because that is certainly not the reason.
  Last year we tried to rewrite the Bill so as to abolish certain parts of the contributions procedure for national insurance. However, we took the view this year that—having had extensive debates last year on what is a highly technical Bill on which we cannot discuss matters of great principle—the Committee would be better served if we simply had a debate basically on clauses 1 and 2 stand part and discussed one or two points of concern. I shall certainly refer to the parts of clause 1 with which we are unhappy, but we have proposed no amendment.
  The rise in the earnings limit that the Government have announced in clause 1, in so far as national insurance contributions are concerned and especially the lower earnings limit, causes considerable distress. The figure in the Bill is £29·50, rising from £27. It is well known—it is a matter of statutory requirement—that the lower earnings limit should reflect more or less the basic State retirement pension. If I remember correctly, it must be not much higher but not more than 49p less than the State retirement pension. An amendment that we would have wished to move—that is, not £29·50 but, say, £30—would technically have been out of order unless we had tabled a whole lot of amendments changing both the Social Security Act 1975 and the Social Security Pensions Act 1981.
  I should like to explain why we think the £29.50 figure is too low. It is true that it reflects within lop the new retirement pension of £29.60, but everyone knows—the Government have admitted it—that the new retirement pension is not at the correct figure required by statute—namely, the reflection of the previous year's inflation. The Government have admitted that it is about 2 per cent, less than what it would otherwise have been. Having agreed to that rise next year—we are not going to argue about it today—there seems no justification for basing the lower earnings limit on a false retirement pension figure. It is known in advance that it is 2 per cent. less. The Bill comes before the Committee this week but it will not take effect until the tax year starting in April 1982. Therefore, we think that the Government could make that small change in the lower earnings limit.
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  The reasons, in so far as the lower paid are concerned, are academic. It is probably not generally known outside the Committee that once one passes the threshold—the lower earnings limit for national insurance contributions—the national insurance contribution of 8¾ per cent., as it will be from next April, is paid on all earnings. I estimate that someone earning £30 a week next April will be about £2.60 a week worse off than if the Chancellor had raised the lower earnings limit to the correct amount of £30. In other words, someone receiving a £1 increase next April—from £29 to £30—and not paying national insurance contributions with the correct lower earnings limit in operation, will find himself with a net loss of about £1.60. A £1 rise—in fact, it can be less than £1—can cause a loss of about £2.60 in national insurance contributions at that amount of weekly wages.
  It may be thought that not many people in the country are on a wage of about £30 a week. It is the sort of figure that Conservative Members might spend on a lunch. It has to be appreciated that for part-timers—[Interruption.] If the Minister says he spends 76p, that is fine. I withdraw the charge against him, but it would be nice to know what his hon. Friend pays for his lunch.
  I make the point in jest to point out that a restaurant bill can be about £30 for many hon. Members, but it is also the wage of many people. They are in general part-timers who, by definition, are mainly women. The overwhelming majority are women. They are cleaners doing part-time evening shifts, twilight shifts in factories, early morning cleaning in offices—maybe four hours a day or something of that order—at about £1.50 an hour. That will bring in, over five days, about £28 to £30 in earnings.
  In the discussions on last year's Bill in Committee upstairs, Ministers quoted examples of low-paid people caught in the twilight zone for part of the year paying very heavy national insurance contributions but not being eligible for the benefits that flow from those contributions. It is the unfair change in the lower earnings limit to which we take exception. It is a hidden form of tax. No one will deny that. Under the present rules, there has to be a lower earnings limit. I shall come to the point about abolishing it, but under the present law there has to be a lower earnings limit. Given that it is tied to the pension, given that the pension figure is inaccurate by everyone's admission, and that it is going to be put right, we thought that the Government ought to take an early opportunity to deal with the lower earnings limit as well. Only the lower paid are affected by the lower earnings limit. Once a person is on two-thirds average earnings, he is caught in the trap of national insurance and social security contributions like everybody else.
  4.30 pm
  The so-called 1 per cent. in national insurance is spread unfairly over the working population. It is not as though everyone has to pay 1 per cent. extra in national insurance. That is not so. For a person on average earnings, or two-thirds of average earnings, the increase is 1p in the pound on those earnings. For a person in receipt of five times the average earnings, the increase in national insurance contribution—not taken together with tax—is only 0·7 per cent. For the fortunate person who is on 10 times average earnings—about £70,000 a year—the increase in the national insurance contribution is only 0·3 per cent. That is less than a third of the increase paid by someone who is on two-thirds of average earnings. That would seem to

  469
  be a little unfair, and it arises as a result of the operation of the upper earnings limit. There is a cut-off point, at present £200—from next April it will be £220—above which national insurance contributions are not payable.
  From next April, a person on five times average earnings—£35,000 a year—will pay only 2·9 per cent. of his income in national insurance, whereas someone on average earnings, £140 a weeek, or on two-thirds of average earnings, sometimes less than £100 a week, will pay 8·5 per cent. in national insurance contributions. That is grossly unfair, and it is a highly regressive part of our overall tax and social security system, bearing heavily on the average earner and those on less than average earnings.
  Why should someone on five times average earnings contribute, in proportional terms, towards pensions and other social security benefits—including the part that goes to the National Health Service—only a third of the amount paid by the person on average earnings? There is gross unfairness and, notwithstanding that there are now earnings-related pensions, we are convinced that there is a need to change the system that was introduced by the previous Labour Government. That is necessary to make the system less regressive than it has become over the last two or three years.
  When the Conservative Government came to office, the national insurance contribution was set at only 6·5 per cent. By next April, the increase over three years will be 8·75 per cent. Ministers will no doubt say that an increase is needed to pay for the increased benefits, but in real terms benefits have been cut, not increased. I do not intend to repeat the points that I made in that respect on Second Reading.
  The purpose of having a percentage figure to pay for national insurance was that, once a figure had been set and as earnings rose each year, it would automatically bring in extra national insurance contributions to pay for the benefits at a constant real rate. It is true that for two of the last three years, earnings have risen ahead of inflation, but there has now been a substantial increase in the rate of contribution. That is why the change proposed in clause 1 will bring about a substantial increase in income to the fund. According to appendix 1 of the Government Actuary's report, the figure will be about £850 million. that will arise because of the increase in earnings limit coupled with the increase in the standard rate. On top of that, one can build an estimate of the earnings increase for next year. The overall effect will be to produce substantial extra revenue to the Government.
  Mr. Mike Thomas: I support most of the hon. Gentleman's general argument, but a few moments ago he said that he and his hon. Friends now regard the system laid down in the Social Security Pensions Act 1975 as unsatisfactory. That would seem to be a Second Reading point. On Second Reading, when Social Democratic and Liberal Members were making exactly that point, why did the hon. Gentleman and his hon. Friends fail to mention it?
  Mr. Rooker: I do not think that I was making a Second Reading point. This time last year the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) was a Labour Member. I have no doubt that he has looked at the proceedings on the Bill that was rushed through in a week last year. We attempted to put right what we saw as the greater regressiveness in the system that has arisen in the last two years.
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  There was some hit and miss about the measure as it started in 1975. The late Brian O'Malley made it clear that it was a brand new system and that it would take a few years to see how it worked in practice. Payments under the new earnings-related pension scheme have been made only in the last two years. In considering whether in 1975 the Government devised the right system in terms of the upper and lower earnings limits, one has only to look at how they were chosen. It was done in a very hit and miss way. It was almost by accident that the system was tied to the basic pension increase. Then the upper earnings limit became six-and-a-half or seven-and-a-half times the pension figure. That was not the original formula. It was chosen only because the original figure was about one-and-a-half times average earnings.
  Therefore, when the 1975 Act began to operate, it was to a considerable extent operating in uncharted waters. No one denied it at the time. Since, on behalf of the Opposition, I have had responsibility for social security matters, I have learnt that the 1975 measure was not as cut and dried as it appeared to be on the surface to those who did not take a detailed interest in it.
  In dealing with the similar measure last year, we tried to eliminate the regressiveness in terms of the upper earnings limit. We wanted to abolish it or to put it on a sliding scale. It was clear that some well-paid people could get large State retirement pensions if we abolished the upper earnings limit. That is one of the problems. It would bring in the extra revenue, but substantial changes would be required in the original Act. We also sought to abolish the lower earnings limit, so that national insurance contributions were collected only on earnings above the lower earnings limit. We wanted to make it work like a tax threshold. When a person crosses the tax threshold, he pays income tax on the earnings above the threshold, but the national insurance system does not work like that.
  Last year, when we dealt with the similar measure, it was about 5 am before our amendment was reached. I said that I had a rough idea what the amendment might cost, but that I would prefer the Government to produce an accurate figure. A few minutes later I was told that the figure would be about £4½ billion. In the circumstances, the amendment was withdrawn.
  A substantial amount of revenue is gained from earnings below the lower earnings limit. The figure for this year must be nearly £5 billion. At that end of the national insurance system, complex technical changes will be required in our social security legislation. Opposition Members have deliberately set out not to try to rewrite the Bill in the way that we did last year, because we have made good our points and they do not bear repetition today.
  Mr. Mike Thomas: Has not the hon. Gentleman, whose convolution exceeds only his fluency, been induced to put only one radical subclause into his speech—which is more appropriate for a Second Reading debate—because Social Democrat and Liberal Members put some radical thought into the matter on Second Reading?
  Mr. Rooker: The hon. Gentleman must appreciate that when I replied for the Opposition on Tuesday I said in the first paragraph—I did not realise that my statement was quite so bald—that I did not intend to refer to the Bill but that I would do so today in the same way as last year. My response on Tuesday was directed to one part of the Opposition's reasoned amendment—the real cuts in benefits.

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  It would be easy for Opposition Members to repeat verbatim their speeches and amendments on last year's Bill because, apart from one narrow point on which we have an amendment, it is almost word for word the same as last year. Only a few figures have been changed. I am dealing now in a general way with clause 1 to cover the detailed points that I made last year. The Opposition's stance is entirely consistent with what we said last year, when the hon. Member for Newcastle upon Tyne, East was a Member of the Labour Party. It cannot possibly be a reaction to what was said by Liberal and Social Democrat Members on Tuesday, because their arguments and advocacy of new forms of taxation were shot to pieces.
  The Secretary of State for Social Services (Mr. Norman Fowler): Does the hon. Gentleman agree that the alternative put forward by the SDP on Tuesday was very radical? The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said that there should be a radical increase in income tax. If the SDP wishes to campaign upon that issue, I suggest that it makes the matter public. It was also apparent that precisely the opposite point was being put forward by the Liberal Party spokesman in the debate.
  Mr. Rooker: That is correct. I have read the speech of the hon. Member for Truro (Mr. Penhaligon), which was in conflict with the speech of the hon. Member for Newcastle upon Tyne, East on that point. I speak for the official Opposition. The members of the Social Democratic Party can speak for themselves. We have made it clear during the past two years that, because of the changes made by the Government—some for technical reasons because of the way in which the new pension scheme operates, and others for cost-cutting public expenditure reasons—the system has become more regressive. We wish to have radical changes.
  Mr. Mike Thomas: Oh!
  Mr. Rooker: Yes. That is what I said last year, when the hon. Gentleman was still a member the Labour Party. The hon. Gentleman did not contribute to the debate last year. However, we made the point that instead of a penny in the pound increase in national insurance contributions to raise revenue it would be fairer to increase the standard rate of income tax by about 1·2p in the pound.
  Mr. Mike Thomas: That is exactly what we said.
  Mr. Rooker: That is what the Labour Party said last year. I agree in part with the hon. Member for Newcastle upon Tyne, East—who must stop interrupting from a sedentary position—because I have not disowned his conclusion about amalgamating the two systems. That was the point that I made last year on behalf of the Labour Party, which the hon. Gentleman then voted for and agreed with. He seems to be doing the same today.
  Mr. Mike Thomas: It is called consistency.
  Mr. Rooker: Yes, consistency by the official Opposition. As I said, it would be fairer if the money required were raised via income tax. In order to amalgamate the two systems, we must abolish the tax threshold system so that income tax is collected on all income and we no longer have personal allowances, or we must abolish the lower earnings limit. We must do one or the other if the systems are amalgamated.
  Mr. Mike Thomas: We do not have to do that.
  Mr. Rooker: We must do that and we must take account of the fact—
  Mr. Mike Thomas: The hon. Gentleman's attitude is that we should do nothing.
  4.45 pm
  Mr. Rooker: I am happy to give way to the hon. Member for Newcastle upon Tyne, East. We are in Committee so he knows that he can speak as often and for as long as he wishes. I have no doubt that he has a valid contribution to make. However, I wish to make my point. We must be wary and not sell the public something that we cannot deliver. We must take account of the vast amount of revenue raised by the national insurance contribution on earnings below the lower earnings limit, which is £5 billion. That is somewhat more than a penny in the pound on income tax. Therefore, we must be more careful about the method by which the systems are amalgamated than simply adding the two sums together, calling it all income tax, and collecting it in that much fairer way.
  Mr. David Ennals: On Second Reading the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) on behalf of the Social Democratic Party, said:
  "We must do what successive Governments and the two old parties have ducked for so long, and that is to consider the questions of poverty, social security, pensions and taxation together."—[Official Report, 15 December 1981; Vol. 15, c. 198.]
  During my three years as Secretary of State for Social Services I do not recall the hon. Gentleman telling me that I was ducking the issue. The 1975 Bill was agreed by both sides of the House and by the right and left wings of the Labour Party. The hon. Gentleman voted for it then. I do not know what he is talking about now.
  Mr. Rooker: My right hon. Friend speaks with some experience in the matter. If representations were not made at the time, the hon. Member for Newcastle upon Tyne, East can now tell us in detail how the two systems would be amalgamated. However, this Bill is not the right vehicle for that, because one cannot table the necessary amendments to put a coherent case about income tax.
  Mr. Mike Thomas rose—
  Mr. Rooker: I shall give way to the hon. Gentleman once more. Then I intend to complete my speech without giving way to him, irrespective of the number of times that he interrupts.
  Mr. Mike Thomas: I am grateful to the hon. Gentleman. Does he wish to collect the £5 billion from the lower paid? If not, his argument is entirely specious.
  Mr. Rooker: Therein lies the problem. The sum of £5 billion is collcted not from the lower paid but from every wage earner because the contribution comes from the first slice of income up to £30. The average earner pays the national insurance contribution on his earnings between nought and £30, which is why such a large amount of money is collected. There is no easy answer to the problem. I could find £5 billion in many places, but I should be out of order if I started to itemise them. The Opposition are taking steps within their internal structure to discuss that issue. We shall in due course issue a set of

  473
  coherent proposals to clear up the problem of the interaction between the income tax and social security systems.
  The increases that I have detailed as they affect average earners, five times average earners and two-thirds average earners, must be set against the fact that they will pay for contributory benefits. That is one of the other problems. It has always been a part of our system that contributions have been separated from the income tax system and that it should not be possible for a Government to cut or abolish benefits. However, the Government are trying to abolish the contribution principle. That will provide the Opposition with the welcome opportunity to return to square one and to reconsider the entire system.
  The increases in contributions must be set against reductions in benefits. There are some who argue that the Government are perpetrating a social security fraud, but I suspect that those who report our proceedings will not take that on board.
  What will be the effect of the changes in clause 1 on employees? I shall not read out a long list of statistics, because the Committee would find that boring and because those who report our proceedings do not find it easy to take down a mass of statistics. In putting some comparisons before the Committee, I shall assume that the basic 30p flat rate will remain in the next financial year. Under the Government's proposals, someone on half average earnings will pay 38·75p in the pound on each extra pound that he receives. I refer to combined income tax and national insurance contributions. The rate for someone in receipt of twice average earnings will be 30p in the pound. Those will be the rates from next April.
  It is crazy that someone in receipt of half average earnings—perhaps £80 by next April—will have 38·75p taken from every extra pound that he receives in the form of overtime payments or bonuses, while the higher paid will lose less. Someone in the same factory or company on twice average earnings—perhaps £250 a week—will lose only 30p in every extra pound. I suspect that that person's payments will not be in the form of overtime. He or she will pay a smaller amount in the pound because there will be no loss in the form of extra national insurance contributions.
  It is relevant to compare the respective positions in 1978. Those on half average earnings were then paying 31·5p in the pound on every extra pound, while those on twice average earnings were paying 33p. The result of the 1978 Budget, which was the last effective Budget that the Labour Government introduced, was that those on half average earnings paid less in the pound in the marginal rate of tax and in national insurance contributions than those on twice average earnings. This Government have reversed the respective positions. I do not think that any other comparison can show more effectively the unfairness of the extra tax burden that has been imposed by the Government. It has been shifted from those who earn more than average earnings to those who earn only half average earnings. The effect of the Government's changes from April 1982 will stem entirely from the large increase in the national insurance contribution rate that is contained in clause 1 and the extra 1 per cent. this year.
  It is my understanding that these increases will wipe out the benefit that many wage earners enjoyed following the reduction in the standard rate of income tax from 33p in the pound to 30p. The Government are not trying to keep the increased national insurance contributions a secret, but
  474
  the measures that contain such changes are usually carried through the House of Commons by order at about this time of the year, and often fairly late at night. The Government have had to introduce a Bill this year—they had to do so last year—largely for arithmetical reasons, except for the current redundancy payments change. I hope that they will learn their lesson and recognise that in future they should keep increases within the limit provided in the original Act. That would avoid taking up the time of the House of Commons with primary legislation.
  It is generally true that we introduce the changes that we are discussing during December and that they come into operation in the following April. The Budget judgment is presented in March, when the Chancellor of the Exchequer makes great pronouncements, on income tax and tax thresholds, that appear in headlines. Increases in income tax are never highlighted at that time but the changes are already coming into effect and they will hit people's pay packets in the form of national insurance contribution increases, which can have a greater effect on pay packets than almost any other announcement that the Chancellor might make in his Budget judgment.
  When the increased contributions take effect many of our constituents say "This was never discussed in Parliament at the time of the Budget. Why do Members of Parliament let these things through without debate or scrutiny?" We, the Opposition—I am sure that this applies to previous Oppositions—can point to late night debates shortly before Christmas when no one pays a great deal of attention to the minutae of what is passing through the House of Commons. The effect of what we are doing now on the pay packets of more than 20 million wage earners will be catastrophic, especially for the low-paid. It will have the effect of shifting the balance of tax contributions from the higher paid to the lower paid.
  The attendance in the Chamber is not very great. Although we are not allowed to refer to it, the attendance of the press representatives who report our proceedings is even less great. The national insurance system has become so complicated that hon. Members and members of the press are almost frightened to consider and discuss it. That has happened because of the scale of the complexity and the magnitude of the Budget, which involves £30 billion. That being so, we tend to lose sight of the effect on the individual.
  We must find a way of organising our debates and enacting social security legislation, especially that which bears on contributions and benefits, so that hon. Members may play a greater part in our debates. We shall be able to do that only if the consequences of legislation are made more clear to hon. Members. I do not criticise the notes on clauses that have been provided by the Government on this or on any other Bill, but the briefings that we receive from groups outside the House, such as the Low Pay Unit and the Child Poverty Action Group, are couched in much more humane terms than anything that we receive from the Government. The briefing from outside groups tell us in clear terms what the effect of proposed legislation will be on ordinary families. Of course, we are aware of the effect of Government action when we attend our surgeries and undertake constituency work. I urge the Government to take steps to provide clearer information.
  It may be upsetting even for Ministers to note that not one Conservative Back Bencher is in the Chamber. They must be worried when they find that none of their supporters is seeking to participate in the debates. Many

  475
  more hon. Members should be seeking to catch the eye of the Chair. The Bill is fundamental to the British people. We shall oppose the clause for the reasons that I have detailed. The clause is grossly unfair. Our reasons for opposing it are the same as those that were advanced when we considered last year's Bill.
  I hope that we do not have another such Bill. The Government must find a better way to order the tax and social security system. They must not make further impositions and further cut benefits.
  5 pm
  Mr. Ennals: I entirely support what my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) said, but I do not agree that the Government are concerned about the fact that the Benches behind them are empty. They wish to get the measure through and get the extra money for the Treasury. The quicker that they can do that and the fewer people who notice it, especially among the press, the happier they will be.
  This is just a Treasury Bill. As I said on Second Reading, it places a heavy impost on working people when their cost of living is rising. Rents and prescription charges are increasing and inflation is not coming down in the way that the Government promised. Burdens are being piled on working people, yet they are told that they must accept low wages.
  Under the Government the national insurance burden is getting higher and higher. When Parliament introduced earnings-related contributions, it was not the intention constantly to have Bills to raise the percentage of earnings. As earnings rise, earnings-related contributions rise. In a well-ordered system, with a Government who knew what they were doing, Parliament would not have to be asked year after year to increase the percentage.
  The system was introduced because it was fairer and because it would prevent the nonsense year after year of increasing the amount that people had to pay. The 1974 White Paper announcing the new scheme, Cmnd. 5713, stated at paragraphs 33 to 35:
  "The Government Actuary estimates … that a combined contribution from employers and employees of not more than 16½ per cent. of employees' earnings up to the scheme's ceiling would be required to finance the scheme in its early years if 8 million employees were contracted out. This contribution would compare with the 14 per cent. combined contribution proposed for April 1975 under the Social Security Amendment Bill now before Parliament. It covers all national insurance benefits, industrial injuries benefits, a contribution to the national health service and the employer's contribution to the Redundancy Fund",
  which this Bill does too.
  "The balance between the scheme's income and expenditure will be affected by the number of occupational scheme members who are contracted out. For example, a contribution of not more than 16 per cent. would be needed in the early years if the number contracted out turned out to be 6 million, rather than 8 million."
  The Government have not yet mentioned the numbers contracted out of the State scheme and I hope that the Minister will deal intelligently with the matter in his reply.
  Paragraph 35 states
  "It is not necessary to decide the initial contribution rate firmly at this point … it is thought right to illustrate the effects of the scheme by assuming an initial contribution of 16½ per cent. and the figures shown in the text of this White Paper are on that basis. Of a 16½ per cent. contribution, if that proved appropriate, the employee would pay 6½ per cent. and the employer 10 per cent."
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  In 1977 those were the percentages. The employee was asked to pay 6½ per cent. However, last year the employer's contribution was increased to 7·75 per cent. and a further 1 per cent. increase is proposed. With the employee's contribution at 13·7 per cent., the total is 21·45 per cent.
  The original proposals were made by the Labour Government and accepted by the Conservative Opposition. However, the Government have now got themselves in a mess, not only over the insurance system but over increased unemployment. On Second Reading the Secretary of State said that a high proportion of the money went to the large number of elderly people and it has not changed.
  People asked to pay the extra 1 per cent. will wonder what they will get for it. They will get nothing. There will be no improvement in benefits. Last year unemployment benefit was increased by 5 per cent. under the rate of inflation, which was an effective cut, and the earnings related supplement has been stopped. The Government have completely undermined the contributory system.
  Does the Secretary of State believe in the contributory principle or does he see the Bill simply as a system of taxation? If the latter, it has grave weaknesses. It is extremely regressive to use national insurance contributions as a tax system. It does not take a higher percentage from people with incomes above a certain level, who, in any case, get special tax concessions from the Government. If contributions are increased but contributory benefits reduced, it is bound to undermine confidence in the contributory principle.
  The Social Security (No. 2) Act 1980 abolishes the earnings-related supplement from next January. It increased certain contributory benefits by 5 per cent. less than the rate of inflation, although it retained price protection for non-contributory benefits such as supplementary benefit. The Act took away the right which people believed that they had through paying their national insurance contributions.
  If the Government believe that the contributory principle is a load of old codswallop and wish to throw it out of the window, we must think again. The basis of the new pension scheme and the whole basis of earnings-related pensions was that people would better understand and, therefore pay their contribution because they knew what they were getting from it.
  Mr. Mike Thomas: I have sympathy with what the right hon. Gentleman says, but do people really understand the contributory principle? The level of contributions and the tax-gathering aspect have so undermined the principle that people can conceive of it no longer.
  Mr. Ennals: The hon. Gentleman is making the same point as I am. Successive actions by the present Government, during the period when he was a member of the Labour Party, have steadily eroded the contributory principle. That principle has been accepted by the House ever since the Beveridge report was implemented and strong arguments have been made for it. I remember Richard Crossman delivering the Herbert Morrison memorial lecture and arguing that people are prepared to pay when they can see that they are buying a worthwhile benefit. Earlier still—in 1942—the Beveridge report stated:

  477
  "It is, first and foremost, a plan of insurance—of giving in return for contributions benefits up to subsistence level, as of right and without means test, so that individuals may build freely upon it."
  It was the contributory principle which the Social Security Pensions Act 1975, approved by both parties, sought to strengthen. Moreover, it is the essential element in the new pensions scheme which, thank goodness, up to this moment has not divided the two parties but has been accepted, and is now three years into its 20-year maturity period.
  It would be disastrous if the principle written into that Act, and accepted by Parliament and by the people, of paying contributions in order eventually to receive benefits were ignored. It is a pay-as-you-go scheme. Today's earners are paying for benefits received by those who are retired or unemployed. There is an honesty about that, but that honesty is now being undermined as year after year the Government change the percentage of contributions, using it simply as a taxation measure.
  We shall discuss the reduction of the Treasury supplement later and I shall not go into it now. However, it is another example of the Treasury obliging the DHSS to turn national insurance into a system of tax collection in an anti-social and unsatisfactory way which hits the poorest hardest and the richest least.
  For those reasons, I shall happily and willingly support my hon. Friend the Member for Perry Barr in voting for the amendment.
  5.15 pm
  Mr. Andrew F. Bennett: Clause 1 should be deleted. We are involved in an utterly ridiculous procedure. If the proceedings on the Bill were submitted as a script for "Yes, Minister" I suspect that they would be rejected as a subject for humour because they are so ridiculous as to lack any credibility whatever.
  We are discussing one-third—the contributions—of a three-part equation. We cannot discuss the benefits to be paid, or the level of income tax which in part makes up the contribution side. We cannot discuss all three together because, traditionally, income tax contributions and benefit levels are set in the Budget while national insurance contributions are set several months earlier.
  Most people would be more sympathetic to being asked to pay an extra 1 per cent. if they knew that extra benefits were to be paid. They might also take a different view if they knew the level of tax to be imposed on them by the Budget, and particularly whether the tax thresholds would be raised. Yet here we are asked to consider one part of a three-part equation while remaining blindfolded with regard to the other two. We should be able to debate all three at the same time. Income tax, national insurance contributions and benefit levels should be set at the same time, either now or at the time of the Budget. To decide one part of the equation now and the other two later is absurd. The situation seems to have come about because national insurance is based on a weekly contribution while income tax is based on an annual contribution. That is one major contradiction to be considered in seeking to amalgamate the two.
  A number of absurdities result from national insurance contributions being on a weekly basis. For instance, a person who earns £50 per week for half the year and does not work for the other half pays considerably more in contributions than a person who earns £25 per week for the
  478
  whole year. On the other hand, a person perhaps working on a North Sea oil rig who manages to earn £300 per week for half the year and does not work for the other half pays considerably less in national insurance contributions than the person who earns £150 per week throughout the year. That is another absurdity to be taken into account when considering whether national insurance contributions should continue to be on a weekly basis.
  If the contributions were based not on weekly but on annual earnings, the national insurance contribution could be adjusted at the same time as the tax contribution. That would make far more sense.
  Such a change would also solve some of the problems of those in the lowest income groups who are in and out of the system as a result of increases in the lower earnings limit and who, sadly, end up with only half a year's contributions and therefore no entitlement to benefit because the lower earnings limit has changed or because they have received a small rise which, if it is less than £2, usually results in a cut in income so that they have to plead with their employer not to give them a rise which would take them just over the lower earnings limit. Again, that is absurd.
  When the Minister attempts to justify the clause, will he give some answers to people who are in and out of the system as a result of yo-yo-ing around the lower earnings limit? Would not it be fairer to make refunds to those who cannot make sufficient contributions to qualify for benefit? If he is not prepared to do that, will he consider crediting in those people who are unable to make a complete set of contributions because for part of the time their earnings are too low?
  I turn to the question of those who are already credited in for benefits, particularly those in youth opportunities schemes. I understand that those at present participating in such schemes are credited in for some but not for all benefits. Will the Minister explain what happens in these cases, particularly for those young people who are out of work for a considerable period and are in and out of a youth opportunities scheme or some other scheme of that kind and thus cannot contribute for a lengthy period? This has an impact on their pension rights, and, although their pensions may still be far in the future, they are entitled to our concern on that point. The Government must also consider carefully the problem facing those aged 60 to 65 who are unemployed but receiving no benefit and can no longer contribute to their pension entitlement, particularly the earnings-related element.
  Finally, what will be the position with regard to the new training schemes? The Department of Employment seems to have decided that the participants will receive only pocket money rather than any real income. Will they receive full credits in relation to national insurance contributions?
  The national insurance system has reached such a farcical position that it is logical now to reject the clause and force the Government to bring back a unified system in their Budget proposals. National insurance contributions and income tax rates can then be considered at the same time and we may begin to iron out the major anomalies between the two systems.
  Mr. Fowler: This has been a wide-ranging debate, although only relatively few hon. Members have taken part in it. I agree with the right hon. Member for Norwich, North (Mr. Ennals) that we should aim to seek as much

  479
  agreement as possible on issues such as pensions. The first speech that I ever made on social services was as Opposition spokesman on Brian O'Malley's Bill. I call it Brian O'Malley's Bill because I am sure that Mrs. Barbara Castle would not seek to say other than that he was the major author of that Bill.
  There was general agreement, which I hope will continue, on the contributory principle. The hon. Member for Newcastle upon Tyne, East (Mr. Thomas) said that the contributory principle is very different from a funded scheme. That is correct. It is a pay-as-you-go system, with today's contributors funding today's benefits. Therefore, it makes no sense to criticise the extra 1 per cent. as not earning extra benefits.
  Mr. Mike Thomas: Will the right hon. Gentleman define the difference between the contributions as now made and a tax?
  Mr. Fowler: My point is that the pay-as-you-go contribution system is a system whereby people who are contributing now are paying for the benefits to today's pensioners. If the hon. Gentleman wishes to call that a tax, it is a matter for him.
  Mr. Ennals: The Secretary of State cannot get away with what he has just said. The whole basis of the contributory principle that he is now justifying does not apply. We are telling people that they must now pay, not just more money, but a higher percentage of their income, and we have already taken away some of the benefits that they thought they would get for the money they paid. Surely the contributory principle has gone.
  Mr. Fowler: I was talking about pensions. The right hon. Gentleman's remarks show the unwisdom of my making generous comments and going wider than necessary on clause stand part. I should have thought that there was still a consensus on pensions, whatever other differences there might be between the two sides of the House.
  Mr. Clement Freud: Does not the Secretary of State agree that this is not so much a pay-as-you-go system but a we-pay-as-they-go system?
  Mr. Fowler: Yes; that is the definition of pay-as-you-go.
  Mr. Andrew F. Bennett: Does not the Secretary of State accept that even on pensions the Government have torn up the agreement because people made contributions on the basis that pensions would rise in line with earnings and prices? The Government changed the rules and pensioners are now about £5 a week worse off.
  Mr. Fowler: We are now going back to fighting every battle that we have fought on social security over the past two and a half years.
  I sympathise with the hon. Member for Birmingham, Perry Barr (Mr. Rooker), in believing that it is difficult in a debate such as this to try to get a human assessment of the effects of the legislation. The House should remember what the Bill—and particularly clause 1—seeks to do. Next year we shall be spending almost £30 billion on social security benefits—an increase of £2½ billion. Of that, about £19 billion will come from the national insurance fund. Of that £19 billion, £13½ billion will be spent on the
  480
  retirement pension—about £1½ billion more than this year. That is one of the essential justifications of the Bill and, indeed, the clause.
  In clause 1, in raising those contributions, we are seeking as far as possible to try to protect the employer and the self-employed on the grounds that, although we are talking essentially about benefits, the major aim of any political party and any Government must be to secure the recovery of industry and a reduction of unemployment. That is why we have so weighted the clause.
  Clause 1 raises the lower and upper earnings limits for class 1 contribution liability from £27 and £200 a week to £29·50 and £220 a week respectively. That forms part of the annual exercise for reviewing national insurance contributions. Clause 1(2) raises the employee's contribution from 7·75 per cent. of liable earnings to 8·75 per cent. Of that extra 1 per cent., 0·3 per cent. is to keep the national insurance fund balanced; a further 0·25 per cent. is to compensate for the reduction in the Treasury supplement; 0·35 per cent. is the additional employment protection allocation; and 0·1 per cent. is an allocation to the National Health Service, which has so far been unquestioned, or has not been raised seriously either today or on Second Reading.
  Mr. Ennals: I should hate the Secretary of State to believe that that will not be challenged. I challenge it, not because I do not want more money to be spent on the National Health Service—all present and past Secretaries of State for Social Services want that—but because the Secretary of State is making up for the fact that the Treasury does not give him the money that he needs for the NHS and therefore he has to put a higher load on the contributor through the national insurance system. It is another way of saving the money that the Treasury might otherwise have contributed, if it had been wiser or more generous, to the National Health Service.
  Mr. Fowler: We have sustained spending on the National Health Service. We have increased spending on the NHS by 5 per cent. in real terms since 1979, and this is a further contribution to the increase in spending. I should have thought that the right hon. Gentleman would have welcomed the fact that we are spending more on the NHS and employing more doctors and nurses. We then come to the question of how it will be paid for. The vast bulk comes from general taxation—87 per cent. There is nothing particularly sacrosanct or special about the exact percentage that comes from the NHS contribution, but the right hon. Gentleman should know that compared with the early 1960s we are now spending less as a percentage of the NHS contribution than we were then.
  The Opposition always omit the fact that six out of 10 people are exempt from prescription charges, and accordingly I believe that this is a fair and reasonable way of financing the NHS and achieving growth in it during a period of recession. That is what we are talking about—the growth of the Health Service during a difficult period of economic recession.
  5.30 pm
  Mr. Mike Thomas: I wonder how stupid the right hon. Gentleman thinks the public are. If he puts up the charges on every employed person, that will affect their pay packets at the end of the week. How can he believe that they will be conned with the idea that at the same time the

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  Government are keeping the income tax level down to 30 per cent. or, depending on the next Budget, to 25 per cent.? Does he really believe that the public distinguish between NHS charges raised in this way and those raised through income tax? The only distinction they make is the way in which this bears grotesquely unfairly on the low paid.
  Mr. Fowler: I would have considerably more respect for the hon. Gentleman if during his period—
  Mr. Thomas: Cheap abuse.
  Mr. Fowler: I do not want to get involved in cheap abuse, but I intend to offer the hon. Gentleman a few hints. It is easy for Members on both Front Benches to tall about radical solutions, and the hon. Gentleman has not asked us to come forward with a radical solution. All he has said is that we should be thinking about one. The only radical solution that he has proposed is a vast increase in income tax. That is certainly radical, and I hope that he campaigns on it. If he is asking whether I think that there is a difference between income tax and the amount that goes to the NHS through this contribution, my answer is "Yes". By definition, this money is earmarked for the NHS, and that is an important part of the contributory principle that some of us hold to be important.
  Mr. Andrew F.Bennett rose—
  Mr. Fowler: I shall not give way, not even to the hon. Gentleman.
  If clause 1 was deleted, there would be a loss to the national insurance fund as a result of not raising contribution rates. That must be clear. Secondly, it would mean holding the lower and upper earnings limits at their present levels.
  Such a move should, therefore, be resisted for three major reasons. First, it would result in a deficit in the working balance in 1982–83 of about £1½ billion in the national insurance fund. That would reduce the balance in the fund to about £3·3 billion, which represents only nine weeks of benefit expenditure. As the House knows, the fund has no borrowing powers, and a working contingency reserve is a necessary part of the scheme about which we are talking.
  Secondly, it would be regressive—that word has been used time and again—to hold the upper earnings limit at its present level, as this would place a disproportionately greater burden on the lower paid. It would bring into contribution liability low earners, especially part-timers, who have hitherto escaped because of the fact that the earnings limit has kept ahead of their earnings. In addition, to compensate for the loss of the £225 million income to the national insurance fund in 1982–83 by not raising the earnings limit, the contribution rates would have to go up by a further 0·2 per cent. That is the effect of the proposals, and that would hit hardest the lowest paid. Keeping the upper earnings limit down would mean that people at the upper end of the earnings scale would pay less in contributions than their proper share.
  Additional pension rights are earned on the band of earnings between the lower and upper earnings limits. By compressing that band by artificially keeping the earnings limits down would disappoint the legitimate expectations of people on higher earnings about the amount of additional pension to which they would be entitled as well as have the effect on low earners that I have described.
  482
  Thirdly, as was fairly mentioned by the hon. Member for Perry Barr, the lower earnings limit must by law be kept broadly in line with the basic pension rate of £29·60. It must, therefore, be increased as the Bill proposes.
  Even if no changes were made in the rate of the Treasury supplement or the NHS allocation, an increase in contributions would be needed to avoid a deficit in the fund. It has been the policy of successive Governments to keep the income and the expenditure from the fund broadly in balance. The Opposition must, therefore, accept that some increase in contributions was inevitable.
  I have already indicated why the earnings limits should be raised. I find it hard to believe that the Opposition do not accept the need for contributions to be levied on a higher band of earnings to reflect the increase in inflation. To leave them as they stand would benefit higher wage earners and penalise the lower paid—precisely the opposite to what the Opposition have argued.
  The upper earnings limit must be between six and a half and seven and a half times the basic pension rate. The present limit of £200 was 7·37 times the pension rate in 1981–82. To leave it at that level in 1982–83 would reduce the multiple to 6·76 at a time when income to the national insurance fund needs to be bolstered to match expenditure on benefits.
  Many other points could be made about the Bill and the clause, but I strongly urge the House to resist the arguments advanced for leaving out the clause.
  Mr. Rooker: I do not accept what the Secretary of State has said would be the consequences for the upper and lower earnings limits as a result of removing clause 1. As I have already said, we should like to see other changes. Our basic contention is that, if the Government put people back to work, by definition more earners would pay contributions at existing rates and less unemployment benefit would have to be paid. That is the main reason why we shall register a protest, and we shall do so in the only reasonable and logical way possible, which is to vote against clause 1.
  Question put, That the clause stand part of the Bill:
  The Committee divided: Ayes 271, Noes 218.

  Division No. 34]

  [5.40 pm

  AYES

  Adley, Robert

  Brown, Michael(Brigg&Sc'n)

  Aitken, Jonathan

  Brovme, John(Winchester)

  Alexander, Richard

  Bruce-Gardyne, John

  Alison, Rt Hon Michael

  Bryan, Sir Paul

  Amery, Rt Hon Julian

  Buchanan-Smith, Rt. Hon. A.

  Ancram, Michael

  Buck, Antony

  Arnold, Tom

  Budgen, Nick

  Atkins, Rt Hon H.(S'thorne)

  Bulmer, Esmond

  Atkins, Robert(PrestonN)

  Burden, SirFrederick

  Baker, Nicholas (N Dorset)

  Butcher, John

  Banks, Robert

  Butler, Hon Adam

  Bell, Sir Ronald

  Carlisle, John(Luton West)

  Bendall, Vivian

  Carlisle, Kenneth(Lincoln)

  Benyon, W. (Buckingham)

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

  Bevan, David Gilroy

  Chalker, Mrs. Lynda

  Biffen, RtHon John

  Chapman, Sydney

  Biggs-Davison, Sir John

  Churchill, W.S.

  Blackburn, John

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

  Blaker, Peter

  Clark, Sir W. (Croydon S)

  Body, Richard

  Clarke, Kenneth(Rushcliffe)

  Bonsor, SirNicholas

  Clegg, Sir Walter

  Bottomley, Peter(W'wich W)

  Cockeram, Eric

  Bowden, Andrew

  Colvin, Michael

  Boyson, Dr Rhodes

  Cope, John

  Bright, Graham

  Corrie, John

  Brinton, Tim

  Costain, SirAlbert

  Brittan, Rt. Hon. Leon

  Cranborne, Viscount

  483

  Critchley, Julian

  Knight, MrsJill

  Crouch, David

  Knox, David

  Dean, Paul (North Somerset)

  Lang, Ian

  Dickens, Geoffrey

  Langford-Holt, SirJohn

  Dorrell, Stephen

  Latham, Michael

  Douglas-Hamilton, LordJ.

  Lawrence, Ivan

  Dover, Denshore

  Lawson, Rt Hon Nigel

  du Cann, Rt Hon Edward

  LeMarchant, Spencer

  Durant, Tony

  Lennox-Boyd, HonMark

  Dykes, Hugh

  Lester, Jim (Beeston)

  Eden, Rt Hon Sir John

  Lewis, Kenneth (Rutland)

  Edwards, Rt Hon N. (P'broke)

  Lloyd, Ian (Havant & W'loo)

  Elliott, Sir William

  Lloyd, Peter (Fareham)

  Eyre, Reginald

  Luce, Richard

  Fairbairn, Nicholas

  Lyell, Nicholas

  Fairgrieve, SirRussell

  Macfarlane, Neil

  Faith, MrsSheila

  MacKay, John (Argyll)

  Farr, John

  Macmillan, Rt Hon M.

  Fell, Anthony

  McNair-Wilson.(N'bury)

  Fenner, Mrs Peggy

  McNair-Wilson, P. (NewF'st)

  Finsberg, Geoffrey

  McQuarrie, Albert

  Fisher, Sir Nigel

  Madel, David

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

  Major, John

  Fletcher-Cooke, SirCharles

  Marlow, Antony

  Fookes, Miss Janet

  Marshall, Michael(Arundel)

  Forman, Nigel

  Marten, Rt Hon Neil

  Fowler, Rt Hon Norman

  Mather, Carol

  Fox, Marcus

  Maude, Rt Hon Sir Angus

  Fraser, Peter (South Angus)

  Mawby, Ray

  Fry, Peter

  Mawhinney, DrBrian

  Gardiner, George (Reigate)

  Mayhew, Patrick

  Gardner, Edward (SFylde)

  Meyer, Sir Anthony

  Garel-Jones, Tristan

  Miller, Hal(B'grove)

  Gilmour, Rt Hon Sir Ian

  Mills, Iain (Meriden)

  Glyn, Dr Alan

  Mills, Peter (West Devon)

  Goodlad, Alastair

  Mitchell, David(Basingstoke)

  Gorst, John

  Moate, Roger

  Gow, Ian

  Montgomery, Fergus

  Gower, Sir Raymond

  Morgan, Geraint

  Grant, Anthony (Harrow C)

  Morris, M. (N'hamptonS)

  Green way, Harry

  Morrison, Hon C. (Devizes)

  Griffiths, E. (B'y St. Edm'ds)

  Mudd, David

  Griffiths, Peter Portsm'thN)

  Murphy, Christopher

  Grist, Ian

  Myles, David

  Grylls, Michael

  Neale, Gerrard

  Gummer, John Selwyn

  Needham, Richard

  Hamilton, Hon A.

  Nelson, Anthony

  Hamilton, Michael (Salisbury)

  Neubert, Michael

  Hampson, Dr Keith

  Newton, Tony

  Hannam, John

  Nott, Rt Hon John

  Haselhurst, Alan

  Onslow, Cranley

  Hastings, Stephen

  Osborn, John

  Havers, Rt Hon Sir Michael

  Page, John (Harrow, West)

  Hawkins, Paul

  Page, Richard (SWHerts)

  Hawksley, Warren

  Parkinson, Rt Hon Cecil

  Hayhoe, Barney

  Parris, Matthew

  Heddle, John

  Patten, Christopher(Bath)

  Henderson, Barry

  Patten, John (Oxford)

  Heseltine, Rt Hon Michael

  Pattie, Geoffrey

  Hicks, Robert

  Pawsey, James

  Higgins, Rt Hon Terence L.

  Percival, Sir Ian

  Hill, James

  Peyton, Rt Hon John

  Hogg, Hon Douglas(Gr'th'm)

  Pink, R. Bonner

  Holland, Philip(Carlton)

  Pollock, Alexander

  Hooson, Tom

  Porter, Barry

  Hordern, Peter

  Prentice, Rt Hon Reg

  Howe, Rt Hon Sir Geoffrey

  Price, Sir David (Eastleigh)

  Howell, Rt Hon D(G'ldf'd)

  Prior, Rt Hon James

  Howell, Ralph (N Norfolk)

  Proctor, K. Harvey

  Hunt, David (Wirral)

  Pym, Rt Hon Francis

  Hunt, John(Ravensbourne)

  Raison, Timothy

  Hurd, Hon Douglas

  Rathbone, Tim

  Irving, Charles(Cheltenham)

  Rees-Davies, W. R.

  Jenkin, RtHon Patrick

  Ridsdale, SirJulian

  JohnsonSmith, Geoffrey

  Rifkind, Malcolm

  Jopling, Rt Hon Michael

  Roberts, M. (Cardiff NW)

  Joseph, Rt Hon Sir Keith

  Roberts, Wyn (Conway)

  Kaberry, Sir Donald

  Rossi, Hugh

  Kershaw, Sir Anthony

  Rost, Peter

  Kitson, Sir Timothy

  Sainsbury, Hon Timothy

  484

  St. John-Stevas, Rt Hon N.

  Townsend, CyrilD, (B 'heath)

  Scott, Nicholas

  Trotter, Neville

  Shaw, Giles (Pudsey)

  van Straubenzee, Sir W.

  Shaw, Michael(Scarborough)

  Vaughan, Dr Gerard

  Shelton, William(Srreatham)

  Viggers, Peter

  Shepherd, Colin(Hereford)

  Waddington, David

  Shepherd, Richard

  Wakeham, John

  Shersby, Michael

  Waldegrave, HonWilliam

  Silvester, Fred

  Walker, B. (Perth)

  Sims, Roger

  Walker-Smith, Rt Hon Sir D.

  Skeet, T. H. H.

  Wall, SirPatrick

  Speed, Keith

  Waller, Gary

  Speller, Tony

  Walters, Dennis

  Spence, John

  Ward, John

  Squire, Robin

  Watson, John

  Stainton, Keith

  Wells, Bowen

  Stanbrook, Ivor

  Wheeler, John

  Stevens, Martin

  Whitelaw, RtHon William

  Stewart, A(ERenfrewshire)

  Whitney, Raymond

  Stewart, Ian (Hitchin)

  Wickenden, Keith

  Stokes, John

  Wiggin, Jerry

  Stradling Thomas, J.

  Wilkinson, John

  Tapsell, Peter

  Williams, D.(Montgomery)

  Taylor, Teddy (S'end E)

  Wolfson, Mark

  Tebbit, Rt Hon Norman

  Young, SirGeorge(Acton)

  Temple-Morris, Peter

  Younger, Rt Hon George

  Thomas, Rt Hon Peter

  Thompson, Donald

  Tellers for the Ayes:

  Thorne, Neil(IlfordSouth)

  Mr. Robert Boscawen and

  Thornton, Malcolm

  Mr. Anthony Berry.

  Townend, John (Bridlington)

  NOES

  Abse, Leo

  Dixon, Donald

  Adams, Allen

  Dobson, Frank

  Alton, David

  Dormand, Jack

  Anderson, Donald

  Douglas, Dick

  Archer, Rt Hon Peter

  Dubs, Alfred

  Ashton, Joe

  Duffy, A. E. P.

  Atkinson, N.(H'gey,)

  Dunnett, Jack

  Barnett, Guy(Greenwich)

  Dunwoody, Hon Mrs G.

  Barnett, Rt Hon Joel (H'wd)

  Eadie, Alex

  Beith, A.J.

  Ellis, R.(NED'bysh're)

  Benn, Rt Hon Tony

  Ellis, Tom(Wrexham)

  Bennett, Andrew(St'kp'tN)

  Ennals, Rt Hon David

  Bidwell, Sydney

  Evans, Ioan (Aberdare)

  Booth, RtHonAlbert

  Evans, John (Newton)

  Boothroyd, MissBetty

  Ewing, Harry

  Bottomley, RtHonA.(M'b'ro)

  Faulds, Andrew

  Bradley, Tom

  Fitch, Alan

  Bray, Dr Jeremy

  Fletcher, Ted(Darlington)

  Brocklebank-Fowler, C.

  Foot, Rt Hon Michael

  Brown, Hugh D. (Provan)

  Ford, Ben

  Brown, R. C. (N'castle W)

  Foster, Derek

  Brown, Ron(E'burgh, Leith)

  Foulkes, George

  Buchan, Norman

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

  Callaghan, RtHonJ.

  Freeson, Rt Hon Reginald

  Canavan, Dennis

  Freud, Clement

  Carmichael, Neil

  Garrett, John (Norwich S)

  Clark, Dr David (S Shields)

  George, Bruce

  Cocks, Rt Hon M. (B'stolS)

  Gilbert, Rt Hon Dr John

  Cohen, Stanley

  Golding, John

  Coleman, Donald

  Graham, Ted

  Concannon, Rt Hon J. D.

  Grant, George(Morpeth)

  Cowans, Harry

  Grant, John (Islington C)

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

  Grimond, RtHonJ.

  Crawshaw, Richard

  Hamilton, James(Bothwell)

  Crowther, Stan

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

  Cryer, Bob

  Hardy, Peter

  Cunningham, G. (IslingtonS)

  Harrison, Rt Hon Walter

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

  Hart, Rt Hon Dame Judith

  Dalyell, Tam

  Hattersley, Rt Hon Roy

  Davidson, Arthur

  Haynes, Frank

  Davies, Rt Hon Denzil (L'lli)

  Heffer, EricS.

  Davies, Ifor (Gower)

  Hogg, N. (EDunb't'nshire)

  Davis, Clinton (HackneyC)

  Home Robertson, John

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

  Homewood, William

  Deakins, Eric

  Hooley, Frank

  Dempsey, James

  Horam, John

  Dewar, Donald

  Hoyle, Douglas

  485

  Huckfield, Les

  Race, Reg

  Hudson Davies, Gwilym E.

  Radice, Giles

  Hughes, Mark(Durham)

  Rees, Rt Hon M (Leeds S)

  Hughes, Robert (Aberdeen N)

  Richardson, Jo

  Hughes, Roy (Newport)

  Roberts, Albert (Normanton)

  John, Brynmor

  Roberts, Allan(Bootle)

  Johnson, James (Hull West)

  Roberts, Ernest (Hackney N)

  Johnson, Walter (Derby S)

  Roberls, Gwilym(Cannock)

  Johnston, Russell (Inverness)

  Robinson, G. (Coventry NW)

  Jones, Barry (East Flint)

  Rooker, J. W.

  Jones, Dan (Burnley)

  Roper, John

  Kaufman, RtHon Gerald

  Ross, Ernest (Dundee West)

  Kerr, Russell

  Rowlands, Ted

  Kinnock, Neil

  Ryman, John

  Lamborn, Harry

  Sandelson, Neville

  Lamond, James

  Sever, John

  Leighton, Ronald

  Sheldon, Rt Hon R.

  Lestor, Miss Joan

  Shore, Rt Hon Peter

  Lewis, Ron (Carlisle)

  Silkin, RtHonJ.(Deptford)

  Litherland, Robert

  Silkin, Rt Hon S. C. (Dulwich)

  Lofthouse, Geoffrey

  Silverman, Julius

  Lyons, Edward (Bradf'dW)

  Skinner, Dennis

  McCartney, Hugh

  Smith, Rt Hon J. (NLanark)

  McDonald, DrOonagh

  Snape, Peter

  McElhone, Frank

  Soley, Clive

  McKay, Allen (Penistone)

  Spearing, Nigel

  McKelvey, William

  Spriggs, Leslie

  Maclennan, Robert

  Stallard, A.W.

  McMahon, Andrew

  Steel, RtHon David

  McNally, Thomas

  Stewart, Rt Hon D. (W Isles)

  McNamara, Kevin

  Stoddart, David

  McTaggart, Robert

  Stott, Roger

  McWilliam, John

  Straw, Jack

  Magee, Bryan

  Summerskill, HonDrShirley

  Marshall, D(G'gowS'ton)

  Thomas, Dafydd (Merioneth)

  Marshall, Jim (LeicesterS)

  Thomas, Mike (NewcastleE)

  Martin, M(G'gowS'burn)

  Thorne, Stan (PrestonSouth)

  Maxton, John

  Tinn, James

  Maynard, Miss Joan

  Torney, Tom

  Meacher, Michael

  Varley, RtHon EricG.

  Mikardo.lan

  Wainwright, E. (Dearne V)

  Millan, RtHon Bruce

  Walker, Rt Hon P.(W'cester)

  Miller, DrM.S. (EKilbride)

  Watkins, David

  Mitchell, Austin(Grimsby)

  Weetch, Ken

  Mitchell, R. C. (Soton Itchen)

  Wellbeloved, James

  Molyneaux, James

  Welsh, Michael

  Morris, Rt Hon A. (W'shawe)

  White, Frank R.

  Morris, Rt Hon C. (O'shaw)

  White, J. (G'gowPollok)

  Morton, George

  Whitehead, Phillip

  Mulley, RtHon Frederick

  Whitlock, William

  Newens, Stanley

  Wigley, Dafydd

  O'Halloran, Michael

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

  O'Neill.Martin

  Williams, Rt Hon Mrs (Crosby)

  Orme, Rt Hon Stanley

  Wilson, Gordon (DundeeE)

  Owen, Rt Hon Dr David

  Wilson, RtHonSirH.(H'ton)

  Palmer, Arthur

  Wilson, William (C'trySE)

  Park, George

  Winnick, David

  Parker, John

  Woodall, Alec

  Parry, Robert

  Woolmer, Kenneth

  Pavitt, Laurie

  Wright, Sheila

  Penhaligon, David

  Pitt, WilliamHenry

  Tellers for the Noes:

  Powell, Raymond (Ogmore)

  Mi. Joseph Dean and

  Price, C. (Lewisham W)

  Mr. Lawrence Cunliffe

  Question accordingly agreed to.
  Clause 1 ordered to stand part of the Bill.

Clause 2

  ALTERATION OF TREASURY SUPPLEMENT TO CONTRIBUTIONS
  Question proposed, That the clause stand part of the Bill.
  Mr. Brynmor John: We are opposed to the clause standing part of the Bill. We had all sorts of dire
  486
  forecasts from the Secretary of State about what would happen if clause 1 did not stand part of the Bill. The Economic Secretary to the Treasury will correct me if am wrong, but I understand that the only effect of deleting clause 2 would be to keep the Treasury contribution at 14½ per cent.
  When we debated the matter on Tuesday, in opening the debate the Secretary of State said that there were no hard and fast rules about the amount of the supplement. We tried to make it as hard and fast as possible with sovereign legislature, and in 1975 we enshrined it at 18 per cent., where it remained until the present Government took office. During the past three years the Treasury supplement has moved down from 18 to 14½ per cent. and it is now proposed to move it down to 13 per cent.
  The Secretary of State for Social Services was wrong when he said that there was no hard and fast rule. In the Government's view there is, and it is that the supplement should always go down and that employed persons' contributions should always go up. We object to clause 1, which states that whereas an employed person must pay a higher contribution, every other contribution is either frozen or, as in the case of the Treasury supplement, diminished.
  In opening the debate on Tuesday the Secretary of State said that the cost of benefits to the taxpayer had increased. That is true for two reasons—the new non-contributory pension concept, and because many more people are receiving benefits because of the Government's failure to ensure that they are gainfully employed. However, the Secretary of State rather spoilt his case, because he entered into an argument, which I hope the Economic Secretary to the Treasury will make clearer, about how much extra it is reasonable to expect the general taxpayer to find.
  It ought to be made clear to the House that the employed person and taxpayer are often the same person. 'When saying that the amount that the general taxpayer has to find must be reasonable, we predicate the case of a taxpayer who is not employed, within the meaning of the National Insurance Act, and not contributing to the fund.
  There is a case argued about contributory benefits, particularly among the self-employed—although I do not argue it—that there could be an element of unfairness in paying for extra contributory benefits, because the contributor does not always get benefit from that class of payments. There can be no such argument about non-contributory benefits, because the taxpayer is entitled to non-contributory benefits in the same way as every member of the community. Therefore, we must consider whether the regressive nature of the national insurance contribution is any fairer than expecting the general taxpayer to meet the burden of the fund.
  If it is argued that the burden is being placed on the taxpayer because of the non-contributory pension—as the Chief Secretary to the 'Treasury said in Tuesday's debate—that is not unreasonable. The cost of non-contributory pensions is increasing and, therefore, the Treasury supplement ought to remain the same. Fairness is an elastic concept, and I doubt whether the Economic Secretary and I would often agree about what is fair arid what is not. However, it might be possible to move towards resolving whether the Government's proposals in the Bill are fairer or less fair than maintaining the Treasury contribution.
  The Chief Secretary to the Treasury repeated on Tuesday figures that the Secretary of State gave, and hon.

  487
  Members who attended the debate will remember that they both made considerable play of them. They repeated the figure that from 1975–76 to 1981–82 the burden on the general taxpayer in respect of social security benefits had risen by 8 per cent., from 37 per cent. to 45 per cent. When rounded up, that rise of 8 per cent. over five years is a small proportion—it has increased relatively slowly at less than 2 per cent. a year—of the total fund.
  On the other hand, one must take the two concepts as being equally open to examination if one is fairer than the other. I said on Tuesday that an employed person's contribution had increased in the three years that the Government had been in office by ¼ per cent., 1 per cent. and now a further 1 per cent. Therefore, we are talking about a 2¼ per cent. rise. According to my admittedly shaky mathematics—no doubt the Economic Secretary to the Treasury will correct me if I am wrong—that is a rise of 34½ per cent. in three years—an annual rate of 11½ per cent.
  6 pm
  Whereas the taxpayer's burden has risen by about 1·6 per cent. a year over the past five years, the employed person's contribution has risen by 11½ per cent. a year over the past three years. Coupled with the regressive nature of that tax—once a person goes over the threshold of liability for national insurance contributions they are paid not merely on the balance of income over the threshold, but on the whole income—the way that the burden of the employed person has increased, with a 2¼ per cent. rise in his weekly contribution, has made the unfairness comparison bear more heavily on employed persons.
  The results of the Government's action and way that they contemplate acting in future will bear ever harder on the employed person. The Government will try inexorably to cut the Treasury contribution. We know that if the clause remains in the Bill the Treasury contribution will be the lowest percentage in the history of the scheme. Of course, there was no contribution bank when the scheme started in 1949 and the initial contributions from the Treasury were high—36 per cent. in 1949, 37·6 per cent. in 1950, 38·7 per cent. in 1951 and 27·7 per cent. in 1952.
  Thereafter, in the 1950s, the balance between claims on the fund and contributions meant that the contributions could be maintained at a steady rate because they brought in an income that did not need a big supplement, but in none of those years did the supplement fall as low as 13 per cent. The previous lowest supplement that I can find was that in 1955, when the Treasury contribution was 15·8 per cent. After that it varied between 17 per cent. and over 20 per cent. and has settled since 1975 at a steady 18 per cent.
  At a time of economic depression the Treasury is cutting its contribution and forcing those in employment to pay up to an extra £3·75 a week. The result will be a lowering of people's net incomes, whether they earn the average weekly wage or more. I know that it is an unfashionable doctrine in the Treasury, but that will surely reduce people's spending power and increase the viciousness of the spiral into which the economy has been plunged.
  I should like the Economic Secretary to dismiss the half-hearted attempt by the Secretary of State for Social Services—
  Mr. Ennals: Why not just dismiss the Secretary of State?
  Mr. John: That is probably beyond the Economic Secretary's competence. He has been known to move mountains, but I do not think that he could move a Cabinet Minister so easily.
  I ask the Economic Secretary at least to clarify the situation. The Secretary of State tried to blind us on Second Reading by throwing out figures by the gross. He pretended that the new contribution would result in only £9 million less going into the fund next year, but he said earlier that about £260 million was being taken off the Treasury contribution. I think that that is the agreed figure.
  The theme of Government statements in our debates—the Chief Secretary, no doubt because of a shortage of material, seemed to speak of little else—is that the increases are necessary to pay for extra benefits. We are told that the ratio of pensioners to employed persons will rise. That is correct, and the number of claims on the fund will, therefore, also rise.
  However, as the ratio worsens and there are more retired people living longer and receiving pensions, the logic of the Government's position is that every time claims go up the whole burden will fall on the employed person's contribution. No other way has been suggested.
  Employers are not being touched, except in relation to wage drift, taxpayers are not being clobbered—heaven forbid that the Government should do that—and the whole burden is being heaped on employed persons, many of whom are also taxpayers. They are not particularly happy about the situation.
  We do not dispute the fairness of extra benefits. Indeed, we resent the trickery of the rest of the Chancellor's statement in which cuts were made in the real value of benefits. We also resent the fact that the Government expect employed persons alone to be able to bail the Government and the national insurance fund out of the present difficulties. That is hard on employed persons, unreasonable and counter-productive. Therefore, the clause should be struck from the Bill.
  The Government are cutting out earnings-related benefit from January. It will pass from our lives, though not, I hope, for ever. I hope that it will soon return. The figures from the DHSS are imprecise, as the Under-Secretary of State for Health and Social Security will admit, but the supposed saving for the Treasury from the ending of that benefit is £385 million. That was stated in an answer to my hon. Friend the Member for Barking (Miss Richardson) on 29 October 1981.
  It is true that that figure was an estimate, but I cannot be blamed for quoting an estimate, because the Minister told my hon. Friend the Member for Barking that he would write to her when the latest estimate of the saving was available. To the best of my knowledge, no such estimate has been given and we are, therefore, left with the best guesstimate of the DHSS, which is a likely saving of £385 million.
  We are entitled to know the latest position. How much will be saved by not paying earnings-related benefit? The Secretary of State spoke today almost as if a contract was being entered into between the national insurance payer and the Government. The fact is that many of those who will find themselves without earnings-related benefit next January paid their contributions in the expectation that the benefit will be available if misfortune arose.

  489
  It does not lie in the mouth of the Secretary of State to talk about the contractual, semi-sacred and mystical nature of the bond between the Government and national insurance contributors. As shown when the 12 per cent. uprating was cynically cut to 10 per cent., the Government act arbitrarily. They cut whenever they want to. They cut whenever it suits the economy's need to do so.
  There is no link between the contributions paid by the insured person and what he will receive. At the rate things are going, many of those who wish to call upon the fund will find that the benefits they expected have disappeared. It is imperative that the Treasury contribution is maintained at its present rate. Indeed, I regret the fact that the contribution is only at its present rate. I regret, too, the fact that the original contribution was not maintained at the full 18 per cent. inherited in 1979. I believe, nevertheless, that the 1½ per cent. that is supposed to be cut by the exercise that we are discussing should be restored. It should be maintained. That is why the Opposition believe that clause 2 should not stand part of the Bill.
  Mr. Ennals: I support this amendment, just as I supported the previous one. The main argument that I used—
  The First Deputy Chairman of Ways and Means (Mr. Bryant Godman Irvine): Order. I remind the right hon. Gentleman that no amendment has been before the House on either clause.
  Mr. Ennals: I beg your pardon, Mr. Godman Irvine. I should be referring to the clause standing part of the Bill.
  The argument that I used on the previous occasion was that the Government were taking further steps to undermine the contributory principle of the national insurance system, which Governments of successive parties had sought to operate over the last 30 years. I almost stated that both parties had tried to make improvements. In fact, there have been improvements only when the Labour Party has been in power.
  It was envisaged at the time of Beveridge that there would be a significant Treasury contribution to the national insurance fund. Beveridge envisaged
  "a tripartite scheme of contribution"
  under which the Exchequer would provide one-third of the cost of unemployment benefit, and one-sixth of the cost of pensions, disability and maternity benefits.
  In practice, the Treasury supplement has fluctuated considerably over the years since the scheme came into operation in 1948. In the first few years it went as high as 38·7 per cent. There was a period when it was 23 per cent., but since 1963 it has averaged 18 per cent. A statutory obligation that it should be 18 per cent. was established, not through any Act passed by a Labour Government, but through the 1973 Social Security Act. The supplement was fixed at 18 per cent. from 1975. It became law—this had never previously been the case—as a result of actions taken by a previous Conservative Government.
  My main case against the clause is that it undermines further the principles of the Welfare State that were established following the Beveridge report. Once again the national insurance fund is being used as a means either of raising money for the Treasury or of saving money that would otherwise have been spent by the Treasury. It is difficult to understand why the Government have decided upon this course, other than that the Treasury requires it of the Department of Health and Social Security.
  490
  6.15 pm
  On Second Reading I sought to discover from the Secretary of State what his argument was. The right hon. Gentleman linked non-contributory benefits and contributory benefits and said:
  "over the years, the proportion of benefit expenditure"—
  both national insurance and non-contributory—
  "met from general taxation has tended to rise. It was about 37 per cent. in 1975–76. It is 45 per cent. in the current year and, even with the 1·5 per cent. cut in the Treasury supplement it will still be about 45 per cent. in 1982–83".—[Official Report, 15 December 1981; Vol. 15, c. 176.]
  There is no logic in that. We are talking about the national insurance system. We are not talking about supplementary benefit. We are not talking about other types of means-tested benefit. Of course, it is true that, as a result of action taken by the Government, an increasing proportion of people are dependent not upon their national insurance contributions but upon the topping-up that supplementary benefit and supplementary pensions provide for them. The Government have made such a mess of things that there is now an increasing proportion of people dependent on supplementary benefit, yet their answer is to place a heavier burden on the working population to pay for national insurance benefits. The Government have blurred the issue and made no distinction between the national insurance system and the system of supplementary benefit, which is a safety net and a topping-up provision for people in great difficulty.
  I asked the Secretary of State in an intervention on Second Reading why he argued that it was more unfair to put the burden on the taxpayer than on a limited number of workers. The national insurance system has its weaknesses. For this reason the Opposition will urge at a later stage that the upper limit should be increased. It is not as fair a system as taxation, which does not have an upper limit. The right hon. Gentleman gave no answer to my question. He said that
  "we must consider two aspects. The first is the Treasury supplement. The second is the amount that the taxpayer pays for benefits in general."—[Official Report, 15 December 1981; Vol, 15, c. 176.]
  What answer is that? It is no answer at all. I hope that the Minister will be frank in replying to the debate. He can repeat the Secretary of State's argument that because an increasing proportion of the sad British public are dependent upon supplementary benefit, the increasingly lucky people still allowed to have a job will, as unemployment increases, have to pay more as the Treasury pays less. I am really asking the Minister to justify the cut from 18 per cent., which was the statutory requirement, to the present 13 per cent.
  I wish to put a specific question, which I hope will be answered. If the Government had not sought to change what has been happening for almost 20 years, and had not moved from the 18 per cent., how much money would the national insurance fund have saved? My hon. Friend the Member for Pontypridd (Mr. John) has done his arithmetic more carefully than I have done mine. I am certain that the Treasury Minister has done his. Would it have been necessary to raise the level of workers' contributions if the Treasury had fulfilled the statutory obligation placed on it by a previous Conservative Government?
  Mr. Andrew F. Bennett: I hesitate to rise at this stage because I have just noticed that the hon. Member for Rugby (Mr. Pawsey) has entered the Chamber. He is one of the few Government Back Benchers present so perhaps

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  at long last we shall hear from a Conservative Member, other than a Minister, why the Bill should be passed. So far, on Second Reading and in Committee, no Conservative Member has pointed to any virtue in the Bill. Even the Ministers seem a little half-hearted. Perhaps we shall now have some enthusiasm, but I doubt it.
  This is a bad Bill, and each clause is bad and vicious in its own way. My constituents will be disappointed that clause 1 was passed, because they will be asked to make larger contributions. Most of them feel that they already make large national insurance contributions and that they should not be asked to pay more. Some of them would perhaps be prepared to put up with the extra contributions if the level of benefit were improved, and particularly if some of the extra money were used to expand and improve the National Health Service. If they believed that, as a result of the extra contributions, the queue of people waiting for kidney transplants were to be shortened, or that doctors should be more willing to treat people over 45 who need kidney transplants or other major surgery, they would perhaps go along with the proposal. If my constituents believed that the waiting lists for hernia operations and treatment for people with bad backs would be improved, again they might go along with it. However, they find that their extra contributions to the National Health Sevice will not improve the service, but will merely allow the Treasury to make a smaller contribution.
  We do not know how the Treasury intends to use the money that is to be saved. If the Treasury said how it intended to use the money, my constituents might have some sympathy with this proposal. As this is one-third of the package and the other two bits—the tax changes and the benefit changes—are firmly wrapped up, we shall not know the answer until the Budget. At present, people are being asked to pay increased contributions for an unknown reason. We have been given no clear statement how the Treasury intends to use the extra money that will come in in this way, enabling the Treasury to make a smaller contribution.
  Is the Minister prepared to give us some enlightenment? Will the extra money help to reduce income tax? If so, my constituents would then know where they stood. Of course, most of them would be disgusted, because they feel that income tax is little more progressive than national insurance contributions as a form of taxation. Nevertheless, they would know where they stood. If it meant a change in VAT, again my constituents would know what was involved. As it is, we have had no statement from the Government on how the money saved is to be used.
  If child benefit or supplementary benefit were to be increased as a result of the saving, my constituents might be sympathetic. If the Treasury were expecting a loss of revenue from the tax on cigarettes, again my constituents might feel a little sympathy for the increase. But if they have no idea how the Treasury intends to use the money that it saves, they will be firmly against the increase.
  The Government are again placing burdens on those who are making contributions and giving benefits, to those who have unearned incomes or earnings of more than £220 a week. My constituents will be bitter if they are asked to make extra contributions so that people with unearned
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  incomes and high earnings can benefit. I therefore challenge the Economic Secretary to tell us what the 1·5 per cent. that is being saved here will be used or.
  The Economic Secretary to the Treasury (Mr. John Bruce-Gardyne): I approach my reply to this debate with some trepidation. I admit that this is the first time that I have participated in a debate on social security legislation. I realise that for the unwary and for the neophyte, the subject is beset with pitfalls.
  We have had an interesting debate. The hon. Member for Pontypridd (Mr. John) put his arguments with lucidity and reasonableness, and I shall attempt to answer one or two of the matters that he and his hon. Friends raised.
  First, however, I am bound to draw attention to the implications of the defeat of this clause, if the Opposition take it to a Division. If the amendment were accepted, the Treasury supplement would remain at 14·5 per cent., as this year. The House has already agreed to clause 1, which increases the rates of national insurance contributions and earnings limit to the levels that are proposed by the Government. Thus, we have already secured sufficient income under clause 1 for the fund to meet the Government's objectives. If we were to leave the Treasury supplement as it stands in 1981–82, there would be a surplus of income to the national insurance fund of some £261 million more than is required. The hon. Gentleman queried that figure earlier, and he was right when he said that it was £261 million. That addition, as I understand it, would simply increase the surpluses in the national insurance fund. They would have to be invested in gilt-edged securities, and thus help the financing of the public sector borrowing requirement.
  If the House were to reject the clause, the effect would be to take from the taxpayer or raise money by borrowing beyond the moneys required for the purpose of the national insurance fund expenditure simply to have the proceeds reinvested in gilts or handed back to the taxpayer in another form. In other words, as the Bill is drafted, clause 2 is consequential on clause 1. Now that clause 1 has guaranteed the income to the fund, the deletion of clause 2 would have no effect beyond an unnecessary recycling of money. I want that to be absolutely clear.
  However, I fully understand hon. Gentlemen's anxiety to discuss the rationale of our decision to reduce the Treasury supplement from 14·5 per cent. of contributions to 13 per cent., and it is to that subject that I shall now address my remarks.
  6.30 pm
  The hon. Member for Pontypridd said that fairness was an elastic concept. I confess that when my children upbraid me with the allegation that something is not fair I tell them that the world is not a fair place and that the sooner they realise that, the better. In my experience, fairness tends to be a concept which is in the eye of the beholder. It is a highly subjective judgment. The hon. Gentleman was fair enough to acknowledge that there is no golden figure for the size of the Treasury supplement. It has fluctuated widely for many years.
  We heard much on Second Reading—and there have been references this evening to the speeches made by my right hon. Friend the Secretary of State for Social Services and by my right hon. and learned Friend the Chief Secretary—about the balance between the taxpayer's contribution and the contribution made by the national insurance contributor. The hon. Gentleman and his hon.

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  Friends pointed out that they are often the same person. That is so. But the balance between the two parts of the equation is a matter of judgment, not of absolute principle.
  The financing of national insurance benefits inevitably involves a partnership between the national insurance contributor and the taxpayer who contributes through the Treasury supplement. In examining the financing burden and the balance between the two classes of contributor, I must tell the House—I know that this is disputed by the right hon. Member for Norwich, North (Mr. Ennals) and by all Labour Members—that it is argued that it is perfectly legitimate to take account not only of contributory but also of non-contributory benefits in striking a balance.
  When the national insurance scheme started, the bulk of social security expenditure was on national insurance benefits. I understand that the only non-contributory benefits were supplementary benefits—the old national assistance—family allowances and war pensions. The bulk of expenditure was on contributory retirement pensions. Even as late as 1970 the majority of social security benefits were still contributory. In 1970, national assistance, family allowances and war pensions still amounted to only just under £1,000 million out of a total national insurance bill of £3,700 million. Since 1970 there has been a veritable explosion in expenditure on non-contributory benefits. A large part of this has been increased expenditure on supplementary benefits—a point made by the right hon. Member for Norwich, North. I accept that.
  That is by no means the whole story. Child benefit replaced the old child tax allowances and family allowances, and a whole raft of new benefits was created to meet different circumstances—attendance allowances, invalid care allowances, non-contributory invalidity pensions, mobility allowances, old persons' pensions, and family income supplements. All have added to the non-contributory total expenditure.
  In 1978–79—the year that the Conservative Party took office—total expenditure on non-contributory benefits was £4,600 million out of a total of £15,200 million—about 30 per cent. In the current year, expenditure on non-contributory benefits is expected to be £9,300 million out of a total of £26,600 million, or 35 per cent. Next year, expenditure will be nearly £11,000 million out of a total of nearly £30,000 million. Compared with the year in which the Conservative Party came to office, total expenditure in 1982–83 will approximately double and expenditure on non-contributory benefits will more than double.
  Mr. Andrew F. Bennett: Surely it is unfair to include child benefit in that category. It has replaced the tax allowance and should be considered in the same light as that. It should not be used to justify the argument that the balance of non-contributory benefits has greatly increased.
  Mr. Bruce-Gardyne: That does not alter the fact that that benefit adds to the totality of non-contributory benefits and hence to the burden that falls directly on taxpayers.
  Mr. Bennett rose—
  Mr. Bruce-Gardyne: I listened carefully to the hon. Gentleman's earlier remarks, but I shall now concentrate on bringing my remarks to a close.
  The House can see that the burden has shifted over the years in the direction of expenditure on benefits financed
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  entirely by the taxpayer. That is not a temporary phenomenon that has resulted entirely from the tragic increase in unemployment, but a long-term trend. Against that background, it is only right that those who stand to benefit directly from their contributions should shoulder a greater proportion of the burden on the taxpayer.
  We are not arguing that there is anything god-given about one figure, whether that figure is 14·5 per cent. or 13 per cent. Given the shift in the burden between the contributor and the taxpayer, it is legitimate to make some modest reduction in the Treasury supplement, which will assist in striking the balance that must be struck at Budget time. If I were to try to speculate about the appropriate answers to the questions asked by the hon. Member for Stockport, North (Mr. Bennett) concerning the equations that will be struck at that time, I have a nasty suspicion that my brief tenure of office in the Treasury would come to an abrupt conclusion. To avoid that disastrous eventuality—for me, if not for other hon. Members—I shall not take up those points.
  Mr. John: I asked a specific question about how much the Treasury would save when earnings-related benefit no longer became payable from the end of the month. Will the Minister confirm the figure of £380 million?
  Mr. Bruce-Gardyne: I apologise to the hon. Gentleman for not having answered that question. I stress that I am a complete innocent abroad in these matters—
  Mr. Mike Thomas: The Minister must know this figure.
  Mr. Bruce-Gardyne: It is probably just as well that I did not hear that intervention. I understand that the latest estimate of the gross saving from the abolition of earnings-related supplement in 1982–83 is £445 million, which represents a revision of the figure that has been given.
  That does not alter the basis of my argument, which is basically that, given the circumstances of this year and the steady drift in the burden from the contributor to the taxpayer, this adjustment in the level of the Treasury supplement is justifiable at this time.
  I ask the House to support the clause.
  Mr. John: I am bound to say to the hon. Member for Knutsford (Mr. Bruce-Gardyne) that I realise that this is an arcane subject, as the attendance at these debates seems to show.
  The Minister started with his best point and worked his way steadily down throughout his speech, and I shall deal with his points in reverse order and hope that my speech does not fade away in quite the same way as his did.
  The hon. Gentleman spoke about earnings-related benefits. He described with charming candour his future as being well behind him if he went down this road, but stated that in view of the steady drift of our economic affairs throughout the last year we needed to save £261 million by decreasing the contribution of the Treasury to the national insurance fund. He said that £450 million would be saved as a gross figure anyway. The net figure might be somewhat less, because some people might then qualify for supplementary benefit. That is part of the logic chopping that has gone into the Government exercise on social security benefits.
  Mr. Bruce-Gardyne rose—
  Mr. John: Let me finish my point, and then, I shall give way.

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  By reducing the amount of benefit £450 million will be saved. People expected, and had every right to expect, that in certain circumstances they would be paid earnings-related benefit. The hon. Gentleman will know—and if he does not the Secretary of State and other Ministers know—that the two greatest sources of earnings-related benefit are unemployment and sickness, when people have every right to expect that benefit. It does not add to their sense of fairness if it is taken away. However we define that difficult word, if they see that benefit suddenly taken away and the Treasury contribution suddenly reduced by £261 million, and they are left with the supreme delight of paying 1 per cent. more for national insurance contributions, that does not add to their sense of fairness.
  Mr. Bruce-Gardyne: I ought to set the record straight. I did not say anything about the £261 million being required because of the steady drift of our affairs, or something like that. All I said was that if the clause was rejected that sum of £261 million would be added to the fund and it would then have to be recycled through the Government's gilt-edged market.
  6.45 pm
  Mr. John: I understand that point. As that was the Minister's first and best point—and possibly his only point—I intend to deal with it last.
  The hon. Member used the words "steady drift". Perhaps it was a Freudian slip. Or perhaps it was what he ought to have said had he really applied his mind to it.
  Let me deal with the question of fairness. We are talking about people who are in employment, who are paying national insurance contributions. We think it right and proper—I hope that this applies to us all—that they should provide for other people's misfortunes. We are in agreement about that. But that depends upon what they are doing being seen to be fair.
  The Beveridge concept, to, which my right hon. Friend the Member for Norwich, North (Mr. Ennals) referred, envisaged a tripartite funding of the national insurance fund—by employed persons, by employers, and in part by the Government. That is the origin of the Treasury contribution. Indeed, had the Treasury not contributed in the early years the scheme could not have got off the ground, because there was no money in the fund.
  It will not add to any feeling of fairness if those who pay the insured person's contribution see that they alone have been singled out to carry this extra burden. The rest are either being left neutral or, in the Treasury's case being given the opportunity—rather like some speculator on the Stock Exchange—to take a quick profit and claw back £261 million.
  If people see that happening and see the undermining of the tripartite system on which the fund has always been understood to be based they will feel a sense of unfairness. The figures that I gave were not disputed by the Minister, so I cannot be quite as bad a arithmetician as I had thought. If the taxpayer's contribution to the national insurance fund goes up to 45 per cent. bearing in mind that over the last three years their contribution has gone up by 11½ per cent. per annum, that will greatly increase the sense of unfairness.
  Mr. Mike Thomas: I agree with the point that the hon. Gentleman is making. Is not the argument here that the
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  Government have decided how they will treat benefit recipients? I agree that they are treating them meanly, especially in relation to making up the shortfall, and then considering whether to get the money back through this provision or through income tax. This is an artificial discussion, related to whether the Chancellor can pretend in his Budget next year that he has reduced income tax to 25 per cent. whereas he is taking it all back in these increased contributions.
  Mr. John: Marginal taxation has risen quite sharply.
  For the reason that I shall give in a moment I agree that there is an element of artificiality about this debate, in view of what happened on the last clause. The point that I am making is that if people believe that it is right to make provision for others, they must have a sense of fairness. That sense of fairness is absent, and the danger is that people will say that they are not willing to believe in the concept of the welfare state.
  That would be a great sadness to many people, but it would be the result of the temptations to which the Treasury has succumbed with monotonous regularity. Like Oscar Wilde, the Treasury has not been able to resist anything, not even the temptation to claw back money. The Treasury contribution has decreased from the 18 per cent. that it was when the Government took over, down to 13 per cent. under the Bill. That is a decrease of 5 per cent. If the Government were to maintain their contribution at 18 per cent., that would be equivalent to 0·75 per cent. weekly on the national insurance contribution which is almost all of this increase.
  What we are really talking about, therefore, is a shift from that mythical creature the general taxpayer to the insured person. What I object to most in the whole of this exercise is putting the burden of the increased benefits on insured persons, who are a small fraction of the community and are getting smaller. We believe that the whole community should shoulder the burden of financing extra benefits, and that means involving the general taxpayer.
  It is no good the Minister saying that the general taxpayer has to pay for his non-contributory pension. Of course he has. He is entitled to it, even if he is not an employed person. He, too, can benefit from it. Many people in employment go through their lives without ever claiming benefit; many others who are entitled to benefit are unaware of the fact that they are entitled.
  The debate has been worth while, if only to enable us to air the sense of frustration that must be felt by employed people when they see whole burden put unfairly upon them. For that reason, if for no other, it has been a valuable debate.
  I come now to the Minister's main point. He said that, clause 1 having been passed, the effect of not passing clause 2 would be to produce a surplus of £261 million, which would then be invested in gilts and produce a surplus to the community or to the Government. I do not think that the community and the Government are identical at the moment. I accept the logic of what the Minister said. Having failed to dislodge clause 1, if we were to dislodge clause 2 it would be a Pyrrhic victory. It would benefit the victor rather less than the vanquished. Therefore, I do not intend to press the matter to a Division.
  The Treasury will, however, have to face the mounting sense of inequity and act accordingly; otherwise the whole

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  concept of the Welfare State, in which I understand all parties in the House believe, will be muddied and dirtied beyond recall.
  Question put and agreed to.
  Clause 2 ordered to stand part of the Bill.

Clause 3

  ALLOCATION OF CONTRIBUTIONS
  Mr. John: I beg to move amendment No. 3, in page 2, line 34, leave out subsection (3).
  The Second Deputy Chairman of Ways and Means (Mr. Ernest Armstrong): With this it will be convenient to take the following amendments: No. 4, in page 3, line 12 leave out subsection (3).
  No. 6, in page 4, line 2, leave out schedule 1.
  Mr. John: In a sense, the amendment bears upon the matter that we have already been discussing, because—
  Mr. Andrew F. Bennett: On a point of order, Mr. Armstrong. Although the amendment relates to redundancy payments, it is very much a Treasury matter so a Treasury Minister should be present.
  The Second Deputy Chairman: The hon. Gentleman knows that that is not a matter for the Chair.
  Mr. John: My favourite song was never "Let my people go". However, I agree with my hon. Friend that on this occasion a Treasury Minister should be with us.
  The clause seems to enshrine a dangerous novelty compared with previous Bills of this kind. It makes the employed person responsible to the extent of 0·35 per cent. of the 1 per cent. increase in contribution. For the first time, the employee is to be responsible for the redundancy payments fund. That type of benefit was first introduced in the Redundancy Payments Act 1965.
  On the Second Reading of that measure, the right hon. Member for Wanstead and Woodford (Mr. Jenkin) made an extremely interesting speech. Some of it proves his consistency; some of it ought to make the Government squirm with embarrassment. The only truly good taste that the right hon. Gentleman showed in his speech was when he mentioned my constituency. In explaining his opposition to the Bill, he said:
  "I should much prefer to have seen a wage-related unemployment benefit scheme. That would seem to combine all the advantages of redundancy payment in a form which would achieve the aims of the present scheme."
  That rings hollowly today when the Conservative Government are intent upon destroying the sort of scheme that the right hon. Gentleman was then espousing.
  Later in his speech, the right hon. Gentleman argued that
  "it would be possible to make sure that a larger proportion of redundancy payment was borne by the fund and a smaller proportion by the employer".
  Then he added:
  "this is a measure of social benefit for employees generally and some part of the additional contribution might come from an additional 2d. per week from the employee."
  I hasten to add that that was in old—or what I would call real—money. The right hon. Gentleman continued:
  "I should not regard that as an improper or unusual suggestion."—[Official Report, 26 April 1965; Vol. 711, c. 103–4.]
  In Conservative Party philosophy there has been some vague and lingering suggestion that the employee should
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  somehow bear the cost of his own potential redundancy, but we were then, in 1965, talking about tuppence a week. Now we are talking about 0·35 per cent. of the 1 per cent. increase in contribution. For a man on average earnings of £150 a week, it means more than £1 a week.
  I suspect that for some time during the debate today—and certainly during the debate on Tuesday—we have been thrown by the fact that the Bill refers to the principal Act as being the Social Security Act 1975, but that was an Act to consolidate the 1973 Act and other Acts. I am not sure whether it is now proper to mention the right hon. Member for Sidcup (Mr. Heath) in the presence of Ministers, but certainly the debates took place when his Government were in office. No objection was expressed by any Conservative Back Bencher that the Government were trying to enshrine a provision that only the employer and the State should contribute towards the redundancy payments fund. No one suggested that the cost should be partly borne by the employee. Not a word to that effect was said. The measure went through on the nod. That was satisfactory from our point of view, because we believed it to be right. No Conservative Back Bencher could be found in 1973 to espouse the cause that an employee should pay a contribution towards his own prospective redundancy.
  Now we find that the wheel has turned full circle. In the debate on Tuesday the Secretary of State said that it was
  "a perfectly logical extension of the principle of social insurance"
  to make those in work pay towards their own redundancy.
  It was clear from the debate on Tuesday that the 0·35 per cent. which employed persons are asked to pay in respect of their liable earnings will bring in £353 million in 1982–83. Such is the record of the Government and such is the avalanche of redundancies created by their policies that the Minister had to go on to admit that the extra income
  "should be sufficient to keep the borrowing of the redundancy fund within the £300 million limit agreed by the House for the year."—[Official Report, 15 December 1981; Vol. 15, c. 175.]
  7 pm
  We are again talking about the Government's fig leaf of cash limits as though they are sacrosanct and that every other imperative must be made subordinate to maintain them. We ignore the fact that the Chancellor of the Exchequer has consistently missed his targets and exceeded his borrowing requirements. He has failed to impose those cash limits to which he alleges he is sticking.
  Therefore, those who have lost their jobs, through no fault of their own, are required to pay towards the redundancy fund. I have described it as the "Pay now, be redundant later" clause, which is a fair description. However, the people who contribute to the fund and who voted for the Government did not vote for redundancies, and certainly did not vote to finance their own redundancies. They voted for the synthetic concern of Saatchi and Saatchi's wall posters. In the Bill they face the increased prospect of redundancy and of paying towards it in the interim.
  We do not believe that employed persons must contribute to keep the redundancy payments fund afloat. That is genuinely and properly the responsibility of the employer and of the State, and that is where it has rested since 1965. If it must be kept up by additional public expenditure, I for one would differ from the Economic

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  Secretary, the hon. Member for Knutsford (Mr. Bruce-Gardyne), because I would not feel faint and retire to bed for a fortnight to recover from the shock. If it must be done in that way, so be it. It is time that the Government learnt that the proper use of public expenditure is to guard people against misfortune. The misfortune that is all too common in Britain today is that of people becoming redundant. To ask them to pay in preparation for their own redundancy is obscene. Therefore, the subsection should be struck out of the Bill.
  Mr. Andrew F. Bennett: I support the amendment.
  I raised a point of order earlier to impress upon the Government the fact that we should have some Treasury Ministers here because the clause is not a social security measure. It is fundamental to the management of the economy. It is sad that the Government have hinted in the Bill that they do not believe their statement that we are turning the corner. If they really believed that and also that the number of redundancies would decline during the next few months, the need to boost the redundancy fund would disappear. The Government do not have that confidence in their policy, so they must boost the fund in this way.
  If the fund will be called upon less than has been the case in recent months, the need to boost it would be greatly reduced. If there is an improvement in the economy, such as the Government have claimed, the likelihood of redundancies will be less and the Government should be talking about the redundancy fund being better off than it is. The worrying feature of the Bill is the Government's lack of confidence in the future of British industry.
  If the Government are not confident that they have turned the corner, they should take other measures than simply putting their efforts into ensuring that there is enough money in the fund for future redundancies. It will not give my constituents much Christmas cheer to learn that the Government are saying that we have not seen the worst of the redundancies and that there are more to come. A town such as Stockport has already seen far too many redundancies, although it is still an area that is more fortunate in that respect than many. The Government should have confidence in their economic policies or do something about them. They should not put the emphasis on increasing the redundancy fund.
  If there must be more money in the redundancy fund, where should it come from? It is inappropriate to say that it must come from the employees and that they must pay for their own redundancies. They have little control over the matter. They are rarely consulted about whether there should be redundancies at any time. It is a blow that strikes suddenly. A notice goes up, there is a meeting with the shop stewards, and the workers are informed. There is no way in which they can influence the decisions that make them redundant. The employers have much influence about whether people are made redundant. It is also an area of Government policy. Time after time firms must make people redundant because of Government policy, not because of the behaviour of the employees.
  High interest rates have operated this year. If the Government could get interest rates down, the likelihood of a large number of redundancies next year, thereby creating an imbalance in the fund, would be greatly reduced. The Government should direct their attention
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  towards bringing down interest rates rather than ensuring that there is sufficient money in the fund to pick up the disasters that occur because of their policy.
  If we consider again the question of who should pay, it is suggested that the slimming down of British industry would be to the benefit of the whole community. It is certainly not for the benefit of those groups that are made redundant. Redundancy payments should be made out of the tax that is paid by everyone and not merely those who are in work. This is one of the more mean measures being brought forward by the Government. It will also boost inflation, because as contributions are increased people receive less in their wage packets, which encourages them to ask for more. That undermines the Government's strategy.
  The measure of putting up employees' contributions to the redundancy fund shows the Government's lack of confidence in their economic management. It is a mean measure, because it asks those who are about to suffer to contribute to a minor relief of that suffering. The Government should consider ways in which we can ensure that there will not be a drain on the redundancy fund during the next 12 months.
  The Under-Secretary of State for Health and Social Security (Mrs. Lynda Chalker): This has been a short debate, but I shall try to put into context some of the claims that have been made by the hon. Members for Pontypridd (Mr. John) and for Stockport, North (Mr. Bennett). The effect of the amendment and those linked with it, Nos. 4 and 6, would be to remove from the Bill the provision that introduces into the primary class 1 contribution—the employee's contribution—an element for the employment protection allocation.
  The hon. Member for Pontypridd said that he did not believe that employees should make a contribution. That already happens in a roundabout way. Subsection (3) of clause 3 earmarks 0·35 per cent. for the employment protection allocation. I question the hon. Gentleman's statement that employees should not make a direct contribution, because it has become a long established principle in Britain that we make contributions towards our pensions and towards those days when we must have recourse to the national insurance fund. I should have thought that this measure, which is to provide resources for times ahead when one may not, for one reason or another, be in paid work, is a sensible and logical extension.
  Mr. John: I think that the hon. Lady will accept that we all hope that retirement is within our control. If it is not, natural causes have intervened. Redundancy is caused by others and not by the employee. Secondly, I take up the remarks of the Secretary of State on Second Reading, especially in column 175 of Hansard of 15 December. The right hon. Gentleman is not setting his principles on an elevated plane. He is acting to keep the redundancy payments fund solvent. We know that, and it is no good dressing this up as a moral issue.
  Mrs. Chalker: We all hope that we may choose retirement, but equally we all know that many reach retirement age and are not ready to retire. We know also that others must have recourse to the fund through no wish of their own. That can happen, for example, if a person has an accident and becomes ill.

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  I endorse what my right hon. Friend the Secretary of State said in column 175 of the Official Report. The increase in employees' contributions for the employment protection allocation will mean that the fund will keep within the statutory borrowing limits which the House of Commons agreed on 18 November.
  We seek to ensure that if redundancies occur there is adequate provision in the fund to make the necessary payments. The manner of doing so by contributions from those who are in employment seems to be the most sensible course. I note that there have been no suggestions for alternative funding. If we are to criticise what is proposed in clause 3(3) it behoves us to think about alternative means. It is true that there are rarely any except to provide the necessary funding by general taxation.
  Mr. Andrew F. Bennett: Will the hon. Lady accept that it is difficult for us to table amendments that represent an alternative economic strategy, and that it is the need for such an alternative that is basically the argument? If we had a better economic strategy, there would not be a need for the Bill.
  Mrs. Chalker: I look forward to hearing the hon. Gentleman's economic strategy. I shall enjoy debating it with him.
  The financial effect of the three amendments would be to deprive the redundancy payments fund of £353 million in 1982–83 and to increase the income of the national insurance fund by £438 million, including £47 million of Treasury supplement. I do not think that anyone has suggested that that is what should be done.
  There has been a far higher level of redundancies than anyone would wish. The Government wish that there could be no redundancies. However, I am confident that we shall see a steady fall in the number of redundancies in future. Having agreed that clause 1 should remain part of the Bill and that we should make a 1 per cent. increase in national insurance contributions, we would not be very sensible or logical if we were to amend clause 3(3) by amendment No. 3. That would not cause a reduction in national insurance contributions, but it would mean extra resources for the national insurance fund. That is clear to all those who have delved into these matters.
  However we go about ensuring that there are sufficient resources in the redundancy fund for those who suddenly become redundant, we must apply economic sense, and that is exactly what clause 3(3) does.
  7.15 pm
  Mr. John: The hon. Lady rightly addressed her remarks to the effect of the clause. Unfortunately, she seemed to come up against several mental barriers which prevented her from contemplating a different approach. She said, for example, that the effect of the amendment would be to provide extra income for the national insurance fund, as if the fund is currently embarrassed by the money that it has available and that it cannot find useful ways in which to use it. It could use extra income to uprate benefits by the full amount of inflation instead of a 2 per cent. shortfall. It could retain an element of earnings relation.
  Mr. Andrew F. Bennett: Does my hon. Friend agree that if we managed to carry these amendments we would be happy to table a series of amendments that set out ways of spending the money?
  Mr. John: We can spend any money that the Government can provide.
  Mrs. Chalker: So can I.
  Mr. John: I understand that. That is almost the reverse of my domestic function.
  Another central theme of the hon. Lady's reply was that the Government would overshoot the borrowing requirement of the redundancy fund if they accepted our amendments. Again, the hon. Lady was running up against mental buffers—horror of horrors, we might have to borrow more to keep the fund alive. We have said consistently that the Government have a mental block. The Economic Secretary has a mental blockage on the Government's borrowing requirement, but with our reserves of oil and natural wealth there would be no great obstacle to increasing the requirement. I doubt whether even a Treasury mandarin would be forced out through ill health if we were to put before the House of Commons a measure to increase the borrowing requirement for the redundancy fund by another £300 million to keep it in balance. I consider the hon. Lady's reply to be spurious.
  The Minister said that the Government expect the number of redundancies to lessen. She did not devote the rest of her speech to inspiring us with confidence. It is notable how striking proclamations are made in tremulous tones. The Government Actuary's assessment and assumptions suggest that another 300,000 adult employees will be made redundant. When the Bill is enacted, those who are now in employment will be called upon to pay to keep the the redundancy fund alive. They will not want to lose their jobs. If the 300,000 could be polled, it would be the one opinion poll that I would believe. I am sure that they would be 100 per cent. in favour of retaining their jobs, yet the forced loan that the Government are presenting will cause them to pay towards their own inevitable doom.
  The hon. Lady argued that the subsection is necessary, that the system that we propose is not necessary and that in any event our suggestion is being followed in a roundabout way already. If that is so, there is no reason to reject the amendment. If she resists it, that more than ever will convince me that we are right. To show that we believe that the way in which redundancy payments have heretofore been dealt with is the right way, we intend to divide the Committee on this amendment.
  Question put, That the amendment be made:—
  The Committee divided: Ayes 202, Noes 272.

  Division No. 35]

  [7.18 pm

  AYES

  Abse, Leo

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

  Adams, Allen

  Brown, Ron(E'burgh, Leith)

  Alton, David

  Buchan, Norman

  Anderson, Donald

  Callaghan, RtHon J.

  Archer, RtHon Peter

  Campbell-Savours, Dale

  Ashton, Joe

  Canavan, Dennis

  Atkinson, N. (H'gey,)

  Carmichael, Neil

  Barnett, Guy(Greenwich)

  Clark, Dr David (S Shields)

  Beith, A. J.

  Cocks, Rt Hon M. (B'stolS)

  Benn, RtHon Tony

  Cohen, Stanley

  Bennett, Andrew(St'kp'tN)

  Coleman, Donald

  Bidwell, Sydney

  Concannon, Rt Hon J. D.

  Booth, RtHon Albert

  Cowans, Harry

  Boothroyd, MissBetty

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

  Bottomley, Rt HonA.(M'b'ro)

  Crawshaw, Richard

  Bradley, Tom

  Crowther, Stan

  Brocklebank-Fowler, C.

  Cryer, Bob

  Brown, Hugh D. (Provan)

  Cunningham, G, (IslingtonS)

  Brown, R. C. (N'castle W)

  Cunningham, DrJ, (W'h'n)

  503

  Davidson, Arthur

  McKay, Allen (Penistone)

  Davies, Rt Hon Denzil (L'lli)

  McKelvey, William

  Davies, Ifor (Gower)

  McMahon, Andrew

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

  McTaggart, Robert

  Deakins, Eric

  McWilliam, John

  Dean, Joseph (Leeds West)

  Magee, Bryan

  Dempsey, James

  Marshall, D(G'gowS'ton)

  Dewar, Donald

  Martin, M(G'gowS'burn)

  Dixon, Donald

  Maxton, John

  Dobson, Frank

  Maynard, MissJoan

  Dormand, Jack

  Meacher, Michael

  Douglas, Dick

  Millan, Rt Hon Bruce

  Dubs, Alfred

  Miller, Dr M.S. (EKilbride)

  Duffy, A. E. P.

  Mitchell, Austin(Grimsby)

  Dunnett, Jack

  Mitchell, R. C. (Soton Itchen)

  Dunwoody, Hon Mrs G.

  Molyneaux, James

  Eadie, Alex

  Morton, George

  Ellis, R.(NED'bysh're)

  Newens, Stanley

  Ellis, Tom (Wrexham)

  O'Halloran, Michael

  English, Michael

  O'Neill, Martin

  Ennals, Rt Hon David

  Orme, Rt Hon Stanley

  Evans, Ioan (Aberdare)

  Owen, Rt Hon Dr David

  Evans, John (Newton)

  Palmer, Arthur

  Ewing, Harry

  Park, George

  Faulds, Andrew

  Parker, John

  Fitch, Alan

  Parry, Robert

  Fletcher, Ted (Darlington)

  Pavitt, Laurie

  Foot, Rt Hon Michael

  Penhaligon, David

  Ford, Ben

  Pitt, WilliamHenry

  Foster, Derek

  Powell, Raymond (Ogmore)

  Foulkes, George

  Prescott, John

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

  Price, C. (Lewisham W)

  Freeson, Rt Hon Reginald

  Race, Reg

  Freud, Clement

  Radice, Giles

  Garrett, John (NorwichS)

  Rees, Rt Hon M (Leeds S)

  George, Bruce

  Roberts, Albertf(Normanton)

  Gilbert, Rt Hon Dr John

  Roberts, Allan(Bootle)

  Golding, John

  Roberts, Gw'iiym(Cannock)

  Graham, Ted

  Robinson, G. (Coventry NW)

  Grant, George(Morpeth)

  Rooker, J. W.

  Grant, John (IslingtonC)

  Ross, Ernest (Dundee West)

  Hamilton, James (Bothwell)

  Ross, Stephen (Isle of Wight)

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

  Rowlands, Ted

  Hardy, Peter

  Ryman, John

  Harrison, Rt Hon Walter

  Sever, John

  Hart, Rt Hon Dame Judith

  Sheerman, Barry

  Hattersley, Rt Hon Roy

  Sheldon, Rt Hon R.

  Haynes, Frank

  Silkin, RtHonJ. (Deptford)

  Healey, Rt Hon Denis

  Silkin, Rt Hon S. C. (Dulwlch)

  Heffer, EricS.

  Silverman, Julius

  Hogg, N. (EDunb't'nshire)

  Skinner, Dennis

  HomeRobertson, John

  Smith, Rt Hon J. (N Lanark)

  Homewood, William

  Snape, Peter

  Hooley, Frank

  Soley, Clive

  Howell, RtHonD.

  Spearing, Nigel

  Hoyle, Douglas

  Spriggs, Leslie

  Huckfield, Les

  Steel, Rt Hon David

  Hughes, Mark (Durham)

  Stewart, Rt Hon D. (W Isles)

  Hughes, Robert (Aberdeen N)

  Stoddart, David

  Hughes, Hoy (Newport)

  Stott, Roger

  Jay, Rt Hon Douglas

  Straw, Jack

  John, Brynmor

  Summerskill, HonDrShirley

  Johnson, James (Hull West)

  Thomas, Dafydd(Merioneth)

  Johnson, Walter (Derby S)

  Thomas, Mike (NewcastleE)

  Johnston, Russell (Inverness)

  Thomas, DrR.(Carmarthen)

  Jones, Barry (East Flint)

  Torney, Tom

  Jones, Dan (Burnley)

  Varley, Rt Hon Eric G.

  Kaufman, Rt Hon Gerald

  Walker, Rt Hon H.(D'caster)

  Kerr, Russell

  Watkins, David

  Kilroy-Silk, Robert

  Weetch, Ken

  Kinnock, Neil

  Wellbeloved, James

  Lamborn, Harry

  Welsh, Michael

  Lamond, James

  White, J. (G'gowPollok)

  Leighton, Ronald

  Whitehead, Phillip

  Lestor, MissJoan

  Whitlock, William

  Lofthouse, Geoffrey

  Wigley, Dafydd

  Lyons, Edward (Bradf'dW)

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

  McCartney, Hugh

  Williams, Rt Hon Mrs (Crosby)

  McDonald, DrOonagh

  Wilson, Gordon (DundeeE)

  McElhone, Frank

  Wilson, RtHonSirH.(H'ton)

  504

  Wilson, William (C'trySE)

  Winnick, David

  Tellers for the Ayes:

  Woolmer, Kenneth

  Mr. James Tinn and

  Wright, Sheila

  Mr. Lawrence Cunliffe.

  NOES

  Adley, Robert

  Fairgrieve, SirRussell

  Aitken, Jonathan

  Faith, MrsSheila

  Alexander, Richard

  Farr, John

  Alison, Rt Hon Michael

  Fell, Anthony

  Amery, Rt Hon Julian

  Fenner, Mrs Peggy

  Ancram, Michael

  Finsberg, Geoffrey

  Arnold, Tom

  Fisher, Sir Nigel

  Atkins, RtHonH.(S'thorne)

  Fletcher.A.(Ed'nb'ghN)

  Atkins.Robert(PrestonN)

  Fletcher-Cooke, SirCharles

  Baker, Kenneth(St.M'bone)

  Fookes, Miss Janet

  Baker, Nicholas (N Dorset)

  Forman, Nigel

  Banks, Robert

  Fowler, Rt Hon Norman

  Bell, SirRonald

  Fox, Marcus

  Bendall, Vivian

  Fraser, Peter (South Angus)

  Benyon, Thomas(A'don)

  Fry, Peter

  Benyon, W. (Buckingham)

  Gardiner, George(Reigate)

  Berry, Hon Anthony

  Gardner, Edward (SFylde)

  Bevan, David Gilroy

  Garel-Jones, Tristan

  Biffen, RtHonJohn

  Gilmour, Rt Hon Sir Ian

  Biggs-Davison.SirJohn

  Glyn, DrAlan

  Blackburn, John

  Goodlad, Alastair

  Blaker, Peter

  Gorst, John

  Body, Richard

  Gower, SirRaymond

  Bonsor, SirNicholas

  Grant, Anthony (HarrowC)

  Bottomley, Peter (W'wich W)

  Green way, Harry

  Bowden, Andrew

  G riff iths, E. (B 'ySt. Edm 'ds)

  Boyson, Dr Rhodes

  Griffiths, PeterPortsm'thN)

  Bright, Graham

  Grist, Ian

  Brinton, Tim

  Grylls, Michael

  Brittan, Rt. Hon. Leon

  Hamilton, Hon A.

  Brotherton, Michael

  Hamilton, Michael(Salisbury)

  Brown, Michael(Brigg&Sc'n)

  Hampson, DrKeith

  Bruce-Gardyne, John

  Hannam, John

  Bryan, Sir Paul

  Haselhurst, Alan

  Buchanan-Smith, Rt. Hon.A.

  Hastings, Stephen

  Buck, Antony

  Havers, Rt Hon Sir Michael

  Budgen, Nick

  Hawkins, Paul

  Bulmer, Esmond

  Hawksley, Warren

  Burden, SirFrederick

  Hayhoe, Barney

  Butcher, John

  Heddle, John

  Butler, Hon Adam

  Henderson, Barry

  Carlisle, John (Luton West)

  Heseltine, Rt Hon Michael

  Carlisle, Kenneth(Lincoln)

  Hicks, Robert

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

  Higgins, Rt Hon Terence L.

  Chalker, Mrs. Lynda

  Hill, James

  Channon, Rt. Hon. Paul

  Hogg, Hon Douglas(Gr'th'm)

  Chapman, Sydney

  Holland, Philip(Carlton)

  Churchill, W.S.

  Hooson, Tom

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

  Hordern, Peter

  Clark, Sir W (Croydon S)

  Howell, RtHonD.(G'ldf'd)

  Clarke, Ken neth (Rushcliffe)

  Howell, Ralph (NNorfolk)

  Clegg, Sir Walter

  Hunt, David (Wirral)

  Cockeram.Eric

  Hunt, john(Ravensbourne)

  Colvin, Michael

  Hurd, Hon Douglas

  Cope, John

  Irving, Charles (Cheltenham)

  Cormack, Patrick

  Jenkin, RtHon Patrick

  Corrie, John

  Johnson Smith, Geoffrey

  Cranborne, Viscount

  Jopling, RtHon Michael

  Critchley, Julian

  Joseph, Rt Hon Sir Keith

  Crouch, David

  Kaberry, SirDonald

  Dean, Paul (North Somerset)

  Kitson, SirTimothy

  Dickens, Geoffrey

  Knight, MrsJill

  Dorrell, Stephen

  Knox, David

  Douglas-Hamilton, LordJ.

  Lamont, Norman

  Dover, Denshore

  Lang, Ian

  Dunn, Robert(Dartford)

  Langford-Holt, SirJohn

  Durant, Tony

  Latham, Michael

  Dykes, Hugh

  Lawrence, Ivan

  Eden, Rt Hon Sir John

  Lawson, Rt Hon Nigel

  Edwards, Rt Hon N. (P'broke)

  Lennox-Boyd, Hon Mark

  Eggar, Tim

  Lester, Jim (Beeston)

  Elliott, SirWilliam

  Lewis, Kenneth(Rutland)

  Eyre, Reginald

  Lloyd, Ian (Havant& W'loo)

  Fairbairn, Nicholas

  Lloyd, Peter (Fareham)

  505

  Luce, Richard

  Sainsbury, HonTimothy

  Lyell, Nicholas

  Scott, Nicholas

  Macfarlane, Neil

  Shaw, Giles (Pudsey)

  MacKay, John (Argyll)

  Shaw, Michael(Scarborough)

  Macmillan, RtHonM.

  Shelton, William(Streatham)

  McNair-Wilson, M.(N'bury)

  Shepherd, Colin(Wereford)

  McNair-Wilson, P. (NewF'st)

  Shepherd, Richard

  McQuarrie, Albert

  Shersby, Michael

  Madel, David

  Silvester, Fred

  Major, John

  Sims, Roger

  Marland, Paul

  Skeet, T. H. H.

  Marlow, Antony

  Speed, Keith

  Marshall, Michael(Arundel)

  Speller, Tony

  Marten, RtHon Neil

  Spence, John

  Mather, Carol

  Sproat, Iain

  Maude, Rt Hon Sir Angus

  Squire, Robin

  Mawby, Ray

  Stainton, Keith

  Mawhinney, DrBrian

  Stanbrook, Ivor

  May hew, Patrick

  Stanley, John

  Mellor, David

  Stevens, Martin

  Meyer, SirAnthony

  Stewart, A(ERenfrewshire)

  Miller, Hal(B'grove)

  Stewart, Ian (Hitchin)

  Mills, lain (Meriden)

  Stokes, John

  Miscampbell, Norman

  StradlingThomas, J.

  Mitchell, David(Basingstoke)

  Tapsell, Peter

  Moate, Roger

  Taylor, Teddy (S'end E)

  Morgan, Geraint

  Tebbit, Rt Hon Norman

  Morris, M. (N'hamptonS)

  Temple-Morris, Peter

  Morrison, Hon C. (Devizes)

  Thompson, Donald

  Mudd, David

  Thome, Neil (IlfordSouth)

  Murphy, Christopher

  Thornton, Malcolm

  Myles, David

  Townend, John(Bridlington)

  Neale, Gerrard

  Townsend, CyrilD, (B'heath)

  Needham, Richard

  Trippier, David

  Nelson, Anthony

  Trotter, Neville

  Neubert, Michael

  van Straubenzee, Sir W.

  Newton, Tony

  Vaughan, DrGerard

  Onslow, Cranley

  Viggers, Peter

  Osborn, John

  Waddington, David

  Page, John (Harrow, West)

  Wakeham, John

  Page, Richard (SW Herts)

  Waldegrave, HonWilliam

  Parris, Matthew

  Walker, Rt HonP. (W'cester)

  Patten, Christopher(Bath)

  Walker, B. (Perth)

  Patten, John (Oxford)

  Walker-Smith, RtHon Sir D.

  Pattie, Geoffrey

  Wall, SirPatrick

  Pawsey, James

  Waller, Gary

  Percival, SirIan

  Walters, Dennis

  Pink, R.Bonner

  Ward, John

  Pollock, Alexander

  Wells, Bowen

  Porter, Barry

  Wells, John(Maidstone)

  Prentice, RtHon Reg

  Wheeler, John

  Price, SirDavid (Eastleigh)

  Whitelaw, RtHonWilliam

  Proctor, K, Harvey

  Whitney, Raymond

  Pym, RtHon Francis

  Wiggin, jerry

  Raison, Timothy

  Wilkinson, John

  Rathbone, Tim

  Williams, D. (Montgomery)

  Rees-Davies, W. R.

  Winterton, Nicholas

  RhodesJames, Robert

  Wolfson, Mark

  RhysWilliams, SirBrandon

  Young, SirGeorge (Acton)

  Ridsdale, SirJulian

  Younger, RtHon George

  Rippon, RtHonGeoffrey

  Roberts, M. (CardiffNW)

  Tellers for the Noes:

  Roberts, Wyn (Conway)

  Mr. Robert Boscawen and

  Rossi, Hugh

  Mr. John Selwyn Gummer.

  Question accordingly negatived.
  Clause 3 ordered to stand part of the Bill.
  Clauses 4 and 5 ordered to stand part of the Bill.

Schedule 1

  CONSEQUENTIAL AMENDMENTS
  7.30 pm
  Mrs. Chalker: I beg to move amendment No. 5, in page 5, line 22, after "Act", insert
  "and of the reduced primary class 1 contribution specified in regulation 104 of these regulations".
  506
  This is a purely formal amendment. Once upon a time there were very few opted-out women mariners, but times have changed. Stewardesses are now likely to be opted-out women mariners. The mariners have their own redundancy scheme, and their employers are exempted from the employment protection allocation and pay an abated rate of contribution.
  Clearly it is similarly fair to exempt mariner employees from the employment protection allocation in their contribution. That is achieved by paragraph 3(2)(b). Unfortunately, it did not cover mariners who were opted-out women and widows. I hope that the Committee will therefore see fit to accept the amendment, which will repair that omission and put opted-out women mariners on the same footing as their male and opted-in women counterparts.
  Mr. John: As this affects women mariners. I should not dream of making waves.
  Amendment agreed to.
  Schedule 1, as amended, agreed to.
  Schedule 2 agreed to.
  Bill reported, with an amendment.
  7.34 pm
  Mr. Fowler: I beg to move, That the Bill be now read the Third time.
  On Second Reading, I set out the five main aims of the Bill. They were, first, to fund the increase of £2½billion extra spending next year on social security benefits; secondly, to make a contribution to the growth in spending on the National Health Service; thirdly, to broaden the financing arrangements of the redundancy fund by asking employees to contribute to it; fourthly, to reduce the size of the Treasury supplement; and, fifthly, to protect as far as possible employers and the self-employed from the changes necessary to increase the national insurance and redundancy funds. I emphasised also that these changes were entirely consistent with the principles of social insurance. I think that increasing contributions to pay for increased benefits, or the aim of minimising the cost borne by employers, are objects of policy that many hon. Members would welcome. In the same way, as I said at an earlier stage, I believe that the contribution towards the National health Service is worthy of the House's support. it must be emphasised once more that the Government have not cut health spending. We are increasing health spending and paving the way for a further increase in spending in 1982–83.
  On the level of benefits, I re-emphasise the fundamental point that benefits to one group in society can be made only through the contribution of the rest of society. There is no other source. That is why we have repeatedly said that the improvement of the living standards of those most in need ultimately rests on the capacity of the nation to create wealth and to compete in the world market. It is also the reason why we have asked for a greater contribution from those in work for those who are retired, without employment, sick or disabled.
  With regard to the changes in the financing of the redundancy fund, I do not accept the argument that this is an unfair additional charge on the employee, nor that it in any way departs from the main principles of social insurance. Similarly, I do not think that an objective

  507
  appraisal of the limited reduction to the Treasury supplement could conclude that this is unfair or a fundamental change in the funding arrangements.
  Mr. James Dempsey: Perhaps the Minister will clarify one point. I understood that the redundancy fund was funded on the basis of 41 per cent. from Treasury and 59 per cent. from the employers. Is that not being altered by asking for a contribution from the insured person?
  Mr. Fowler: That is indeed the purpose and that is what we have debated, but I think that would take us back not just to the Committee stage but to Second Reading.
  The first point to make clear about the Treasury supplement—this has been emphasised from the Dispatch Box—is that the proportion of benefit expenditure met from general taxation is not being reduced. The proportion is estimated in 1982–83 as 45 per cent.—the same proportion as this year—compared with 37 per cent. in 1975–76. Every Government must decide the right balance, giving due weight to the economic circumstances of the time, the planned level of public expenditure, the position of employers and the cost borne by employees.
  I believe that we have achieved a balance that will be seen by the public to be fair. I also believe that we have adhered fairly to the principles of the "pay-as-you-go" system of financing benefits. I commend the Bill to the House.
  7.39 pm
  Mr. John: I suspect that if we were to debate for an hour longer we should not find many new points to raise. I shall therefore do as the Secretary of State has done and briefly reiterate the old points.
  We do not intend to divide the House on Third Reading. Lest that be misunderstood, I place it on record that we have voted against two of the three main props of the Bill. We have made our opposition clear. I briefly put on record once again why we oppose the Bill.
  First, despite the honeyed words of the Secretary of State, I do not believe that the Bill is within the Beveridge concept. It undermines the tripartite concept of funding insurance because it makes employed persons solely responsible for bailing the Government out of their present difficulties. Instead of looking to the whole of society to pay for the additional benefits, they are placing the burden on one segment of society—the employed person.
  I warn the Government that this is fundamentally an unsound principle because employed persons will be a declining percentage of the population and the number of retired people and other people out of work will increase. The Government will have to place more and more burdens on fewer and fewer people in employment unless a radical—I hate to use the word that the hon. Member for Newcastle upon Tyne, East (Mr. Thomas) used, but it has been used so often from a sedentary position that I thought it would be a novelty to use it from an upright position—change is made. The Government will have to take a fundamental look at the national insurance principle in order to make sure that the strain upon the scheme is not too great for the country to bear.
  The 1 per cent. increase in national insurance contributions will be an increased burden. It has risen from 6½ per cent. to 8¾ per cent. under this Government, and
  508
  it will rise further. At the same time, the Treasury contribution has fallen. If we have established anything, it is the completely arbitrary nature of the Treasury contribution and the completely Pavlovian desire of the Treasury to claw back money every time that it can do so, whether or not it is right in the prevailing economic circumstances. We do not believe that it is right.
  I come back to the point that was made by my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) about the redundancy payment. We believe that the scheme that has proceeded well for the last 16 years should continue and that if there is a shortfall or if the borrowing requirement of the redundancy fund needs to be changed no economic harm will come to the country. More economic harm has come from the Government's belief that if they increase this country's borrowing at a time of depression it will bring the house down around our ears. It will not. The failure to recognise that will itself gravely weaken the fabric of our country.
  People should know that this is a fundamentally unfair Bill which places the burden on employed persons alone. For that reason, we shall continue our opposition to it.
  7.43 pm
  Mr. Dempsey: The present system is unfair to the employed person. I hear in the business reports on the radio of the grand profits being made by employers in different aspects of business—manufacturing, distribution, and so on. It is extremely unfair, if we are to relieve the employers of a part of their national insurance contribution, to pass the burden to the insured employee who works hard to earn his wages every week. This is another form of income tax.
  Because of the Government's policies, more and more of the burden of financing public investment and expenditure is put on working people. That is most unfair, especially from a Government who, in redistributing our national income, wickedly reduced taxation on the wealthy from 83p to 60p in the pound. In money value, that means a creaming-off by the wealthy of about £1,500 million per annum. To give those people such a handout and then to ask the insured employee to pay more in order to protect himself against redundancy is an unfair and inequitable way of distributing the wealth of the country.
  I come from an area that has one of the highest rates of unemployment on the mainland of Scotland. This is the festive season in bonnie Scotland. We are coming up to new year's day—called Ne'erday in Scotland—and 200 workers are being laid off. That is their new year's present. They were not consulted. The mandate was posted up in their workplace, and that was it. Why should people who are subject to that sort of merciless treatment be asked to make a contribution towards their redundancies? They are first sacked, and then they are asked to pay for being sacked. That is immoral. I am glad that my hon. Friend the Member for Pontypridd (Mr. John) said that we shall continue to oppose this mean Bill.
  7.46 pm
  Mr. Andrew F. Bennett: All hon. Members who have spoken, except Ministers, believe that this is a mean and squalid Bill. The Secretary of State gave five misleading reasons for supporting the Bill. He emphasised that the extra £2½ billion in contributions is required to pay for increased benefits. He, more than anyone else in the House, should know that we do not have any increased

  509
  benefits. In almost every area benefits have been cut. He should use the English language to make it clear that we are paying £2½ million not for extra benefits, but because increased numbers of people, particularly pensioners, are eligible for the benefits.
  The Secretary of State said that the extra contribution to the National Health Service is to pay for an expansion of the Service. Most people are not aware that the service is improving. In fact, they are worried that it is not improving sufficiently to keep pace with the demand from the growing number of people of pensionable age who need to use the Health Service. Instead of proudly claiming that the Government are spending more money on the National Health Service, the Secretary of State should concentrate his attention on whether the Service is improving. Most of the evidence suggests that it is not.
  The Secretary of State stressed that it was a useful principle that employees should pay for their redundancies. The Government are admitting their own failures by saying that we shall need more money for the redundancy fund. They are saying that there will be more redundancies. They say that employees must make a contribution, but that involves all employees. Many, who are in the lowest-paid jobs, will never benefit from the redundancy fund. If they work for one employer for less than two years, they will not qualify. They are continually asked to make contributions but, because of the nature of their work, the areas in which they work, and the fact that they have to change jobs frequently, they receive no benefit. We are therefore asking the least well paid to make contributions to a fund that tends to benefit workers who have secure jobs—at least for a period of more than two years. That does not seem equitable.
  The right hon. Gentleman justified the Bill by saying that it was a good idea to require a smaller contribution
  510
  from the Treasury. As we have already said, it depends how the Treasury plans to spend the money. If it were to use it to increase child or, supplementary benefit, we could possibly reach a deal, but I can think of many other areas in which it is more likely that the Treasury will spend the money. Even if the right hon. Gentleman were merely fighting for his own Department, I doubt whether he would really believe that it was a good idea to reduce the Treasury's contribution.
  The Secretary of State also argued that the Bill was necessary to protect employers and the self-employed. I wonder whether that is true. Someone on average earnings will find an extra £1·50 stopped from his earnings. The natural reaction is to get that money back, and that encourages people to ask for more in their pay packets. Of course, they will ask not for £1·50, but for £2, because, by the time income tax and other stoppages have been deducted, they know that they will need £2 to compensate for the £1·50. Human nature being what it is, if people need £2 to stand still, they are likely to ask for £2·50. Therefore, the pressure on the employer may be greater than if the £1·50 had been taken off him in the first place. Instead of asking for £1·50, workers are likely to ask for £2·50, and the employer will be under pressure to pay it.
  It may be that over 12 months many employers will find that, in addition to making a contribution towards the money that the Government are demanding, they will have to pay out even more. That may help the Government to get extra in taxation, but it will not help the employer.
  This is a disastrous Bill. That view is summed up by the fact that not one Conservative Back Bencher had a good word for it.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

House of Commons Members' Fund
7.53 pm
Mr. Alfred Morris: I beg to move,
That, in pursuance of the provisions of section 3 of the House of Commons Members' Fund Act 1948 and of section 2 of the House of Commons Members' Fund and Parliamentary Pensions Act 1981 the maximum annual amounts of the periodical payments which may be made out of the House of Commons Members' Fund under the House of Commons Members' Fund Act 1939, as amended and the annual rate of any payments made under section 1 of the said Act of 1981 shall be varied as from 1st December 1981 as follows:
(a) for paragraph 1 of schedule 1 to the said Act of 1939, as amended, there shall be substituted the following paragraph:—
1. The annual amount of any periodical payment made to any person by virtue of his past membership of the House of Commons shall not exceed £1,820 or such sum as, in the opinion of the trustees, will bring his income up to £3,365 per annum, whichever is the less:
Provided that if, having regard to length of service and need, the trustees think fit, they may make a larger payment not exceeding £3,510 or such sum as, in their opinion, will bring his income up to £5,055 per annum, whichever is the less;
(b) for paragraph 2 of that Schedule there shall be substituted the following paragraph:—
2. The annual amount of any periodical payment to any person by virtue of her being a widow of a past Member of the House of Commons shall not exceed £910 or such sum as, in the opinion of the trustees, will bring her income up to £2,455 per annum, whichever is the less;
Provided that if, having regard to her husband's length of service or to her need, the trustees think fit, they may make a larger payment not exceeding £1,755 or such sum as, in the opinion of the trustees, will bring her income up to £3,300 per annum, whichever is the less;
(c) in paragraph 2A of that Schedule for the words 'the annual amount of any periodical payment' to the end of the paragraph, there shall be substituted the words:—
'the annual amount of any periodical payment made to any such widower shall not exceed £910 or such sums as, in the opinion of the trustees, will bring his income up to £2,455 per annum, whichever is the less:
Provided that if, having regard to his wife's length of service or to his needs, the trustees think fit, they may make a larger payment not exceeding £1,755
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or such sum as, in the opinion of the trustees, will bring his income up to £3,300 per annum, whichever is the less;'
(d) in section 2(1) of the said Act of 1981, for the words from the beginning to the end of paragraph (b) there shall be substituted the words:—
'the annual rate of any payments made under section 1 shall be —

(a) £1,060 if the payments are made to a past Member; and

(b) £530 if the payments are made to the widow or widower of a past Member.'

It may be for the convenience of the House if we discuss at the same time the second motion. Both motions stand in my name and the names of the Father of the House, my hon. Friend the Member for Dagenham (Mr. Parker), and the hon. Member for Shrewsbury (Sir J. Langford-Holt). their purpose is clear from their wording, and I warmly commend them to the House.
Question put and agreed to.
Resolved,
That one-tenth of the sums deducted or set aside in the current year from the salaries of Members of Parliament under section 1 of the House of Commons Members' Fund Act 1939, and one-tenth of the contribution determined by the Treasury for the current year under section 1 of the House of Commons Members' Fund Act 1957, as amended by the House of Commons Members' Fund and Parliamentary Pensions Act 1981, be appropriated for the purposes of section 4 of the House of Commons Members' Fund Act 1948.—[Mr. Alfred Morris.]

STATUTORY INSTRUMENTS, &c.
Mr. Deputy Speaker (Mr. Ernest Armstrong): In order to save the time of the House, I will put together the Questions on the two motions to approve statutory instruments.
Motion made, and Questions put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &c.)

STATUTORY INSTRUMENTS, &c.
  COMPANIES
  That the Company and Business Names Regulations 1981 (S.I., 1981, No. 1685), a copy of which was laid before this House on 25th November, be approved.
  AGRICULTURE
  That the draft Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1981, which were laid before this House on 1st December, be approved.—[Mr. Lang.]

  Lee James Whitmore
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Lang.]
  7.54 pm
  Mr. Fred Silvester: The debate takes place a little earlier than I anticipated. Normally I can say that I am pleased to bring before the House the case of a constituent. On this occasion, I can say that I am pleased that it is possible to bring be fore the House the case of my constituent, Lee James Whitmore, but I would rather that it was not necessary.
  I am grateful to my hon. Friends in the Department for the care that they have taken over this case. I know that they have given personal attention to the papers and that they would like to say "Yes" if they could, but they are bound by the law.
  I should begin by stating what the law is and to state those parts of the law that I should like the Minister to use. The law gives the Secretary of State power to make an award to a child who has been vaccinated and has suffered harm as a result. The Minister is not obliged to accept the recommendation of any medical adviser, although he usually does. His is the first decision. If the decision is "No", the parent has a right to appeal. That appeal is taken to a medical tribunal and that decision is binding on both the Secretary of State and the parent. That is the stage that we have reached in the case of Lee James Whitmore.
  The Secretary of State may on his own initiative, without consulting anyone, reopen a case if he is satisfied that the decision was made in ignorance of, or based on a mistake as to, some material fact. Once he has decided officially to reopen the case, and if, after consulting the new facts he still decides against the claimant, the decision to reopen is crucial because it again gives the parent a right to appeal to an independent tribunal. I should make it absolutely clear that the mere reopening of the case, even if the Minister subsequently decides against the claimant, opens the way to a further appeal. That is important.
  The Minister may believe that it would be extremely unkind to follow this route. It would be typical of his considerate approach to these matters if he felt that reopening the case without any guarantee of success would be to raise the parents' hopes, only to have them dashed again. I urge him not to take that view.
  Obviously I want him to come to a decision today—or soon—clearly and unequivocally in favour of making an award. If—and I have today checked this with the parents—he is willing to reopen the case and decides against it, they would rather take their chance with the tribunal, despite the pain and difficulty that may cause, than not have the chance at all. I hope that my hon. Friend will come to a favourable decision without further reference to any tribunal.
  Lee Whitmore was born a perfectly healthy baby with a normal birth weight on 14 June 1967. He received his first triple vaccination, including vaccination against whooping cough, on 25 August. Just under two months later, on 2 October, he received a second dose. That date of 2 October has turned out to be crucial.
  Mrs. Whitmore noticed that the child was going stiff, screaming and rolling his eyes on 21 October—19 days after the vaccination. The GP could not diagnose the child's complaint, and referred him to the Duchess of York hospital on 23 October. The hospital was unable to identify
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  the trouble, and the mother eventually sat by the cot to indicate to the ward sister the symptoms about which she was worried. Despite that, the child was sent home on 26 October without the spasms having been identified. The mother records that she was told that she was "an over-anxious mother".
  That might have been an adequate and understandable reaction had the future not proved the mother right and the hospital wrong. By December 1967, three months after the inoculation, it was clear that convulsions were taking place regularly, even though their cause was not known. Today, Lee, a boy of 14, is unable to speak and is severely mentally damaged.
  The sequence of events cannot be disputed. It is known that Lee was healthy before the vaccination. It is known that the first electroencephalograph report on 12 December 1967 identified abnormalities, and it is known that from that day to this there has been a continuous deterioration.
  The question therefore is: can what occurred between 2 October and 12 December be regarded on the balance of probability—that is the phrase in the Act—as an unbroken link in a sequence of events?
  It is worth emphasising, before we analyse that in greater detail, that, if we decide that there was no sequence of events, we are faced with the singularly unattractive alternative of having to believe that the cause of Lee's malady—not to this day identified—arose independently but within a few days of the administration of the vaccine. I doubt whether that would stand for long on the same test of the balance of probability.
  Three reasons have been advanced for refusing compensation, and new evidence has been presented to my hon. Friend and his predecessor on each of these three reasons. The Minister's first and, so far, only decision was based on the report of someone known only as a consultant with particular experience of vaccine damage. That report, dated 30 January 1979, contained a serious error of fact. It stated that the onset of spasms occurred three weeks after the second injection and that that period was too long for a cause to be established. It went on:
  "Moreover, there is no evidence from these notes that spasms were influenced by the administration of the third dose of triple vaccine on 4 or 6 December."
  There is only one natural meaning to that sentence—that the consultant was in part influenced by the lack of reaction to a third vaccination. As my hon. Friend knows, we have now proved that, contrary to all the evidence of the records submitted to the tribunal, the third whooping cough vaccine was not administered. This is the first new evidence presented to the Department, and it is relevant not to the whole but to a significant part of the consultant's opinion.
  My hon. Friend wrote to me on 2 December 1981 that he was
  "advised that the possibility that the pertussis element"—
  that is, the whooping cough vaccine—
  "was omitted from the third immunisation was known and taken into account but not considered material when the Secretary of State's determination on this case was made."
  That is not shown by the record, which reveals that the third vaccination was a significant part of the consultant's opinion and, therefore, of the Secretary of State's consideration.
  The parents then secured a review by an independent tribunal, whose decision, by Act of Parliament, is conclusive. The tribunal, unlike the Minister, does not mention the third vaccination, but, as it was included in

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  the documents, it may well have affected its judgment. The tribunal's decision turned on the view that there was not a slow, progressive decline, but a marked deterioration in the second year. Frankly, it is difficult to see how the tribunal came to that conclusion, because the medical record clearly shows otherwise.
  As I said, the first EEG, which took place when the child was six months old, revealed—all of these quotations are taken from the child's medical records—
  "marked generalised abnormalities including epileptic discharges."
  That was at six months. At 6½ months, Lee was unable to sit up. At seven months it was thought that he was improving, but by nine months the spasms had returned and were recorded as numbering up to 20 or more a day.
  For a while, Lee again responded to treatment, and at 12 months he was making
  "rather slow but steady progress."
  But he was still having about six attacks a day. During the second year, according to the tribunal, the deterioration was more marked, but the records show otherwise. At 15 months they report "minor attacks" and "improving in many ways." At 18 months, the reports refer to "attacks almost every day", and at two years to "attacks quite frequently" and that they tended to be "more severe."
  Looking at those quotations, one sees clearly, even if one judges by the number of attacks per day, that the number of attacks per day in the first year was greater than in the second year. Whichever way one cuts that cake, there is no sign that the condition was more marked in the second year than in the first.
  On the basis of this evidence, it seems to me that it is perverse to suppose that nothing much happened in the first year but that a lot happened in the second year. Where is the evidence to support such a conclusion? Yet it was clearly the determining factor in the tribunal's decision. The tribunal reported:
  "It also seems unlikely that there was a disabling illness following discharge from hospital on the grounds that both the mother and her health visitor regarded the baby as normal at 10 months."
  In a way, that is the cruellest part of the affair. That the baby looked perfectly normal is understandable, but to rely upon the mother's evidence of normality in the face of other evidence to the contrary is a doubtful practice. Mrs. Whitmore had continually reported spasms throughout this period. The child was on drugs and in danger of appearing cushingoid. He was behind in his development. All this is clearly reported from contemporary records.
  However, one has to satisfy my hon. Friend's requirement for further evidence. I sent to my hon. Friend's predecessor letters from people who did not present evidence to the tribunal. Those letters, from Mrs. Beaton, Mrs. Bainbridge, Mrs. Campion and Mrs. Grant—women who knew the child intimately during the crucial early period—prove beyond peradventure that Lee was not normal and was often convulsed within the first 10 months. I hope that my hon. Friend will recognise the force with which this evidence questions the tribunal's conclusion.
  When my hon. Friend's predecessor wrote to me on 30 January he said that those letters
  "do not seem to throw any further light on the events of the period 2 October to 23 October"—
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  the three-week period. They were not meant to do so, but that is not the only consideration. The tribunal was unquestionably affected in its assessment of the balance of probability by its view of the whole of the first year. Otherwise, the comments that I have quoted were meaningless and the letters are new evidence which must be taken into account.
  There remains what has become the final bolthole of the argument for upholding the original decision—that the period between 2 and 21 October, between vaccination and the recorded spasms, is too long. New evidence has also been presented on that point. My hon. Friend has received the analysis of Lee's case undertaken by Professor Ehrengut of Hamburg, who is regarded as a leading authority on vaccine damage in Germany. He reviews two or three cases a week and submits conclusions, which are accepted by the Social Court, which adjudicates on such matters in Germany. His standing is not in question.
  The opinion of Professor Ehrengut is apparently regarded by the DHSS as "highly committed and partial". That will not do. Apart from the professor's eminence in Germany, his attitude towards British cases submitted to him by The Sunday Times does not reveal any lack of detachment. Five cases relating to whooping cough vaccine have been submitted to him, and Lee's is the only one that he has supported. The professor's opinion is based on much research, not only by himself, but by people in this country.
  The professor's opinion is that, while a link could not generally be assumed after a three to four-week period when the child suffered from convulsions, the same is not true if the child suffered from infantile spasms. In that case, the inoculation is not the actual cause, but the precipitating factor, and there can therefore be a delay of several weeks. He underlines further the unsafeness of the tribunal's decision because
  "of the difficulty in diagnosing this convulsive disease. The decisive EEG diagnosis was neglected and this omission cannot be laid at the door of Lee's parents."
  The first time the test was applied in December the evidence became available that the child was suffering from convulsions and had been seriously affected. That judgment, taken from the first EEG, has not been disputed.
  The least that can be said of that third piece of new evidence is that it opens an area of doubt where reputable medical opinion treads uncertainly. It is unthinkable that Lee should be caught in that crossfire. His is the only case of which I am aware which is so close to the date of vaccination. There are others, but they involve delays of some months. If there is doubt among the medics, it is the Minister's duty to see that Lee is not harmed by it.
  Let me summarise the story. A healthy baby was born of a healthy mother who had an untroubled pregnancy and delivery. Lee was known to be healthy and progressing well until his second vaccination. He then entered a period of convulsions and decline, documented and attested and continuing from within two or three weeks of the vaccination to the present day.
  We are asked to believe that some unknown cause intervened in those two or three weeks, unconnected with the administration of the vaccine, and that that explanation is somehow more probable. I believe it it much more probable that the two events were causally connected, but that the early stages of the convulsions were inadequately recorded.

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  I do not doubt that my hon. Friend should reverse his decision. He can do so in the knowledge that the case would not establish a wider precedent. It is a simple case of individual justice.
  My hon. Friend might argue that any one of the three additional pieces of evidence is insufficient, but I cannot see how he could argue that, taken together, they do not disturb the original decision. Put in the scales, they must upset the balance of probability test in the Act. If he cannot bring himself to reverse the decision, let him reopen the case and reject the decision so that we may again try our hand with the tribunal. However, I urge him to take the direct and, in my view, just course of awarding Lee his compensation.
  8.15 pm
  The Under-Secretary of State for Health and Social Security (Mr. Geoffrey Finsberg): I start by making it plain that I have every sympathy both with those who are themselves severely disabled and with the families who have to care for disabled children. The Government have repeatedly made clear their intention to improve the provision for the disabled generally when resources permit.
  In the meantime, the Vaccine Damage Payments Act 1979, provides for a lump sum payment of £10,000 in cases where, on the balance of probability, severe disablement has resulted from vaccination against any of the diseases specified in the Act.
  Of course, that is a very substantial preference for the vaccine damaged over other groups of the disabled, and although there has been considerable pressure on us to extend or amend the scheme, we have not felt it right to do so in view of our preference for improvements for disabled people generally when the state of the economy permits.
  It is a sad truth that a number of parents have been disappointed that their claim for a payment under the scheme has been turned down. The circumstances in which vaccine damage payments can be made are clearly laid down in the Act and, as my hon. Friend will no doubt recall, the provisions were fully debated during the passage of the Bill.
  Apart from the conditions of residence and the like, the main provisions are that the person should have been severely disabled as a result of a type of vaccination specified in the Act or by the Secretary of State in an order made by statutory instrument, the disablement is to the extent of 80 per cent. or more and, on the balance of probability, the disablement resulted from the vaccination.
  The onset of spasms in a baby and subsequent mental or physical handicap, despite a normal healthy birth, is a known medical condition, which may coincidentally be present after vaccination, but without vaccination being the cause.
  It may be helpful if I explain the steps that are taken when a claim is made. On receipt, an application is examined to ensure that the basic qualifications are met. My Department then contacts the medical sources quoted in the application form and obtains all existing relevant medical records in connection with the claim.
  In addition, where doubt exists a consultant opinion is obtained. All the medical evidence forms a basis for the
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  Secretary of State's determination. When the determination is that the conditions required for an award are not met, the claimant is informed that he may apply for a review by an independent appeal tribunal.
  When a request for a review is received, all the evidence used in the initial stages is submitted to the tribunal and a copy of the submission is sent to the claimant. Any new information which may have come to light is, of course, included in the submission. A date for the hearing is set with the claimant's agreement and claimants are encouraged to attend the hearing. After the hearing the tribunal makes its determination which is conveyed to the claimant.
  The decisions of the vaccine damage tribunals are conclusive, except that there may be a reconsideration of the case if there has been a material change in circumstances since the determination was made or if it was made in ignorance of, or was based on a mistake as to, some material fact.
  I come to the case that my hon. Friend the Member for Manchester, Withington (Mr. Silvester) has brought to our notice. In the sad case of Lee James Whitmore, the claim was received in September 1978 and turned down by the Secretary of State in March 1979 on the basis that although Lee's disablement amounted to at least 80 per cent. it was not caused by vaccination. Mrs. Whitmore then sought a review of the case and it was heard by an independent medical tribunal in March 1980. This upheld the Secretary of State's determination that on the balance of probability the disablement was not due to the vaccination.
  In April 1980, Mrs. Whitmore requested that the case be reopened under the appropriate section of the Act which, as I previously mentioned, enables the Secretary of State to reconsider a case where the determination was made in ignorance of, or was based on a mistake as to, some material fact and she has made considerable efforts to produce new evidence as my hon. Friend has said.
  My hon. Friend too has been extremely diligent in pursuing the case and has written to us several times during 1980 and 1981. He has received three letters from my predecessor and one from me and he also had a meeting with my predecessor in May of this year. Following that meeting he wrote again with what was felt to be new evidence about the constituents of the third vaccination, which was given to Lee after the spasms had occurred.
  I replied recently, after looking again in very close detail at this case, explaining that the components of that vaccination were in fact known by the Secretary of State when he made his original determination and that the tribunal knew that it was a possibility that the pertussis element had been excluded but did not consider it a material fact. I reiterated the view expressed by my predecessor that there are at present no grounds on which a reconsideration by the Secretary of State would be justified. However, my hon. Friend has made a number of points tonight that require, and indeed demand, examination. I shall ensure that they are considered carefully and the papers re-examined yet again to see whether there is any basis whatever for a reconsideration by my right hon. Friend the Secretary of State.
  My hon. Friend said that the parents realise that if there were a reconsideration and the case was able to go yet again to a tribunal, there could be no guarantee what the outcome might be. I am undertaking, however, to have the

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  papers re-examined and I will look at them myself again. I shall write to my hon. Friend with the results as soon as possible.
  I hope that my hon. Friend will feel that this is a satisfactory outcome to the very distressing case that he has raised and that the assurance I have given him means at least that the new points that he has produced tonight, together with any light that they may shed on the facts already in our possession, will enable me to ask my right hon. Friend to consider this case and to take whatever final decision he needs to take.

  Uxbridge Cottage Hospital
  8.23 pm
  Mr. Michael Shersby: I am grateful for this opportunity, at extremely short notice, to raise the question of the proposed closure of Uxbridge cottage hospital. I realise that the Minister will be in some difficulty in replying in detail to some of the points in view of the fact that I was able to give notice of this Adjournment debate only half an hour ago. Nevertheless, this is an invaluable opportunity to deploy the arguments that are being discussed in great detail in my constituency and which are causing a great deal of alarm and distress to my constituents.
  Uxbridge cottage hospital, situated in Harefield Road Uxbridge, has been in existence for many years. It is a pleasant 24-bedded cottage hospital which, throughout my lifetime, has provided excellent care for the sick in the community. I was a patient of the hospital as a child when I had my tonsils removed. I can claim an intimate knowledge of the hospital. The fact that I am still standing today and that I am in good voice demonstrates that the expertise of the surgeons in those days was of a high order.
  The reason I am raising the proposed closure of the hospital is that the Hillingdon area health authority submitted proposals a year or two ago to close the hospital and to relocate the patients who would normally be treated there in what is known as the Uxbridge cottage hospital ward at Hillingdon district hospital. The main reason for the proposal was financial.
  It cost at the time of the proposal—I speak from memory—about £103,000 a year to run the cottage hospital but only £40,000 a year to run the same number of beds in the Uxbridge cottage hospital ward at Hillingdon district hospital. One has to realise the difficulties of Hillingdon area health authority and the fact that we live in times when there are severe financial constraints. Nevertheless, the proposal aroused considerable opposition locally. Many people felt that the Hillingdon area health authority, if it had tried hard enough, could have found the money to keep the cottage hospital open as a separate entity.
  The proposal went ahead. The Hillingdon area health authority submitted proposals that would have resulted in Uxbridge cottage hospital being used as the headquarters of the Hillingdon area health authority. In other words, it proposed to turn the 24-bedded hospital into an office block to accommodate the administrators who run that fine health authority. However, this proposal also fell on stony ground because many people in the community could not reconcile themselves to the possibility of their cottage hospital being lost in this way and the fact that the 24 beds that were in existence for the care of the sick and the elderly would disappear.
  The Hillingdon borough council, for its part, indicated that in no circumstances would it be prepared to grant planning permission for the proposed change of use and the proposal was dropped. Time went by. Other proposals were submitted to the Hillingdon area health authority that would have enabled the 24 beds to have remained in use for the benefit of the community. I shall return to that point later.
  The Hillingdon area health authority decided that, in view of the fact that its earlier proposal to turn the cottage hospital into an office block had been refused, it would

  521
  submit new proposals, contained in a consultation paper, whereby the cottage hospital would be used as residential accommodation for the nursing staff, serving the other hospitals in the Hillingdon area.
  I fully recognise the difficulties which all area health authorities experience, including my own health authority in Hillingdon, in finding suitable accommodation for nursing staff. However, it is a very serious matter to propose the closure of a cottage hospital and to contemplate the loss of 24 beds which could otherwise be used for the care of the sick and the elderly. Nevertheless, the Hillingdon area health authority has proceeded with the proposal, which has been considered also by the Hillingdon community health council. Both the Hillingdon area health authority and the Hillingdon community health council approved the proposal that the hospital should be used as residential accommodation for nursing staff.
  Last week, the North West Thames regional health authority considered the proposal, and it, too, approved it. It is now on its way to the desk of my hon. Friend the Minister for Health. This evening, therefore, I shall point to some other aspects of the matter which may not have appeared as fully as I—and perhaps my constituents—would wish in the papers that have been prepared by the Hillingdon area health authority and by the Hillingdon community health council, and which my hon. Friend will consider in due course.
  There has been a long tradition of public support for Uxbridge cottage hospital. That can be demonstrated by the fact that for many years there has been in existence an organisation known as the League of Friends of the Cottage. In fact, it has been in existence for 25 years. That organisation has done a great deal to support the hospital. It contains many local people who live in Uxbridge and who believe that the hospital should continue to be used for the care of the sick and elderly.
  To get the matter into perspective, I shall quote briefly from an article which appeared in the Uxbridge Gazette recently. It stated:
  "Hillingdon Community Health Council has appealed to the Minister of Health, Dr. Gerard Vaughan, to come to a quick decsion over the future of Uxbridge Cottage Hospital.
  Mrs. Shirley Court, chairman, told a meeting of the CHC last week that she had written to Dr. Vaughan immediately after the area health authority meeting at which it was decided to continue to house Uxbridge Cottage Hospital in Uxbridge Ward at Hillingdon Hospital.
  She referred to the letter from the Minister to Uxbridge MP Michael Shersby promising that he would look into the future of the hospital before a firm decision was made.
  'We are desperately concerned that the former Uxbridge Cottage Hospital patients should not have to wait any longer for their present accommodation in Uxbridge Ward at Hillingdon Hospital to be upgraded,' Mrs. Court told Dr. Vaughan."
  In response to the report of Mrs. Court's letter to my hon. Friend, a letter was written this week to the Uxbridge Gazette by Mr.H. J. Ingle, who for many years has been honorary treasurer of the league of friends. I shall read the letter, because it is relevant to the matter:
  "I was surprised to see in your issue today, that Mrs. Shirley Court, Chairman of the CHC, stated that the opposition to the closure of our hospital, came from a small group only, 'the same four who attended today's meeting'. May I suggest this is only due to the long wearying time in which I, for one, have been involved in this campaign. The interest is still intense.
  May I, as honorary treasurer of the League of Friends of the Cottage, for twenty five years claim to have considerable knowledge of the whole problem, and continuing evidence of the
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  overwhelming opinion of Uxbridge people, in favour of reopening the Cottage hospital for full nursing services and minor operations. My reasons are as follows:

  1. In October 1976, a formal consultation paper was issued calling for comments on the subject of the proposed closure of Uxbridge Cottage hospital. This resulted from many meetings on the matter. Our members compiled a paper, of which I have a copy, detailing thirteen good reasons why the hospital should remain open, and sent it to the HAHA.

  2. Following a large Public meeting, held about the same time, attended by Mr. Michael Shersby, our Member for Parliament; the prospective candidates of the other two parties; the Chairman of the Cottage Hospital Medical staff committee; myself, and about one hundred citizens, a campaign was slatted to bring our views in favour of the retention of the hospital to the attention of the Health Authority.

  3. In furtherance of this meeting, I organised a petition, in which I was assisted by many local citizens, who took turns sitting in the local Public Library, for two weeks, taking signatures. The result was that I presented lists containing 6,264 names, to the Minister, Mr. David Ennals, MP. As no further action followed, we presumed and hoped that we had been successful.

  4. All was quiet for two years, until October 1978, when the hospital was closed for installation of a new lift and re-decoration. I was then given to understand that it would re-open in the New Year for all nursing services and minor operations. Since then the bureaucratic machine has been grinding away, and the position has become so confused, it has been difficult to keep in touch, but not due to lack of interest. I feel guilty for fading into the background, recently, but I am an old man. I hope it is not too late for some young energetic people to take up the torch, and save the dear old `Cottage'".

  I quote that letter because Mr. Ingle has been associated with the hospital for 25 years. The fact that 6,264 people were involved in petitioning the former Minister, the right hon. Member for Norwich, North (Mr. Ennals), shows the substantial public opposition that exists in Uxbridge to the closure of such an excellent hospital.
  With great respect to the dedicated and excellent people who form the Hillingdon area health authority and the community health council, they are not elected by the people. Consequently they have no mandate from the people of Uxbridge to recommend the hospital's closure. I mention that because, in sharp distinction to their views, Hillingdon borough council, which, after all, consists of the elected representatives of the people, has resolved that it does not agree with the hospital's closure. Therefore, the unelected representatives of the Minister and of the other organisations that nominate people to serve on area health authorities and on community health councils take one view and the elected representatives of the people—Hillingdon borough councilors—take another.
  As a result of that sharp difference of opinion, Hillingdon borough council will hold a public meeting on the evening of 14 January to discuss the matter in detail and to submit its views to my hon. Friend the Minister. Whatever view my hon. Friend may take when he considers the issue in detail, I hope that he will give: me an assurance tonight that he will not take any decision until he has received and considered the views of Hillingdon borough council, which represents the people of Hillingdon.
  I must declare an interest, because I am president of the Abbeyfield West London Society Ltd. and of the Abbeyfield Uxbridge Society. Throughout the period that the Hillingdon area health authority and the Hillingdon community health council have considered the hospital's closure, issued consultation papers and eventually made recommendations to the North-West Thames regional health authority and to my hon. Friend the Minister, the Abbeyfield West London Society has put forward a

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  proposal to acquire Uxbridge cottage hospital from Hillingdon area health authority at an agreed figure and to set up Uxbridge cottage hospital as an extra care society. It would provide the extra care that people need when they can no longer care for themselves in an ordinary Abbeyfield house. One possibility was that the West London society would act as an umbrella society so that those from other Abbeyfield homes in the Hillingdon area could go there when they were no longer able to care for themselves.
  Another idea which has been canvassed recently but which has not been specifically put to the Hillingdon area health authority is that we should form an Uxbridge Abbeyfield cottage hospital extra care society. In other words, we should form an extra care society which would operate for the benefit of Uxbridge people exclusively, at no cost to the Hillingdon area health authority, and which would operate with Government grant and public support to keep those 24 beds in operation for the care of the sick and the elderly.
  It has been suggested in the local press that the Abbeyfield project is no more and no less than a nursing home, but of course Abbeyfield, as my hon. Friend well knows, is not an organisation which operates in such a way that its activities can be described so narrowly as that of a nursing home. Abbeyfield societies are run by local societies which operate throughout the country. The concept of the Abbeyfield extra care house arose from the increasing need to provide care for the residents of ordinary Abbeyfield houses who, whilst not hospital cases, had become so frail that they required more constant attention than the busy housekeeper could be expected to provide.
  It was felt that the local Abbeyfield society could contrive to provide such care if their frail, elderly residents could be grouped together, on an area basis, in suitably designed houses with special equipment and kind and experienced staff. This purpose has been well explained by the national Abbeyfield Society, and it should be well known to the Hillingdon area health authority and to the Hillingdon community health council, and I am quite certain that it is well known to my hon. Friend the Minister.
  The Abbeyfield West London Society is very interested in acquiring Uxbridge cottage hospital, and it would be willing to raise the necessary funds by public subscription, not just in Hillingdon but elsewhere, and it would seek grant aid in the normal way. I mention that as only one possibility for the alternative use of Uxbridge cottage hospital if it proves impossible for it to continue in use as a cottage hospital because of financial stringency.
  I must make it absolutely clear that not everybody in Uxbridge agrees with the idea that the cottage hospital should be used as an Abbeyfield extra care house. There is a body of opinion among local general practitioners that in some way the cottage hospital should be kept open for its traditional use. On the other hand, there are general practitioners and members of the Hillingdon area health authority who feel that it should be closed. Whatever may be the variation of opinion, it seems to me that one thing is clear. It surely must be a very serious matter for any area health authority, or any regional health authority, or any Minister of Health, to contemplate snuffing out 24 beds in
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  a splendid hospital on which a great deal of money has been spent only recently, and instead using those premises for residential care for nursing staff.
  8.43 pm
  The Minister for Health (Dr. Gerard Vaughan): I am very glad indeed to have been able to listen to this debate and to reply to it. My hon. Friend the Member for Uxbridge (Mr. Shersby) is right to have brought this matter before the House. It is of great importance to his local community. He has put the situation clearly and persuasively, and it has been helpful to me to have his further views.
  My hon. Friend declared his possible interest in an alternative proposal that he has put to the House, and rightly so. I hope that his constituents will hear of the debate and will appreciate not only the way in which he has brought the subject to my notice previously, but his sense of timing in bringing the debate to the House tonight. The papers arrived at my Department only this morning—indeed, I have not yet had an opportunity to go through them—but on the same day my hon. Friend is pressing his views in an Adjournment debate.
  As my hon. Friend rightly reminded us, we are discussing a small general practitioner hospital of 24 beds. The Government are very keen to support the continuation of small general practitioner hospitals of this kind whenever possible. We think that they perform a very important local function in the community. When we discuss possible closures with the various authorities, we always suggest that they should look not only at the medical reasons and, if necessary, the financial reasons, but at the community implications of any closure.
  My right hon. Friend is right in saying that the hospital was temorarily closed on financial grounds. At that time the patients were moved into beds in a separate, identifiable ward in the Hillingdon district general hospital. The health authority has every right, under the Health Acts, to close down some parts of the service temporarily if there is a major financial problem, but it is not intended that any facility closed in this way should remain closed indefinitely.
  A proposal was brought forward fairly quickly that the hospital should be turned into offices for the area health authority. That is not the sort of step that I could welcome, and we have made clear our view that buildings that are for services to patients are not to be converted, unless there are very strong grounds for it, into administrative accommodation. So that proposal was abandoned, the hospital remained temporarily closed, and now there is a fresh proposal to confirm the closure and to use the building for staff accommodation—particularly accommodation for nurses.
  I understand that there are possible plans that the hospital might later be reopened as a community or psychiatric hospital, but we all know that once a hospital has been closed for clinical purposes and is then put to some other quite different use—even though it is within the National Health Service—it is very difficult to reestablish it as any kind of working hospital. My hon. Friend spoke to me about it a little while ago. At that time he put the local views very strongly. I was persuaded not only by his argument but by the understanding that perhaps the community health council might not have been able to take all the factors into account when it came to its conclusions.

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  Therefore, I thought it right to take a rather unusual step, which was to call in the whole proposal and look at it myself. I was very reluctant to do that. We do not do it very often. We are reluctant to do so. We feel that decisions of this kind ought to be made locally, because the various needs of the service are best understood locally. We feel that it is not right for the Government to keep interfering in local matters. However, I felt that in this instance it would be right to do so, and the papers, as I have already mentioned, arrived today.
  It is also wrong for a health authority that will be replaced in April next year by a new district health authority to make decisions that might pre-empt the new authority, which may have a different view. When such decisions arise they should be put off if possible until the new district health authority is fully established and can reconsider the matter.
  Those were our general reactions to the matter, as a result of which I believed it right to call the matter in. The matter is now with me, but it would be wrong to raise local hopes because I am considering it. It may well be that it is in the interest of the local community that the hospital should remain permanently closed, although not for financial reasons. It would not be satisfactory if short-term financial problems led to the closure of a hospital which, in the longer term, may be required. However, by closing the hospital a better local service can be provided by Hillingdon district general hospital.
  My hon. Friend has put forward an interesting alternative proposal, which I shall be glad to consider and to take into account before coming to a decision. I assure him that no decision will be taken before the meeting to which he has referred.

  National Health Service (Private Enterprise)
  8.51 pm
  Mr. Michael Brown: I am grateful for the opportunity to raise the subject of the greater involvement of private enterprise in the National Health Service, especially in hospitals. On my last Adjournment debate about the complex Boothferry bridge proposals, I had to detain the House for nearly an hour. I am pleased to say that I have a simple argument to advance this evening, one that I am sure will find favour with my hon. Friend the Under-Secretary of State for Health and Social Security.
  I am grateful to my hon. Friend for being prepared to respond to the subject at such short notice. I know that it is dear to his heart, as it is to his colleagues at the Department of Health and Social Security. They have tried to tell the health authorities that it is possible for them to involve private enterprise in the provision of many ancillary services. I am glad that the Government have decided to issue general directives and general encouragement in support of my contention that this proposal will ensure that hospital ancillary services are provided much more efficiently than at present.
  I am aware, as are all hon. Members and the general public, that there is a great shortage of funds available to the National Health Service. No one wishes to see the NHS starved of funds. Every hon. Member must try to ensure that the NHS can provide the sort of medical care, aftercare and trained doctors that are needed. However, at present there is a shortage of money for every aspect of the services provided by the Government. We must recognise the situation, not as we would wish it, but as it is. The Health Service is in the same position as every other Government-provided service—it is short of money. That is the base from which I start.
  I feel that we are not getting the value for money from the National Health Service system that we could get if we contracted out to private enterprise some of the cleansing and laundry services that are now done in house. We all remember the winter of discontent about three years ago, when NUPE stopped a number of hospitals from doing their normal work because its members refused to clean hospitals. It is terrible that that monopoly union and COHSE should be able to hold a hospital to ransom and compel it to close its doors to new patients, or impose demands upon nursing and medical staff that are unreasonable.
  I know from the experience of the United States that there are companies in Britain that can provide a better standard of cleansing service at a lower price than the service that is now provided. What does that mean? I am not suggesting that the savings that could be achieved by using private enterprise should lead to the Health Service being deprived of the funds that are now made available to it. I am saying that the savings made could be released for other purposes.
  We constantly read stories in the newspapers about local health authorities that have to close down wards and to close kidney units, for example, because of a shortage of money. A classic example was brought to our notice last week when the attention of the Prime Minister and of the House was drawn to the lack of funds for the bone marrow unit at Westminster hospital.

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  We should encourage local authorities to take to heart and implement the guidance of Ministers at the Department of Health and Social Security. I know that the Government are anxious that they should do so. If that is done, we can release funds from the cleansing services, which is work that private enterprise could probably do more efficiently at a cheaper price. The money that would be saved could be redirected, for example, to kidney units and to the Westminster bone marrow unit. I should like to know from Westminster hospital what steps it might take in the near future to involve private enterprise in the provision of some of its ancillary services.
  At present there is a monopoly that is not giving value for money. It is run by two or three trade unions and it is powerful enough to cause hospitals to close. There is no moment when a hospital cannot be closed, but invariably closures are caused to take place in the winter when hospitals have more patients than at any other time. Recently a hospital in North Humberside was threatened with closure because a trade union that is involved in providing ancillary services decided that it would call a strike.
  I am not suggesting that the involvement of private enterprise in the provision of ancillary services necessarily means that there will be no industrial disputes, but it means that in future a local health authority will be able to invite tenders from a number of cleansing firms which I know are experienced in the work that is involved. Firms in Britain that are performing this work are ready and waiting for local authorities to interpret the guidance that has been given by my right hon. and hon. Friends.
  It is possible to involve the private sector to the long-term benefit of patients. There should not be a monopoly. A system that enables a number of firms to tender for a hospital contract gives the hospital the security of knowing that if the firm does not meet the contract it can be dismissed and another employed instead. No firm wants to lose a contract. It will be only too anxious to provide an efficient service, as it will want the contract renewed at the end of the period. There is a sanction that can be applied to answer that the firm provides a standard of care and cleansing. That does not apply to local authorities.
  We have a unique opportunity. Next year we shall have the new DHAs running our hospitals. New chairmen have already been appointed, as have the members of the authorities. Some members have great experience of health authorities as they will have been members of the old authorities, but, whatever their experience, they will bring a breath of fresh air to the new authorities, which will enable them to reconsider how to run their hospitals.
  With the new opportunity, and with guidance from the DHSS, the new DHAs have a chance of providing a new beginning for our NHS hospitals. It has nothing to do with private health care. The patient is still a NHS patient in a NHS hospital. I, like my right hon. and hon. Friends in the Department, an anxious to get better value for money. I do not have the figures, and I do not expect my hon. Friend to have them, as the debate has been called at short notice, but a massive amount of money in the NHS is not being used to pay and train doctors and nurses and for the units which we believe are essential, such as kidney and marrow transfer units. That is the sharp end of the service, where we should concentrate the money.
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  When there is an industrial dispute, it grieves me to know that nurses who are badly paid have to do duties which they should not have to do. If a private firm cannot deliver the goods, the health authority can dismiss it and re-employ another. I hope that my right hon. Friend will translate the statements that he and his colleagues have made into action when the new DHAs come into being next year.
  Finally, I point out that the NHS is sitting on a great deal of land surplus to its requirements. If it could sell it, more money could go to the sharp end of the service to pay doctors and nurses what they justly deserve.
  9.4 pm
  The Under-Secretary of State for Health and Social Security (Mr. Geofrey Finsberg): I am grateful to my hon. Friend the Member for Brigg and Scunthorpe (Mr. Brown) and indeed to my hon. Friend the Member for Uxbridge (Mr. Shersby). It seems that only Conservative Members are sufficiently interested in their constituents' problems to stay and take the opportunity available to raise these important matters. It is also pleasant to have the chance to answer a debate without warning, without preparation and without briefing. One has the opportunity to respond in a way that is perhaps unusual for a Minister and which I frankly welcome.
  What my hon. Friend has said is basically correct. We wish to make the maximum amount of money available for the benefit of the patient. That is what hospitals are for—medical care.
  It is common sense to look to private enterprise in matters of the kind to which my hon. Friend referred, such as catering and cleaning. There is the example of the substantial amount of money that private enterprise is saving ratepayers in Southend on refuse collection.
  In the meetings that I have already had with the private sector on this, it has been made clear that private firms are not seeking any advantage. They are merely asking for the opportunity to quote on a fair basis. If the health authorities' costings for work currently carried out on an in-house basis include all the items that a private contractor must bear as overheads and are still cheaper, private contractors can have no objection to that. They are worried that in many cases they do not have the opportunity to quote and sometimes wonder whether all the overheads have been included to make a fair comparison. There should be little argument among people of common sense but that my hon. Friend's suggestion has much merit. I certainly assure him that the Department is well aware of the potential benefits available to the National Health Service in considering these matters for privatisation.
  My hon. Friend was perfectly right in saying that much needs to be done, but one thing is too often overlooked, perhaps because, being good news, it is no news and whereas sensational stories hit the headlines, good news seldom does. Nevertheless, it is a fact which I shall continue to repeat that spending on the National Health Service is now 5 per cent. greater in real terms than it was when the Government came to power in 1979. I am sick and tired of hearing Opposition Members talk about cuts being made in the National Health Service. There are now more nurses, more doctors and more midwives in the Health Service than when we came to office. I hope that

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  there will now be an end to the scare stories put around by the Opposition that we are cutting the National Health Service.
  My hon. Friend is right to point out that the National Health Service has a substantial amount of unused and underused land. We have asked area health authorities and regional health authorities to examine their land holdings to see what can be done to release any land not required for National Health Service purposes. We do not want them to sit on land like broody hens. That does no good. Moreover, it is worth recalling that if land is sold the capital receipt does not go back to the Treasury but is available as extra capital expenditure for the National Health Service. That, again, is often overlooked by the Opposition and is perhaps not always at the forefront of the minds of some people in the National Health Service in deciding whether to hold on to land.
  I hope that when the new district health authorities take over in April they will address themselves to two specific tasks, in addition to all the other equally important things that they have to do. I hope that they will accept that the basis of what my hon. Friend has said, and what my hon. Friend the Minister for Health has been saying for a long time, is that it is incumbent upon health authorities to put their limited resources to the best possible use. The best possible way of making certain that they are getting value for money is to see whether jobs such as catering and cleaning are being done efficiently, effectively and as
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  cheaply as possible. It is unreasonable to expect the public to believe that those jobs are best done in house unless they can see it. I think that it was the late President Truman who said
  "I am from Missouri. Prove it".
  That is what my hon. Friend is saying. Prove that doing the jobs in house is better and then no one will argue.
  I hope that the health authorities will also consider what land they can release, so that it can be put to productive use in other ways and so that the capital receipts can be added to their expenditure in whatever way they may choose in their region or district. We have said that if the land is made available by, at present, areas, and in future by the districts, the bulk of the money should be capable of being spent in the district or the area and should not necessarily be swallowed up by the region. The important consideration is that it is extra money for the National Health Service.
  I appreciate the interest that my hon. Friend has shown in the subject by raising it tonight. I hope that he will feel that I have given him some encouragement. "Some' is a modest word. I assure him firmly that this is an issue that will not be forgotten at 9.12 tonight. We shall continue to bring it to the attention of those who are at the sharp end of the National Health Service—those who run the districts and regions.
  Question put and agreed to.
  Adjourned accordingly at eleven minutes past Nine o'clock.

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Preamble
The House met at eleven of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Carlisle): The CHAIRMAN OF COMMITTEES on the Woolsack.

Enterprise Zones
Baroness Gardner of Parkes: 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 how many enterprise zones are now in operation and what response there has been in areas where they have been set up.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Bellwin): My Lords, 11 enterprise zones have been announced across the United Kingdom; 10 of them are now in operation. The Isle of Dogs zone, in London's Dockland, is likely to be designated early in the New Year. While it is still too early to draw firm conclusions about the impact of the zones, the initial response by the private sector has been encouraging, and a wide range of development is already taking place in the zones.
Baroness Gardner of Parkes: My Lords, I should like to thank the Minister for his reply. May I emphasise my concern particularly over the one in the Isle of Dogs. Can he comment on whether he believes that the present Labour GLC's legalistic opposition to the whole idea of the enterprise zone in London has prevented progress of that scheme, as I believe it is the one that the noble Lord mentioned as being not off the ground yet? This scheme being so important to London, and any delay in it possibly affecting the Docklands redevelopment, does the noble Lord think that the GLC under its present administration is opposing this, or does he think that any opposition is futile and that it is progressing in spite of it?
Lord Bellwin: My Lords, in fact the GLC has very little role in this matter now, other than in regard to certain planning aspects of it. The reason why this particular zone is behind the others is that it had to be part of the urban development corporation, the London Docklands Development Corporation, which in fact is the enterprise zone authority, and they had to go through the timescale of the Select Committee in your Lordships' House which took some 50 days, and then there were other statutory requirements before they could proceed. Indeed, a certain amount of statutory form is still going on, and that is basically the reason for the delay. But in answer to my noble friend, I should not have thought that the GLC, whatever its views may be, is in fact in a position really to do anything that would hinder or delay what is planned to be done within the zone.
Lord Bruce of Donington: My Lords, have any cases been reported to the noble Lord of enterprises immediately outside the enterprise zones moving into them in order to incur the smaller overheads that would be applicable there? Would not such a move, from the immediate vicinity of an enterprise zone into it by firms which want to establish that position, be contrary to the whole purpose of the establishment of enterprise zones, which we on this side of the House, of course, entirely support?
Lord Bellwin: My Lords, was it only yesterday that I covered the same point? I think it was the noble Lord, Lord Underhill, who raised it. I said then, and repeat again, that there may well be cases such as the noble Lord has mentioned, but I would hope they would be very few in relation to the other benefits that will flow from the establishment of the zones. Just as yesterday I was slightly reluctant to reel off a list of what might be terms the "goodies"—and some of them are impressive—as to what is happening within the zones, I feel it would be better to wait a little while until we can see a clearer picture. So, conversely, I would be reluctant to comment on the extent, if any—well, there is a little we know, but I do not think it is significant—of the action that the noble Lord refers to.
Lord Leatherland: My Lords, would the Minister consider whether the number of these enterprise zones should he increased so that Downing Street might be included in that category?
Lord Bellwin: My Lords, I am not sure what the impact on the Exchequer would be of that concession in terms of rates. I think, if I may make a serious point on what the noble Lord says, there are building up now some very interesting, and hopefully I think your Lordships will all ultimately agree considerable, success stories within the zones. But it is too soon, and I do not want to say much more about it at the moment.
Lord Underhill: My Lords, in order to put the record straight, is it not a fact that the Tower Hamlets Borough Council, in the area of which the Isle of Dogs is situated, themselves accepted the principle of enterprise zones and have put in an alternative bid, and if the Docklands Corporation had not been set up that would have been there for consideration?
Lord Bellwin: My Lords, I thank the noble Lord for his helpful comment. I think that that is absolutely right. There is great enthusiasm. Indeed, your Lordships may recall the noble Lord, Lord Northfield, yesterday pressing me to say when we might be considering one for the area in which he is interested; but we have to wait and see.
Lord Gridley: My Lords, may I ask my noble friend the Minister with regard to these imaginative schemes whether, if the enterprise zone allowance—which is now a pilot scheme—is successful, that will be able to be used in the Isle of Dogs, to which I believe this question refers?
Lord Bellwin: My Lords, if I understand my noble friend aright, I think that the answer is, Yes, but again we shall have to be very careful. I think I said also yesterday that we are having a special monitoring. A special survey of this is being set up so that we can assess the situation carefully, because before we consider any extension or anything else, quite apart from all the financial implications, which are quite considerable, we have to be absolutely certain that the benefits are on the scale that we hope for.
Baroness Gardner of Parkes: My Lords, I should like to ask the Minister for one further comment. I know that he has covered this subject very much in the last few days. Is there yet any way of assessing how many jobs will be created through the enterprise zones? Also, is there any mechanism for interchange of ideas so that each zone may benefit from the experience gained in other zones?
Lord Bellwin: My Lords, I would not want at this stage to give any figures of jobs created. I think it is too early to do so. I have some information which is interesting, but 1 would rather wait for it to be confirmed. Therefore, I would ask my noble friend to excuse me from being too specific on that point. My noble friend's other point about interchange of experiences and ideas is important. It is something that is happening at the present time and I think will happen much more as experience within the zones builds up.

British Atlantic Committee: Grant
11.8 a.m.
Lord Brockway: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether the Foreign and Commonwealth Office is making a financial grant to the British Atlantic Committee, a political organisation campaigning against nuclear disarmament by Britain endorsed by the conferences of the Labour and Liberal parties, and, if so, what is the amount of the grant.
The Parliamentary Under-Secretary of State, Foreign and Commonwealth Office (Lord Trefgarne): My Lords, the Foreign and Commonwealth Office makes a grant to the British Atlantic Committee to support it in pursuing its aim "to promote knowledge and understanding of the North Atlantic Alliance and the central role that the Alliance plays in ensuring the security and the democratic freedom of the United Kingdom". British membership of NATO enjoys the support of all major parties in Parliament and, indeed, of the over-whelming majority of people in this country. The grant to the British Atlantic Committee totalled £30,000 in 1981–82.
Lord Brockway: My Lords, is this not a very dangerous constitutional practice? Is the Minister aware that this organisation stands in a partisan way, propagating views much wider than he has indicated? Is he aware
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that it propagates opposition to decisions reached by both the Labour and Liberal annual conferences? Is it not politically wrong for a Government to make a grant to an organisation which is sympathetic to their policies but opposed to the policies of opposition parties in this country?
Lord Trefgarne: My Lords, I am not responsible for decisions taken at Labour Party or Liberal Party conferences, but in fact the British Atlantic Committee covers a very wide spectrum of British political opinion, including members of the party sitting opposite.
Lord Mayhew: My Lords, in regard to that bracketing of the Labour and Liberal conferences, is the Minister aware that, pending multilateral disarmament, the Liberal conference supports NATO's established nuclear deterrent and is therefore not unilateralist, and is associated with the British Atlantic Committee's position and not with that of the Labour Party? Is the noble Lord further aware that the Liberal Assembly takes its decisions by democratic methods, and not——
Lord Paget of Northampton: The noble Lord is making a speech.
Lord Mayhew:—by methods which have made the Labour conference an object of universal ridicule?
Lord Trefgarne: My Lords, I am not sure it is for me to intervene in the discussions which go on, and exchange of views which takes place, between the Labour Party and the Liberal Party. So far as I am able to detect them, Liberal Party policies in this matter seem acceptable.
Lord Paget of Northampton: My Lords, is the Minister aware that I was for many years a secretary of a similar organisation, the United Kingdom Council for United Europe? I was joint secretary with Julian Amery under the joint chairmanship of Lord Robens and Mr. Harold Macmillan. That was an association which was plainly non-party but equally plainly political. We raised money from many sources but we never dreamt of raising money from the Government. On the other hand—
Several noble Lords: Question!
Lord Paget of Northampton:—this is plainly a political organisation and it is quite deplorable.
Lord Trefgarne: As I said earlier, my Lords, the fact is that this organisation has no particular political affiliations and enjoys the support of representatives of all the major political parties in this country.
Lord Paget of Northampton: It is political.
Lord Trefgarne: Of course, my Lords, the question of financial support is a wider philosophical one, but it is perhaps worth mentioning that I think the opposition party itself now enjoys some support from central Government.
Several noble Lords: Oh?
Lord Jenkins of Putney: My Lords, is the noble Lord aware that the director of this " pro-bomb " organisation, Mr. Alan Lee Williams, is a defector from the Labour Party to the Social Democratic Party? Is he further aware that Mr. Alan Lee Williams has admitted that this organisation receives a direct grant from NATO, as well, and that one of its main purposes is to campaign against the CND; therefore, ought it not to be entitled the Campaign for Nuclear Armament?
Lord Trefgarne: My Lords, it is not the purpose of this organisation to campaign for or against any other body with political affiliations, but in certain cases to correct certain misrepresentations.
Lord Brockway: My Lords, is the Minister aware that I welcome the fact that this organisation advocates multilateral disarmament? But if that is one of its purposes, ought it not to be campaigning at the second assembly of the United Nations next year against the Government, who at the Geneva Committee are obstructing proposals for multilateral disarmament?
Lord Trefgarne: My Lords, there is nothing in the constitution of this body which would preclude it from campaigning against the Government, as the noble Lord puts it, if thought fit to do so; but of course it prefers to act on the merits of the matter.

British Wine
11.14 a.m.
Lord Montagu of Beaulieu: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper, but in asking it I wish to declare my interest as president of the English Vineyards Association.
The Question was as follows:
To ask Her Majesty's Government why the excise duty on "British Wine" not made from British grapes is half that charged on English and Welsh wine made from English and Welsh grapes and whether they intend to continue to favour wine made from grape must from non-EEC countries and discriminate against wine produced from English and EEC must.
The Minister of State, Treasury (Lord Cockfield): My Lords, there is no distinction according to country of origin. The distinction is between wine made from fresh grapes and that manufactured from a concentrate, whether imported or home-produced.
Lord Montagu of Beaulieu: My Lords, while I reluctantly accept the Government's difficulties in regard to tax, may I ask my noble friend whether he would agree that it is grossly unfair to genuine English wine producers and misleading to the general public that they should allow a situation to continue whereby producers of British wine do not have to conform to EEC regulations in regard to labelling, or indeed to our own Trade Description Acts? Would my noble friend further agree that the only British content in so-called British wine is British water?
Lord Cockfield: My Lords, one must admire my noble friend's tireless campaign on behalf of the producers of English and Welsh wine. The question of labelling is outside the scope of this Question. The simple truth of the matter is that we are dealing here with two quite different products—and I am certain that my noble friend would regard the product of English vineyards made directly from the fresh juice of the grape as very different from the product manufactured from an imported concentrate.
Lord Ponsonby of Shulbrede: My Lords, is the Minister aware that many overseas visitors to this country like to taste the exellent white wine made from English and Welsh grapes but are put off doing so because the price of the wine is often considerably higher than the price of wine imported from Europe? Is he able to do something about that?
Lord Cockfield: My Lords, that is a matter about which I could not do anything, because the duty, which is the only element in the price for which Her Majesty's Government are responsible, is the same whether the wine is imported or grown in this country.
Lord Monson: My Lords, bearing in mind the praise-worthy efforts made by the English wine industry since the end of the last war, in the face of far from favourable climatic conditions, may I ask the Minister whether he would agree that English vineyards are extremely poorly treated in the matter of grants and tax allowances when compared with their Continental counterparts, and indeed when compared with other sectors of British agriculture?
Lord Cockfield: That is quite outside the scope of the Question before the House, my Lords. It is perfectly true that conditions in this country often diverge from conditions in other EEC countries, sometimes to our advantage and sometimes to our disadvantage.
Lord Reay: My Lords, while everyone would wish the English and Welsh wine growers well—and, considering the climate, would regard their achievements as remarkable—may I ask my noble friend to give an assurance that no measures will be taken by Her Majesty's Government which would damage the vital interests of the long-established British wine industry?
Lord Cockfield: My Lords, that again is a question which lies outside the scope of the Question on the Order Paper. As my noble friend knows, it is not the custom ever to anticipate changes in duty in one direction or another.

Export Statistics: Effect of Strike
11.18 a.m.
Lord Mottistone: 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 it is correct that, consequent upon the Civil Service strike of last summer, it is intended that statistics relating

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to export between March and August 1981 will never he produced in detail, notwithstanding any harm that this may do to the vitally important export drive.
Lord Trefgarne: My Lords, after the industrial dispute in the Civil Service earlier this year, the backlog of trade statistics work at Customs Statistical Office was equivalent to some six months' output. It is not possible to provide current trade figures and to recover the backlog within a reasonable time without a reduction in the overall workload. For this reason, and after careful consideration of users' needs, it has been decided to produce the export statistics for the nine months of March to August 1981 on the basis of a sample.
Lord Mottistone: My Lords, is it true that the import figures are being produced? Is my noble friend aware that exporters need these figures very importantly in order to be able to penetrate third world markets which are getting increasingly competitive? May I ask him to reconsider this point and make a real effort to see whether these figures can be produced? I am sure my noble friend is aware that a sample is really not good enough in these circumstances.
Lord Trefgarne: My Lords, I assure my noble friend that my right honourable friend the Chancellor of the Exchequer, who is responsible for these matters, considered this matter very fully indeed, and did so on more than one occasion, and came to the conclusion to which I have referred. I agree that this presents some difficulties for exporters in particular, but I think that the difficulties that would have been created by following some other course would have been even greater.
Lord Bruce of Donington: My Lords, can the noble Lord explain the extent of the extra effort that would be required? Is he aware that to obtain any representative sample on which reliance could be placed for statistical purposes would also require a certain amount of effort? Is he completely satisfied that it would not be better, and in the long run prove shorter, for the actual figures to he abstracted? Is the noble Lord aware that evidently—if my information is correct—these figures are available to EUROSTAT, which reproduces quite a number of the export figures relating to this country? Will the noble Lord give the matter further consideration, since, as his noble friend said, this is of some importance to the export industries of this country?
Lord Trefgarne: My Lords, I certainly agree that, if it were possible, it would be highly desirable to produce the figures to which my noble friend and the noble Lord have referred, but there are two difficulties. It was a question not only of providing adequate resources for the task, but also of practicality. For example, it was suggested that the extra work might be done by using outside computer bureaux or computer agencies, but that proved to be impracticable because of the need to preserve confidentiality. Added to that there is the difficulty of providing the necessary additional skilled personnel to undertake the necessary computer inputs.
Lord Bruce of Donington: But, my Lords, the noble Lord talks of confidentiality. Will he explain how in fact any question of confidentiality arises, since if the figures are produced they will be published anyway?
Lord Trefgarne: My Lords, the need for confidentiality arises in transferring the figures from the pieces of paper on which they originate to the depersonalised information which eventually appears in the published statistics. It is necessary to remove the name of the individual exporter from documents relating to a particular transaction, for example, and that is the confidentiality element to which I referred.
Lord Mottistone: My Lords, I wish to raise two further points. First, my noble friend did not reply to my supplementary question so as to confirm whether the situation will not apply to imports. Import statistics are being produced, are they not? If that is so, if the Government can produce import statistics, why can they not produce export statistics? That is the first point.
Lord Trefgarne: My Lords, it is the case that some of the import statistics are being produced slightly more comprehensively than are the export statistics, but the answer remains the same: that it is not possible to provide the additional service to which my noble friend referred because of the difficulties that I have described.
Lord Willis: My Lords, in the spirit of Christmas, will the noble Lord himself undertake, and ask others, not to use, the word "confidentiality", which has no basis whatsoever in the English language?
Lord Trefgarne: My Lords, I have great sympathy with the noble Lord in regard to that supplementary question, and I shall do my best not to use the word again.
Lord Mottistone: My Lords, with regard to my second point, surely the argument about not going out to contractors with confidential information is not a very strong one, since to my personal knowledge in relation to defence services the Government frequently contract out under special rules. Is what my noble friend has said not an inadequate answer? Can my noble friend not say that he will look at it again, and does he not consider that his right honourable friend has something to look at, which perhaps he has not considered in the past?
Lord Trefgarne: My Lords, I can assure my noble friend that my right honourable friend the Chancellor has looked at this matter with the greatest care and indeed the greatest sympathy. As my noble friend will know, my right honourable friend has received a number of representations on this subject, not least from the organisation of which my noble friend is a senior official, but my right honourable friend nonetheless came to the view that, despite the difficulties, it was not possible to proceed in the way that some people were asking because of the problems that I have described.
The confidentiality point is a powerful one, because

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the statistics are produced by injecting into the computer information from a large number of documents which are presented in the course of the exporting process, and each of those documents has to be depersonalised before it can become a statistic.

Civil Aviation Bill [H.L.]
Lord Lyell: My Lords, on behalf of my noble and learned friend the Lord Chancellor I beg to introduce a Bill to consolidate certain enactments relating to civil aviation. I beg to move that this Bill be now read a first time.
Moved, That the Bill he now read a first time.—(Lord Lyell.)
On Question, Bill read a first time; and to be printed.

Junior Hospital Doctors (Restriction of Hours) Bill [H.L.]
Lord Wells-Pestell: My Lords, I beg to introduce a Bill to restrict the hours worked by junior hospital doctors. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(Lord Wells-Pestell.)
On Question, Bill read a first time; and to be printed.

Standing Orders (Private Business)
The Chairman of Committees (Lord Aberdare): My Lords, this Motion in my name on the Order Paper proposes amendments to Standing Orders to put into effect the decision of the House taken last July on the recommendation of the Procedure Committee relaxing the requirement that Personal Bills should be printed. It will however remain within the discretion of the Chairman of Committees to direct that a particular Bill should be printed if in his opinion it would be desirable to do so. If a Personal Bill is sent down to another place unprinted, it will of course be for that House to decide whether or not to make a similar relaxation of the rules. My Lords, I beg to move.
Moved, That the Standing Orders relative to Private Business be amended as follows:—
Standing Order 149
line 1: after "House" insert "other than a Personal Bill, shall".
line 2: leave out "shall".
Standing Order 152
line 4: leave out "printed".—(Lord Aberdare.)
On Question, Motion agreed to.

Business of the House
Lord Denham: My Lords, on behalf of my noble friend the Leader of the House I beg to move the Motion standing in her name on the Order Paper.
Moved, That, if the Consolidated Fund Bill is brought from the Commons, Standing Order 43 (No two stages of a bill to be taken on one day) be
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dispensed with to enable the Bill to be taken through all its stages on Tuesday next.—(Lord Denham.)
On Question, Motion agreed to.

Midlothian District Council Order Confirmation Bill
11.27 a.m.
Lord Lyell: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read a third time.—(Lord Lyell.)
Lord Ross of Marnock: My Lords, this will be the last time on which I shall have to weary the House on the problem of stray dogs in relation to a council order confirmation Bill, because another Bill that is at present before the House contains, in Clause 124, these words:
"Any enactment in any local Act which amends section 3 of the said Act of 1906"—
blah-blah—
"… as it applies to the area of the council shall cease to have effect".
That means that what we are passing here today, taking up the time of the House and resulting in cost to the District Council of Midlothian, will be wiped out when later in the Session the other Bill to which I have referred becomes law. Is it not absolute nonsense? The noble Lord, Lord Lyell, told us that this is such a vital problem that Midlothian must have these powers now, that the gap, which has been there since 1906, should not be allowed to continue, and that we must plug the gap for the few months that remain. What utter nonsense! In addition to that we are told, "Well, this is what they want".
I shall be troubling the House about stray dogs. There are two clauses in the Civil Government (Scotland) Bill about stray dogs, and the local government section of the Scottish Office has been very helpful. The suggestion has been that after the amendments relating to Clauses 73 and 123 go through, we shall then have the right statute about stray dogs in Scotland. Will we? Where are the eagle eyes of the Minister of State, the noble Earl, Lord Mansfield, and the noble Lord, Lord Lyell? They are concerned about registers. We are to have registers for all the things that are to be licensed in Scotland, and I put down an amendment to provide that the local authority should be allowed to charge anyone who wanted to see the registers, but I was told, No, it was contrary to modern practice. I suggested that I could, if I troubled my memory, produce other Acts in which it was provided that the public had to pay for the sight of registers.
I hope we have a look at this Bill. We will discover that anyone who wants to see the register for stray dogs and what has happened to them has got to pay not less than 10p. But the Scottish Office is moving on! If we have a look at the amendments in relation to the Civic Government (Scotland) Bill we will see that there has to be the register of stray dogs but they have forgotten to amend (and, of course, it will fall to me to put down an amendment, and people will say, "There's Ross with his amendments again") what is the cost in the 1906 Bill. It is in Section 7:

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"A dog seized under this section shall not be disposed of"—
that is going to be put in—
"by transferring it to an establishment for the reception of stray dogs unless a register is kept"—
that is the same as in the present Bill—
"for that establishment containing such particulars as to dogs received in the establishments as are above mentioned, and such register is open to inspection by the public on payment of a fee not exceeding one shilling".
What is a shilling? I think there must be a stray civil servant, as well as stray dogs around. They have not amended this.
So, please, my Lords, consider me and my problems with the Scottish Office when you see another string of amendments. Because I shall need to put one down to change the "one shilling" to—what? One shilling in 1906—what will it be now? Or shall we leave it out altogether? If we do that, of course, we are robbing this Bill that we have before us now of its great value to local authorities. They will not be able to charge 10p. They will be in a dilemma as to how they are going to charge less than a shilling. Or shall we leave it out altogether?
These are the problems that are in these simple little Bills, and I hope that the noble Lord, Lord Lyell, will report to the Scottish Office that once again they are slipping up and hammering local authorities, taking away their 10p. for this valuable register that is going to be produced. Other than that, I think that this Bill deserves a Third Reading if only from the point of view that it is the last such Bill that we shall see. It is the last of, I think, over 20 that we have had—which I consider to be a complete waste of money.
Lord Lyell: My Lords, the noble Lord would not expect as lengthy a reply from me or, indeed, from the Scottish Office as his remarks in possible complaint about the very simple Bill that I have moved today for the third time and hope to see on the statute book. This is a problem, and I am sure that every potential victim of dogs in the Midlothian district will note with rueful tenderness, probably, the views of the noble Lord that dogs should be allowed to roam about choosing their victims at will. The noble Lord shakes his head. Possibly he should come with me to various other areas which are afflicted by this problem.
This is a simple Bill. I hope the noble Lord will allow Midlothian to deal with this problem, which they feel important enough. I am sure that in the many years that the noble Lord, Lord Ross, had in control of the Scottish Office—this (I hesitate to say) empire, of which he was the jewel head for many years—he will have had experience of these problems; and I hope that he will allow the dogs of Midlothian to be controlled in a respectable and humane manner by the district council. I believe we should give them these powers.
The noble Lord mentioned the problem of one shilling in 1906. Without notice, I could not possibly give him the statistical answer there, but the noble Lord suggested to me that legislation of Scotland contained currencies that were out of date. I would remind him that certainly when the noble Lord was the Secretary of State at the Scottish Office I happened to be studying the legal problems of bankruptcy in Scotland and trust law. I recall that in the law of Scotland in 1964 we read about pounds (Scots). I
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think there were £8 (Scots) to the current £1 sterling. So the noble Lord should not criticise me, or indeed the Scottish Office, for having out-of-date currencies in Scottish legislation, certainly not today. But, that said, I hope that we may possibly agree that this Bill should now be read a third time.
Lord Ross of Marnock: My Lords, before the noble Lord sits down, I do not think he should mislead the House. All we are doing here is to give to the district council powers which are already available to the police. So there is no problem in relation to no one looking after stray dogs. So far as concerns his facts about the pound sterling and the Scots pound, he had better have another look at that again, because he will find that his relationship is quite wrong as from time to time it changed.
On Question, Bill read a third time, and passed.

Nuclear Industry (Finance) Bill
Read a third time, and passed.

Fire Service College Board (Abolition) Bill [H.L.]
11.37 a.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Belstead): My Lords, I beg to move that this Bill be now read a second time. At the end of the Second World War fire-fighting functions were taken out of the hands of the National Fire Service and returned to local authorities by the Fire Services Act 1947. Section 23(1) of that Act permitted the Secretary of State to establish and maintain a central training institution for providing courses of instruction in matters relating to fire services. Section 23(2) required that any central training establishment which might be set up should be under the general direction of a board. Such a board was set up, and is known as the Fire Service College Board. It is the purpose of this Bill to abolish this board.
The history of central training institutions in the fire service since the war starts in 1951 when a college, set up during the war at Saltdean as the National Fire Service College, was succeeded by a Fire Service College established by the Home Office at Wootton House, a very fine Tudor mansion, near Dorking in Surrey. This had residential accommodation for 60 students, and was equipped with lecture theatres, demonstration rooms and a library, but it had no practical fireground facilities. In 1967 it was renamed the Fire Service Staff College. In 1968 work began on a new technical college for the fire service on a former RAF airfield at Moreton-in-Marsh, and building work, representing a capital investment of several million pounds, was completed by the mid-1970s.
The new technical college had accommodation for 470 residential students. The facilities are now generally recognised to be among the finest in the world, and include, in addition to classrooms, lecture and command theatres, a library and laboratories, also a modern fireground with specially designed fire buildings of a variety of types in which training in all forms of

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fire-fighting—including, incidentally, fire-fighting in ships—can be given under realistic conditions of heat, smoke and fire. The college was formally opened by Her Majesty the Queen on 17th May 1974. From that time the staff college at Dorking became responsible for training the more senior officers in the fire service in the skills required for higher command; and these, then, were the two institutions over which the Fire Service College Board had general direction until this year.
In 1980, however, it was decided that the staff college at Dorking should close and that its functions should be transferred to Moreton-in-Marsh. This move was successfully completed earlier this year and now both aspects of central training for the fire service are concentrated at Moreton-in-Marsh at the newly-named Fire Service College. This combined college provides courses for students from fire brigades throughout the United Kingdom from leading firemen to chief officer rank. Courses for students from overseas and industrial and other outside organisations are also held. The closure of the staff college has resulted in the Fire Service College Board now exercising general direction over only one institution—the Fire Service College.
The requirement for a board to provide general direction over central training institutions was introduced by way of amendment during the course of the Fire Services Bill in 1947, on the grounds that local authorities were likely to be required under regulations to contribute towards the running costs of the institution. With the introduction of rate support grant, however, it was considered appropriate for the whole cost of central training for the fire service to be borne by the Secretaries of State, both the Home Secretary and also the Secretary of State for Scotland. Local authorities have, therefore, since 1st April 1967, made no contribution towards the substantial costs of providing and running the facilities which now exist for central training of the fire service, and the primary reason for the board thus came to an end some years ago.
However, even before this happened, in 1960, a sub-committee of the Central Fire Brigades Advisory Councils known as the Joint Training Committee was set up and it is to this committee that the Fire Department of the Home Office now looks for advice on the central training programme. The organisations represented on the Fire Service College Board are represented also on the Joint Training Committee. It was not unexpected, therefore, when the abolition of the board was proposed as a contribution towards the general reduction in non-departmental public bodies in Sir Leo Pliatzky's report published in January 1980.
This Bill in no way represents any diminution in the importance which the Government attach to the provision of proper central training arrangements for the fire service, and the cost of this will continue to be borne in the same way by the Home Departments as it has since 1967. The amount of money which would be saved as a result of the abolition of the college board would be modest; the main advantage would be the reduction in time and effort involved in arranging and attending meetings for board members whose organisations are, as I have said, already represented
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in just the same way on the Joint Training Committee of the Central Fire Brigades Advisory Council.
I am grateful for the opportunity this gives me to pay tribute to the valuable contribution which the board has made toward the general direction of the two central training colleges in the past, and I am sure that this has played a significant role in building up the high reputation both of the staff college and the technical college. The duties discharged by the staffs and the standards at both colleges were of the very highest calsibre. The Government will do their utmost to ensure the maintenance and, if possible, the enhancement of that reputation which the two colleges have carried with them over past years.
Lastly, I should perhaps refer to the position in Scotland. Recruit training in Scotland is carried out centrally at the Scottish Fire Service Training School at Gullane, East Lothian. The school was established under Section 23(1)(b) of the Fire Services Act 1947 as a local training centre to provide training for fire service recruits and junior ranks. It is administered by the Secretary of State for Scotland on the advice of a committee which he has established, and not by a board. Since this committee was not established under the provisions of the Fire Services Act 1947, it would be unaffected by the provisions of the Bill now under consideration. I am advised that my right honourable friend the Secretary of State for Scotland wishes that committee to remain in existence in order that he can continue to benefit from its advice.
The Fire Service College Board has served its purpose well but it is no longer necessary for it to provide general direction for the Fire Service College. The Bill does not affect the present position in regard to the funding and the administration of the college, for that responsibility rests with my right honourable friend the Home Secretary, and he is advised on training matters by the Joint Training Committee of the Central Fire Brigades Advisory Councils. With that assurance, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read a second time.—(Lord Belstead.)
11.45 a.m.
Lord Boston of Faversham: My Lords, in view of the subject matter of this Bill, which deals with the fire service, it should have been possible for me to think up something inflammatory to say. However, I am afraid that I have to disappoint the noble Lord the Minister and your Lordships. Either as a result of being captivated by the gentle persuasiveness of the noble Lord, Lord Belstead, or being overcome by the approach of the season of good will—or both—I find myself unable to oppose the purposes of this Bill.
In thanking the noble Lord for explaining the background and the aims of the Bill, I want to say that we on this side of the House do not regard it as particularly controversial and we do not wish to stand in its way. Even so, there are some points that I should like to raise. The noble Lord will recall that in 1970 we had the report of the departmental committee on the fire service under the chairmanship of Sir Ronald Holroyd. If I may say so, it was a very thorough and comprehensive report.
The committee had been set up in 1967 by the then

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Home Secretary and the Secretary of State for Scotland—now my noble friend Lord Ross of Marnock. That report set out the composition and functions of the Fire Service College Board in much the way that the Minister has explained this morning. The report pointed out that the board had very strictly limited freedom of action. As the Minister has indicated, the board would, if it continued, have that much less to do now with the closure of the Fire Service Staff College at Dorking and the transfer of those functions to the fire service technical college at Moreton-in-Marsh.
It is worth noting in passing that the annual report for 1980 of Her Majesty's Inspector of Fire Services mentions that the staff college at Dorking would be closing, and that this would be taking place after careful consideration by the Home Secretary who decided that in order to achieve savings in Government expenditure it should he closed and higher training transferred in the way that the Minister has indicated this morning to Moreton-in-Marsh.
However, I do not think that it should pass without notice that that was in fact foreshadowed, to some extent at least, in the recommendations of the Holroyd Report in 1970, which felt then that the Dorking College had a limited life. In those ways it is true to say—and I wholly agree with the Minister on this matter—that the board's functions were both limited and diminishing. However, the Holroyd Committee did not recommend the board's abolition when it reported in 1970. It made certain recommendations for somewhat extending the board's powers and functions. The report made this clear in paragraph 269 in particular:
"We therefore recommend that the College Board, renamed the Governing Body and with broadened membership, should he given powers and responsibilities more akin to those of the Governing Bodies of the new Polytechnics and Colleges of Further Education."
I do not intend going further into those matters now, but I should like to ask the Minister whether those suggestions which were made in the Holroyd Report were taken into account by the Government in coming to their decision to introduce this Bill. If so, to what extent were they taken into account? I feel sure that at the very least we owe it to those who worked very hard on that inquiry to offer some explanation or indication that their views were considered.
May I say that I know the Minister himself, the noble Lord, Lord Belstead, has taken a close interest in these matters and he has visited the college at Moreton-in-Marsh, as is mentioned in a recent annual report of Her Majesty's Inspector of Fire Services. So far as the new arrangements are concerned (those outlined by the Minister this morning) and which will result from this Bill, if it is passed, it is the case that although fire authorities throughout the country will no longer have their contact with the administration of the college through its board, they will presumably—and the Minister has gone some way to indicate this—continue to keep in touch and be kept in touch with developments on training through, I assume, the Central Fire Brigades Advisory Councils and their Joint Training Committee which have been referred to by the Minister today.
I would ask the Minister whether he is completely convinced that those arrangements will be wholly satisfactory and whether those new arrangements will
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be adequate to fulfil all the duties and functions at present undertaken by the board itself, and also whether the supervision of the college syllabus and of any future proposals for its revision will continue to be effectively carried out under these new arrangements.
My Lords, I feel that we have a duty to make sure that the college and the service will continue to function at least as well as they do now and this Bill will do nothing to reduce their efficiency. Subject to being reassured on these points—and the Minister has gone a considerable way to doing that this morning—I am happy to give a welcome to this Bill. I am pleased to understand that the Fire Brigades Union is happy to go along with it, too. Perhaps I could place on record, on behalf of those on these Benches, our warm thanks—and here I join with the noble Lord, Lord Belstead—to all concerned who are serving and have served on the board over the years and those who have serviced it, as well. As one final thought, I must confess I am almost tempted to give warning that I might at the Committee stage propose amending the Title to the Bill. It strikes me that in view of the subject matter—and, after all, it deals with the fire service—instead of the Fire Service College Board (Abolition) Bill perhaps a more felicitous title might have been "The Fire Service College Board (Extinguishing) Bill". But I am a little reluctant to do that, just in case the Minister decides that he has no alternative but to pour cold water on the idea.
11.54 a.m.
Lord Belstead: My Lords, I am grateful to the noble Lord, Lord Boston, for the support he has given for the objectives of this short Bill. The noble Lord said that he found it hard to deliver any inflammatory remarks. If the noble Lord had been able to deliver any inflammatory remarks, I feel sure they would have been put out later by the Welsh Water Authority (Constitution) (Variation) Order 1981, which we are going to take in a little while.
The noble Lord asked me two specific questions. The first concerned the Holroyd Report, and the noble Lord's other question was whether the Government were satisfied that the best arrangements possible were being made for training now to be concentrated at the Fire Service College at Moreton-in-Marsh so that standards would be maintained and enhanced. So far as the first question is concerned, the noble Lord is right. The Holroyd Report, in essence, suggested that the college board with broadened membership should be given powers akin to governing bodies of polytechnics and colleges of further education; but, as this type of power was seen at that time as being more appropriate to the advisory nature of the Central Fire Brigades Advisory Councils, no direct action was taken on that recommendation.
The Joint Training Committee of the Central Fire Brigades Advisory Councils has fulfilled the function so far as training content is concerned. The noble Lord specifically mentioned the question of syllabuses and the importance of central direction—not a usual term in British educational circles—of the content of the training in the fire service. This is one of the functions of the Joint Training Committee of the Central Fire Brigades Advisory Councils. Therefore, the Holroyd recommendation was never pursued by the local authorities or the other representative bodies

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on the CFBAC. During its lifetime, the college board was content with its existing role, while the Joint Training Committee assumed an increasing role in respect of its responsibilities.
Perhaps it is important to repeat the fact that the representatives on the Joint Training Committee are precisely the same, so far as representation is concerned. They are representatives of the local authorities, the Home Office and the fire service, which were to be found on the college board, with the addition (on the Joint Training Committee) of that important body, the Institution of Fire Engineers, who are to be found on the JTC but who were not on the college board. So far as the arrangements made at the college are concerned, the training has been—and this is not part of the Bill—concentrated. Careful attention was given to ensuring the minimum interference with the existing arrangements for training and that a suitable environment was provided in which to preserve the integrity and excellence of the higher training courses previously provided at Dorking. In the event, it has been possible to provide a full range of facilities to accommodate higher training in Moreton-in-Marsh without detracting from the standards and levels of technical training provided before the transfer. The existing accommodation has been adapted to provide syndicate rooms, closed circuit television, a command theatre, all separated from other courses at the newly-named Fire Service College, and, in addition, library facilities, a quiet room, known as the "Dorking Room", with furnishings and other items from Wotton House, and a senior officers' bar have all been provided.
It is important to say that, although the two forms of training are concentrated at the Fire Service College at Moreton, they are conducted separately. I believe that that is right, and I am sure the fire service believe that it is right. My right honourable friend the Home Secretary and I have seen these facilities, and my right honourable friend and I both feel they are the best we can provide and that they should, if possible, enhance training at the college.
Finally, these arrangements will be kept under review. There is every indication at present that training in the fire service will continue at the same high level as before the transfer. I hope that those comments have answered the questions asked by the noble Lord.
On Question, Bill read a second time and committed to a Committee of the Whole House.

Housing (Amendment) (Scotland) Bill
11.59 a.m.
Lord Lyell: My Lords, I beg to move that this Bill be now read a second time. This is a short, fairly modest Bill but it is necessary to increase the amount which the Scottish Special Housing Association can borrow in order to finance its normal capital expenditure. The present limit on the Scottish Special Housing Association's borrowing is £500 million and their present commitments seem likely to reach £485 million. It is likely on present form that they will reach their present limit early next year, and the Bill before your Lordships today is needed for that reason. The Bill increases the limit to £600 million, and opportunity
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has been taken, as was the case with previous similar Bills, to provide that my right honourable friend the Secretary of State may further increase that limit by means of an order subject to the affirmative resolution procedure in another place but always within the overall limit of £750 million. As your Lordships will be aware, the SSHA for more than 40 years has enjoyed an extremely high reputation throughout Scotland in respect of all aspects of its house building and its management work. I believe your Lordships would wish to allow that work to continue, and accordingly I beg, to move that this Bill be read a second time.
Moved, That the Bill be now read a second time.—(Lord Lyell.)
12 noon
Lord Ross of Marnock: My Lords, I think we are all grateful to the noble Lord, Lord Lyell, for moving, this important Bill. He said it was "modest". I do not think it is, unless of course it is a reflection on the sums of money that are just bandied about by Governments nowadays. Here we are giving, an association the right to spend another £250 million. I would not have called it "modest", but it is important, and it affords us the opportunity to pay a tribute to the Scottish Special Housing Association after some 40 years. I think it was in the 1930s when Walter Elliot—and I am glad to see the noble Baroness, Lady Elliot, in her place—put on the statute book the Act creating the SSHA and gave it the right and the money to build houses where nobody else would build them—in the Highland areas, in the Islands, in country areas and towns and cities—though they could only build in towns and cities if they had the agreement of local authorities there.
I remember opening their one hundred-thousandth house in Glasgow and paying my tribute then to a series of very fine men who had headed that organisation, men in public life and in the Civil Service too. The quality of construction and the efficiency of management speak for themselves, and I think it is rather sad when I read some of the things in this particular Bill, because it is said they will probably run out of money. Of course they are governed by the Tenants Right Act: they have to sell off their houses to them; and, remembering that many of these houses were built in areas which are very isolated and where they will not be able to be replaced by other tenant-occupied houses, I think it is rather a pity they were included in that 1980 Act. Could the noble Lord tell us exactly what the sales receipts will have amounted to at the present time, and also up to the time when they are likely to run out of money in the early part of next year? I shall be grateful for that information.
The fact is also mentioned that the amount of money required by the SSHA depends on the annual deficit. There was a time when they received exactly the same subsidies as local authority houses but, unlike local authorities, the association could not dip into the rate funds in order to reduce their rents still further. That meant there was a deficit, and that deficit has been made good by the Government. There has been a change in how this is done, because there is no question of calculation of subsidies in respect of each individual house, as there was in earlier years.

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There was a time when every time you built a house the aggregate subsidy went up because you were letting houses at rents below economic rents. That was facing the facts of the economic situation; and when I read in the memorandum that—
"…present public expenditure plans do not envisage an increase in the total of these subsidies…",
it can only mean two things, and probably means both: First, fewer houses are going to be built by the association, and, secondly, the rents of their houses will be increased. Of course this is all part of the Government's plan, and I think it is to be regretted that the work of the SSHA is being curtailed. It has proved its worth over these 40 years and more that it has been in operation. I certainly wish it well and would not for the life of me seek to oppose this Bill and see the possibility of it running out of money in the early part of next year.
There is a second purpose in the Bill, quite apart from the purpose of providing additional money. There is a point about clarification of the law. I wonder whether the noble Lord, Lord Lyell, could tell us exactly what the question is that has been in doubt, because I see in Clause 1(2) the words:
"… enabling or assisting the Association to carry out such other works in connection with housing accommodation provided or improved by them".
What has been the snag there? I know that the association is doing wonderful work at the moment in Glasgow. They are participating in the clearance, rehabilitation, rebuilding and reconstruction of the East End of Glasgow. That is a tremendous thing that is going on, and I believe the Secretary of State for the Environment has only just discovered that we have been doing this in Glasgow for some time. He has even been up to see it and thinks it might be well worth doing somewhere else.
One of the invaluable organisations which is participating in this is the SSHA and I hope that work is not going to be cut down. Is it in relation to some of the work there that they found they required this further power to provide not just houses but to assist the association to carry out "other works"? Could we be given a little information about what these "other works" are? Apart from all this, I certainly agree with the noble Lord, Lord Lyell, about the Bill. It may be short; he may consider it to be "modest"; but I consider it to be very important.
12.8 p.m.
Baroness Elliot of Harwood: My Lords, I should like to say just a word or two to thank the noble Lord, Lord Ross, for his reference to my husband, because it was he who put through the original Bill. If I remember rightly, it was the first Bill that gave an independent housing authority—controlled by the Scottish Office but still not attached to local government authority—the chance to build houses, as the noble Lord, Lord Ross, has said, in parts of Scotland which were difficult of access and expensive to build in, and so on.
But it went much further than that, because of course it also covered houses to be built in cities with the acquiescence and the authority of the Scottish Office and the money for them came from central funds. It is encouraging to think that an Act which I believe
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was passed either in 1936 or 1937 should still be so useful today, because while there is a great deal of legislation we could do without, this is one of those pieces of legislation that has an interesting past and a very important future. I support wholeheartedly what the noble Lords, Lord Lyell and Lord Ross, have said because I am sure this is a useful Bill and I am glad that it is to be continued.
12.9 p.m.
Lord Mackie of Benshie: My Lords, like the noble Lord, Lord Ross of Marnock, and the noble Baroness, Lady Elliot, we must welcome this Bill; and I must repeat the words of commendation of the noble Lord, Lord Ross, and also his great praise for the work that has been done by the Scottish Special Housing Association over very many years. I have in the past criticised the quality and beauty of some of their schemes but, taken on the whole, there is no question that the Scottish people generally are greatly benefited by the Scottish Special Housing Association.
It is very difficult speaking after the noble Lord, Lord Ross, because he has said it all, but like him I should like to expand on the sinister words,
"present public expenditure plans do not envisage an increase in the total of these subsidies."
If he could tell us how this will be achieved I should be grateful.
Lord Drumalbyn: My Lords, may I also welcome this Bill very much and briefly comment on what the noble Lord, Lord Ross of Marnock, has said in regard to the special works and additional works. If I remember rightly, the Scottish Special Housing Association was to build managerial houses—
Lord Ross of Marnock: That is recent.
Lord Drumalbyn: At any rate, my Lords, that is a very special function, and I should like to ask my noble friend whether it is anticipated that that will still continue. It seems necessary, when you are seeking to found new industries, to provide houses for them. I wonder whether my noble friend could refresh our memories on the question of the purchase of houses. My recollection is that these houses have not before been offered for sale by the Scottish Special Housing Association. The noble Lord, Lord Ross of Marnock, nods his head, indicating that they have been offered for sale—
Lord Ross of Marnock: My Lords, will the noble Lord allow me to intervene? We are coming on to another very important order when we can discuss this very fully. But there has been a certain measure of frustration at the Scottish Office, because the Bill on tenants' rights has been held up in respect of certain of their houses. However, I can assure the noble Lord that they are in the Bill. One of the things that worries me is the houses that were built for executives, young people, who may be there for only two or three years. What is the use of building houses if they can be sold to a sitting tenant and if the purpose is lost?
Lord Drumalbyn: My Lords, if they are sold to a sitting tenant, they will be lost if the sitting tenant

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ceases to be an executive. Is that what the noble Lord means?
Lord Ross of Marnock: No, my Lords. We do not want to go over the whole subject. But a sitting tenant can buy an SSHA house, provided that he meets the qualifications, in the same way as he can buy a public authority house. I remember agreeing to their building houses to be let at economic rents, and very desirable places there were, too. But the purpose for which they were built will be lost if the sitting tenants can buy them and sell them to whoever they like at a very considerable profit. This is one of the weaknesses of the Bill on tenants' rights. But the short answer to the noble Lord's question, which I am sure will be confirmed by the noble Lord, Lord Lyell, is that they are affected by the Bill on tenants' rights, in the same way as any other public sector house.
Lord Drumalbyn: My Lords, I am much obliged. I am sure that my noble friend will deal with this matter in a later order. I need not pursue that any further, but I would reiterate the need for us to know what are the new purposes, because that will be an indication of what will be covered in paragraph (bb).
12.14 p.m.
Lord Lyell: My Lords, I am sure that the whole House will be grateful for the reception that has been given to this Bill. I am convinced that the Scottish Special Housing Association will read with the greatest of pleasure the tributes that have been paid to that organisation, and to all the work that it has been doing for well over 40 years. According to the memory of my noble friend Lady Elliot, it must be 45 or 46 years. But, certainly, we all agree that the Scottish Special Housing Association has done, and we hope will continue to do, enormously valuable work throughout Scotland. I am very grateful for the support of my noble friend Lady Elliot. I should have known that it was her husband who instituted the Scottish Special Housing Association, but I regret to say that I was not aware of that fact. However, I am very grateful to noble Lords who have explained it to me.
The noble Lord, Lord Ross, asked me a number of questions, with two main ones. I hope that I shall be able to give him reasonable satisfaction on them. He asked me whether I could give an approximation of the figures of sales. We understand that gross house sales of Scottish Special Housing Association property during 1981–82 are estimated at being around £17½ million and that about two-thirds, or 66 per cent., of this total is likely to be financed by building societies and other private sources. So that sales receipts, net of lending to tenants, would amount to about £10 million, which should be available to the Scottish Special Housing Association to reduce its borrowing from the National Loans Fund. But I would qualify that—
Lord Ross of Marnock: My Lords, can the noble Lord say how many houses?
Lord Lyell: I am sorry, my Lords; I am afraid I cannot tell the noble Lord that. If he will bear with
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me, I shall finish explaining the figures. No precise estimate of the sales in future years has been made, but we believe there is every likelihood that these sales will continue at about the current level for the foreseeable future. I am afraid I have no information on the precise number of houses that have been sold. Did the noble Lord want the figures for the whole of Scotland, or for any particular area?
Lord Ross of Marnock: Just throughout Scotland.
Lord Lyell: I am sorry, my Lords, I do not have that figure. As soon as I can obtain it, I shall let the noble Lord know. If I obtain it before I sit down, I shall give it to him; otherwise, perhaps I may give him a brief written note before the festive season over-takes us. I am pleased to say that the winged messengers have now produced the information. The figure is thought to be around 2,000 houses in this year, which I presume means in the current financial year 1981–82, or the calendar year. But, at any rate, it is 2,000 houses in this year. I hope that that answers the first half of the noble Lord's question.
The noble Lord, Lord Ross, and my noble friend Lord Drumalbyn asked about the fascinating paragraph (bb), and the noble Lord, Lord Ross, was wondering about the carrying out of "other works". I think that the "other works" refer to what we call environmental improvements, which I expect will be clear to the noble Lord. So far as I am concerned, it means non-capital expenditure on repairs to existing property. I am advised that environmental improvements are not directly related to new housing development, so they will be the "other works" which are mentioned in paragraph (bb).
I am advised that we have received some legal advice which indicates that there is some doubt surrounding the continued effect of paragraph (bb); certainly, there was some doubt about the continued effect of the paragraph in the 1968 Act. The Scottish Special Housing Association will be very grateful to receive the tributes that have been paid to them from all sides of your Lordships' House today, and I hope that I have said enough to answer the bulk of the questions—
Lord Mackie of Benshie: My Lords, would the noble Lord please answer the question I asked about how economies are going to be effected which will keep down the subsidies to the present level?
Lord Lyell: My Lords, I have no specific information on that point. The winged messengers have been unable to convey any information to me about it. Perhaps I could inquire and write to the noble Lord as expeditiously as I may.
Lord Mackie of Benshie: My Lords, one of the points which needs to be brought out in the debate on Second Reading is how this money is going to be saved. If subsidies are not going to rise, money will have to be saved somewhere. If, however, the noble Lord does not know the answer, of course he may write to me.
Lord Ross of Marnock: My Lords, I wonder whether the noble Lord would include me in this correspondence. I asked him whether this meant that

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fewer houses are going to be built and that rents will be increased. Will he deal with that point, too, in the letter?
Lord Lyell: My Lords, I am afraid I do not have that information. Therefore I shall have to include the noble Lord, Lord Ross of Marnock, in the correspondence to the noble Lord, Lord Mackie of Benshie. I beg to move that this Bill be now read a second time.
On Question, Bill read a second time; Committee negatived.
Then, Standing Order No. 43 having been dispensed with, pursuant to resolution, Bill read a third time and passed.

Welsh Water Authority (Constitution) (Variation) Order 1981
12.22 p.m.
Lord Belstead Lord Belstead rose to move, That the draft order laid before the House on 1st December be approved.
The noble Lord said: My Lords, this order gives effect to the proposals for varying the constitution of the Welsh Water Authority which were announced in another place on 30th November. The draft is laid before Paliament in exercise of the powers conferred by Sections 2(4) and 3(10) of the Water Act 1973.
My right honourable friend the Secretary of State for Wales issued a consultative document outlining his proposals for reorganising the Welsh Water Authority on 27th July of this year. This document outlined my right honourable friend's belief that the management of the authority could be improved if the present structure, with a majority of local authority members and a strong bias towards the local government system of management, with a large number of committees considering details, were replaced by a smaller board of about 10 members wholly appointed by the Secretary of State. Over 100 responses were received to the consultation document and, apart from the local government interests, the majority of them supported my right honourable friend's proposals. My right honourable friend met the local authority associations on 1st October and after hearing their views he decided to modify his proposals to the extent of increasing the board membership to 13 and making express provision for four members who, although they would be appointed by him, would be nominated by the local authorities who are at present entitled to appoint members to the authority.
While these proposals were under consideration in Wales, the Monopolies and Mergers Commission reported on the Severn-Trent Water Authority and they, too, formed the view that the local government committee system was unsuitable for the administration of a water authority. This is what the Monopolies and Mergers Commission report said:
"The size of the authority has resulted in a complex committee structure requiring extensive administrative and other support services. Despite its historical origins the authority is not an instrument of local government and does not therefore have to be controlled by a body which is largely composed of people who derive their membership from the electoral process of local government. Its policies and activities are in no way dependent on political issues within its particular boundaries. It is one of 10 similar bodies which are virtually nationalised industries
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organised on a regional basis responsible to Ministers and co-ordinated by the National Water Council. We recommend that the size of the authority"—
that is, the Severn-Trent Authority—
"should be substantially reduced and that its members should not be based predominantly on local government representation".
The Government take the view that those comments apply as much to the Welsh Water Authority as they do to the Severn-Trent Authority. In proposing to change the controlling board of the authority the Government are concerned not only to improve the efficiency of the authority and its ability to make decisions but also to enhance the means whereby consumers' views are genuinely taken into account.
Consumer interests arguably are not being properly represented under the present system. With only two members from each county the representatives are necessarily remote from their electorate, especially in the large Welsh counties. Few people are aware that local authority representatives have this role on water authorities and fewer still will know which local authority members serve on the authority. Moreover, local authority members are often placed in the difficult position of having to act as consumer watchdogs while at the same time they must take part collectively in agreeing decisions which may properly accord a higher priority for the needs of other parts of the authority's area. The Secretary of State for Wales has decided therefore that there should be established five local consumer advisory committees based on local authority districts approximating to the area covered by the Welsh Water Authority divisions, or combinations of those divisions.
The order itself does not make provision for this because the powers of Section 3(10) of the Water Act 1973 do not enable the Secretary of State to provide constitutionally for consumer advisory committees. But the Welsh Water Authority themselves have power under Section 6(8) of the 1973 Act to appoint committees to advise on any matter relating to the discharge of their functions, and after taking account of the views that have been expressed the Secretary of State has formed the view that five local consumer advisory committees would be better able to safeguard the consumer interests than the present system. He believes that it would not be necessary to establish as many as seven committees corresponding to the seven divisions of the water authority in view of the fact that the three Glamorgans make up a concise area and that the boundary between the Wye and Usk divisions cannot be reconciled with local authority boundaries.
My right honourable friend therefore proposes to establish a single committee for Glamorgan and another single committee for Wye and Usk. The other three committees would cover the Dee and Clwyd, Gwynedd and West Wales divisions. The Secretary of State is preparing draft guidelines for the Welsh Water Authority relating to the constitution, functions and operations of the five committees and he will be consulting interested bodies about these guidelines.
I am advised that the establishment of these committees would not result in an overall increase in the number of committees of the authority, because in addition to their headquarter's committees at least seven divisional committees will be able to be dis-

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banded. I am advised therefore that the new proposals should involve overall a decrease of something of the order of £100,000 per annum in the cost of running the authority.
Finally, I should like to emphasise that the laying of this order is not to be construed as any criticism whatsoever of the existing members of the Welsh Water Authority. My right honourable friend the Secretary of State has gone on record as taking the opportunity to thank the chairman, Mr. Haydn Rees, and all his colleagues for the immense amount of work they have done for the authority. The Government know full well that the Welsh Water Authority has had a difficult task since it was set up in 1974 to take over functions which for many years had been exercised by a large number of smaller bodies, but when one looks back it can be seen that the present consitution should be regarded only as an interim one to cover the development of the new authority, drawing on the experience of the local authority members. After over seven years of operation the time has now been reached when further progress requires a change of management style, and this is what the draft order proposes to do. My Lords, ask this House to approve the order.
Moved, That the draft order laid before the House on 1st December, be approved.—(Lord Belstead.)
12.30 p.m.
Lord Cledwyn of Penrhos: My Lords, the House will be grateful to the noble Lord, Lord Belstead, for his explanation of the order, although in due course the House may take the view that his comments were totally inadequate. However, I would agree with him entirely on one matter; namely, the appreciation which he indicated to my friend Mr. Haydn Rees and the members of the water authority for the excellent work they have done over the past seven years since the Welsh Water Authority was first established. The House would also do well to recall that it was a Conservative Government in 1973 that was responsible for the initial Water Act and also for the setting up of the water authority itself.
I shall comment briefly, first, on the timing of this order and, secondly, on part of its substance. On both counts, I believe there is a strong case for saying that the Government would be right and certainly prudent to give more time to second thoughts. Consultation after the event is not good enough. The noble Lord referred to consultation after the guidelines; this would be consultation after the order had been passed and after the major decision has been taken. That is not satisfactory.
More by accident than design, I believe, the Secretary of State for Wales has the power to change the composition of the Welsh Water Authority by order. The Secretary of State for the Environment, on the other hand, needs legislation to reform the English water authorities. Let us look at the time-scale. The noble Lord said that the Secretary of State set out his proposals in a consultative document dated 27th July and invited comments by 11th September, The consultation document did in fact differ from the order, in that there would have been no local government representatives at all under the original proposals. I would make the submission, and I think it is a reason
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able one, that the period from 27th July to 11th September, given that August is a holiday month, was quite inadequate for proper consultation with local authorities in Wales.
The noble Lord referred to the Monopolies and Mergers Commission, and I would merely say this: it is not for a quango such as the Monopolies and Mergers Commission to say that local authority representation is not necessary—that is for Parliament to decide. It is not for an appointed body to say what democratic representation should be provided. The reason given for excluding local government was that, when the water authorities were set up in 1973, it had been intended that councils should among other things represent the consumer, but this was not generally appreciated by the public, as the noble Lord has just said. The Secretary of State proposed an alternative form of consumer council, upon which local government would be represented along with local industry, commerce and agriculture; trade union, amenity and consumer organizations. Another alternative proposed was consumer representation on the water authority. In the event, the Secretary of State has decided to set up five local consumer advisory committees covering district council areas approximating to the seven Welsh Water Authority divisions, or combinations of them. All seven Welsh districts are in whole or in part within the area of the Welsh Water Authority, and so are parts of 10 English water authorities, of which nine are members of the Association of District Councils. The Severn-Trent Water Authority projects into Wales, and parts of four Welsh districts are now within its boundaries. From the start I was opposed to the intrusion of the Severn-Trent Water Authority, which is an English authority, right into the heartlands of Wales, but it was the noble Lord's colleagues who in 1973 decided that that should be established for Wales.
On 27th October the Committee on Welsh Affairs in another place announced that it intended to conduct an inquiry into Welsh water, and, as part of the inquiry, would examine the Secretary of State's consultation paper. The Parliamentary Under-Secretary of State, Mr. Wyn Roberts appeared before the Committee on 2nd December, but on 1st December the order was laid before Parliament after an announcement by the Secretary of State on 30th November. Then we had the Monopoly and Merger Commission's Report on the Severn-Trent Water Authority.
Although the Secretary of State's order now includes four persons to represent local government, this in no way meets the views of district councils, which are that there is a good case for more local authority representation rather than less. The Secretary of State's proposals wholly contradict the Department of the Environment's review of the water inquiry, which emphasised that local authority membership was,
"designed to reflect local accountability and the need to maintain links with local authorities in the provision of essential services to the community".
Hence the small increase in local authority representation in 1979. The proposals removed the valuable element of local democratic accountability of the Welsh Water Authority and its only public accountability will henceforth be to Ministers, whose position will be strengthened at the expense of local govern

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ment. I should have thought that this was entirely contrary to the pledges made by the Conservative Party at the last election. Replacement of local democratic control by remote ministerial appointments and controlled bureaucratic bodies will be a further move towards centralism and a weakening of the institution of local government. Close links between local authorities and water authorities are essential because, in the words of a former chairman of the National Water Council,
"the water services are most directly and intimately the hand-maiden of local authorities' work in the field of housing, public health and planning", [and the] "constitutional strength" of local government representation is a substantial help in the formation and strengthening of these relationships.
The idea to have consumer councils—a concept abandoned by common consent when water authorities were established—is no substitute for direct local involvement. We know this from our experience of the health service report introduced by the 1973 Government. Consumer councils can never effectively reflect local and other interests, and direct local authority representation on water authorities remains the best safeguard. Local authorities through their water authority members, who are themselves consumers, have been vigilant watchdogs over the level of water and sewerage charges and charging policies.
There is acute concern in Wales about the sharp increase in water charges over the past few years. They have been able to deal at first hand through sewerage agencies with complaints about blocked or overflowing drains or sewers and their statutory duty to ascertain the sufficiency and wholesomeness of water supply means that complaints about water quality can be pursued effectively locally. Complaints under these heads form a large proportion of the total water and sewerage complaints. A framework for consumer complaints is already there, at district level. I cannot understand the right honourable Gentleman, the Secretary of State for Wales, or the noble Lord, Lord Belstead, when they say that Welsh people are not aware who their local authority representatives are on the Welsh Water Authority; they really are living in a land which I certainly do not inhabit, because the Welsh people, if they are anything, are concerned about local representation. The average Welshman is a very political person. He knows perfectly well where to go; if he wants to make a complaint or an inquiry, he will find out who his local authority representative is on the Welsh Water Authority. It is really quite an invalid argument for the right honourable Gentleman the Secretary of State and the noble Lord to advance to the other place and to this House.
The House must also be ware that very strong representations have been made by the Association of County Councils, the Association of District Councils and the Welsh Counties Committee. There is no doubt that they feel deeply that this is a further unfortunate attempt by the Government to erode their democratic rights. It comes at a very unfortunate time, if I may say so. I would like to quote very briefly what the Welsh Counties Committee have said on this. Firstly, they say,
"The Government's proposals represent a retrograde step of considerable significance to local Government."
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Secondly, they say,
"There is no evidence whatsoever to suggest that consumer interests will be better served under the new proposals."
Then they go on to say, thirdly:
"The Welsh Counties Committee does not for one moment suggest that present arrangements are perfectly satisfactory, and it would have welcomed an opportunity to participate in a thorough examination with the Government of the Welsh Water Authority. It is felt that there should have been wider consultation at a far earlier stage and before the present radical proposals were published".
The third point is of considerable significance. They do not argue that there should be no reform. I do not argue that there should be no reform. They ask reasonably for more time to examine it, and it would be a great mistake to deny them.
Let me say this. There may well be a case for reform. I was no great supporter of the 1973 Act, as the noble Lord may know, but I am not entirely satisfied that this is the right reform and I am absolutely convinced that the Government are wrong to rush it through in this way. A large number of questions remain unanswered. For example, how does management fail to exercise proper financial control. How has decision-making been thwarted? And also there is the question of water charges, which has been a matter of grave anxiety in the Principality over the last seven years. The Government will lose nothing at all by allowing a further few months for consultation, and I most earnestly urge the noble Lord and his right honourable friends to make this simple concession.
12.42 p.m.
Lord Hooson: My Lords, I very much agree with many, in fact all, the criticisms made by the noble Lord, Lord Cledwyn, of this Order. If I may pose a question, why is there such a rush to get this through? It is a matter entirely of a legislative quirk that the Welsh Water Authority's structure can be altered by means of an order, whereas no regional authority in England can be so altered without legislative action. That is entirely an accident.
The Secretary of State published his consultation paper on 27th July this year. That was, I think, two days before the long Recess began. The other place reassembled about mid-October, and on 28th October the Select Committee for Wales announced that they were going to look into the position of the Welsh Water Authority. In the debate in the other place on 14th December the Secretary of State said that he could not wait for the Select Committee to consider the position. Why not? It seems to me strange, I am bound to say, that when a Select Committee at the end of a long Recess, on the first opportunity they had to meet to consider the matter, announce that they will look into it, the Secretary of State should announce that he cannot wait. Why is there this rush? Is it to save £130,000. I do not believe for a moment this money would be saved. I have been in Parliament, in the other place and here, far to long not to know that these estimates of savings by these various changes of structures never come about—not even when my noble friend Lord Cledwyn was in the Secretary of State's position.
Lord Cledwyn of Penrhos: My Lords, I must advise

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my noble friend that, as against the notional saving of £130,000, would he not agree, the Government have a duty to tell us what the cost of the new consultative committees would be?
Lord Hooson: My Lords, I entirely agree. If I may paint the proposal in a broader context for a moment, given its history—that is, water undertakings run by private companies and by local government over the years—water is now run as a public utility on a national scale. One quite understands the reasons why one should look critically and carefully at the way any public utility, whether electricity, gas or water undertaking, is run. But why should proposals of this kind be introduced piecemeal. Surely there is a very good case for investigation by the Government into how consumer representation or consumer influence is brought to bear on a public utility. For example, there is not a great deal of praise, I am bound to say, for the consumer councils in the gas industry or the electricity industry.
Many people argue that direct local authority representation, even though it is indirect with two members from each local authority, does in fact mean that there is better consumer representation in the water industry than in some of the other public utilities. I do not know what the answer is. All I am trying to ensure is that we do not have proposals like this introduced piecemeal. We should look at what is happening in the gas industry, the electricity and the water industry, to see what is the best way of bringing about the most effective consumer representation. Therefore, the introduction of the order at this stage is misconceived.
One should have had the opportunity, first of all, to consider what the Select Committee discovered about the water industry in Wales. Secondly, the Department of the Environment are going to publish a paper in March next year making proposals arising from the criticisms made by the Monopolies Commission of the Severn Trent Authority. I entirely agree with the point made by my noble friend Lord Cledwyn; that is, that one would not accept, at its face value, the criticism of a Quango on such a thing as a water authority. A Quango may think that any utility is best run as a Quango and take a very different view from that which a Select Committee might take. But there is no reason that has been advanced by the Government for the urgency of this matter.
If I may come to the second point, this is the merit of the proposals. I am inclined to believe that if the Welsh Water Authority is to be improved there is a case to be made for a slimming down of the actual body. But when this criticism is made—who is the local authority representative of any area on the Welsh Water Authority?—I would not mind betting that you would not find one person in a hundred in Wales who would know who is the local consumer council representative on the Gas Board or the Electricity Authority. They are much more likely to know who is the representative of the local authority. That does not mean that a large proportion of the population would know, but at least you would probably find that they were more aware of the people on the water authority than the people on the Gas Consumer Council or the Electricity Consulta-
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tive Council, whatever it is called. So I do not think the merits of the proposal have been made out.
Thirdly, I would raise the question of the proposal itself. Agriculture is no longer to have a direct representative on the authority. That seems to me to be a very great weakness. If water affects anything, it is agriculture. There has to be a representative who has experience of land drainage and of fisheries, but surely agriculture is at least as important as fisheries and land drainage. After all, it is the largest single industry in Wales and it is directly affected by everything, or most things, the water authority do. The Secretary of State in another place said that in fact business included agriculture, but that there would be no direct representative of agriculture. I regard this as one of the major weaknesses of the proposal by the Government, subject, as I think it is, to the criticisms already made of the proposals. But taking the proposal as it is, surely the noble Lord, Lord Belstead, can give an undertaking today that there should be a direct representative of the agricultural industry on this authority.
12.49 p.m.
Viscount Ridley: My Lords, I hope it is in order for a mere Englishman to intervene in this somewhat Celtic debate. I would like, if possible, to represent the views of the Welsh counties and the Welsh members of the ACC on the matter. I do not doubt the need after seven years to reorganise the membership of the Welsh or any other Water Authority. No doubt 35 members was much too large a number for things to get done. But I do not think it has anything to do with Parliament, certainly not with Secretaries of State, how they organise their committee systems. I would have thought that was something that should not have provoked this, and something that could safely be left to whatever the authority may wish to do.
We debated the Water Act 1973 very fully indeed in this House. I think that at that time my noble friend Lord Sandford was on the Front Bench and he may be able to tell us much more about it. It seems to me absolutely wrong that we should proceed to legislate in this way for Wales without dealing with the whole country as one. I know, as the noble Lord, Lord Hooson, has said, that the reason is that Wales can be dealt with separately like this, but England needs primary legislation. But surely the decision which the House comes to today on Wales will inevitably be quoted when we come to discuss England and will pre-empt whatever decision we may wish to make. It will be said that because the House or Parliament agreed to reduce the number on the Welsh authority there is no case for not doing exactly the same thing to the 10 English water authorities when the time comes.
It has been suggested by other noble Lords who have spoken that there is no reason given for this unseemly haste in proceeding to legislate today. I do not think that it is fair to say that there has been no consultation. This Government arc not famous for consultation, but in this instance I think that perhaps they have done their best. The only reason which I can find—from reading the debate in another place this week—for this unseemly haste is the fact that the chairman of the Welsh Water Authority is to retire in May, and it would be nice to have it all done and

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finished with before his successor takes over. That seems to me the worst possible basis for any legislation—we have a chairman of an appointed Quango whose time is up and a new one has to take over, and therefore we must legislate the week before Christmas in this hole-and-corner method.
In the debates in 1973, Parliament, in its wisdom or otherwise, made some considerable effort to ensure that the membership of all the water authorities had a built-in local authority membership as a majority. That was done, I think, not necessarily because members of local authorities knew anything more about water than anyone else—and certainly I would give the members of Welsh local authorities the credit for drinking as much whisky as anybody else with their water—but also because members of local authorities were, in fact, elected to represent their constituents and their worries. That is why I believe that Parliament chose to have this majority of local authority people. It is not true to say that it is a better way of representing the consumer interests. Surely the locally elected person—this point has already been made this morning—is far the best person to represent the electorate in any matter, whether it is water or anything else. I join with other noble Lords in wondering whether the consultative committee is in any way a satisfactory substitute.
Furthermore, I must strongly disagree with my noble friend the Minister when he said something about councillors being remote from their electorate. Surely that is something which no one in this House could accept. My limited experience of Welsh local authorities is that they are extremely close to their electorates and if they were not they would very soon be put out at the next election.
The proposals are such that the Welsh county councils will he reduced in membership from at present eight Welsh members and two English to a total of two from the 10 county councils. That is because two English county councils are involved—namely, Cheshire, and Hereford and Worcester. This is a drastic reduction and the majority, of course, is to go. The Welsh councils feel very strongly that this is wrong. Never mind; if that is to be done and the majority is to go, then surely we must make sure that a basic and very important constitutional change of this kind should be debated in the context of the whole country and not just as an ad hoc decision for Wales. It may be the right thing to do, but certainly I think that it would be quite wrong to take this decision today and then use it, as I have already said, as a pretext for doing the same thing in England.
Furthermore, if the Secretary of State in his wisdom chose to appoint one of the two county council members from the two English counties I can see an almighty outcry from Wales, quite justifiable, and therefore the two English counties are, to all effective purposes, unlikely ever to be represented at all. It is another example of the Government's continual eroding of the powers and duties of local authorities and their replacement by centrally appointed Quangos or bodies of that kind.
Water is—and at least the Monopolies Commission have now squarely put it on record—a nationalised industry, but it need not have been and I still think that it would have been better if it had been left, as to a
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great deal at least, in the hands of locally elected people. I am sorry that the Government choose to go down this road. Even if it is a small step it is a significant constitutional step, and I hope that it can be deferred.
I find particularly objectionable the power that the Secretary of State takes in this order to appoint all the members himself. It is perhaps correct that he should appoint the chairman and should appoint the other members for their specific interests and the contribution which they can make. I have no doubt that all those on the Welsh authority have done their best and, I believe, have done very well indeed in a difficult job. But in my view it is quite impossible to suggest that the Secretary of State should appoint the local authority members himself. It looks as though they cannot even be trusted to appoint from their own number those people whom they wish to represent local government. If they cannot be trusted to find two councillors from among their representative councils, but the Secretary of State has to do it for them, then it shows no confidence whatever in Welsh local government. I hope that the Government will think again very seriously on this whole matter.
12.55 p.m.
Lord Energlyn: My Lords, I rise to speak as a hydrologist. I welcome this order because it strips an organisation which confessedly I have heard in your Lordships' House has been structured as a Quango. As such it has been dominated by amateurs in the world of hydrology. I am pleased with the order because it tells us strictly that we are now going to have a hoard which is composed at least of some real experts.
The noble Lord, Lord Hooson, mentioned drainage. I see that we are to have a member of the board who knows something about land drainage, which I agree with the noble Lord is extremely important. But when we come to deal with this subject it is not one that should be dominated by politics. Rivers and underground water tables do not conform to political boundaries: they are the gift from heaven. If we talk to some of the members of these authorities—I shall not pick on Wales in isolation—as I have done from time to time, we find that they are completely mystified by the essence of water. Water is not just simply H2O—it is one of the most mysterious and the most important molecules ever invented by nature. If it were not for that invention, we as human beings, or any form of life for that matter, would never have appeared on this planet. It was the formation of water that started all history of life on earth.
I shall not treat your Lordships to a Jules Verne lecture, but I shall try to emphasise that these political amateurs, these "quango-ites" have been functioning, as I understand it, for seven years unsuccessfully. I mention "unsuccessfully" because that is the reason for change. You now realise that what you need on this board is somebody to run an industry—the water industry—and not a political machine. So I am delighted to see that at least we are to have somebody who understands something about fisheries, and particularly somebody who understands something about land drainage, because land drainage is the most important element in agriculture and horticulture.
Perhaps I may illustrate my point by mentioning two or three matters that are on-going among us

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experts at present in Wales. If you go to Aberdovey—mystique, wonderful place—you find that it has never been really developed horticulturally. Why?—because the Mabinogions forgot to take the salt out of the soil (for the benefit of Englishmen I mean the little men of Wales). What we scientists can now do is reduce the level of salt in the Aberdovey area where there are climatic conditions which would produce a horticultural industry you have never even thought about.
Then you turn a little further north to Bannouth. I had a call in 1948; we moved into Barmouth to process the muds of the Barmouth estuary in the complete belief and, in fact, the scientific conviction, that we could take out of the Barmouth estuary as much gold as England would wish. We were not simply going to take the gold out and forget the rest; we were going to resoil the Barmouth estuary with the type of soil which is as rich as that which you find today in Norfolk—the soil that was recovered from the sea for us by the Dutch. There is one axiomatic point about soil. The richest soils anywhere on earth are those which have been last to emerge above sea level; they are the soils which contain all the balance trace elements. With that in mind, I now turn to the point made by the noble Lord, Lord Hooson, about land drainage.
We turn to Baglan where, along with the imaginative director of the Steel Company of Wales, as it then was, Mr. Cartwright, I worked out a whole plan for developing the Baglan Moors—derelict land. It is a tragedy. There you have a horticultural and agricultural area that could feed the whole of south Wales if properly developed. Now we can do it, because we now have on board the development of these areas, at the same time asking one question: where will we get the necessary electrical power to supply the horticultural needs for pumping, for heating the soil, for the geochemical processes et cetera?
Perhaps I may tell your Lordships something about which you may know nothing. In the eastern part of the South Wales coalfield—and it is a pity that the noble Lord, Lord Aberdare, is not here, because this is his domain—in the Aberdare area, two lowermost seams in the coalfield cannot be worked. The reason they cannot be worked is that the moment you drive an adit into those seams, the hydrostatic pressure in the carboniferous limestone 700 feet below it will burst through and drown the mine. Here, you have a form of artesian pressure which would drive a water turbine indefinitely. I could go on at great length, but the point that I am trying to emphasise is this. I am delighted with this order because at last it puts an element of pragmatism into the development of what is one of Wales' best resources—its water.
Lord Cledwyn of Penrhos: My Lords, before my noble friend sits down, the House has listened with great interest to him because, as a leading scientist, he speaks with such authority. However, would he not agree that when public bodies of this kind are set up—such as, the Welsh Water Authority—or, indeed, are changed substantially, there should be public consultation and that attempts should be made to seek public consent?
Lord Energlyn: My Lords, perhaps I may rise to
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answer my noble friend. I do not wish to enter into this question of representation and consultation, but surely the best basis for consultation is for an authority, a body, or whoever it is, to have placed before it a plan. It can discuss the plan—not the politics of the plan, but the plan. Such a board as I visualise this order will establish would produce a plan and, unquestionably, the end product will be the development of the greatest supplies of water that you can get and its best utilisation. I am as devoted a Welshman as the noble Lord, Lord Cledwyn, but there was tremendous sense in the Trent Water Board extending its boundaries into Wales, because you had to develop the River Trent, not Plynlymon.
1.3 p.m.
Lord Nugent of Guildford: My Lords, I am most interested to listen to the noble Lord, Lord Energlyn, with his expert contribution, but I must take issue with him on one point, where he says that the board has not been a success in the past seven years. Perhaps he does not know that there are 13 members now on the board who are appointed by the Minister for their expertise. They work together with the local government members and, in fact, they have been extremely successful in their management of water in Wales.
Lord Energlyn: My Lords, I accept that remark. What I meant was that I interpret the necessity for this water as meaning that the board has not been as successful as the Government would like it to be. That is really what I am saying.
Lord Nugent of Guildford: My Lords, although I am usually a supporter of my Government, I am not sure whether they are entirely right on this matter. I think that the general trend of comments today indicates that, whether they are right or wrong, they have been quite astonishingly precipitate in what they have done here. As the noble Lord, Lord Ridley, said, some of us are concerned that this could be the forerunner for a change throughout the nine water authorities in England as well. Therefore, it is not only a very important matter for Wales, but for the whole country.
What has been done with the existing structure over the past seven or eight years is that with these large numbers of local authority members on these boards a compromise—a balance—has been achieved between the expertise of the appointed members and the contribution of the local government members. The local government members—many of whom had some expertise to contribute as well—have contributed the feelings of local people. Heaven knows! in Wales water is much more than water and everyone wants to have a say in it. It really matters that you should carry local people with you. To a certain extent that is true in all regional authorities throughout the country. So I just put it on the record that, although the noble Lord's comments are absolutely right that the hydro-logical factors are, of course, of vital importance to the whole community, not only in Wales but in England as well—because so much of our water comes from Wales—nevertheless, we need to keep the right balance.
Therefore, I turn to the order, and I must say to my noble friend Lord Belstead, who seems to be on the receiving end of rather a lot of criticism, that he has

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much sympathy from me in being asked to bring this order before the House today. For myself, obviously I shall not vote against it. However, I say straight away that it has been wildly precipitate; first, for itself—for Wales—and, secondly, in its implications for the country as a whole. The timetable has already been rubbed into my noble friend, and it really gave no time at all for consultation. I understand that there was one meeting with the district authorities, possibly only with the county council authorities, and they have had really no chance to say what they feel about it. They are not at all happy in having their representation reduced, in the case of Wales, from 22 to four. This will leave a very sore spot there, which will be a handicap in the future. I am sure that this is something which my noble friend does not wish to see.
The existing structure has worked well in practice. It is true that it is cumbersome in some respects, but it was an attempt to try to carry local authorities with the 1973 Act when local authorities felt very upset indeed at having functions taken away from them—the sewage function taken away completely and the water supply function taken away to a considerable extent. This was the compromise that was worked out. On the whole, it has not worked out badly. I speak now generally because this order has such obvious implications. It has not worked out badly in practice in order to obtain efficient management combined with carrying local feeling with the authorities.
I have read quite carefully the report of the Monopolies Commission, which is apparently the basis of the Government's action in this respect. I refer, of course, to the report on the Severn-Trent. It is quite obvious from that that the Monopolies Commission—an excellent body in many ways—was primarily concerned with commercial, industrial and financial affairs. They have greatly over-simplified the issue. They conclude that the volume of complaint against water authorities has proved that the existing structure does not work. My word, it might be nothing to the volume of complaint you get against the new structure. They do not realise what the complaint has arisen from. The complaint arose because in the first place these functions were taken away from local government, and therefore local government complained; and secondly, from consumers generally because the sewage function which had previously been performed by local government, and was included in the general rate payment, now for the first time became a separate payment by every householder for the sewage function being performed.
Worse than that, the central Government not only made this transfer but the rate support grant element which used to be in the local government sewage costs was now removed, and so the householder had to pay the full costs. Naturally this has meant that what used to be a simple water supply charge has suddenly doubled straight away, and then, on top of that we have had inflation over recent years which has meant that the water bill has suddenly become a very significant item.
That is the main basis of the complaint, and quite understandably if complaints continue—and they are likely to do so still—at least the local government complaint had simmered down, and local government felt that they had been given a reasonable status in the water authorities and there was reasonably har
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monious relationship between water authorities and local government bodies. We are going to lose all that if my noble friend goes ahead with this present proposal.
I make the point to my noble friend that while for myself I am going to accept with very much regret this order that he puts before us today, before his right honourable friends in another place, the Government generally, consider extending this order to the rest of the country, they really must have a very full consultation with local government throughout. They really must persuade local government that the new consumer council structure is going to be an improvement in giving consumers a say in the operation of this important national utility.
I repeat the point already made, that certainly from my side of the House consumer councils have never been regarded as a very satisfactory body. They have never been regarded as a body which very effectively reflects consumer interests. So what assurance have we now that a consumer council in this field is going to do that much better?
The point has already been made by the noble Lord, Lord Hooson, that the Monopolies Commission in their report on Severn-Trent say that the cost to the existing structure of local government in Severn-Trent was an extra £1 million a year, and that that would all be saved. But setting up the consumer councils is going to cost a lot, and the Monopolies Commission do not make an estimate for that. My noble friend gave us an estimate today of the net saving of £100,000, I notice, but as the noble Lord, Lord Hooson, said, it is not by any means the rule that these estimates are fulfilled. In other words, I do not think that there is going to be any significant cash saving on setting up consumer councils.
The real issue is: are they going to give greater satisfaction to consumers generally? And that, of course, most importantly includes opinion in local government circles. Are they going to give greater satisfaction than the existing structure? I say absolutely finally to my noble friend that this case simply has not been proved. There is one default on Severn-Trent by a body which certainly can evaluate very well certain factors; but there are political factors in this; constitutional factors. Parliament is the place where this can be weighed up properly. Therefore, I beg my noble friend to take this message back to his right honourable friends—and indeed my right honourable friends—and ask them to give a great deal more thought to this important matter.
If we have to accept this precipitous action over Wales—and it appears that we have to—well for heaven's sake, let us have a proper study and a really balanced thought before any further action is taken. It has been rightly said that you will have to legislate to do it. This means that there will be quite a few hurdles to negotiate, but there will be plenty of time before any extension is made, and on no account should this Welsh order be seen as a precedent for an extension into the rest of the country.
1.16 p.m.
Baroness White: My Lords, I should perhaps make clear at the outset that in general terms I support the order which is before us. This puts me at variance,

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I am afraid, with my noble friend and with other speakers in the debate, including the noble Lord, Lord Energlyn. No, I beg his pardon. He is the one person who, I would not say that I am not at variance with, but my reasons arc different, shall we say? I am entirely at one with the serious concern which has been expressed in all quarters of the House at the manner in which the order has been introduced and the way in which it has been dealt with.
It is particularly unfortunate that it went off with such a bad start. The dates of the introduction of the consultative document and the date by which comments were required, quite obviously had the implication that the opinion of outside bodies, both local authority and some of the voluntary organisations which are closely concerned, was really of little consequence. Anyone who had given any thought to the matter would have recognised that for the local authorities, which customarily do not meet in August, the dates proposed were frankly insulting. There is really no other word for it.
It is true that some concessions were later made in response to protests, but it was particularly unfortunate that the matter should have been handled in this way at the outset. The local authorities could not but consider it to be really a slap in the face for them. It showed a lack of sensitivity; a lack of imagination. One does not want to overemphasise this, but I am sure that it set the whole process off in an unfortunate way.
So far as the Parliamentary response is concerned, I suppose it is hardly for us in this House to comment on the diplomacy, or lack of it, exercised in relation to the Select Committee on Welsh Affairs in another place. Perhaps we should merely note it respectfully from a distance. Nevertheless, to my mind it was politically unfortunate that the Secretary of State did not find himself able to come to some better accommodation in relation to the Select Committee, particularly as he himself recognised in the debate in another place on 14th December that he is still in the middle of a consultative process, and yet we are being asked to accept an order which to some degree is bound to stultify the consultative process.
It was also rather sad that in the debate in the other place there was an understandable preoccupation on the part of the Welsh Members of Parliament—and there has been in the Welsh Water Authority itself—with the matter so vividly described by the noble Lord, Lord Nugent: this whole question of charges, which was bound to put this order in a difficult context. It was particularly regrettable that, because of this very understandable preoccupation with charges and the effect on the consumers, and so on, the real purpose of the order was hardly discussed in the other place. It was overlaid by details which were not directly germane to the matter in hand.
Clearly, as has been emphasised during the debate, the position of the local authorities is central to this order. Other noble Lords beside myself will have received representations from the Association of County Councils as well as from the Welsh Counties Committee, and naturally one appreciates the feelings, in particular of the county authorities. But I would not go along with the proposition of the Association of County Councils that nothing should be done in Wales because
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the legislation covering England is different. The Welsh position permits our Secretary of State to take an initiative in an area which is of great importance to the Principality, and personally I am glad that he has tried to do so. It leaves the English authorities either to follow suit, if the Government are not so persuaded, or they may learn from our experience and do something different. So I am afraid I do not accept the situation that because we have a different administration in Wales we should never do anything different from England, and I was rather surprised that my noble friend did not take that point as a former Secretary of State; he may or may not agree with it, but it seems to me that we have some advantages.
Lord Cledwyn of Penrhos: My Lords, my noble friend knows me well enough to know that I took that point very much to heart. The gravamen of my case is the precipitate way in which the Government have acted in this matter.
Baroness White: As I said previously, my Lords, on that we are entirely at one, but it is a point that should be made.
The main concern of the local authorities, of course, is the proposal drastically to reduce the number of local authority representatives on the Welsh Water Authority and the manner of their appointment. I did not feel that the noble Lord, Lord Belstead, made it clear—though perhaps I failed to follow him—exactly how the English dimension, if one may call it that, is to be handled, and I would strongly represent that four is the absolute basic minimum of local authority representation which is appropriate for the Principality itself. Therefore I take very much the point made by the noble Viscount. Lord Ridley, about the English authorities, and it appears to me that the minimum number of local authority representatives that could be acceptable on the Welsh Water Authority would be five. I do not think one can properly diminish the number of Welsh representatives below two for the counties and two for the districts.
I speak from some experience, as a former chairman of another quango, the Land Authority for Wales, where that pattern of representation, of four members with local authority backing, was adopted, and one cannot represent the areas of Wales, as well as the county and district councils, adequately with any fewer. I therefore hope that this point can properly be taken into account. The trouble with an order is that we cannot amend it but that is one of the points which in my view has been unsatisfactorily digested.
The other matter on membership in relation to the proposals which I did not feel was satisfactorily dealt with by the noble Lord, Lord Belstead, was the position of the Severn-Trent Water Authority member who, as I had understood from previous comments by the Secretary of State, was to be retained. I am not at all clear from the order what the position of such a member would be because he does not seem to be included anywhere in the magic number of 13. Perhaps we may also have some clarification of that.
Of course, the deeper issue, to my mind, has not been faced by the local authority associations, by the Secretary of State—in public at least—or in the debate in the other place, and that is whether a preponderance

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of elected members on a body which is primarily executive and managerial in nature is desirable. The members of the local authorities concerned are not elected for the purpose of running the water undertaking and they are not directly answerable to their electorate in this regard. The water industry is an industry of peculiar importance, but basically in its structure it is industrial, and I do not believe it can lend itself to an organisation based on local government boundaries, except in relation to direct consumer interests.
There is prevalent at the present time a view that so long as one is elected, all will be well. The point was made in another place that the water authority was likely to take a corporate, rather than a representational, view of their duties. But for functions such as regional water supplies, sewerage, sewage treatment, pollution control and the like, a corporate view may be more appropriate, with the necessary answerability at certain levels, but what levels those should be is the crux of the argument. To my mind, the existing pattern has been one of pseudo-democracy and needs reform. As in other publicly-owned industries, however, we have not yet struck the happy mean, and I am not necessarily convinced that the order before us does so.
I was particularly disappointed to find in the letter from the Welsh Counties Committee that they were hankering for the return to the local authorities of what are now Welsh Water Authority responsibilities. I was disappointed because it indicated a complete failure to understand the tremendous gain under the 1973 reorganisation of basing our water resources control and sewerage systems on total river catchment areas instead of on boundaries unknown to nature. I am afraid that here again I differ from my noble friend Lord Cledwyn in so far as, from the point of view of the control of water resources, it was perfectly logical to include the upper reaches of the Severn with the lower reaches of the Severn although they cross the national boundary.
Lord Cledwyn of Penrhos: My Lords, if that principle were applied throughout Europe, there would he a very different map.
Baroness White: It would be a very much better map from the point of view of water control.
Lord Cledwyn of Penrhos: That is a matter of opinion.
Baroness White: My Lords, noble Lords present today who sit on the European Communities Environment Committee will appreciate that one of the great difficulties in Europe is precisely that; there are no authorities which can control cross-boundary rivers in their entirety. We are extraordinarily fortunate from that point of view in our island situation, in that we can do so. The only place where we might have a slight difficulty would be Northern Ireland and the Republic, but fortunately those particular rivers are not of great consequence except locally.
That was a tremendous advance in the management of water resources, sewerage and sewage treatment, and I would say in passing that one of the most difficult legacies inherited by the Welsh Water Authority—and
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I have no doubt by others—were the local authority sewerage arrangements, some of which were absolutely lamentably inefficient. So far as the Welsh Water Authority is concerned, this extends to the English element as well as to the Welsh.
I earnestly plead with noble Lords who may think differently, and with those whom they represent, that whatever failings there may be, either in the present administration or in that proposed in the order before us, we should not hanker for the old system. I am sympathetic indeed, in that the feelings of local authorities have been aroused by the way in which the order has been introduced, but I plead with them to think clearly on the very great advantages of this element of the reorganisation.
If I may turn to one or two of the details of the order—and I greatly regret that we are not in a position to amend it—I would query some of its provisions. I appreciate that there are some matters which cannot be dealt with under an order. For example, in my view if we are to have the kind of board that is now proposed for the Welsh Water Authority, the part-time members should receive some payment, but that is a matter that we cannot discuss today.
My main concern is with the proposed composition of the authority. I have already indicated that I see considerable difficulties over the number of local authority members; I am not at all clear about the Severn/Trent relationship. In my view the balance of the proposed appointment of members by the Secretary of State is incomplete. It is incomplete in a most important respect, which was touched on by the noble Lord, Lord Energlyn, though I felt perhaps not quite in full possession of the present facts, because the noble Lord, Lord Nugent of Guildford, was quite correct—there are already appointed members covering some of the functions with which the noble Lord, Lord Energlyn, was concerned.
The proposed categories in the order seem to me to be too narrow. In effect, they boil down to two elements. One is business, and the other is industrial relations. It is of course true that the Secretary of State suggested that the term "business"—after all, what are management and finance, if they are not business?—should subsume agriculture. On the other hand, there is an obligation among the other members to include the land drainage authority, and I should have thought that they might very well he regarded as subsuming agriculture. In the opinion of many of us the relations between the water authorities and the land drainage interests is one of the least satisfactory relics of a past age. I do not think that, in fact, agriculture will be left out, But what is missing from the categories is any mention of the fundamental relationship between the activities of a water authority and the natural environment. To my mind, there is no nationally-based activity that is more physical than water resource control and sewerage systems, but this absolutely basic characteristic is completely over-looked in the list of desirable qualifications for membership of the authority.
It is true that in his exposition of his proposals the Secretary of State mentioned that amenity will be one of the concerns of the five local consultative bodies at divisional level, but I would sumbit that that is quite inadequate for the purpose of controlling

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central policy, useful as no doubt it can, and will, be at divisional level. It is far too important an element of the function of a water authority to be left exclusively to officials, more particularly as there will be full members on the authority representing particular and special interests, such as agriculture, land drainage and fisheries, and there can be conflicts of interests.
So I strongly support the view which has been put forward, by, among others, the Council for the Protection of Rural Wales, the body mentioned specifically in the consultation document, and of which I have the honour to be president. We have made representations about this matter, because we are quite clear that welcome though the brief reference to amenity at the divisional level is, by itself it is not good enough. Therefore, we would be extremely unhappy if the interpretation of the qualifications required for the appointed members is not broadened, so as to include the interests which I have mentioned.
I do not wish to take up further time of the House, but from what I have said it will be clear that this is a much more complex affair than has been recognised hitherto. It is that which makes me fully understand the eagerness of the Secretary of State to do what he believes to be right and proper in the interests of the Welsh Water Authority. On the other hand, as I believe was suggested elsewhere, he has not yet appointed a new chairman. In fact, the advertisements went out not so long ago. He has a very experienced chairman in office. So far as I am aware, Mr. Haydn Rees, who is a most capable person, is still in good health, and to my mind his chairmanship might easily be extended for an additional period of six months, or whatever, to enable consultation in depth to be carried out. That has not been done, and that is why the noble Lord, Lord Belstead, is encountering such an adverse reaction from all quarters of the House.
1.35 p.m.
Lord Sandford: My Lords, two factors impel me to take a dip in Welsh water. One is the parental concern, to which my noble friend Lord Ridley alluded, and the other is that I have the honour to be the President of the Association of District Councils, which includes in its membership all the Welsh districts. The parental interest takes my mind back to the responsibility for introducing the Water Bill and passing it through your Lordships' House on to the statute book in 1973. The only two factors that I want to recall are these. First, for the whole of the three years, from the formation of the Conservative Government in 1970 to the passage of the Bill in 1973, consultations were going on about the structure of the regional water authorities, and that is why the precipitateness of the Secretary of State for Wales on this occasion is so regrettable. We are trying in a matter of a few months to undo something which took years to construct, though that is not to say that the time might not have come for some reconstruction.
The second factor leads me to want to pay a tribute at this moment to the first chairman of the Welsh Water Authority, our late colleague, Lord Brecon. I do that not merely out of respect for his name but also because there we had somebody who was primarily an industrialist, an industrialist by background,
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but who had sufficient political judgment to take up willingly the daunting task of chairing a body of 35 people. The body was composed of local authority representatives on the one hand, and industrialists and experts such as the noble Lord, Lord Energlyn, has spoken of, on the other hand. It is the combination of those two which I believe has made the regional water authorities effective. They certainly have defects, but they are the admiration of most other authorities throughout the world who have the daunting task of managing water.
The order comes to us at a most ironic moment. Only yesterday was there marked the end of three months painful and vexatious campaign that was necessary in order to stop another right honourable friend of mine from proceeding with legislation which would have had the effect of placing another area of local government, local government finance, progressively under the control of Whitehall. That was an error of judgment occasioned by the same kind of mistake that is being made at this moment—the unwillingness to consult properly those whose interests were affected.
The campaign to which I refer came to a successful conclusion in the Statement made in both Houses yesterday. But here we have another Secretary of State—and it grieves me that it is a Tory one—introducing an order which has had virtually no proper consultation. To say that there has been consultation on a paper which went out in the last week of July, and to which the replies were required by the middle of September, is really worse than not having any consultation at all. It is an absolute insult. It has been undertaken without any proper consultation among the parties directly concerned. It has been undertaken at a time when a parliamentary committee in the other place has indicated that it is about to investigate this very matter, and it has been undertaken at a time when it is known that the Secretary of State for the Environment is about to publish a consultative paper covering the nine other authorities in England. That seems to me to be not only precipitate, but untimely and ill-judged.
Are we really satisfied that the performance of nationalised industries—because this is a step towards nationalisation—in electricity, gas, shipbuilding, steel-making, running the railways and the airways, is so satisfactory that we can take this step, in the case of Welsh water, away from local government towards nationalisation? My noble friend claimed that the county council representatives and, I think he said, district council representatives are remote from the people that the regional water authorities serve. But how much more remote is the Secretary of State for Wales? It is a ridiculous argument, if I may say so.
Are we satisfied, too—and this is the point that the noble Lord, Lord Hooson, made—that in respect of these big, remote, nationalised organisations the consumer councils are all that effective? I should have thought we were very far from satisfied. But this is the system which my right honourable friend the Secretary of State proposes to introduce to replace the local authority representation, by which, through a majority of such representation, these regional water

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authorities are given a measure of democratic control.
I think it is only by the good fortune of the Christmas spirit which prevails on the last day of term that my noble friend has any chance of getting this order through. I hope that he will do as my noble friend Lord Nugent was suggesting, and will take this message to his right honourable friends in another place and advise them very strongly to do a more thorough job when it comes to dealing with the English authorities.
1.42 p.m.
Lord Mottistone: My Lords, very briefly, to support my noble friend Lord Ridley, and advised by the Isle of Wight County Council, I would implore my noble friend Lord Belstead to consider whether the particular error is not the precipitate nature of bringing this order before this House in view of the fact that the whole matter is to be considered for England in the very near future, with the great concern that counties must have that precedent will be set (whatever may be said) in this particular order.
Why the Isle of Wight is worth quoting in this respect is that, unlike all the other counties, we are separated wholly from the mainland by sea, by salt water, and it is of paramount importance for us that we have a say in the water that we have to share with the mainland. In many cases we give them our water; and, as my noble friend Lord Ridley said, it is highly unlikely that the English counties listed in this order will get a look in with regard to this, in the nature of things, new body, on which there are only four local authority representatives altogether. We would fear very much that the same thing might be said for our small county, in the very much wider area of the South West Water Authority. I am very uncertain as to what might be done if any of the steps are taken, but the best thing that my noble friend Lord Belstead can do is to withdraw this order and not try to press it just before we rise for Christmas.
1.44 p.m.
Lord Belstead: My Lords, water authorities are, of course, large and very important bodies with substantial incomes and capital investment programmes, and I think it is fair to say that since 1974 the need to ensure that water authorities are subject to the same disciplines as the nationalised industries has been increasingly recognised. Perhaps the first question I could answer is to those of your Lordships who say that they question whether a mirror image of the nationalised industries is something that we would want to create in the water authorities.
I would reply that, although I realise—and who more than a member of my own particular party, which has been so critical of some of the ways in which nationalised industries have developed over the years?—that the nationalised industries have very great problems, nonetheless one of the tasks to which the present Government have set their hand is to try to see that the nationalised industries are subject to discipline which will make them more cost-effective and, therefore, more efficient. The aim, therefore, is that water authorities should provide an essential service in as expert and as cost-effective a way as possible; and I was grateful to the noble Lord, Lord Energlyn, for making this point
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in much more detail in his speech from his own particularly expert point of view.
Of course, the Welsh water authorities should be accountable to the Secretary of State for Wales and to Parliament; and although I have heard very clearly the criticisms of this order which have been made from all parts of the House—and I will start by giving an undertaking to your Lordships that I will personally draw the attention of both my right honourable friend the Secretary of State for Wales and also my right honourable friend the Secretary of State for the Environment to what has been said on this order—I think it is fair for me to say that many of your Lordships with great experience of water matters from different points of view, not least my noble friend Lord Sandford (who, of course, was so closely involved in piloting the 1973 Bill through your Lordships' House), have also reached the conclusion that probably the time has come when some changes need to be made so far as the water authorities are concerned.
The noble Lord, Lord Hooson, says, nonetheless, "But why the hurry?" My right honourable friend the Secretary of State for Wales felt that, since he could proceed by way of a parliamentary order, he should not delay implementing his proposals by awaiting primary legislation. My right honourable friend concluded that he would be wise to take the opportunity of the retirement of the chairman on 31st May of next year to provide a change of management style and structure. If that is to be achieved, then, of course, if people are to know where they stand so far as all the many responsibilities of the Welsh Water authority are concerned, then this order is needed without delay.
Having said that, I have heard also the criticisms which have been voiced about the period of consultation—a period which was, of course, extended for one further month, and then at the end of that month, which was the month of September, on 1st October my right honourable friend the Secretary of State met the representatives of the local authorities. Perhaps I might just remind your Lordships that originally my right honourable friend proposed that the new authorities should be reduced to about 10 members, but after listening to the local authorities at that meeting he decided that the membership of the whole authority should be increased and that four members should be appointed by him specifically to represent the interests of the county and the district councils, who are entitled at present to appoint members. I should like to give an assurance to your Lordships that my right honourable friend will certainly consult with the local authority associations about the names of those to be appointed.
Lord Cledwyn of Penrhos: My Lords, will the noble Lord give way? The noble Lord has now made clear that the sole reason for the precipitate action that has been taken is the impending retirement of Mr. Haydn Rees, the present chairman of the authority. Given that every noble Lord who has spoken in this debate, with the possible exception of my noble friend Lord Energlyn, who was in any event advancing important scientific arguments, has criticised the Government severely for this hasty action, is the noble Lord not able now to say that he will withdraw the order on behalf of the Government? Because once the order is passed, then the die is cast. In view of the strong

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arguments advanced right across the board in this House (including arguments by my noble friend Lady White, who otherwise was in fact supporting the Government) and in view of the tenor of this debate, can he now not help the House by saying that the order will be withdrawn for a period of six months or so?
Lord Belstead: My Lords, I entirely understand the point which the noble Lord, Lord Cledwyn, is putting to me, but I am myself looking back at the Hansard of the House of Commons of 14th December, in column 106. There my right honourable friend the Secretary of State made the point (I paraphrase what my right honourable friend said) that, of course, he has the executive responsibility, and he felt that once he had entered into a consultative process he had a responsibility, both to his office and to those with whom he was consulting, to reach a decision. In fairness to my right honourable friend as well as to the House, that consultative process, although deprecated as being too short by your Lordships, started five months ago. Therefore, I regret that I am not in a position—considering that five months have passed since the consultative document was published by my right honourable friend—to say that it will be possible to withdraw this order today.
Lord Cledwyn of Penrhos: My Lords, the noble Lord is patient, but I know he would not wish to mislead the House. Consultations have not taken place for five months. Five months have passed since the publication of the consultation document. The consultation finished well before then.
Lord Belstead: My Lords, I would not dissent from what the noble Lord has said. It is true that the consultation period ended at the end of September. None the less, that is not, in fact, the end of the consultation period because I have just given an assurance that in making the appointments, for instance, to the new authority if this order were to be approved so far as the local authorities are concerned, my right honourable friend will consult with local authorities as to the specific names to be appointed.
The noble Baroness, Lady White, asked me about the representation on this particular point and also about the Severn-Trent representation. She asked me about what she called, "the English dimension" which was a phrase which has been used before in the debates on this matter and about how this would work and about the Severn-Trent authority. My understanding is that if there is agreement among the local authority organisations, including those representing the English authorities, on four names the Secretary of State will accept those names; but, if not, my right honourable friend will select four names from lists submitted by the local authorities. One of the members on the authority will be appointed also as a member of the Severn-Trent Water Authority. It is a statutory requirement and did not need to be included in the order.
Baroness White: My Lords, could we be further enlightened? Is it not so that that is reciprocal; so
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that a member of the Severn-Trent authority is a member of the Welsh Water Authority?
Lord Belstead: My Lords, that is my understanding. I do not think it alters what I have said.
Baroness White: My Lords, it does. You can appoint somebody to be a member of the Severn-Trent from the Welsh Water Authority; but do you not then have to make a place for somebody from the Severn-Trent on the Welsh authority—which takes up one of the places?
Lord Belstead: My Lords, you do have to make a place and the place is within the total of 13 on the new authority.
Baroness White: My Lords, under what category does that person, the Severn-Trent man, come on to the authority?
Lord Belstead: My Lords, I think I covered that in the words that I delivered in reply to the noble Baroness's question. It is a statutory requirement and did not need to be included in the order.
Baroness White: My Lords, does that mean that there will then be 14 members?
Lord Belstead: My Lords, that is not my understanding. However, if I have got that wrong I will write to the noble Baroness.
Baroness White: My Lords—
Lord Belstead: My Lords, I am sorry but I think that I have given way enough, if the noble Baroness does not think me discourteous. The question of consultation, I realise, is a matter which has troubled the House very much on this order—and I have tried, perhaps not adequately, to deal with it. But there is also the question which has been raised (and I raised it in my opening remarks) about, because of the system at the moment, the comparative remoteness of local authority representatives.
I would not want to give a wrong impression of what it was the Government were attempting to say in this matter. The view of the Government on this is that at present any local committees set up by the authority include members of the authority which might or might not include local authority members. The new set-up under the order will ensure that all county and district councils will have a representative on the proposed local consumer advisory committees; so that local experience and knowledge would be brought to bear, we think, in the right place.
Perhaps I may say to the noble Baroness, Lady White, about the English dimension that the noble Baroness referred to the present set-up of the Welsh Water Authority as being in a way a pseudo-democracy. I think it is fair to say that the system has nothing to do with personalities or the way in which functions are discharged by local authority representatives. But the system of the present Welsh Water Authority makes it almost impossible for the local authority representatives, with the best will in the world, to represent the wishes and needs of consumers.

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I repeat the tribute which I paid to local authority members who contributed to the setting up of the Welsh Water Authority that we believe the true role for the councillor is to provide the vital link between the new authority and the people living at the local level. That is why my right honourable friend has confirmed that each county and district council within the Welsh Water Authority area will, I repeat, be represented on the proposed local consumer advisory committees. It is in that way, we believe, that local interests can be safeguarded and where local knowledge and experience can be effectively applied. In considering, therefore, the effect on local authorities of this order (if Parliament approves it), the most important point is that every district and county will be represented on the advisory committees.
My right honourable friend wrote to Mr. Alec Jones, MP, on 11th December about the guidelines for the functioning of these consumer advisory committees. My noble friend Lord Nugent of Guildford said that consumer committees have been bodies which have not always had the easiest passage or the most satisfactory results. I think it is clear from the communication sent by my right honourable friend, and the new committees arc envisaged as having proper secretarial support and technical and professional advice supplied by the new authority and that there would be clear advice on the arrangements for access to the water authority by these consumer committees and for liaison between their chairmen and the central authority.
Finally, my Lords, I come to the point put forward by all those speakers deeply concerned with water interests but perhaps not, at first hand, with Welsh interests: namely, is this not precipitate; will it not, as my noble friend Lord Ridley said, really pre-empt a decision of the Secretary of State for the Environment? While my right honourable friends the Secretaries of State for Wales and for the Environment have both been anxious to proceed with proposals to provide more effective management for water authorities, the former has been able to proceed more quickly by virtue of the feature which distinguishes the constitution of the Welsh Water Authority from those of regional water authorities—in other words, my right honourable friend the Secretary of State for Wales can proceed by order and does not need primary legislation. My right honourable friend, having been reinforced in his views, by the recommendation of the Monopolies and Mergers Commission in respect of the Severn/Trent Water Authority, concluded that he should seek to put his proposals into effect to coincide with the retirement of the current chairman next year; and he did this with the agreement of his Government colleagues.
My right honourable friend the Secretary of State for the Environment will shortly be issuing a consultation document on the membership of the regional water authorities. I give two assurances to your Lordships. The first is one that I have already given; which is that I will draw to his attention what has been said today and will do so urgently; and, secondly, I can give the assurance that the proposals of my right honourable friend the Secretary of State for the Environment will not be prejudiced by the outcome of today's debate. I realise that, in replying to this short debate, I shall have not have given satisfaction
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to many of your Lordships as regards the questions that you have asked. But I believe that my right honourable friend the Secretary of State for Wales has taken the interests of the local authorities carefully into account. He gave opportunities for representations and responded to them. I ask your Lordships to approve the order.
Lord Cledwyn of Penrhos: My Lords, before the noble Lord sits down, can he tell the House what length of consultation period the Secretary of State for the Environment has, on the basis of his consultation paper?
Lord Belstead: My Lords, I am afraid that I am not in a position to answer that question because of course the paper has not been published.
On Question, Motion agreed to.

Scottish Special Housing Association (Vesting of City of Glasgow District Council Land) (Scotland) Order 1981
2 p.m.
Lord Lyell Lord Lyell rose to move, That the order laid before the House on 25th November be approved.
The noble Lord said: My Lords, I beg to move the Motion which stands in my name on the Order Paper today. I seek your Lordships' approval for this order. It transfers ownership of the land specified from the Glasgow District Council to the Scottish Special Housing Association. This is being done to give the tenants of the 9,000 houses built on the land the right to buy their homes—the same right that is enjoyed by all other tenants of Glasgow District Council and the Scottish Special Housing Association who qualify for the right to buy under the terms of the Tenants' Rights Act 1980.
This order is made under Section 1A of the Tenants' Rights, Etc. (Scotland) Act, a section which was added to that Act by the Local Government Act 1981, when it was learned that certain houses had been built by the SSHA on land which it did not own but instead leased from Glasgow and Dundee District Councils. As the SSHA as landlord does not own the land, it cannot sell the houses, and consequently these tenants cannot exercise their right to purchase under the 1980 Act. This produces the anomalous situation whereby one public sector housing authority is leasing land from another public sector housing authority and the tenants of the houses on the leased land do not have the right to buy their homes, even though all the other tenants of both authorities would be able to do so. Therefore an amendment was made to the 1980 Act allowing the Secretary of State, if necessary, to transfer ownership of land to allow tenants to exercise their right to buy. It is important to understand that this power is only to be exercised by the Secretary of State to give the tenants the right to buy and both the parties involved must be public sector housing authorities whose tenants can qualify to purchase their houses under the Act.
My right honourable friend the Secretary of State has been at great pains to try and resolve this matter

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without recourse to making an order and indeed the legislation requires him to assure himself that an order is absolutely necessary. To this end both Glasgow and Dundee District Councils were informed in August of this year of our wish to see the tenants concerned given the right to purchase, and they were told that, if necessary, an order transferring ownership would be made. Happily, after consideration Dundee District Council consented to sell their land to the association, but Glasgow refused; and it should be noted that, in refusing, the district council cited no special detailed considerations about the land in question, but simply stated in correspondence with the Scottish Office and the Government that they were opposed to the right to buy and the sale of public housing to sitting tenants at a discount. The district council will, of course, be fully compensated by the association for the land. The exact amount has yet to be determined by the district valuer. This will be a figure which he will have to apply in view of his own special knowledge.
The sale of council houses to sitting tenants has been one of the most important policies of this Government; and indeed we lost no time when taking office in May 1979 in allowing local authorities to sell, if they wished. The 1980 Act gave the right to buy to tenants for the first time and it seems to us quite unacceptable that certain tenants should be denied this right simply because their houses are situated on leased land. No one, even those who oppose our policy, can suggest it is right that these particular tenants should be discriminated against and therefore I seek your Lordships' approval to this order this afternoon.
Moved, That the order laid before the House on 25th November be approved.—(Lord Lyell.)
2.5 p.m.
Lord Ross of Marnock: My Lords, the standards of Celtic revolt were very nearly raised on the last issue that came before us. I feel very much like raising the standard of Scottish revolt on this one. It is only my very considerable respect for the traditions of this House and the superiority of another House, which has already passed this order, that makes me hesitate.
The noble Lord said that there was here at stake simply a matter of a tenant, who was in a house where the owner of the house did not own the land, being frustrated in his right to purchase his house, that these tenants should not be put in this position and that the land which belongs to the other public sector owners should be compulsorily taken away from them. He said that there was no option but for the Secretary of State to do this.
I too have been reading the statute, and the statute is something that they discovered belatedly in the Scottish Office. They have been slipping up of late. It was not in the Tenants' Rights Act and then somebody spotted the fact. Then a year later they put it into the Local Government (Miscellaneous Provisions) (Scotland) Act. Section 35 says this:
"The Secretary of State may by order"—
not
"shall by order".
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If he makes an order then it shall only be made where—and certain things follow—the circumstances that have been narrated here, the separation of the ownership of the house and the ownership of the land, are concerned. I am prepared to argue—and I am no lawyer—that this is not mandatory on the Secretary of State; but he has decided to do it and once again set aside the ideas of the local authority concerned who own the land and the rights of the community which they are justifiably putting forward. Once again we see the blatent obsession of so-called tenants' rights.
There is not in Glasgow a single tenant of a private occupied house who has any right to purchase. The number is limited, and those are in local authority houses in Glasgow and elsewhere in Scotland. The number of public sector houses in Scotland is a great deal higher than those who are racing to get hold of them. There are 185,000 public sector houses in Glasgow—a fair number—and the number who have sought to purchase them since 1980 is, I think, 3,400. That is a very small percentage indeed, and we were given the impression that everyone was racing to buy their house.
It was said: "Just pass this Act; forget that the Government have no mandate in Scotland". On the latest opinion polls they never were less popular: they have in the elected House only half the number of Conservatives as there are Labour men. So, I suggest that I share the anger of the district of the City of Glasgow in respect of this blatant interference by the Government in what they consider to be their civic right, carried out over a large number of years, in providing houses for one of the worst-housed cities in the whole of Europe. The policy of the Government is socially divisive and is destructive of the long-term planning that has gone on in respect of it. But I leave aside that point of principle, which has been decided, and come down to the particular point about these houses.
The ground for most of these houses was leased by the City of Glasgow to the SSHA. Why did they lease this land? The usual way of land holding in Scotland is on feudal tenure. You grant people a feu. You put into the feu the conditions. There used to be a feu duty, but I am glad to say that when I was Secretary of State we managed to wipe that out; and so that part of it has gone. The system gave the land superior a continuing interest in the land and a right in respect of that land. Leasing was more in evidence in Scotland than many people thought. Many people thought people did not lease land in Scotland.
I remember that some time around 1950 I was a member of the Long Leases Committee under Lord Guthrie. We discovered a considerable number of leases in Scotland, and long leases at that, instead of feus. When we tracked it down originally there was a certain element of doubt as to the eligibility of people who held the land, to own it. With dissolution and the changes in the Church in Scotland at the Reformation, certain people jumped in very quickly and took possession of land to which they had no real title. Rather than feu the land, which would have meant a certain amount of recording, they leased the land. We found one case, I believe somewhere in Ayrshire, where the land had been leased by the Eglinton Estates and

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the Earl thereof for 9,999 years: there is an element of perpetuity in that.
Generally speaking, one of the reasons for leasing—and it was mainly in England and there is nobody more knowledgeable about that than your Lordships' House—was that the only way to break an entail which barred you from selling the land was to lease the land. So you got long leases in England; they were more popular in Wales; and there were very few in Scotland. But we did find them in Scotland.
We sought to deal with the problem by a formula which allowed people to translate their long lease. There were some weavers in Lanarkshire who had built their own cottages but did not own the land. The leases were falling in—and when a lease falls in and is not renewed the land and all that is on it goes to the owner of the land. We did something about that.
Why, then, did Glasgow lease land? I think that one of the members of that Guthrie Committee was a Mr. Pinkerton, who was a very knowledgeable public servant employed by the City of Glasgow. I remember asking that question and he said, "Well, Glasgow preferred to lease land because of their experience", and their experience was that, so often, they sold land to somebody and then, 20 or 30 years later, they had to try to buy it back. I was speaking to my noble friend Lord Galpern about this yesterday, and he gave me examples of occasions when they had to do that, and it cost them hundreds of thousands of pounds to buy back a small piece of land which they had let slip for little or nothing. So as a matter of principle, Glasgow leased land, rather than sold it outright, or even feued it. There is a lot of history in this order, and a long-term plan by Glasgow is completely set aside by this phoney call of tenants' rights, when so many other tenants do not have rights.
Let us have a look at the pieces of land which the noble Lord thinks it is right should be compulsorily taken from Glasgow—admittedly, with compensation paid. I think that for the whole 14 pieces of land that are designated with a title, the SSHA pay to the City of Glasgow between £23,000 and £24,000 a year, and the suggestion is that the total compensation will be £1 million.
Let us look at the first piece of land at Anderston Cross, Glasgow. I know that the noble Baroness, Lady Elliot, knows Anderston Cross very well. She remembers what Anderston Cross was. Originally, it was not part of Glasgow at all. Then it was built up and, latterly, Glasgow took it over. But it was the hub of the shipping of Glasgow and we can appreciate what happened during the industrial revolution. Over the years, the Corporation of Glasgow had a tremendous task of clearing the whole area. Anyone who remembers the historic Anderston Cross and looked at it today, would not recognise it. Whoever would have thought that one of the best hotels in Glasgow would be in that area, and whoever would have thought that on this site in Anderston there would be a great expanse of office building?
I wonder whether the noble Lord knows where the headquarters of the Scottish Special Housing Association is. It is in Anderston, at the Anderston development. So the noble Lord will appreciate the value of the ground in that area. They will be delighted to be able to get this piece of ground where the houses are
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at knock-down prices in relation to the development value later. What Glasgow is concerned about, or should be concerned about, and what I am concerned about is that the foresight of the city fathers of Glasgow should be frustrated. Here is an area that has changed in relation to its value. The Holiday Inn is, at the moment, building a big new hotel right beside the Anderston centre, where the SSHA have their head-quarters and are probably, losing their valuable car park. This is an area which Glasgow deliberately leased, so that in future they could control the development and not have to pay back through the nose for anything that they wanted.
Houses do not last for ever, and it may well be that these houses will be finished and will have to come down by the end of this century. It could be earlier than that. Here we are getting the very fragmentation of ownership that created the difficulties when we tried to clear the slums from Anderston. It took us years and years of work to get the ownership into one hand, and to be able to deal with all the problems of Anderston, and here we are repeating it by this kind of action. So the community interest is being set aside in the phoney interest which the Minister of State and the Government speak about.
I could speak about Balornock in Glasgow, and about the lovely Swedish houses that were put up by the SSHA. Even though made of wood, they were probably the warmest houses in Glasgow in the past bad weeks. We have to clear everything out of the path that will prevent them from being sold and passing out of the public sector at knock-down prices.
I turn to the next one: Broomhill, Cadder Road, Carron Street, Collina Street, Fortrose Street. These are the most desirable houses in Glasgow. There is no doubt that there will be a bigger rush for purchases there than for purchases in many of the other Glasgow schemes. The rule of the SSHA is that they must take their tenants from the Glasgow housing list. Many people now in local authority houses are longing for the day when they can move into these very houses which are to be taken out of the public housing stock. They are going to be sold.
I turn now to the land at Hutcheston Town, Gorbals. There is history for anybody! The first Labour Member of Parliament came from there in the 1906 election. I am sorry that the noble Lord, Lord Shinwell, is not here because he was very much involved. The Tory candidate was Bonar Law. Lord Shinwell was thrown out of a cinema in the area for interrupting Bonar Law. One can hardly imagine anybody nowadays daring to throw Lord Shinwell out of anywhere! This is where I started my teaching career. The school has gone. The church where Buchan's father was Minister is there. The Gorbals Terriers in Buchan's novels came from that area. All that has gone. In its place we have got the SSHA. It will hold valuable houses, valuable land. It has become more valuable as the city has developed. That land is now going to pass out of public ownership not for the sake of the tenants but for the sake of future development. That is what will happen when these houses are taken down in the future, as happened to the old tenements in this particular area. When you look at Hutcheston Town, Gorbals, the words, "The county of the barony and regality of Glasgow",

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take you back into history, to the time when this area was a barony and a borough of regality. At one time Gorbals itself was a countryside village. It then became part of Glasgow.
I should like to ask the Minister of State how long the lands we are speaking about in Gorbals and the other areas I have mentioned have been in the possession of the City of Glasgow. In some cases the land has been in the possession of Glasgow for centuries. Now it is being compulsorily taken and given to the SSHA. It has not even been decided what they are going to pay for it yet, but I will come to that later.
I turn next to Langlands Road—17½ acres—and North Kelvin. There is no mention of a lease in relation to North Kelvin, which is a very desirable area. How did Glasgow come to own this land in North Kelvin? I will pass over Rosshall and Toryglen! These are very desirable houses. And the land is very desirable from the point of view of eventual development by the local authority.
Then we come to the land at Wyndford and the houses there. If I mentioned Maryhill Barracks, anybody who was in the HLI, as I was, would know exactly what part of Glasgow I was talking about. At Wyndford there are certain exceptions: six acres of ground delineated in green on Plan F. I will bet that one of them is the old guardhouse of the barracks, where you could only pass if you kept a bundle of papers under your arm and walked very smartly. That is just off Maryhill Road and stretches right back to the Kelvin. I opened that housing scheme. I think it was the 100,000th house that the SSHA built. It was on the site of the old garage and just near the mess where we took Hess in as a prisoner during the war and where Lance Corporal Ross had to march around at night to protect that valuable catch of the soldiery.
That is going too—a very fine scheme and very important land. Why was it necessary to do this and to destroy what was to my mind a very important piece of forward planning by the city fathers of Glasgow ('74, 1952, 1947—all these were done then) for this particular purpose? There are about 9,000 houses on all these plots of land, I understand, and so far the number of approaches to the SSHA in respect of prospective purchasers is about 500. That does not mean to say that they will all come to the actual point of sale. Indeed, with the amount of unemployment there is in Glasgow, it is very doubtful that many of the people who have been thinking about purchasing their house will be able to go through with it, bearing in mind the interest rates and everything else which is the result of this Government's activities on the economic front.
How is the compensation—and this is an important point—to be done? One threads one's way through these Acts. There is the Town and County Planning Act 1972, and then one has to look at the Land Compensation (Scotland) Act 1963. How is it all going to be done? What if there is disagreement between the local authority and the SSHA? I believe there is a procedure by which someone is brought in whose decision is final: am I correct in thinking that, or is there a right of appeal? This is one of the worst pieces of consequential legislation from a vile Act.
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The Act itself was bad and this is even worse, because it shows exactly the effect this legislation has. When a local authority decides to plan properly not just its housing but also its land it now has to be faced, probably in 20, 30 or 40 years, with exactly the same problem that it was facing in Anderston Cross and the East End, of buying back land that it sold. This time it is not land that it has sold but land that it has been compelled to sell, and by a Government with no mandate in Scotland to do so. I started by saying that the standard of Celtic revolt had been nearly raised in respect of the last order, and I can say that, on this one I should very much have liked to raise it today.
2.29 p.m.
Lord Lyell: My Lords, I am sure that your Lordships will have been very interested to hear the points raised by the noble Lord, Lord Ross of Marnock. With his tremendous experience of Scotland and in view of his previous incarnation in charge of all things Scottish, certainly your Lordships will not have been surprised to hear the noble Lord rattling claymores or making threats of raising the Celtic standard of revolt. He made a very forceful and powerful speech, and it is only to be expected of the noble Lord.
If I could try to reply to one or two of the points he raised, first of all he mentioned that we were concerned about 9,000 houses out of 185,000 houses in Glasgow. I think the noble Lord mentioned the figure of 3,400 houses which either had been bought or tenants had applied to buy, that would be out of the entire stock of houses in Glasgow. The latest figures we have in Scotland are that 46,000 tenants have either applied to buy their houses or have bought them. As to the tenor of the noble Lord's remarks, if he wished to extend them outside the boundaries of the district—but perhaps we had better not go into the historical application of the burghs in the Barony and Regality of Glasgow. However, nobody could think from what the noble Lord has said that tenants would be wanting to buy their houses; yet we have seen that 46,000 have applied to buy them or have bought them. That is in just over two years since this Government gave tenants the right to buy.
Lord Ross of Marnock: My Lords, would the noble Lord make it clear that that is 46,000 out of over 1 million.
Lord Lyell: Fair enough, my Lords; but I think 3,400 out of 185,000 is certainly a lower proportion than 46,000 out of one million. The noble Lord would know the precise figure, no doubt, up to the time when the noble Lord gave up the reins of his great office.
The noble Lord mentioned in the course of his opening volleys the ground of most of these houses. I presume he means the 9,000 we are discussing today; I hope he means all these houses. The information I have is that there are no exceptions in the 9,000 houses, and that all of them are the subject of the land which is being sold in the parcels under the order. The noble Lord went on to suggest that the total compensation which would have to be paid by the Scottish Special Housing Association to the City of Glasgow was in the region of £1 million. I would

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not confirm or deny, nor would I say anything further about any prospective compensation. This is entirely a figure to be fixed by the district valuer as part of his duties.
The noble Lord mentioned the headquarters of the Scottish Special Housing Association being in Anderston. I hope I am the right side of St. George's Chapel. I understood the headquarters of the Scottish Special Housing Association were in Palmerston Place, Edinburgh. The precise definition of what buildings did or did not lie in Anderston we can leave until this land is actually sold or transferred.
The noble Lord mentioned the problem of the various individual areas of land; indeed he went through the individual areas in considerable detail. I am sure he would be aware, and indeed your Lordships would be interested to know, that my right honourable friend the Secretary of State consulted the district council about the possibility of making this order. From all the correspondence we have, and indeed in discussions with my right honourable friend, the council raised no points whatsoever about any of the individual areas of land. I think this would suggest that they did not consider any of the particular matters about any individual areas relevant, certainly not to the order we have before us today.
The noble Lord made considerable play of the prospective sales at what he called "knock-down prices". I am sure that he will be aware that subparagraph (4) of Section 1A under which this order is made states:
"Compensation shall be assessed by reference to values current on the date the order under this section comes into force".
Of course the noble Lord, and I am sure your Lordships, will agree that the district valuer will be the arbiter between the two public sector housing authorities. That is how the Government believe the matter should be settled.
The noble Lord gave us a fascinating insight into the areas of Glasgow mentioned in the order. I was fascinated by his description of the old Guard House at the Maryhill Barracks. I regret that I never served there myself. I am reasonably familiar with the large cracks in the Maryhill Road. I am very sad that the noble Lord, Lord Shinwell, is not here possibly to add his comments to what the noble Lord had to say. Of course 1906 was a most interesting year, probably, even more interesting than the Bill which dealt with the first matter I moved this morning. Obviously the problem of dogs was as great then as it is now.
The noble Lord made, as we have come to expect, a very powerful and robust defence of his views. But I am sure he will accept that in his very opening statement he said that, first, he had respect for the traditions of your Lordships' House and, secondly, he said that he very much respected the view which had been taken by another place. It is for that reason that I beg to move the Motion standing in my name on the Order Paper.
On Question, Motion agreed to.

Hill Livestock (Compensatory Allowances) (Amendment) Regulations 1981
2.37 p.m.
Lord Sandys: My Lords, I beg to move that the Hill
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Livestock (Compensatory Allowances) (Amendment) Regulations 1981, a draft of which was laid before your Lordships' House on 1st December 1981, be approved. These regulations, which apply throughout the United Kingdom further amend the Hill Livestock (Compensatory Allowances) Regulations 1979 and give effect to the increase in the hill cow allowance which my right honourable friend announced on 19th November.
Your Lordships will, I am sure, be aware of our long tradition of providing aid to hill livestock farmers in recognition of the special problems they have to face. Under the European Community's Less-Favoured Areas Directive we have continued this aid through annual compensatory allowances on breeding cows and breeding sheep. This is the third year running in which the Government have laid before your Lordships' House proposals for increasing the aid given to hill farmers through these allowances. That, in itself, indicates our commitment to maintaining the confidence of the hill livestock sector even when, as now, there are necessarily severe constraints on the level of public expenditure. It reflects, too, our recognition of the part which hill and upland farmers play in the livestock sector. They provide about 63 per cent. of the specialist beef cow herd, 20 per cent. of the combined beef and dairy herd and 57 per cent. of the national breeding flock. In the production of suckled calves and store lambs for fattening in the lowlands and in the provision of draft ewes to renew the breeding flock their role is fundamental.
But that, important as it is, is not the whole story. Over much of our hills and moorlands livestock rearing on an extensive, rather than an intensive, basis is the only feasible use of the land apart from forestry. The presence of hill farmers is, indeed, vital to the economic, social and environmental well being of these areas. And, as many hill areas are in our national parks, townsmen as well as countrymen have a stake in their future. This wider role of hill farmers is something which we should never forget.
The recent economic history of this sector is that following two satisfactory years in 1977–78 and 1778–79, net incomes began to decline sharply. This Government, in the autumn of 1979, therefore increased compensatory allowances by the highest amount ever. Last year there was some improvement in incomes but it was considered necessary to make further increases. This year's review has revealed a further and quite significant improvement, partly as a result of the increases in the compensatory allowances themselves. But incomes are still substantially below the level of the late 1970s in real terms. This, of course, reflects in part the difficulties being experienced by the economy as a whole.
The position on hill sheep shows the numbers of breeding ewes are still rising and although severe storms in certain areas last April caused difficulties for some hill farmers, the winter weather picture overall was good, with consequent benefit to lambing. The considerable benefits of the sheepmeat regime are now being felt in the hills by way of better store market prices and (more directly) payments of the annual sheep premium. Those hill farmers who are able to fatten some of their lambs before selling them are also being helped through the variable premium. Overall, therefore, the position of the hill sheep sector

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offers particular encouragement, and we have decided not to alter the higher and lower rates of hill sheep allowance from their present levels of £6.25 and £4.25 respectively.
The situation with hill cows is somewhat less encouraging. Numbers overall in the United Kingdom are continuing to decline, although at a lower rate, and we have decided that a further increase in the rate of compensatory allowance is called for. The regulations now before your Lordships' House, therefore, provide for the rate for hill cows to go up by £2, from £42.50 to £44.50. This increase, which will be paid from 1st January next, will be worth some £1.8 million. It will mean that hill farmers will stand to receive, with the suckler cow premium, a total of £56·87 on each cow. This represents an increase of 96 per cent. on the amount of aid per cow paid in 1979. The total level of aid on hill livestock compensatory allowances and suckler cow premium in 1982 will be some £101 million.
No one can underestimate the difficulties which the economy as a whole is presently experiencing and I know that farmers, like all those in industry, are worried about high interest rates and input costs. But the amount of assistance which is now being given to hill livestock farmers in the form of hill livestock allowances, suckler cow premium and sheep annual premium bears testimony to the Government's determination to ensure that hill and upland farming remains in good heart. This determination is, I think, well understood by the industry and there has been a general welcome for the increase given effect in these regulations. My Lords, I beg to move.
Moved, That the draft regulations laid before the House on 1st December be approved. [4th Report from the Joint Committee.]—(Lord Sandys.)
Lord Bishopston: My Lords, I am sure that we are grateful to the noble Lord, Lord Sandys, for explaining the order in the way in which he has. We welcome the help given in the order. The noble Lord said that the increase is indicative of the Government's commitment to maintain the confidence of the hill livestock sector when there are constraints on public expenditure. That may, of course, be true, but the Government should also recognise that the farming industry itself is facing Government restraints in other directions, which makes its task of increasing food production much more difficult, unless, of course, it has adequate Government support.
The help of course is welcome, but the industry thinks that it does not go far enough, for there is to be no increase in sheep allowances, nor for hill ewes or for other types of ewe or, indeed, for the categories mentioned in the 1979 regulations, to which the order makes reference. There is, of course, greater need for an increase in the hill cow allowance and for more for sheep too. There is need for more help for the farmers in the less-favoured areas, because the climate and the production difficulties there are a real problem. The importance of the hill farmer is shown by the figures given by the noble Lord. The hill and upland farming sector has 63 per cent. of the specialist beef cow herd—this, incidentally, is a slight increase above the 60 per cent. of last year—and 20 per cent. of the
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combined beef and dairy herd. The breeding flock has hill sheep representing 57 per cent. of the total. In addition, the importance of the hill and upland use by farmers is indicated by the fact that such areas are vital not only for the production of food but also socially and environmentally, too, because the alternative productive use of this land is very limited indeed.
Aid is available through the less favoured area directive—the LFA—of the EEC, and this is appreciated, but as the noble Lord may know there has for some time been some discontent by those outside the less favoured areas and who do not benefit as much or at all. It would be helpful if the Minister would say whether the Ministry is reviewing the boundaries of the LFA, which I understand when reviewed need to be endorsed by the EEC itself.
The noble Lord admits that incomes are "substantially below that of the late 1970s in real terms". The industry will hardly think that the limited increase of £2 a head for hill cows will be enough to compensate. Will the noble Lord say what help the Government will give the farmers whose livestock has been affected and indeed depleted by the recent and present snow and storms? It would be helpful to know what aid may be given and also what compensation may be expected. If this is a matter which has not yet engaged the Ministry's attention—although I am sure it has engaged its concern—I wonder whether the noble Lord's right honourable friend will consider the matter urgently.
Could we be told also what other aid is given to the livestock sector through the Community? The total aid given by the Government to the industry may sound impressive as a percentage increase since 1979—and the noble Lord gave these figures—but the question still arises as to whether it is sufficient in view of the difficulties facing the industry, and of course the higher costs and general decline. Finally, as we all know, the British farmer must be able to compete not only in the home market but also within the Community and in export markets too in order to maintain a healthy agriculture. As he knows, and the industry knows so well, the maintenance of confidence is vital to the industry. While we welcome this limited amount of help, I hope that the Minister will bear in mind the general problems facing the industry.
Baroness Elliot of Harwood: My Lords, on behalf of hill farmers, I should like to say that we are extremely grateful to the Government for this additional allowance. Of course everybody wants more. I entirely agree with the noble Lord who has just sat down that if we can have more we will take it happily. On the other hand, let us be grateful for what we have been given. It is true that, while most hill farmers have been having two or three extremely bad years, this year has been slightly better. One only hopes that it will continue. On behalf of the many hill farmers, of which I am one, we should like to say to the Government that this is helpful and useful, and we are grateful to them for having arranged this with the EEC as well as with the National Farmers' Union.
2.48 p.m.
Lord Sandys: My Lords, we have had a very useful short debate on these regulations. I am grateful both

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to my noble friend Lady Elliot of Harwood and to the noble Lord, Lord Bishopston, for the support they have given—limited support in Lord Bishopston's case—for the views expressed. A number of points were raised by the noble Lord, Lord Bishopston, and perhaps I may reply to these in a little detail. First, in regard to the effects of the present storms, it is not Government policy to compensate hill farmers for exceptional losses of livestock arising out of the effects of the severe winter weather recently and now being experienced. Such weather is one of the natural hazards of farming. Sympathetic consideration is nevertheless given to farmers who, because of the effects of exceptionally bad weather, have found it difficult to meet the rules on the replacement of breeding animals which are conditional on the payment of hill livestock compensatory allowances. I am sure the noble Lord, Lord Bishopston, and other noble Lords who are interested in this technical matter will be pleased to hear that.
In regard to the question of the LFAs to which the noble Lord referred, the position on assistance to marginal areas is that, following discussions between the NFUs and the Country Landowners Association, it is hoped to submit our proposals to the EEC Commission early in the new year. Extension of the United Kingdom's less favoured areas has to be agreed by the Commission and the Council of Ministers. However, it should be stressed that, in conducting this survey, the Government are not committing themselves to providing extra financial assistance to those areas.
The Government consider that the overall level of aid to the hills and uplands, including the increase which we are now proposing, affords valuable assistance to farmers in those areas. Certainly they are experiencing severe difficulties, as are all sectors of the economy, but I believe your Lordships recognise that in the present circumstances, with severe constraints on public expenditure, the Government's action signals their continuing commitment to the hill livestock sector.
On Question, Motion agreed to.

Marine Fish Farming (Financial Assistance) Scheme 1981
2.52 p.m.
Lord Sandys Lord Sandys to move that the scheme laid before the House on 27th November be approved.
The noble Lord said: My Lords, the Marine Fish Farming (Financial Assistance) Scheme 1981 will provide the back-up grants which are necessary before marine fish farms can qualify for aid under the 1981 FEOGA interim aid scheme for the inshore fishing industry. The FEOGA scheme was introduced in 1978 and has been renewed each year since then. It provides grants of 25 per cent. of capital costs approved by the European Commission for aquaculture projects which breed or rear fish, crustaceans or molluscs in salt or brackish water for commercial purposes.
One of the requirements of the FEOGA scheme is that member states must finance at least 5 per cent. of the investment. In some parts of the country, aid has been available in one form or another. The Depart-
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ment of Industry have on occasion been able to provide regional development grants, for example, and in Scotland, the Highland and Islands Development Board have provided funds for marine fish farmers. In other parts of the country, however, national aid has not been available and this has put fish farmers at a disadvantage compared with their competitors in other regions and in other member states. When the Fisheries Act was being considered by your Lordships last Session, we stressed that we wanted power in Section 31 to put this right. We have now done so. Any fish farmer who wished to apply for the 1981 FEOGA aid would not be disqualified on the grounds that he could not receive the necessary national back-up grant.
I should point out that the Joint Committee on Statutory Instruments asked for elucidation of three points: first, the use of the term "fish farming" rather than "marine fish farming" in paragraph 3(1)(a) of the scheme; secondly, whether the Limitation Acts apply; and, thirdly, whether the person appointed to hear representations in respect of demands for recovery of grant paid should be appointed by the Minister who approves the expenditure. The Ministry provided the information requested in a memorandum and in oral evidence to the committee, and this is set out in the committee's report.
Turning to the details of the scheme, the statutory instrument is made under Section 31 of the Fisheries Act 1981, which was brought into operation last month by the Fisheries Act 1981 (Commencement No. 2) Order 1981. The scheme's scope is limited to providing back-up grants for the FEOGA interim aid and, in consequence, grant will be paid only in respect of expenditure approved by the EEC Commission. The rate of grant will be 5 per cent. of approved expenditure, paid in addition to the 25 per cent. FEOGA grant, except where the project is also being grant aided by other United Kingdom public funds. In such cases grant under this scheme would be reduced.
If the other grant amounted to less than 5 per cent. of the approved expenditure, grant under this scheme would be paid so as to bring up this aggregate grant to 5 per cent. If the other grant amounted to 5 per cent. or more, no grant would be payable under this scheme.
Grant will generally be paid to applicants at the same time as the FEOGA aid is paid. This will help to ensure that the grant is paid properly. The scheme contains the usual provisions for revoking the approval of grant and recovering grant paid that appear in grant schemes administered by MAFF. Prosecutions, for instance for fraudulent claims, would be taken under Section 17 of the 1981 Act.
Finally, your Lordships may wish to have some details of how the scheme is operating. As I explained earlier, the scheme relates only to applicants for aid under the 1981 FEOGA interim aid scheme. This was agreed at the Council of Ministers' meeting on 29th September, and the closing date for applications to reach the agricultural departments was 2nd November. I am happy to say that, despite the very short period available for preparation of applications, a number of fish farmers managed to submit applications in time, and these were forwarded to the EEC Commission before the deadline of 1st December. My Lords, I beg to move.
Moved, That the scheme laid before the House on 27th November be approved.—(Lord Sandys.)
2.56 p.m.
Lord Bishopston: My Lords, I thank the noble Lord for the way in which he has introduced the order and the details that he has given. As he says, it is important because it provides the essential back-up of grants to enable marine fish farmers to qualify for aid under the 1981 FEOGA aid scheme for the inshore fishing industry. We welcome this help, but in view of the importance of the potential of the fish farming industry when other fishery prospects are far from satisfactory, I should like to put one or two questions to the noble Lord.
I recall that various proposals were made in a report of two or three years ago following a review of problems and possibilities affecting the fish farming industry, and one or two questions arise from that. One concerns the definition. I think that it would be useful if the noble Lord would define a little more clearly the term "marine" fish farming, as compared with inshore, freshwater and other categories. Can the noble Lord also say whether there has been any agreement that fish farming should be regarded as agriculture and so de-rated, or regarded as industry and rated? It may be that during the short period in which the details of the scheme have been passing between the two Houses I have missed information on that point, but it has been a matter of great concern to the industry over the years. Can the noble Lord also say whether some of the environmental queries of the report to which I referred have been resolved between the MAFF and the DOE?—because there are environmental considerations as well.
I turn to the Fisheries Act 1981, to which reference is made. Section I deals with fish farming, and Section 32 refers to R and D, which is very important to this industry, as indeed to others. It is in particular essential to the industry's growth. It might be helpful if a little more were said about the help available through reasearch and development. I certainly pay tribute to the R and D facilities of MAFF and other official bodies whose knowledge and experience is of great help to the fish farming industry. I am not sure how greatly the industry is aware of what help is available nationally and from the EEC, and a word or two on that aspect might be informative for the industry.
As we all know, fish farming has grown in recent years, and in the light of the current fishing industry difficulties it can produce more, partly to fill the gap, though those who know anything about the industry realise that one can be too optimistic in this direction. Britain does not have the natural resources of some other countries, such as the warm water and good climate of Japan and other places, but I believe that given reasonable Government help and encouragement, we can add to our food resources in this way.
In this, of course, the Government, the local authorities, the water boards and in Scotland, I think, as the noble Lord has said, the Highlands and Islands Development Board, have a part to play. I certainly welcome the order and the provision it makes, and it would be
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helpful if the noble Lord could comment on some of the questions I have posed to him this afternoon.
3 p.m.
Lord Vernon: My Lords, I find it difficult to discuss the question of fish farming without first referring to the late Lady Emmet of Amberley, who did so much to bring the subject of fish farming to the notice of your Lordships and, indeed, to the notice of successive Governments.
From this Bench, I should certainly like to welcome this order in so far as it gives grant aid to individual fish farmers and so enables them to take advantage of the FEOGA grant. The only doubt I have relates to the scale of the grant, because, when I used to have something to do with this subject in one of your Lordships' EEC sub-committees some years ago, the scale of the FEOGA grant was 25 per cent. and the minimum national grant had to be 40 per cent. of the FEOGA grant. If that is so, the scale of grant has actually declined, and I wonder whether the noble Lord, Lord Sandys, would say something about that when he speaks again.
I do not think anybody who reads the last Annual Report of the White Fish Authority—that for 1980–81—can fail to be impressed by the remarkable progress which is being made in the development of marine fish farming, and in particular in the prospects which are available for commercial farming of, particularly, turbot, Dover sole and scallops. I think that possibly we may he able to look forward to the day when these fish, or certainly Dover sole and turbot, will cease to be something for the luxury market and will in fact be available for mass consumption, in the same way as has happened with chicken since the war.
Finally, I would say this: I think that successive Governments in this country have been somewhat slow to recognise the potential which, by reason of our very long coastline, we have in this country for the exploitation of this particular field. In this respect, I think we compare unfavourably with the Japanese, who have done far more than we have. Admittedly, their climate is slightly different and the situation is not entirely comparable, but I feel that we can do much more than we have done in the past, and I hope very much that the Government will think so, too.
3.4 p.m.
Lord Sandys: My Lords, we have had a useful debate, and I should like to emphasise that the purpose of this scheme is to ensure that marine fish farmers should be able to qualify for FEOGA assistance under the interim aid scheme. We have broken some new ground in introducing this scheme, and I would certainly agree with the noble Lord, Lord Vernon, that the House and indeed the industry as a whole owe a debt of gratitude to the late Lady Emmet of Amberley for the interest she took and for the way she inspired your Lordships in this particular direction over a period of years.
The noble Lord, Lord Bishopston, raised a number of matters to which I wish to refer. First of all, he asked me in regard to the meaning of the words "marine fish farming". This appears in the order itself, on page 2, at the top, where it says:

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"'marine fish farming project' means a project for fish farming in salt or brackish water".
There is no other definition which appears in the 1981 Fisheries Act. The order specifically refers to this definition. I hope that this satisfies the noble Lord. He referred to the question of what action is being taken on the de-rating of fish farms. The Government implemented the de-rating of fish farms in the Local Government Planning and Land Act 1980. Naturally he will be aware of that. I hope that that is a sufficient answer and perhaps will record that as a fact of importance.
The question of what aid is available to fish farmers covers a wide field because there are a considerable number of bodies which can give and have given grants for fish farming in the past: the Ministry itself, the Department of Agriculture and Fisheries in Scotland and the Welsh Office provide grants under the Agriculture and Horticultural Development Scheme and the Agricultural and Horticultural Co-operation Scheme. Grants may also be made by the Department of Industry (and I referred to this) in the form of regional development grants; by the Scottish Development Agency; by the Highlands and Islands Development Board; by the Welsh Development Agency; by the Development Board for Rural Wales and by the Council for Small Industries in Rural Areas (in England). Aid is provided under the European Community Marketing and Processing Grant Aid Scheme, for which there is a United Kingdom back up given under the Agricultural Products Processing and Marketing (Improvement Grant) Regulations 1977. Finally, in Northern Ireland, there is the Assistance to Fish Farming Scheme (Northern Ireland) 1973 which is a parallel measure to the Marine Fish Farming (Financial Assistance) Scheme which we are concerned with today.
The noble Lord further asked what research and development aid is available for fish farmers. I think the situation is that the national programme of fishery research includes fish cultivation. The 1980–81 expenditure was £2·4 million at full economic cost. The details of the expenditure are: for marine fish, £500,000; for salmon, trout and freshwater fish, £670,000; for shellfish, £420,000; for research into fish diseases and parasites, £780,000. I know the noble Lord is interested in the Ministry laboratories at Lowestoft. I am sure he will be interested to know that latter figure. I hope that covers the points raised by the noble Lord, Lord Bishopston.
The noble Lord, Lord Vernon, referred to the question of the scale of the national grant. The only comment I can make is that this is a new scheme; we are breaking new ground. The 5 per cent. mentioned in my speech is the minimum requirement of the EEC regulation No. 1852/78/EEC.
Lord John-Mackie: My Lords, on the point made by the noble Lord, Lord Bishopston, as to what was covered by marine sea farming, would that cover pumping sea water into a reservoir for the job?
Lord Sandys: My Lords, I should have to investigate that. As the noble Lord will be aware, the order identifies marine fish farms as in sea water and brackish
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water. We shall have to examine the point made by the noble Lord.
On Question, Motion agreed to.

Education (Assisted Places) (Amendment) Regulations 1981
3.10 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton)The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton) rose to move that the draft regulations laid before the House on 2nd December be approved.
The noble Lord said: My Lords, the Government put the assisted places scheme on the statute book in order to give able children from less well-off families the opportunity of attending good independent schools, to widen their educational opportunities by helping with the cost of tuition fees where parents could not afford the full cost. The scheme has got off to a good start. This September 4,185 children took up assisted places for the first time. One-third of them received completely free places and two-thirds of the pupils come from families with incomes below the national average.
To start with the main amendments proposed in the regulations, the main provision in these draft amendments is the revaluation of the income scale on which parental contributions are assessed in order to take account of inflation. Regulation 10 increases the income disregarded in respect of dependent relatives to £800. That is a proportionately larger increase than inflation over the last year and reflects our concern that the assessment of parents' income should allow for the number of dependents in each family. Because of that increase, the revised threshold levels for the income assessment scale which we propose in Regulation 12 are correspondingly lower than if they has been revalued directly in line with inflation. The shape of the assessment scale however remains the same, with a very steep gradient once income levels rise above the national average; and this accords with our continuing aim of directing the bulk of the assistance to less well-off families. Taken together, the increase in the dependents allowance and revaluation of the incomes scale corresponds to the increase in average incomes since previous regulations were made. Parents' contributions to tuition fees will, therefore, remain the same in real terms.
I should now draw the attention of noble Lords to Regulation 4. This corrects a technical error in the original regulations. The Government have always intended that parents' incomes should be assessed gross without deductions for superannuation contributions, mortgage interest and other tax allowances. The original regulations were drawn up accordingly. It has, however, recently become apparent that the regulations' reference to tax law relating to super-annuation contributions were incomplete. Regulation 4 remedies this from 1st January. For the school term just ending—and this is why I thought it worth mentioning this small adjustment—parents' income was assessed on the assumption that the regulations had achieved what they had set out to achieve.
Consequently, some parents will be entitled to a small refund, so that their contributions for this

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period are in line with what the regulations actually said. The department will be arranging for those refunds to be paid through the individual schools as soon as possible.
Regulation 7 reduces the period of ordinary residence normally required from three years to two. This is because the school year starts normally about September, but the calendar year, by which residence is calculated starts in January. The effect of the present residence requirements is therefore that they have to be in residence at the right address for 3¾ years rather than three years, and the change by reducing the calendar years to two reduces the qualification period to 2¾ years. I hope that I have made that clear. The remaining regulations are the kind of tidying up amendments which one would expect after running in a new scheme for its first year. I will not mention them in detail; but I will be happy to reply to any noble Lord who has a query upon them.
It remains to point out something that is not in the regulations and which some noble Lords may have expected to be there. I refer to any curtailment of the power of local authorities to veto a transfer under the scheme. Noble Lords will recall that my right honourable friend the previous Secretary of State originally included that, with the power of veto in response to strong representations by local authorities that sixth forms in some maintained schools might be rendered unviable if there were unrestricted transfers to assisted sixth form places.
Events have shown, however, that these fears were unjustified. This was partly because we restricted the number of assisted sixth form places in any one school to five at the most, and partly because demand for the places was not quite as great as many authorities had anticipated. Even so, authorities collectively vetoed about 100 potential sixth form transfers. This attitude became well known and may well have influenced some parents in their decision on whether or not they should take up the offer for their children. The implacable hostility of a local education authority to a scheme such as this, whether its motives are educational or ideological, is something that parents cannot be expected entirely to ignore. These authorities may well therefore have frightened the parents of some children out of joining the scheme.
To close the door of opportunity in the face of children of talent is something which my right honourable friend and I most strongly deplore. The Secretary of State has therefore considered this misuse of the veto very carefully and has decided that it would for the time being be wrong to penalise those authorities which use the veto properly to protect their smaller sixth forms as a response to those who use it for purposes for which it was never intended. He has therefore decided to let the present arrangement run for another year, but if the abuse continues I doubt very much whether he will let it remain.
Those are the principal points in the amendment regulations. If noble Lords have other matters they wish me to elucidate I will endeavour to do so. I beg to move.
Moved, That the draft regulations laid before the House on 2nd December be approved.—(Lord Elton.)
Baroness David: My Lords, I must thank the Minister for his explanation of the new draft regulations. As the noble Lord will know, 1 have no enthusiasm for the subject of assisted places and these new regulations, it seems to me, will bolster up what I regard as a very unwise scheme, and particularly unwise and unimaginative at a time when the state education provision is being damaged by extensive cuts on local authorities.
On 13th January 1981, Dr. Boyson said that the cash limit on Government money for the ASP scheme would be £3 million. This would involve 5,500 children, of whom 950 would be at sixth form level. On 1st December last in answer to an Oral Question, Dr. Boyson said that 4,185 places had been taken up: that is 1,315 less than expected. Of those 4,185 places 525 were for sixth formers: 425 fewer than had been expected.
The Minister has just mentioned that no action is to be taken on the veto. I am very glad about that because I think that any further action against local authorities would have been highly unwise at this point. The way the Minister spoke really assumed that it was not an opportunity for people to do A-level and other higher level work in the state provision, which I think in a way is rather insulting. The cost of those 4,185 places one would expect to be less than the £3 million budgeted for, as explained by Dr. Boyson in January. Not so, my Lords; it is £3·2 million, which is 6 per cent. over the cash limit.
When the Government are being so tough with local authorities about their overspending, I think we should have some explanation from the Minister as to why this has been allowed to happen. Are the estimates for 1982–3 of £7·7 million, and for 1983–4 of £12·3 million, to be allowed to rise in the same way? Is there to be any limit imposed or is it only the state sector which is to be penalised for over-spending?
On 1st December in a Written Answer Dr. Boyson said that on average parents contribute £285 towards fees and the Department £1,038; plus £60 per pupil towards the cost of incidental expenses. That is, the department is paying about 80 per cent. of the cost. Does it need to be kept at that level? Apparently the Government think it does, because the whole point of the new regulations is to make sure that parents pay less.
The memorandum for the Joint Committee on Statutory Instruments says in its explanation of draft Regulation 12:
"This relaxation of the means test (taken with the increase in the income disregard where parents have a dependent relative) … is requisite to maintain the real value to parents of the fee remission arrangements."
I repeat—
"to maintain the real value to parents of the fee remission arrangements".
To achieve this the draft regulations raise the level of income at or below which fees are to be remitted from £4,766 to £5,266. This raises the level by 10 per cent. in line with inflation. The increase in the income disregard, where parents have a dependent relative, has gone up by £200 from £600 to £800—a 25 per cent. increase. The Minister skated over this by saying that there is a "proportionately larger increase than inflation". I call 25 per cent, quite a large increase over 10 per cent.

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I should like to remind your Lordships that student grants are to go up by only 4 per cent.—well below the rate of inflation. In April, the Government announced that they were going to increase pensions by 1 per cent. less than the estimated inflation rate of 10 per cent. The unemployed and the sick were also affected by this 1 per cent. cut, but in their case it came on top of a 4 per cent. cut, compared with inflation, last November. The real value of short-term benefits will therefore fall by 5 per cent.—more for those with children. Moreover, in his latest statement, the Chancellor announced that there will be no increase of the lower exemption limit, at which workers start to pay national insurance, in line with inflation.
According to the Social Service Statistics 1981, the unemployed are now living at a lower level than at any time since 1971. By last month, unemployment benefit for a single person was worth £21.08 a week at April 1981 prices, which is a drop of 93p per week compared with the November 1979 level. How can the Government justify treating those who are making use of the assisted places scheme considerably better than the unemployed, the sick and the pensioner?
I also want to ask the Minister to whom the private schools are accountable? They check the parents' declaration of income—not the department. Is there any outside observation at all on this? Whether the Government are being so generous to the parents of these pupils because they are fearful that fewer places will be taken up and their scheme will appear unsuccessful, I do not know. But there seems to be an overall anxiety not to discourage in these regulations—a certain fussiness.
For instance, in Regulation 3 we have the words added,
"and it is hereby declared that, notwithstanding the definition in section 114(1) of the 1944 Act 'child' includes a child over compulsory school age."
As Section 38(4) of the 1980 Act defines a child as,
"anyone who has not attained the age of 19 years".
and Section 114(1) of the 1944 Act defines a 'senior pupil' as one who has attained the age of 12 but not of 19, this seems a bit unnecessary. The Government must be very nervous about someone making trouble over 16-year-old entry into sixth forms.
I should like to comment briefly on draft Regulation 7, which reduces the residency requirement from three to two years. Again, this shows efforts to get more people able to take up places. Are the Government worried that there will be insufficient suitable applicants? I want to ask the Minister whether this relaxation will mean a general relaxation. The student grant regulations impose a three-year residential requirement. The National Union of Students has been trying to get this changed for some time. Is this now to happen and, if not, why not?
The Minister said that the academic year starts in September and that is the reason for changing this from three to two years. May I remind him that university and other higher degree courses also start in September? It is the same situation. And what kind of people will the relaxation affect—people who have just had jobs in Brussels? It would not seem likely to affect many working-class people.
As regards draft Regulation 13, relating to the computation of income, I confess to not being sure whether
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this is a relaxation or a tightening-up of the earlier conditions. But I doubt whether any working-class families claim relief for losses on unquoted shares in trading companies, or investment in new corporate trades. I hope that the Minister will answer the questions I have put to him.
3.24 p.m.
Lord Kilmarnock: My Lords, we on this Bench are not particularly enamoured of the assisted places scheme. We do not believe that it is the right way to go about closer liaison between the public and the private sectors. However, that being said, and looking at the present amendments and regulations, one or two points arise. Incidentally, I should like to ask the noble Lord in passing, as a question of curiosity, why in Regulation 3(3) after the words "including the United Kingdom" he wishes to add the words "as constituted from time to time"? Is the noble Lord contemplating an early disintegration of the United Kingdom? Similarly, he wants to add the same words after "European Community". That could be interpreted as meaning the accession of Spain and Portugal, but I am wondering what precise weight is to be attached to the words "as constituted from time to time" in relation to the United Kingdom.
Turning to the other amended regulations, there is the question of the disregard in respect of certain persons under 10(3) rising from £600 to £800. With respect to the noble Baroness, that is an increase of 33 per cent., which seems to me to be a very steep increase. I do not have with me my pocket calculator but in Regulation 12 there is a rise in the disregard from £4,766 to £5,266, which is certainly over 10 per cent.
When the noble Lord or any of his colleagues eventually bring before the House uprating proposals for social security benefits and for unemployment benefit, we shall want to look at them very carefully in relation to the advantages offered to parents participating in this scheme.
Turning to Regulation 11, if a parent's income falls dramatically and is assessed, on a previous year's assessment, at 85 per cent. of what it had previously been, that parent will be entitled to an immediate reassessment. However, in Regulation 11(3)(b) we see that paragraph (3) will apply if
"the school, though not satisfied as aforesaid, are satisfied that the relevant income in the current financial year is likely to be so much less than the relevant income in the preceding financial year that financial hardship would result from remission questions being determined by reference to that year …".
That seems to put into the scope of decision by the school whether the parent's income has fallen sufficiently to demand an immediate reassessment. If that is the case, would not the noble Lord agree that the revision is too open-ended and too loose?
3.27 p.m.
Lord Elton: My Lords, I was about to say that I was grateful (the usual form of words) to the noble Baroness for her reception of these regulations, but I am not altogether sure that I am. I should remind the noble Baroness that the scheme is rendered necessary only by her party having destroyed the direct grant system and blown up the bridge between the private and the public education systems.
Baroness David: My Lords, if I could interrupt the Minister, I should like to say that if the Government had had confidence in the state system and put money into it there would be very good provision in the state system.
Lord Elton: My Lords, we do not want to open up a massive debate. I cannot agree with the noble Baroness. We must have a bipartite system. If she were to—no, I will not follow her down that road because it is late in the afternoon. Neverthleless, I am very tempted. I must meet her again on the road we are following regarding the cost of the scheme. She is under a misapprehension. The scheme is not cash limited. The original estimate of the cost of the scheme was £3 million. That was in 1979 prices. The estimate for this year, which was approved by Parliament, was £4 million at current prices. The now expected cost is £3·2 million. That is what she is looking at, in current prices. This represents a saving for exactly the reason she expected: the shortfall in the take-up of assisted places. It is a question of comparing the value of money, which changes from year to year, not its arithmetical equivalent.
The changes we have made are exactly in step with the average increase in earnings. Therefore, the adjustments which the noble Baroness looked at with such detailed comparison work out in the end at keeping the contribution, as I said in my opening speech, exactly in step with the change in the value of money and the value of average earnings. Parents will contribute the same in real terms as they have contributed in the past.
I have already explained the reasons for the change in the residence requirement. I do not think that the noble Baroness should draw any inference from that decision for policy relating to residence requirements for other kinds of students. The noble Baroness is naturally anxious to remind us of the high levels of unemployment. This does mean that people—not only stockbrokers but others—have to travel from one place to another to get jobs. We do want to limit the upset that this may impose on the expections of their families, and that is why we do not want the residents' qualification to be longer than necessary.
The noble Lord, Lord Kilmarnock, asked an interesting question about the definition in paragraph 3, and, with many noble Lords here awaiting the opening of the debate on Nothern Ireland, I can imagine that there is an unnusual level of interest in this. May I reassure the noble Lord, Lord Kilmarnock, and other noble Lords by referring them to the principal regulation which this regulation amends. The noble Lord has taken it out of context. The full context is that the definition of a national of a member state of the European Community is a person who is a national of any state within the European Economic Community, including the United Kingdom. The European Community is changing its membership and may well do so in the future, and that is what this refers to. The United Kingdom is a bracketed, parenthetical part of the European Community in that pargaraph in the regulations.
The noble Lord had another question. I thought that I should not pursue the question from the noble Baroness, Lady David, relating to the value of social
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security benefits, but there was one further question about Regulation 11(b), On the question of monitoring, I should say that the responsibility to Parliament for the proper expenditure of this money rests with the Department of Education and Science, and that therefore it is not the schools which in the last analysis are responsible for getting this right. The money is not simply let go with blind trust.
As to Regulation 11 (b), the noble Lord, Lord Kilmarnock, was anxious about an adjustment allowed by a school in advance of an expected change in financial circumstances. Quite often one can predict, when a works closes or when some other kind of reorganisation takes place, the change in the circumstances of the finances of the family. I consider that I would be wrong for a parent not to be able to embark on the scheme because he knew it would be only after he had paid the first 12 months' worth of fees that he would be able to be reassessed to a level where he could afford to pay. I believe I have answered all the questions which were asked but, if I find upon reading Hansard that I have omitted any, I shall write to those concerned. I beg to move.
On Question, Motion agreed to.

Northern Ireland (Emergency Provisions) Act 1978 (No. 2) Order 1981
3.34 p.m.
The Minister of State, Northern Ireland Office (The Earl of Gowrie)The Minister of State, Northern Ireland Office (The Earl of Gowrie) rose to move that the draft order laid before the House on 2nd December be approved.
The noble Earl said: My Lords, last week we dealt with the economy of Northern Ireland, and this week, in the context of these draft emergency provisions, we can deal with security issues and some political questions. In respect of the latter, may I say how much I am looking forward to the next piece of business and the Unstarred Question in the name of the distinguished ex-Prime Minister, my noble friend Lord Moyola. I mention this at this stage because I must apologise to the House that from the point of view of a Minister there is considerable overlap, and that therefore some of the things which I have to say now in moving these draft orders will render superfluous what I might have to say when I come to wind up the Unstarred Question in the name of my noble friend. I do not consider that this really matters because we have come to hear my noble friend rather than me and to gain from his considerable experience and wisdom.
My Lords, I ask the House at this stage this afternoon to renew for a further six months all the provisions of the Emergency Provisions Act which are currently in force. These last six months have been very eventful ones. Last July, when your Lordships' House last approved the renewal of these powers, the Republican hunger strike dominated all our thoughts and there were frequent and violent street disturbances in the Province and outside it. I am glad to say that that hunger strike has now been brought to an end. The deaths of the hunger strikers were accompanied by a sharp rise in terrorist activity and this has by no means ended. In the course of 1981, 98 people have died, 1,315 have been injured; there have been 82 shooting attacks and 383

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bomb attacks. And this follows 1980, which, in terms of these grim statistics, was the best year than at any time since the troubles started. These tragic figures demonstrate that violence remains a powerful threat to the lives and to the prosperity of all the people in Northern Ireland.
The hunger strike aroused deep emotions and inevitably caused heightened tension in the Province. It drove the communities further apart, as I imagine it was intended to, and left an unhappy residue of deep mutual distrust. There has been, however, no intersectarian violence since then on a scale which could lead to anarchy, but a number of those concerned with the protection of the community have, I very much regret to say, been murdered. The people of Northern Ireland are deeply worried by these repeated attacks, and so are the Government.
Members of the Royal Ulster Constabulary and its Reserve, members of the Regular Army and members of the Ulster Defence Regiment form a higher proportion than in previous years of the ranks of those who have been killed. I should like to pay tribute to all the men and women in the security forces who have again given courageous, unstinting service this year. I have seen with deep admiration how they have faced and dealt with an astonishing range of problems, and I have been very much impressed, if I may humbly say so, by their professional skills and by their patient dedication and untiring application to their duties. The Government are in regular contact with the high command of the RUC and with the military commanders who share responsibility with them for protecting the public from violence and pursing the perpetrators of violence. They know we are doing, and will continue to do, everything within the power of a civil society to help them, and they have acknowledged the support and backing which we give them.
Our security policy is based on a simple premise. It is that those who break the laws of our democratic society must be dealt with by the courts. We have repeatedly made it clear that Republican Nationalist politics legitimately pursued are altogether legitimate politics, and so are Loyalist politics. What is illegal is not politics or attitudes or aspirations, but law-breaking. Murder, violence or the threat of violence, theft, can never in a civil society be sanctioned by the appeal that they were not committed in pursuit of personal gain but for some higher or for some political motive. We operate, therefore, within the context of a civil society and a civil system of law, and that inevitably imposes limitations upon us. In gathering the evidence which is necessary for convictions, for instance, those who enforce the law must also be constrained by it and respect it and be seen to do so. In Northern Ireland, with its deeply-rooted fears of inequality and prejudice, and its unhappy history in this regard, fair treatment for all is essential and must be apparent.
In the light of pervasive violence it is of course understandable that people should turn their minds to extra-legal or draconian measures. But I am convinced that this is no way forward where security is concerned. The innocent would suffer disproportionately from any such measures. The police and the army would lose the popular support which they so crucially need to do their job. If the police
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and the army appeared to be over and above the war, the paramilitarists would set themselves up as defenders of oppressed communities. We are asking people to reject paramilitary solutions to political questions, and we shall not give the men of violence the pretext for claiming popular approval or the chance to claim that the civil system of law is either cynical or unjust.
Within the constraints of civil dealings there is, however, nothing soft, half-hearted or tentative about our approach to security. The Government place no restraint upon the operation of the security forces other than that of the law which it is their job to uphold. If they need further resources we are committed to finding them. The police are the essential civil power: the army acts in support of the police only in those instances and in those places where a particular break-down of order or a sustained breakdown of order makes it impossible for the civil power to function.
The strength of the RUC is now 7,280 and that is higher than it has ever been. I am talking now, of course, of full-time members of the constabulary. Its reputation for professionalism and competence is recognised not only in Northern Ireland but in Great Britain and abroad, and that professionalism is helping to establish throughout Northern Ireland that relationship between police and public which is so essential to peace and security.
The House will be aware that the police and the Army are maintaining a very high level of activity at the moment. The police are deploying as many men as possible on anti-terrorist tasks. Regular Army force levels continue to be reinforced by the spearhead battalion. No effort is being spared. I am happy to be able to report that the security forces have had substantial successes which come not only from the work of recent days, but also from the application of previous efforts which have long and carefully been prepared. So far this year, 361 people have been charged with terrorist offences, including 43 for murder and 65 for attempted murder.
I cannot stress too strongly that the security forces need and deserve the backing of both the public and the Government. From the public they need positive support and co-operation, and in particular they need information about incidents and about people suspected of involvement in crime. And they need people who are not afraid to give evidence. No one should harbour their suspicions or withhold evidence, although as I say this I do, of course, acknowledge the fear of retribution for disclosure to the police and that fear is, alas!, very real.
Only when everyone actively repudiates violence will the security forces be able to end it. But active repudiation of violence is only likely to come about when the two communities in Northern Ireland are able to recognise each other's different aspirations and loyalities, when they are able to live together as close and good neighbours and live with the Irish Republic as close and good neighbours. This means political movement. It means give and take; a recognition that neither community is ever likely to sway the other altogether to its point of view. So, although I am confident of the ability of the security forces to contain violence, only a new deal for Northern Ireland and a change of heart within Northern Ireland has a chance of seriously diminishing the violence.
Nor must the security forces be distracted from their main and essential task by people wishing to take the law into their own hands, or threatening to do so; because that, of course, only makes the security forces' job more difficult, absorbs men, material and time, and plays into the hands of those who organise the violence.
For our part, the Government must, of course, provide the resources—legal and material—on which the security forces depend. The Emergency Provisions Act before the House is one of these resources and the powers that it confers are a vital weapon for the security forces. I can well understand the misgivings of critics. These powers are, of course, exceptional even if, tragically, we have had to get used to them, and they must never be taken for granted. But we have only had recourse to such powers in the Act because of the exceptional nature of the threat to civil society. The powers are, quite rightly, subjected to regular and close scrutiny by Parliament.
Nevertheless, I recognise that some people find certain provisions of the Act—and most notably perhaps the so-called Diplock courts—particularly objectionable. But in this and other provisions of the Act we have not strayed from the essential principles of our civil system of justice; perhaps most importantly, we have not strayed from the right to trial in open court and from the assumption of innocence in default of clear proof to the contrary. Of course, I look forward as eagerly as do any critics of the Act to the day when we can safely dispense with this legislation. But I have to conlude that that time has not yet come.
As I have said, progress on improving security cannot be divorced from developments in other spheres—in relations with the Irish Republic, in improvement of the economy and in internal political advance in the Province. Good relations between London and Dublin can only help our security effort. Both Governments recognise in terrorism a common enemy, and this enemy poses just as strong a threat to stability in the South as it does in the North or to the United Kingdom as a whole. We have always attached great importance to effective cross-border security co-operation, and I am very happy to say that co-operation between the RUC and the Garda is excellent and is producing solid results. Further progress in Anglo-Irish relations can, in our view, only help along that road.
I know that many noble Lords are concerned that terrorists should not be able to exploit the border so as to avoid being brought to justice. The Government are determined that fugitive offenders should not escape justice. We believe that extradition is a vital way of achieving this, and we have left the Government of the Irish Republic in no doubt whatever of our view. In the absence of extradition procedures, both Governments have been seeking to make effective use of the extra-territorial legislation. I acknowledge that this has not always produced very encouraging results in the past, but there are signs that this may be changing.
As the House may be aware, the trial began only last Monday in Dublin of two men accused of offences in connection with the Belfast prison escape. The House will also know that one of the results of the Anglo-Irish discussions was the recent meeting between my
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right honourable and learned friend the Attorney-General and his opposite number in the Republic about this very problem—the problem of how to deal more effectively with fugitives. They are looking at the problem in depth, and they will meet again.
Developing Anglo-Irish relations can benefit Northern-Ireland in other ways and I hope that the new Anglo-Irish inter-governmental council, which will give institutional expression to the relationship between the two Governments, will do useful work in promoting co-operation especially in economic matters. The Government have repeatedly emphasised that none of these discussions or arrangements poses any threat to Northern Ireland's position as a constituent part of the United Kingdom. On the contrary, Northern Ireland has nothing to fear, and a great deal to gain. We also must recognise that very large numbers indeed of citizens of the Irish Republic live in the United Kingdom, both in Northern Ireland itself and in Great Britain. It is quite absurd to claim, therefore, that the Republic has no special relationship with us, or no claim to take an interest in our affairs.
With regard to political advance, my right honourable friend the Secretary of State and I are satisfied that direct rule, while it may be many people's second best, is not an acceptable long-term answer. Nor can there be any question of integration or a return to the old-style Stormont. Either course would be likely to offend one major section of the community in Northern Ireland without fully satisfying the other; it would not therefore contribute to peace, stability and reconciliation, or to improved security. It seems clear, however, that representatives of both parts of the divided community do desire the tranfer of powers to locally elected representatives in the Province, if that can be achieved, so that they can have a greater say in the running of their own affairs, and that is the Government's aim. It is the most likely means of finding Governmental arrangements for Northern Ireland acceptable to both parts of the community and as a method of easing tension. There are several possible ways of making this transfer of powers and we are examining them at present, and until that time, until we come forward with proposals, of course direct rule must continue. But I emphasise just once more that it is not satisfactory as a permanent system of Government for the Province.
As we said last week, the Government are also anxious to see economic improvement in the Province. We are very concerned about the high level of unemployment and we are doing a great deal to encourage job promotion and investment in Northern Ireland. There are some encouraging signs, but much more inward investment is needed if we are to make the progress we need to create new, stable and lasting employment. But it must be realised that the activities of the para-militaries, and indeed the recent tensions created by extremist politicians on both sides of the sectarian divide, have made it very difficult to attract such investment. Unless we can improve the image of the Province, or until the Province takes its own image into its own hands, ordinary men and women in Northern Ireland will continue to lose their jobs. Let us be quite clear that violence and the lack of political movement are reducing job opportunities and possibilities and are undermining standards of living,

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and those who have suffered most in terms of unemployment are the very people whom para-militaries on both sides claim to be defending.
Given world recession and accelerating structural changes, the Northern Ireland economy would in any case be facing grave difficulties, and again we dealt with that last week. What it least needs are self-inflicted wounds. I am nevertheless determined to do everything within my power to improve the economic conditions in the Province. But, of course, there is much more which people in the Province can do to help themselves, and community discord is the road to poverty and not to prosperity.
All these factors—the economy, political development and the relations between the United Kingdom as a whole and the Republic—are important for Northern Ireland's future. Our immediate concern today is the security forces' fight against threats to civil order and the powers they require for that fight. I hope, as I am sure we all do, that one day I shall be able to tell the House that these powers are no longer needed. But for the present I have to say that they are essential, and I invite the House to give us them.
Moved, That the draft order laid before the House on 2nd December be approved.—(The Earl of Gowrie.)
3.56 p.m.
Lord Blease: My Lords, the House will be grateful to the noble Earl, Lord Gowrie, for his clear and helpful explanation of the order. Your Lordships will be aware that this renewal measure was debated in another place during the early hours of yesterday. At the outset I wish to join with the Minister in his praise for the security forces in Northern Ireland and in his words of sympathy for those who have suffered through bereavement and injury caused by terrorism during the six months since we last debated these emergency provisions.
As we recall some of the tragic instances during that period, we are compelled to admit that terrorism has remained a powerful threat to the lives and property of all Northern Ireland people. Tragically, intimidation, fear, distress and bereavement caused by terrorism is a constant factor in our daily lives in Northern Ireland, a factor to which the Minister referred, which has created distrust between the communities, has prevented active community co-operation and has stultified efforts towards employment prospects and economic development.
The noble Earl indicated that there is a measure of overlap between this order and the subsequent debate. He dealt with a number of matters on which I wish to comment, but I shall do that when that debate takes place shortly. Meanwhile, dealing with the order that is before us, I welcome the way in which the Minister dealt with the reluctance and reservations that have been expressed; Government Ministers and members of the official Opposition together with other elected representatives have expressed similar reluctance and displeasure that it is necessary to continue to provide these emergency powers in Northern Ireland.
For those reasons, I consider it important to mention some of the basic principles against which any emergency code of law should be evaluated. One such principle was firmly and clearly upheld by the committee under
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the noble and learned Lord, Lord Gardiner, which reported in January 1975, the principle being:
"A democratic society has the right, indeed the need, to defend itself when subjected to serious and sustained terrorist violence".
In paragraph 21 of the Gardiner Report (Cmnd. 5847) the committee observed:
"The continued existence of emergency powers should be limited both in scope and duration. Though there are times when they are necessary for the preservation of human life, they can, if prolonged, damage the fabric of community and do not provide lasting solutions".
I am glad the Minister dealt at some length with that aspect of the order.
However, may I ask the noble Earl if the Standing Advisory Commission on Human Rights have submitted to the Secretary of State for Northern Ireland recommendations or views on the emergency provisions in the current overall situation? Or has the Secretary of State invited that commission to provide their observations on emergency legislation? I raise the point because the Standing Advisory Commission on Human Rights is comprised of prominent Northern Ireland citizens and the scope and functions of the commission include an advisory role in respect of emergency legislation. While the legal aspects and the libertarian dimensions of the emergency provisions will continue to give rise to conflicts and problems, I consider it important that we react effectively to terrorism without over-reacting and causing irreparable harm to the belief and trust in the rule of law. For those reasons I believe it is vital that these renewal debates should be entered into with the utmost concern by all, and I welcome the very forthright and frank way in which the Minister has presented the order to us today. With those remarks, from these Benches I support the approval of the order.
4.1 p.m.
Lord Hampton: My Lords, I, too, wish to thank the noble Earl for his introduction to the order. I have consulted the Alliance Party of Northern Ireland before speaking today and I should like to pay tribute to its courtesy and helpfulness. Some of what I want to say I have held over until the next debate. It is certainly regrettable, but I believe that it has been necessary, that the emergency provisions should be continued by the acceptance of the order. So far as possible the burden for maintaining law and order should rest, as is present policy, with the police, with the army held in reserve and to be called on only in emergency. Internment is very often counter-productive. The Diplock courts are unfortunately still necessary—the Minister touched on this aspect—and I believe that critics should be reminded that there are, I understand, no jury trials in the Republic of Ireland, either. They have problems with intimidation of would-be witnesses and juries similar to those in the Province.
Protestants, in particular in Fermanagh and South Tyrone, and all along the border, deserve our very greatest sympathy and support, and there is a considerable body of opinion that feels that, far from the emergency provisions being eased, security should, and must, be tightened up without further delay. There is also—and the Minister has touched on this, too—a very real need for maximum co-operation

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with the Dublin Government over extradition. Border troubles in no way help Eire, either.
I should like to join in the sincere tributes that are once again being paid to the work of the security forces. I repeat, that in the present climate I do not see that we should do other than pass the order for the continuation once more of the emergency provisions in the Act of 1978. But it is right that we should reconsider the position at regular intervals, and my party is certainly not uncritically enthusiastic about this continuance.
4.3 p.m.
Lord Donaldson of Kingsbridge: My Lords, it is with complete conviction from this Bench that we support the renewal of the order. It is perfectly clear that this is no time to consider, even for a moment, easing up on the emergency provisions, just when it looks possible that things might be getting a little better. The noble Earl's most interesting introduction gave us some good news about the strength of the RUC, the level of activity, and various successes. Both noble Lords who spoke before me said something about the Diplock courts. I hope that nobody considers for one moment that one get justice in Northern Ireland without the restrictions of the Diplock courts. Even with the Diplock courts, I have seen people unable to give evidence through sheer fear, and in my opinion dispensing with Diplock courts should not even be discussed at this stage.
The two previous speakers both said that they are reserving some of their remarks for the next debate. I am in the awkward position of having last week said what I wanted to say, and so I shall not reserve anything, but I assure your Lordships that I shall not repeat what I said previously, beyond saying—I speak for my party here—that we are entirely behind the Government's present position, with the exception of secret talks with the South, which we think were a fatal mistake. However we believe that there is a very great deal to talk to the South about, and with an open agenda nobody could possibly worry about it.
I should like to say a few words on the administrative position. For the last seven years, during which time I have been concerned with Northern Ireland, it has been our custom to have the appropriation and emergency orders taken together, and sometimes, when any noble Lord particularly interested wanted it, to enter into a more general debate and not curtail it to the exact contents of the orders. I think it is a great pity—and it was in protest against this that I made my speech last week—that we have separated them today, because the noble Earl's speech this evening covered quite a lot of what happened last week. They should go together; and if I had known that the noble Lord, Lord Moyola, was going to ask an Unstarred Question, I would have kept my speech back.
I hope this can be looked at. We do not want to have a series of debates on Northern Ireland in this House—they are apt to do as much harm as good—but I do think that we want to have the opportunity once every six months or so for anybody who feels that they must say something to say it. So I hope the noble Lord will look at that point. Meanwhile, we support the emergency provisions fully.
4.6 p.m.
Viscount Brookeborough: My Lords, I should like to begin by welcoming the speech by my noble friend Lord Gowrie. I should like to say that as far as I am concerned it was the best speech I have heard made by a Government Minister. I hope the noble Lord, Lord Donaldson, will not take this in any way as an affront, but it was quite the best speech that I have heard delivered from the Front Bench. It showed a tremendous understanding acquired in a short time. I certainly welcome my noble friend's translation to his position in the Northern Ireland Office and I look forward to co-operating with him very much. I want to get that out of the way first because there are considerable areas in which I might disagree with him when it comes to the next debate. I should also like at this point in time to say that I am fully aware of the importance of having the closest possible co-operation with the Irish Government in Dublin on security matters and, indeed, on other matters. Again, I say that because at a later date I shall be fairly critical of the Dublin Government's approach on extradition.
May I pay what is now the customary tribute to the forces of law and order. I probably see them more than anybody else in this House except for two of my noble friends, but I certainly am terribly involved with them every single day, and nobody could have a greater admiration for them than I have. The security situation in the last few weeks has improved as a result of the arrival of the spearhead battalion, the parachutists, but what we should like to know is what happens when they go at the end of January, which is their present programmed time for leaving.
Until the spearhead arrived, the situation in County Fermanagh—and I am describing Fermanagh because the noble Earl has described the rest of the country—could never have been worse. We have had 66 murders and only two solved; and we have had over 50 of them in my own area, with a Protestant electorate of only 2,000—and they are the people who have been under attack. At the time of the murder of the Member for Belfast South I had spent the whole week either in a house comforting my neighbours or in a cemetery burying them, or at a cenotaph.
I wish I could describe accurately the life of my neighbours who are in the forces, and of my other neighbours—because we are all at risk. For 10 years we have not opened the front door without first identifying the people calling. We have to watch every car. We take their number if we do not know who they are, and we refer that number to the police to find out who they are. We watch every cross-roads on our way home; and when I say that when a member of the Ulster Defence Regiment goes out on service at night his wife pleads with him not to do so, I think your Lordships can get some idea of the strain that there is on these people. It was against this background of 11 murders in 11 days that there was the great rush and call for the third force.
Your Lordships saw on television the masses of people who took part in a one-day strike—the people who marched. Unfortunately, this has been described as massive support for the leader of the DUP. This is not so at all. Vast numbers of people took part in those demonstrations as an expression of frustration.

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If we who took part had not done so, then we should have isolated ourselves from our own people.
Perhaps I can tell you that on 18th November I went to a meeting of not fewer than 100 or more than 150 people in County Fermanagh, people taken from all walks of life, solicitors, auctioneers, farmers, lorry drivers, excavator drivers, the whole lot, a good cross-section. There was not one area of Fermanagh, the whole area, which was not represented by somebody. It was an organisation, much maligned, called the Orange Order. At that meeting, there was an absolutely clear determination that that order would have nothing to do with illegal forces. There is no support among responsible people for that "Third Force" or for anything approaching it. May I describe what might happen? What am I going to do, coming back from such a meeting at night to be met by a hooded man? I have but one course open to me; to take him on the front bumpers. That is what will happen; and that, I believe, is what certain people want to happen. They want somebody to get murdered so as to produce a confrontation.
The Government would do well to try to use this surge of energy of people wanting to help in some way, if they can. When we were in power we looked at some method of forming something like a home guard, something like the UDR but not quite at such a high level of commitment. The level of commitment of these people is quite staggering. In 1970 in the Lisnaskea area 200 people were in the UDR; now there are 60 and they are out three or four nights a week all the year round and the strain is horrific. I say to the Government: Please look to see if there is someway in which to harness this energy. I have been describing the tension on the Protestant side, but the tension among the Roman Catholics is also very great. They are scared stiff at the present moment, and anything that can be done to reassure them should be done.
I should like to turn to the question of fugitive offenders. I was delighted to hear my noble friend say that the Government were determined that no fugitive offender should get off scot-free without a trial. We in Fermanagh have had all these murders. We know who has been committing them and where they live across the border. We know who they are and what they say—and they say it clearly in public places. The correct way, as the noble Earl has said, is to have extradition. I find the approach of the Irish Government to be hypocritical. They wring their hands and say, "If only it was not illegal, we would have extradition. But, "they say," unfortunately Article 29 of Clause 3 makes it ultra vires if we were to amend the Act."
The first thing about that is that this is not certain to be true; because the noble and learned Lord, Lord Scarman, and the noble Earl, Lord Gowrie, disagree with two Irish lawyers. Therefore, it is a matter for the Constitution in the Irish Republic to play its part. Let the Irish Government show their determination by amending the law on extradition and then submitting it to the Supreme Court to see if they believe it to be ultra vires.
But there is a second method which is even easier for them and that is, that under Section 28, Clause 3, the Trish Constitution, like all other written constitutions, can be suspended; and the operation of an
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amending Act could be made immune to challenge. The basis for this is that the Irish Government has got to declare that there is an emergency, and—surprise, surprise!—there is an emergency. It was declared in 1976 and still exists. If the Irish Government are really sincere about their wish to help these fugitive criminals, all they have to do is to implement the constitution which says that a resolution passed in each of the two houses will make the amended extradition law immune to challenge, and then we have extradition. I find that all the talk about rapprochement is a little hollow unless we have determination on this matter of extradition.
The Earl of Longford: My Lords, may I interrupt? Would the noble Viscount be surprised to know that some at least of the higher authorities in the Northern Ireland police take the view that extradition would not make the slightest difference? I am speaking after attending a conference which dealt with many of these matters recently.
Viscount Brookeborough: My Lord, I thank the noble Lord for his interruption but it does not alter my conviction nor the conviction of by far the majority of people in Northern Ireland who consider that a gesture on the part of the Irish Government for dealing with fugitive criminals would be a matter of the highest political importance.
The great point about extradition is that it does not require the type of evidence that is necessary under the Criminal Jurisdiction Act. That is the basic reason. The Prime Minister, Dr. Garret FitzGerald, was interviewed on a television programme and he really accused the British Government, the Northern Ireland authorities, for not submitting the evidence for the Criminal Jurisdiction Act to operate, because it has hardly operated. But I must also agree with the noble Earl in his welcome of the trial of Ryan and others. This is a big step forward.
The basic reason that there is no evidence to put forward is because the police, the Royal Ulster constabulary, cannot interrogate in the South of Ireland. If the Irish Government do not want to have extradition, the minimum that they should do is to allow our police, under the supervision of the Garda, to actually conduct the interrogation, and vice versa. Once that is done, then we can look forward not only to dealing with criminal fugitives but also to a better relationship between the two peoples of Northern Ireland and Southern Ireland. I welcome this order and I thank the noble Earl for his introduction.
4.18 p.m.
Lord Hylton: My Lords, I think that there is general agreement that the one problem that most impedes progress in Northern Ireland is the continuance of murder and wounding. It is not enough to condemn violence, as many people have over a long period of time. It is not enough to behave in a constructive and non-violent way while murder still inspires fear and fear blocks progress. What is needed is information. I briefly mentioned this in our debate last week.
Freely given information is needed on both sides of the border and from both the main communities in Northern Ireland. This alone will make possible justice

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for past crimes and prevention for the future. I have already appealed outside this Chamber to some of those whose leadership might help to increase the flow of information. It is against this background that I have to ask today whether the Army is in all cases using the best methods for obtaining information.
I have with me written details of a recent case in Belfast which I will give to the noble Earl the Minister after this debate. The case tends to show that a man was arrested at 6.30 a.m. in his father's house and held for four hours. This was not because he was a suspect or even because he was thought to be a potential witness, but rather with a view to inducing him to find out and provide future information. There are fears that this may not be an isolated incident. I question whether the procedure used was within the law and, even if it was within the law, whether it was a wise one and not possibly counter-productive.
I have given notice to the noble Earl the Minister that I would raise this point. I do not expect an instant answer but I should be grateful if the matter could be looked into, because it is the kind of thing which is so liable to bring both the Army and the emergency legislation into disrepute. This is but one small example of why Parliament must be eternally vigilant and why we cannot just allow orders such as the one that we have here today to pass on the nod.
I suggest that we must go further and insist that there should be an independent review of the working of the Diplock courts and of the whole of the emergency laws. This was argued most cogently on 9th July last by the noble and learned Lord, Lord Gardiner, at columns 884 to 887 of Hansard. In reply, the noble Lord, Lord Elton, said that Her Majesty's Government did take this suggestion very seriously. Today I hope that the Government may be able to indicate how they see the possible and practical timing of such an inquiry, which has been asked for already and which I know several speakers will also be mentioning later.
4.22 p.m.
Baroness Ewart-Biggs: My Lords, I too would like to thank the Minister very much indeed for his explanation, which I found of great interest, very clear and very fair. I am extremely grateful to him for giving it. I should like also to take the opportunity to express my very great admiration and respect for all those people who are involved in administering the law in Northern Ireland and who in doing so are running such appalling risks.
I should like to make just one point about these emergency provisions in support of what my noble friend on the Front Bench said and what the noble Lord, Lord Hylton, has just said: that is on the question of a judicial inquiry into this Act. I think there can be no doubt that we are all very well aware of the circumstances which necessitate these special powers, and they have just been described in tragic reality by the noble Lord, Lord Moyola. We know full well that the present situation does not justify the return of the law as we know it, but some of us feel very sincerely that the time has come when an inquiry into the workings of the EPA would be justified. Surely this is a reasonable and sensible request and surely we owe it
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to the people of Northern Ireland to give more than a cursory review to a system which so closely affect their everyday lives.
I remember that in July when the renewal debate took place in another place the Minister intimated a review of the Act and suggested that the Government had doubts about whether major parts of it were working properly. But, in my view, doubts are nothing to be ashamed of; there should always be doubts where powers such as these exist, powers which have departed from the usual democratic process as we know it. The exclusion of doubt brings an element of permanence to the Act, and perhaps such an air of permanence is the most insidious feature of emergency legislation.
Furthermore, the Government have brought movement and a more forward look to so many of their other policies regarding Ireland, so why should their attitude to the Emergency Provisions Act not equally reflect that same sense of movement? It is not a question of modifying the laws but merely of ensuring that they are still best adapted to suit the present circumstances. Such a review would thus ensure that the laws continue to contain the right ingredients which are necessary to maintain that delicate balance of containing the existing security situation without offending the sensitivities of the people affected by those laws.
It must be true to say that in any democratic state the only way terrorism can be defeated is by encouraging the ordinary law-abiding citizen to play his full part in security. As the Minister himself said, terrorism can only be stopped by the united efforts of the security forces and the community, and anything which stands in the way of public confidence in the law stands in the way of the defeat of terrorism.
An example of how these laws must offend the sensitivities of ordinary, law-abiding families in Northern Ireland lies in the section under which security forces can enter any premises without warrant, at any time of the day or night, to search for arms or explosives. The need for such searches is self-evident, but the resentment and bitterness felt by the families concerned, should such searches prove fruitless, must be very great. We ourselves have seen what happened in Brixton, and this happens in Northern Ireland very much more.
The chief constable of the Royal Ulster Constabulary cannot do without the support of the community, and I am sure that all of us here in your Lordships' House share the same admiration and respect for the way in which the chief constable is committed to a police force which is not only highly effective but earning the trust of the minority community as being an unbiased force with strong leadership. Perhaps a deeper look into the laws which mainly affect this particular community might contribute towards reinforcing that trust even further.
4.26 p.m.
Lord Vaizey: My Lords, I welcome this order and I should like to congratulate my noble friend Lord Gowrie on his introduction to this debate. It is very important that we should remember that tone is as important as content in the speeches which come from the Government about Northern Ireland. In this case, I thought that his eloquence and sincerity were so apparent and so important that it will bring very great

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reassurance to our fellow citizens in Northern Ireland.
One always hopes that this will be the last occasion on which this emergency legislation is continued, and I share the feelings of the noble Baroness, Lady Ewart-Biggs, about the danger of frequently renewing this draconian legislation. I must say that I tend to share her feelings that, if it were to be done several times more, it would be absolutely vital that there should be some kind of judicial review of this legislation, because it is not consonant with a long-term policy towards the Province.
Nevertheless, we have to remember that, as the Minister said, 98 people have already been killed in Northern Ireland in 1981—and 1981 is not yet over. Ninety-eight people is a lot of people. It is twice as many people as are present in this Chamber at the moment, just to give one an idea of how many people have lost their lives in this year alone. Nevertheless, having said that, and taken to heart those appalling statistics, I must say that such evidence as one hears from those qualified to speak suggests that the security situation is gradually improving. I know that it sounds very heartless to say that, after what my noble friend Lord Brookeborough so eloquently said. But the truth is that the situation is improving. It is, perhaps, two steps forward and one step back, but there are signs that it is getting better.
The police are taking over from the army in more and more areas. The reputation of the police is steadily rising, as the noble Baroness, Lady Ewart-Biggs, quite rightly said. They are a splendid and superb body of people under a quite magnificent chief constable. I cannot help feeling that, as that gradual progress takes place, so it is not too cold-hearted to say that, in some respects, the situation is improving on the security front.
I was particularly glad to hear, as part of the sign that that is the case, my noble friend Lord Gowrie say so forcefully and eloquently that there is no such thing as a political crime. There is crime, and crime must be dealt with by the police force. The moment we begin to start talking about political offences, political crimes, terrorism and so on, we are actively conceding part of the case of the IRA. They are not a political organisation. They are a criminal organisation, and what they are committing are vile, odious crimes.
As was so rightly said, one reason why things are getting better is because of a greater flow of information. It is probably paradoxical that one of the consequences of the hunger strike and the murder of Mr. Bradford has been a sense of shock in both parts of the community in Northern Ireland. As a consequence, more people are taking the brave step of talking to the police and trusting the police. They are telling them about what is going on.
I have been very pleased indeed to read and to hear the remarks in recent weeks of the Roman Catholic hierarchy. Those remarks are most important and most helpful. We must say how grateful all those of us who are interested in Northern Ireland are for these forceful, fearless words of the bishops in the Roman Catholic community in the North. The fact that the Roman Catholic bishops have felt able to speak out quite so strongly is, I believe, a sign that opinion
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throughout the whole of Ireland (in the South as well) is hardening.
Of course, a great deal of this improvement in the collaboration of the Royal Ulster Constabulary with the Garda to which the noble Earl referred, is due to that very remarkable man, Dr. Garret FitzGerald, the Prime Minister of the Republic. But I do not think that it is only due to that courageous and brave man. Opinion on all political sides in the Republic is quite clearly hardening against the IRA and is rejecting their claims to share in the system of beliefs which led to the establishment of the Republic. It would be unwise for any Government to rely upon the sympathy and friendship of just one great statesman. Even great statesmen lose elections. It is just as important that support for this policy should come from the other side of the Dail as it does from Dr. FitzGerald.
In that context, while I warmly sympathise with what my noble friend Lord Brookeborough said about extradition, I do not think that extradition is "on", for two reasons. First, it would be very difficult indeed, in the political situation in the South, for the South to get extradition through. I quite agree that under the present constitution it is perfectly possible. However, I do not think that it would be feasible. And I am not entirely sure, for the reasons which the noble Earl, Lord Longford, hinted at, that even if a full extradition treaty were at work it would be possible in fact to use it. That being said, I still appeal to my friends in the South to realise how important something of this kind is if they are to convert the ordinary people in the North to the view that the Republic is serious in their wish that this type of crime should be extirpated.
The great bulk of what most of us have to say will arise on the Motion of my noble friend Lord Moyola. Therefore, I will bring my remarks at this stage to a close, and say once more to my noble friend on the Front Bench how greatly I welcomed the tone and the content of his speech.
4.34 p.m.
The Earl of Gowrie: My Lords, I am most grateful for the extremely helpful way in which the House has debated this sad necessity to go for the order again. I am sure that the welcome—and the responsible and sympathetic way in which it has been made—will commend the House very much to the Province. We in Parliament sometimes are under the illusion that everybody in the country is hanging on our lips. They may or may not be. But on these occasions they certainly do in the Province. I am sure that what is being said here today will go down there extremely well.
The noble Lord, Lord Blease, asked me about the Standing Advisory Commission on Human Rights. They are currently examining certain aspects of the emergency provisions Act—in particular the operation of the non-jury courts. My right honourable friend the Secretary of State hopes to receive their report in the early part of the New Year. We shall give serious consideration to their conclusions in the context of our own continuous review of the operation of, and the need for, emergency provisions. The noble Baroness, Lady Ewart-Biggs, has rather echoed her noble friend in this regard.

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I have listened carefully to those who have argued that the time has come for the Government to arrange for a review of the emergency provisions Act. I respect these arguments as indeed I respect the concern that over the years the Act might have become temporary in name only. That is why my colleagues and I keep a close eye on the operation of these powers. I have some doubts as to whether an inquiry would tell us much that was new about the way in which the Act is working. I accept that a review might have advantages if there was any evidence that the legislation was ineffective, or alternatively that the security situation had improved sufficiently, to a point where we could consider reducing or dispensing with the powers. As my right honourable friend made clear in another place, the high level of violence in recent months makes these special powers no less necessary now than hitherto. In my view, this would not be the time to give the men of violence any impression that our resolve was weakening, or to raise the fears of the vast majority of law-abiding citizens by calling this legislation, which I think has become accepted as necessary, however regrettably necessary, altogether into question.
The noble Lord, Lord Hampton, reminded us, very fairly if I may say so, underscoring a point I should like to make in my own remarks, that it is not just the United Kingdom which has suffered in having to make changes to its civil procedures as a response to terrorism but the Republic has had to make changes as well, as I well know. My noble friend Lord Brookeborough asked me about troop movements and the rest. These are, of course, fundamentally operational concerns. Spearhead is there because the GOC requested it and we have met his request. Obviously it would he for him to say, rather than for me, how long he will need it. I hope that I can leave that there, except to reiterate to my noble friend the remarks I made in my opening speech—that we are totally, 100 per cent. responsive to requests made to us by the chief constable and by the GOC.
My noble friend Lord Hylton mentioned that he was going to bring to my attention a case which caused him some concern in terms of the procedures. If he will send the details to me I will of course have the case examined as a matter of urgency. I altogether agree with what was said by the noble Baroness, Lady Ewart-Biggs, that ordinary people have to get involved and have to help with security. Our hands are tied not by a lack of resources or lack of will but by a lack of co-operation sometimes. The other side of the coin in encouraging ordinary people to help is that there should be movement and development within the Province. I am grateful for what my noble friend Lord Vaizey said, in reminding us that the situation was improving in some respects. This time last year, or until the hunger strike started, there was a very substantial improvement indeed—but of course, we have had some reverses since then.
The overall level of violence is still considerably lower than it was in the early part of the last decade. But that gives us no grounds for complacency and no grounds to relent in any way. I am obliged to register—and I say this with great sadness—that even if the incidence of violence is down overall, the tensions, the fears and the entrenched positions have, if anything,
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hardened rather than weakened with that improvement. So, we have a very long way to go in dealing with this most desperate and urgent of all the problems which the United Kingdom faces.
On Question, Motion agreed to.

Northern Ireland: Future Government
4.40 p.m.
Lord Moyola Lord Moyola rose to ask Her Majesty's Government what plans they have for the future government of Northern Ireland.
The noble Lord said: My Lords, I beg leave to ask the Question standing in my name. I did not put this Question down because I really expected a clear and lucid answer as to the future government of Northern Ireland; in fact, I am not even sure that I want one, and it has already been made plain to me by the noble Earl, Lord Gowrie, in his earlier speech that I am very unlikely to get it. Perhaps I may just say in passing what a very encouraging and cheerful speech that was; it certainly gave me a good deal of heart as to the situation in Northern Ireland.
I put the Question down because I am concerned that some of the recent utterances made by representatives of the loyalist parties, or, if you like, parties representing the majority, may in fact have given the impression that we in Northern Ireland no longer wish to be part of the United Kingdom and are looking for the road to independence. I am equally concerned that the appearance should have been given that we as citizens of the United Kingdom should be anxious actually to flout the will of Parliament. I am concerned also at the willingness that there is on the part of some of our public representatives to knock every proposal that emanates from Parliament or from the Northern Ireland Office, be it economic, be it on security, or whatever. I feel that it may well give the impression that we are trying to go some separate way.
My Lords, that is the last thing that the average sane, rational Ulsterman wants. Independence is not in his mind, or, if it is, it is in very few minds. I am quite certain that they do not want to do anything that is going to break up the Union. Most of them would be highly critical of the security situation which has pertained recently, and which I will not go back over now. Most of them are concerned, apprehensive, about the secrecy surrounding the Anglo-Irish talks. And probably it is these two things which have brought about the present situation. But, in their hearts, the people of Ulster do not want to go outside the law, nor do they want to have any part in some of the activities, midnight marches and all the rest, that we have seen going on.
I think I can say that most of them, when they stop to think, genuinely believe that there is absolutely nothing to be gained by frustrating every proposal which comes either from Parliament or from the Secretary of State. They fully realise that they want friends on this side of the water, and they do not want enemies. They also believe that Northern Ireland's problems are not going to be resolved by marches with masks and so on. They also believe that our security problems are not going to be helped if the police force and the army have to be diverted to keep the peace when these marches take place. They are

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fully aware that the proper thing is to let the security forces get on with the main job of fighting terrorism, to avoid giving them extra work, and to avoid giving the media the chance to say that we are on the brink of civil war, which is neither encouraging for investment, which is so badly needed, nor discouraging to terrorism.
I should like to touch further on the drama of civil war that the media like to conjure up all the time. Frankly, I do not think that they ever think of the damage which it does—of all the lost investment of the businesses which might have come to Northern Ireland which are put off by all this talk, and of course there is the encouragement which it gives to the terrorists. Goodness knows! who is going to fight anyway? Certainly I and thousands like me have no desire to fight anyone. In my view, all this talk of civil war is doing a great deal of harm purely to produce a certain amount of sensationalism.
The people of Northern Ireland are at the moment feeling throughly disillusioned. The problem is that the sensible people at present have no forum in which to operate. If they go to meetings they are merely shouted at and abused and therefore they do not go. They have no one to whom they can turn who seems to be able to achieve anything for them. They feel disenfranchised, helpless and permanently unable to change anything. I suspect that they probably feel rather like the Opposition did in the old Stormont because they, of course, were fated to be the Opposition for ever and as such they were not able to change things and as such they became, at times, irresponsible. The same is happening on a Province-wide basis because they cannot be any worthwhile influence on anything. It seems to us that the Northern Ireland Office "knows what is best" and that our advice and opinions are very often ignored.
The point that I am getting round to is that what is badly needed is more Northern Ireland involvement in the Northern Ireland Office. This is the nub of the problem which exists at present and which has probably brought the third force into being. They feel that whatever they say is taken very little notice of. That brings me to what is a difficult point to make without giving offence because it involves the Civil Service. I want to say, before I make this point, that all my political life I have had nothing but the greatest respect and admiration for the dedicated people who work for the Civil Service. The fault that I am finding is not with them, but with the system. The plain fact of the matter is that people come over from this country to the Northern Ireland Office. They come for a short time and they do not get the opportunity to make the contacts which they probably would like to make. They do not meet many, of what I would only call, the rank and file of the population. They do not have the chances that we all have who live there to meet people in the market place, the supermarkets and all the public places to which we all, in our normal lives, have to go. They do not therefore have the opportunity to learn the nuances of Northern Ireland politics and what particular thing will upset which section of the population. I do not honestly believe that anyone who does not live there can ever totally master it. I am not even sure that those of us who do live there always manage it sucecessfully.
The important thing is that if I could persuade Her Majesty's Government that, contrary to what the media have preached over many years, there are in fact many people in Northern Ireland on both sides of the sectarian divide who have objective views, have good will and are responsible, then I would hope very much that they would give serious thought as to how those people can he made use of and in some way fitted into the administration.
On the wider matter of solutions or devolved government, I was hoping that the noble Earl, when he replies, will say that he has, in fact, no plans for devolution or devolved government at present. It is not because I do not want to see it. I should like to see it, and I entirely agree with him that it is something that is highly desirable and highly necessary.
However, it can come about only if the climate is right, and the climate is certainly not right at the moment. It is far, far too polarised as between the two communities. It has been brought about by the hunger strike, by the murders which the noble Viscount, Lord Brookeborough, mentioned in his earlier remarks, by the Anglo-Irish talks, by fear of the third force on the Catholic side, and so on. Throughout Northern Ireland there is very considerable fear on all sides. As long as people are afraid, issues, other than survival and how your neighbour will survive, become very much second place.
Certainly in those circumstances you are not likely to compromise with anyone whom you may regard as your enemy or think is perhaps in sympathy with your enemy. If you want devolved government, compromise is absolutely inescapable. Therefore, at the moment my view is that there is very little chance of achieving anything in this direction. Frankly, even to embark on the course and to start a great deal of talk and discussion about it encourages the terrorist, because the terrorist does not want a solution, the terrorist does not want devolved government, the terrorist does not want the situation cooled down.
I certainly think that great thought should be given before we embark on further courses of devolved Government because, quite frankly, I think that we can produce more deaths, and more murders by rushing into some sort of ill-advised and quick solution. I have said this before and I make no apology for saying it again. I think it would be far better if Her Majesty's Government were to say that there would be no further attempts at a solution for some time to come, preferably for something like the remainder of this Parliament. Frankly, I believe that if that were said, quite a few people in Northern Ireland would sleep easier in their beds. I believe that the people who are trying to find these solutions could then be employed in solving the massive economic problems of the Province.
4.53 p.m.
Lord Blease: My Lords, those of us who live in Northern Ireland will, perhaps, more than most readily appreciate the sensitivity of the Unstarred Question tabled today by the noble Lord, Lord Moyola. The question about the future government of Northern Ireland is of crucial importance, and one that is uppermost in the minds of responsible citizens of Northern Ireland.

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If I may, I should like to commend the noble Lord, Lord Moyola, on the frank and positive way in which today he has posed the question and some of the issues involved. The noble Lord's manner of approach today is not unexpected and, indeed, is in character with the attitudes towards political consensus, the principle of tolerance and civilised living which he has honourably upheld in public life. It was my privilege to have had the opportunity, through the trade union movement, to work with the noble Lord when he was Prime Minister of Northern Ireland some 10 years ago. In dark and troubled times he sought, with earnest and genuine efforts, to promote positive, harmonious leadership with firmness, fairness and good will to all sections of the acutely divided Northern Ireland community.
As I rise to speak here today, I am very conscious that in no way can I lay claim to have the rights of elected representatives or have that authoritative voice. However, as an individual and as a Member of your Lordships' House, I must say that there is no doubt in my mind that the people of Northern Ireland need to assess with some realism the precarious political, constitutional and economic position which pertains today in Northern Ireland. There is no scarcity of plans and formulae for the Government in Northern Ireland. We have 57 varieties neatly packaged and labelled to meet all sorts of requirements. The dilemma is not the plans, but the will to accept in Northern Ireland our interdependence, and to work together to promote positive and active resolutions for the wellbeing of all peaceable citizens in the Province.
It appears to me that this interdependence must be actively pursued and promoted in at least three aspects of government: law and order; political devolution; and economic development. In dealing with interdependence and efforts towards political devolvement I fully realise that previous attempts have failed to reach inter-communal agreement on the real transfer of power to a local assembly and executive on conditions acceptable to United Kingdom Governments and to both Northern Ireland communities. The problem is that the democratic majority rule is rejected by the nationalist community, and governmental power-sharing with the minority is rejected by the Unionist community, as is also the recognition of the Irish dimension.
The United Kingdom Governments—and here I use the plural because it is not only this Government but previous Governments—have stated that, unless the minority community feels able to accept and identify with the institutions of government in Northern Ireland, there is little prospect of political stability in the Province. The failure to find agreement does not diminish the necessity to pursue acceptable arrangements for the retransfer of executive and legislative powers to Northern Ireland.
I believe that the noble Earl the Minister in his earlier opening remarks and the noble Lord, Lord Moyola, both stressed in some way this sense of the need to have a feeling of interdependence in the Northern Ireland community, but before we go down that road we have to start with the political border. Whether one agrees with it or not, Northern Ireland
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in terms of the constitution is part of the United Kingdom of Great Britain and Northern Ireland. That is a fact recognised internationally by the United Nations, by the European Community, and so far as I know by every country in the world, including de facto the Republic of Ireland. That status cannot be changed except by a decision of the Westminster Parliament, and that Parliament has said that it will not change it except by agreement with the majority of the people of Northern Ireland.
Professor Norman Gibson of the New University of Ulster is a keen political observer. In a letter published recently in the press in Ireland, which was published both north and south, he stated:
"The Governments and Parliaments in London and Dublin are determined to work towards closer relationships between Britain and the Republic of Ireland. The United States Government and many governments in Western Europe strongly support these developments; loyalist opposition is not going to stop them, nor is the violence of the IRA or similar groups.
"The people of Northern Ireland have got to decide whether they are for or against these closer relationships.
"If the Protestant community, or a large proportion of it, are prepared to oppose these new departures to the point of taking up arms against Crown forces then it would seem that we are inexorably heading for an insecure and impoverished semi-independence outside the United Kingdom.
"It will be said that to get involved [this is in the Anglo-Irish studies] is to take a giant stride towards a united Ireland which for many in the Protestant community arouses deep-seated fears of becoming a subordinate and alienated minority in a Gaelic and Catholic-dominated Irish Republic.
"Are such fears realistic? Increasingly the evidence is no. Protestant interests and Protestant identity would and could be protected and sustained within the context of closer political and economic relationships between London and Dublin.
"The Catholic and nationalist community in Northern Ireland has also historic choices to make. It, too, must choose whether it is for or against a new departure in British-Irish relationships. To decide against them is to align itself with the extreme republican cause; happily, this seems to be unlikely.
"But for Protestant and Catholic alike, the immediate and fundamental choice is between paramilitarism and dialogue, discussion and compromise. The former can only bring appalling and even greater devastation; the latter can only satisfactorily proceed within the framework of the rule of impartial and evenhanded law. The choice is"—
that of the Northern Ireland people. I quote at length from that letter because I believe it reflects new thinking and new attitudes that are growing in Ireland, in both North and South, and they are encouraging to those who wish to achieve a democratic ideal.
I turn to the issues of law and order, and I feel I can best deal with this aspect by quoting from a statement issued on 26th November last by the chief constable of the Royal Ulster Constabulary, Mr. Herman. He said:
"It is essential that there be no doubt whatsoever about the role and responsibility of the RUC. Quite simply, this is impartial and professional law enforcement in the interests of all the people. Never was it more necessary that every citizen, Catholic and Protestant alike, should understand where the RUC stands in relation to the community and to the enforcement of the law as democratically enacted by Parliament. No Republican or Loyalist paramilitary organisation or any private force acting outside the law will be permitted to usurp the authority of the police and the army. In a democracy that is how it must be. The RUC supported by the army is determined that is how it will be. In saying this, I want to make it clear that the RUC is not in conflict with the community. Only those people who break the law can be in conflict with the RUC and they do so by their choice.
"Now is the time for this community to hold on to its commonsense and not to put in danger the democratic values which we cherish. Be assured that the police and the army will fight

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terrorism until terrorism is finished. I say to the terrorist: You will not win. You will not he allowed to win…. We require greater support by the community because this is so vital to success, but that support and any participation can only he within the law: by joining the security forces, by the community using its eyes and ears to help the police and harry the terrorist, by unequivocal rejection of violence, even to the point of great personal courage and example, and by good neighbourliness and lawful mutual help in areas in which fear and apprehension exists. That is how terrorism will be defeated. That is our objective. The whole fabric of society is threatened by self-appointed armies whose object is to seize power and to dictate to the people, not only what they should do or not do, but whether they should live or die. It therefore behoves everyone who values freedom to be alive to the dangers and to support the forces of law and order. If they do not, they may one day discover to their cost that it is too late".
I make no apology for quoting at length from that statement by the chief constable. It reinforces what has already been said by the Minister and others in this debate. That statement, in my view, did not receive the attention it should have got, because it shows completely the impartial role of our police in trying to uphold law and order in Northern Ireland. We are fortunate to have in the security forces people of the calibre of Mr. Herman; and in this connection I would ask the Minister what measures—that is, apart from those already mentioned—are being taken by the Government to focus attention on these matters and note those aspects of interdependence in respect of law and order.
The Minister has already dealt with the community aspects, as reinforced by that statement from Mr Herman, and he has dealt with some aspects of the relationships between the Garda and the law and order forces in the Republic. But are there not more ways in which we could help as between Great Britain and Northern Ireland? Indeed, this is where the whole sense of interdependence means something real to the people at this particular time.
Finally, there is the crucial interdependence on economic development. I shall be brief, since I dealt with this aspect in the appropriation debate last week. The chronic unemployment and serious social conditions in Northern Ireland will in any case be well known to your Lordships. Against such a backcloth of deprivation and social injustice, how is it that Northern Ireland elected politicians can continue to opt out of consultations on social and economic matters, especially those arranged by the Secretary of State for Monday next? Surely this is the time that politicians should be going along. There is nothing to lose by forthrightness across the table.
What can be done to turn the spotlight away from the illusion to the reality? There is no local forum where the day-to-day issues affecting the lives of the people can be examined, debated and influenced, as the noble Lord, Lord Moyola, mentioned in his remarks. Public debate is limited to the media, with television and radio playing the most important part. The inadequacy of this process is such that it can endanger the democratic process. Only items that are deemed as "newsworthy" find a place—the headline issues. Conflict politics take up much of the time, and most of the remainder is given over to reporting the violence in our midst. As a result the people of Northern Ireland are looking at life through a tunnel so bent and distorted that it is impossible to see any light at the end of it. By the very nature of politics in Northern
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Ireland the media in the main accentuate the negative and neglect the positive. It is no substitute for democratic means of consultation and decision-making.
As the Government pursue their new initiative may I suggest to the Minister that some new thought be given to the ideas put forward by the noble Lord, Lord Moyola. We need a louder Northern Ireland voice to be heard at Stormont—that might sound strange in the context in which I mention it—but we need also a voice of reason, of understanding and of progress, a voice that will be accepted and understood in the international scene, not a voice that is harming the cause of Northern Ireland. I fear that I must agree with the noble Lord, Lord Moyola, in his view that government by press hand-out has failed. Perhaps 20 years ago I would not totally have agreed with the noble Lord in what he said about the integrity and uprightness of the Northern Ireland Civil Service. I was on occasions a victim of the maligning of the Northern Ireland Civil Service, but this is not the time for recrimination. Our Civil Service in Northern Ireland is, I know, impartial and is out to help all citizens in the Province.
I should like to suggest, when the Government's new initiative emerges, why not deliver by post to every Northern Ireland elector a suitable Government explanatory paper? Far too often what is accepted as being the Government's point of view goes right into the press and is misrepresented before it even gets to the people. The Government are then caught up in trying to re-explain their point of view and in trying to get over their intentions to the public.
There seems to be no good reason why the Government should not now embark upon a new initiative, based on these three aspects of interdependence—interdependence in devolution, law and order and the economy. But Northern Ireland has not yet wakened up to where it stands in regard to the rest of the community. Sometimes people think that Northern Ireland is a hub of the universe, but it is indeed sadly missing out. Perhaps if we could turn our attention to the pressing needs of the people rather than to bombastic power politics we would then begin to understand what we have in common rather than what divides us.
5.10 p.m.
Lord Hampton: My Lords, the noble Lord, Lord Moyola, is to be congratulated on raising this important question with the Government so skilfully even as late in pre-Christmas proceedings as this. I have also listened to the noble Lord, Lord Blease, with respect and interest, as always.
There has unfortunately, of late, been greater polarisation of opinion. The SDLP seems much more green nationalist than it was, and Mr. Paisley appears to dominate the Protestant scene, although I did take note of what the noble Viscount, Lord Brookeborough, said in the earlier debate. Nonetheless I have heard it suggested that the possibility of a new Assembly should be considered, which would be offered devolved powers underwritten, in return for the following of certain specified practices, by financial assistance from the United States of America, which both President Carter and President Reagan, I understand, have touched on. This is an interesting idea.

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For the time being, however, we consider that direct rule from Westminster is to be preferred to a return to a Protestant-dominated Stormont, which we reject.
We must therefore persevere patiently with attempts to construct a power-sharing Executive in Northern Ireland in the hopes that there is more support for this in the Province than the present political leaders are prepared to admit—and once again I noted what the noble Lords, Lord Moyola and Lord Blease, said on this—but this depends on careful timing. It may be difficult, but it is essential to maintain a careful balance between possible stagnation of ideas, on the one hand, and, on the other, change for change's sake at an inauspicious moment, promoting a feeling of some insecurity.
The leader of my party, when addressing the American Chamber of Commerce recently, strongly condemned the activities of the IRA and expressed concern about the funds being raised to support them in the United States of America. I agree with him that we must also clearly condemn the bigotry and thuggery on the other side of the argument. As he said:
"The Protestants have their murdering gangs as well, spurred on by irresponsible politicians. It is time we stopped describing them as loyalists, for they are certainly not loyal to the standards of decency and democracy upheld by the British Crown".
Those who still seek the label of "loyalist" and do such things recently disrupted the work of Parliament at Westminster and sought to bring chaos to the administration of the Province. They also showed ill will forcibly when the Secretary of State attended the supposedly Christian funeral service for the Reverend Robert Bradford, the recently murdered Member of another place. Fear and anger can do terrible things to men, but that action by a church congregation was, for me, despicable.
But let me redress the balance with the words of a remarkable woman who has suffered terribly from both natural causes and terrorist activity. She is quoted in Alf McCreary's moving book called Profiles of Hope. She says—and I quote if I may:
"Life is for living and there's no point in being bitter. I am convinced that if we can all go through the tough experiences of life without becoming bitter we emerge as a stronger, better person. Bitterness eats away at people. I have never felt bitter, not even at the man who shot my son. I don't know that I would ever want to meet him. But I would rather be the mother of Sean than the mother of the man who shot him…. That really is a harder cross to bear…. The real me has implicit faith that the country is going to be better after this terrible, harrowing time and that there is going to be a brighter future. I should hate to think otherwise. I firmly believe that we are in the hands of an unseen power, if we only put out our hands for help. It is there".
As the noble Lord, Lord Blease, has already said, news tends to be reported more quickly when it is bad. We must not forget the many people of integrity and tremendous courage in Northern Ireland today.
We believe, then, that there is need to do much more to counter immoral IRA propaganda in the United States of America and to encourage, hopefully, American action in more constructive policies.
We support the talks between our Prime Minister and Dr. Garret FitzGerald as the noble Lord, Lord Moyola, mentioned. We see no possible suggestion of a sell-out and find totally unacceptable Mr. Paisley's
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demands that the talks be broken off. At the same time, we consider that any commitment to a united Ireland would be at present neither feasible nor sensible and would only aggravate the situation. I should like to raise with the noble Earl the Minister the possibilities of a border poll referendum in 1982 or 1983 when it would be possible to spell out at the same time the financial advantages of greater economic unity with the South, for example, as regards gas, electricity, agricultural support, trade and tourism.
We consider that the final solution very likely lies in some form of federal structure but this will take much time and patience and much will depend upon the willingness of Dublin and the people of the Republic to accept suggestions for changing its own constitution. I see no obvious indications that direct rule can or should speedily be brought to an end. There is little chance at present of a satisfactory compromise.
5.16 p.m.
Viscount Brookeborough: My Lords, I should like to start by thanking my noble friend Lord Moyola for raising this subject, even if it is just before Christmas. I should like to support him in this contention that, until there is peace for a considerable length of time, initiatives on devolved government are not going to succeed. While listening to him speak on his criticism of the advice that the Government get from Stormont Castle—criticism which I support—I wonder whether the Government would take on board a brand new idea for service by the civil servants transferred from London to Belfast that, at least for a month before taking up residence on the "Gold Coast" in County Down or in Stormont that they should live with a Northern Irish family—it does not matter of which political persuasion—a long way from Belfast, preferably on the border. They might then come to Stormont with their eyes rather wider open than they appear to have.
I should like to repeat my welcome to the improvement in relations between the sovereign powers in Dublin and London. I welcome further the change brought about by the new Prime Minister in his expressions of how he sees the future of Ireland, but I would disagree with his ultimate aim for a united Ireland. I welcome also most warmly the change by the Roman Catholic heirarchy in Northern Ireland. This will do an enormous amount of good.
The Earl of Longford: My Lords, I am not trying to make a point of interrupting the noble Viscount more or less habitually, but I am afraid that he is under a misapprehension. All this stuff about the hierarchy never having condemned the murders is poppycock. I interviewed the Cardinal at some length for an English newspaper in August. He pointed out to me that he has denounced the murders again and again. I hope that the noble Viscount will denounce Protestant murders as well as Catholic ones.
Viscount Brookeborough: My Lords, I do not think I have ever made a speech in this House when the noble Earl was present when he has not found it necessary to interrupt or correct me on something. I will say absolutely and clearly that the language in which they spoke up to the last five or six weeks has

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been equivocal arid difficult for me to understand; whereas the language in which they speak today is absolutely clear and cannot be misunderstood.
The Earl of Longford: Poppycock!
Viscount Brookeborough: That may be the noble Earl's opinion. He is better educated than I am in semantics, no doubt. I welcome sincerely the hopes of improved trade relations. If you live in our part of the world and see the terrible problems which face us, the meat factories, where in one week they are swamped with beasts, hut, because an MCA comes in, the next week they are left with no beasts to kill. The same thing applies to the meat factories on the other side of the border. Yes, there is a job to do. Gas and electricity are certainly jobs to do. Nobody should feel that in the South of Ireland, in the improvement of trade relations, that there is a crock of gold waiting for us to pick up. We arc all in the very depths of an appalling slump.
I said before that the media had conveyed in the past few weeks that everybody supported the DUP. As I said before, the demonstration by ordinary citizens was that of frustration. I should like to go further into the question of the support and problems of the people in Northern Ireland in discussing politics, and especially to talk about elected representatives in the Lower House. At the present moment in a state of revolution it is almost impossible for a so-called moderate to have any future at all because to be moderate in a revolutionary situation you cannot speak except to mouth the fears and anticipations of the people who are under attack. At the end of the day, people simply have to be re-elected or they are not there. I know that better than anybody else, because I stood and supported my noble friend Brian Faulkner and I was lucky to serve under my noble friend.
The Government time and time again by their actions have played into the hands of the DUP. Violence plays into the hands of the DUP and initiatives taken at the time of violence plays into their hands, and more and more support goes to that party. At this moment if there was a general election today, maybe the election for South Belfast, I am not at all sure who would win that election. It is a strong official Unionist seat. That is the measure of what has happened in the past few months.
The ordinary Ulster man—and I want to try to explain his position and why they have reacted against the Dublin Summit in the way that they have—looks on Anglo-Irish councils, councils of Ireland, with great distrust. The reason is simple—in 1921 there was a Council of Ireland. The object of it was, as designed by this Parliament, that it should eventually produce unity. In 1940 the Government at that time looked at the question of a Council of Ireland with a view by that to buy the ports from De Valera. That Council was designed to produce a United Ireland. The Sunningdale Council in their view was designed to produce a United Ireland. It is therefore extremely difficult in the presence of violence and the other revolution to understand that this Anglo-Irish Summit is a matter of Ministers meeting like-Ministers of sovereign governments. I support what my noble friend said about the apparent advice that appears to
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be emanating from Stormont Castle.
I am certain that the Government will agree that they did not expect the reaction from the Unionist opinion which came as a result of the issuing of that communique. My noble friend Lord Gowrie knows that I was in touch with him about it and said before it happened that it would be predictable and that that was how it would happen.
I now want to turn to the Anglo-Irish studies because they are written in terms which are almost insulting to people of Unionist opinion. I wonder about this—this is why I come back to the advice, although, I do not go so far as the Member for South Down as saying that there is a conspiracy. But the way that they are written is in a way to produce a reaction that the Unionist people in Northern Ireland will take up a stance which makes them totally unacceptable to the people of the rest of the United Kingdom.
I fear more than anything that the actions of Government in supporting Mr. Paisley inadvertently—and lam not saying it is done on purpose but certainly it would not be done if there was strong Northern Ireland advice—might drive us to that particular position.
In the papers—I do not know how many people have bothered to read about the Anglo-Irish studies—there is not one single reference to the union with the United Kingdom, while the aim of the Dublin Government for unity is repeated and honoured. I should like to ask the Government: Can they not even express support for the union?—because after all it is the United Kingdom and the Government are composed of the Conservative and Unionist Party.
Rumour has it that the Secretary of State has even said that he cannot express support for the union because he is afraid it would offend the minority, the Roman Catholic population, who in 30 or 40 years' time may be in the majority. I cannot believe that is true, but that is one of the rumours which is going round. What the Government should remember is that 40 per cent. of the Roman Catholic population of Ulster, apart from all the Protestants, are anti-Dublin. Therefore they cannot go wrong by supporting the union and thereby removing one of the supports which the DUP have.
What should be done now? First, I would suggest that there should be more Ulstermen in Stormont or more and better-indoctrinated English civil servants after a stay in the country. Secondly, I would suggest that the Government should announce as soon as possible that there will be no political initiative and no devolution until after the next election, when there will be 17 Members of Parliament for Northern Ireland and of necessity they will reflect the population. Thirdly, f would suggest that vigorous security should be maintained; and fourthly—as important as anything else—we should increase prosperity, remembering that Ulster depends very heavily on Government expenditure. Given peace and prosperity for a short time, I believe people would be surprised at how quickly politicians would come to think and act with wisdom.
5.27 p.m.
Baroness Ewart-Biggs: My Lords, first, I should like to thank the noble Lord, Lord Moyola, for giving

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us yet another opportunity to talk about Northern Ireland. For my part, I have learned a great deal from what he has said and from what the noble Viscount, Lord Brookeborough, has said. I have sometimes heard the Westminster Parliament criticised for not debating this all-important subject of Northern Ireland enough—but such a criticism could hardly be levelled at this House this afternoon.
As the noble Lord, Lord Moyola, has said, and I do agree, the importance of this debate lies in providing an opportunity for discussing the means towards an end rather than for making any dramatic statement about the actual form such a political settlement should eventually take. Having said that, I think we arc all permitted to nurture a few personal thoughts, preferences and hopes as to what form the settlement might well take.
I think my own hopes might be shared by those who have no particular axe to grind but who merely have a concern for the future of Northern Ireland. Therefore, as I say, these hopes—which may be shared by other people—are that at some point the people of Northern Ireland will agreee on a devolved administration where the responsibility for governing the Province could be shared proportionately between the two communities. Following upon that, it would become the responsibility of such an administration to decide what the future relationship with the Republic of Ireland should be.
That is what some of us would dream of as happening one day; but nevertheless the matter of immediate concern and importance is the work that is going on at the present moment which is aimed at creating the appropriate conditions for bringing about any settlement at all. That priority was very much reflected at a meeting a couple of weeks ago of a private association with which I am involved, at which there were political, academic, Civil Service and press representatives from the North and South of Ireland and from Great Britain. Their discussions centred entirely on ways of resolving present difficulties and improving on the present situation rather than on putting forward any crystalline political solutions. It seemed to me they bore out the theory that it really is impossible to put a lid on a box while the eruptions within that box are of the kind that will blow the lid off again. Thus it would seem right, in the meantime, to concentrate on all those areas where work is going on to pave the way. And, in my view, the most important areas, which have been mentioned by previous speakers, are as follows.
First and foremost—and, of course, the most fundamental contribution of all—are the efforts of the Northern Irish people themselves in the work of reconciliation. What possible political settlement can there ever be while the division remains so profound and so bitter? Secondly, there is the work going on between Dublin and London with the aim not of lining up to impose some settlement on Northern Ireland, but rather of creating that closer relationship which has eluded the two countries for so many centuries.
Thirdly, there is the work of Dr. Garret FitzGerald, the Irish Taoiseach, in his crusade to increase the trust between all the peoples of Ireland. Fourthly, there is the growing awareness of the existence of the European Community as a framework in which to resolve eco-
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nomic and social problems in Northern Ireland. Fifthly, of course, there is the all-important role of the British Government in their administration of the Province in the economic, social and security fields, while at the same time searching for a way of placing some political responsibility into the hands of the people of Northern Ireland themselves. By this, I mean not the search for a political settlement, but the search for a way of filling the dangerous political vacuum which seems exists in Northern Ireland today. It is on this last point that I should like to comment on one or two ideas of my own.
I share the view of previous speakers that the time seems to be approaching for the creation of some forum—however modest—to which the Northern Irish could elect their own representatives. Candidates coming from Northern Ireland's established political parties and the many independent candidates could stand in an election which would operate under the system of proportional representation normally used in Northern Ireland. Once elected, this assembly could keep very well clear of any constitutional objectives, but could initially be given the role of producing a procedural report. Its members would thus be given the task of themselves deciding how to operate. Such a report would give the Secretary of State an opportunity of seeing what kind of body it was. He would then be in a position to choose from a multitude of different formulae how best to proceed.
We are fully aware of the major danger which has, in the past, threatened the creation of such a body. I mean the danger of domination by one single block—the block made up by the two Unionist parties. But this danger now seems much diminished, as, clearly, these two parties seem at present to be at variance, and a coalition could well be formed from elsewhere, including the Alliance Party, the SDLP and, indeed, some of the independent members. The movement forward would necessarily be very gradual. Things could be taken step by step and, if anything went wrong, the ground could be retrieved without anything being lost.
I feel that the points in favour of setting up such a forum are quite numerous. It would provide an ordered way of finding out what people in the Province think. They are not very often asked what they think—except for the two extreme examples of the recent by-elections in Fermanagh and South Tyrone—and, then, what the electorate said was not at all agreeable for the Government to hear. It would provide a valve for letting off steam. At the moment, the methods used by extreme elements in the Province for letting off steam are of a very destructive nature. The practical day-to-day administration of the Province under direct rule might thus be much assisted.
It would be a means of giving expression, as the noble Viscount, Lord Brookeborough, said, to the voice of that moderate and reasonable middle ground in Northern Ireland, whose utterances are always drowned by the noise coming from the extreme elements. It would provide a way of bringing forth new political representatives—people wanting to look forward towards the future, and whose views were not imprisoned by history, prejudice and religious bigotry. The only way of drawing out these new political figures would be by producing a forum in which they

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could operate. Finally, may I say that, in my view, the system of direct rule is justifiable only while there is a constant examination of all these other frameworks which exist to create political progress and to build up trust? It is only in this way that the people of Northern Ireland will be given both the time and the opportunity to decide their own future.
5.35 p.m.
Lord Vaizey: My Lords, may I thank my noble friend Lord Moyola for putting down this Question, so that we can have a full debate on the problems of Northern Ireland. In the previous debate I spoke about the problems of security in relation to the Republic. In a debate which is about Northern Ireland I make no apology for beginning my speech with a discussion of conditions in the Republic.
I wonder whether people in Great Britain appreciate to quite what degree opinion in the South has moved. Discussion now takes place openly, and in all groups, in the South about both Irish traditions—that is, the Irish Catholic tradition and the Irish Protestant tradition. This is not a revolutionary change in sophisticated circles, but I can assure your Lordships that the recognition that there are two major Irish traditions is a radical change in the process of discussion in ordinary Southern Catholic households. It is something which I very strongly welcome.
The noble Lord, Lord Blease, who spoke, as always, so eloquently and brilliantly about this topic, referred to the historic choice which now faces the people in the South of Ireland as well as in the North; whether or not the people in the South are prepared to make the moves and the gestures which will lead to reconciliation. The growing together of the Irish Republic and the United Kingdom is not only desirable but inevitable. We are members of the European Community. Trade links, cultural links, professional-personal links are so close that it is inescapable and inevitable that the rift of the past 60 years or so will gradually he healed and that we shall come together as close and friendly neighbours. In this context, the Unionists will inevitably find that they are modifying their own position, whatever their own strongly held views may be. They will have to respond to the new situation where two sovereign Governments are closely allied in many fields: in security, in trade, in social relations of all kinds.
Lord Donaldson of Kingsbridge: My Lords, I am surprised by the inevitability suggestion. Belgium and Holland were joined in the 16th century. Why should not they, equally, come together? Would the noble Lord say that that, too, is inevitable? I do not follow the argument. The noble Lord is saying something which the facts do not support. This is not an objection to union, but I do not understand the noble Lord's thinking.
Lord Vaizey: My Lords, whenever the noble Lord opposite is present in the Chamber I never make a speech without being interrupted by him. I have not come here to talk about the Province of Benelux. I have come here to talk about the Province of Northern Ireland which the noble Lord first got to know seven years ago, which I have known for 30 years. I am talking about the inevitability in the European Com-
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munity of two neighbouring states, with populations very closely linked by tradition and migration, with a great deal of common trade and, to a very large degree, with common institutions of law and history, growing together. There has been a separation. If the noble Lord wanted to take part in the debate, I wish he had put down his name to speak and had presented us with one of the opinions of his party, about which we should be very interested to learn but on which no statement of any kind has been made so far.
There is no one solution to the Northern Irish question. Many people would say there is no solution to the Irish question as it stands. The pursuit of a solution may have been what caused so much of the trouble: the belief that there was either only the possibility of a United Kingdom, including the South, or the possibility of a united Ireland. I would respectfully submit that there is a series of steps which may offer what in the end may turn out to be, imperfectly, some sort of solution at least to the present security crisis. I say this, and what I am about to say, because my Irish friends are principally Catholics in the South, and the parts of Ireland I know best are County Dublin and County Mayo. But I must say that my sympathies over the past 10 or 12 years have been very strongly for the Protestants in Ulster who have been subjected to this appalling campaign of violence.
There is an element of hypocrisy in talking about Protestant violence and Catholic violence as though they were exactly parallel. It is called "false symmetry", as someone mentioned the other day during the debate on the USSR and the USA; the fact that they both possess nuclear bombs does not mean that they are powers which should be equally condemned by European nations. There have been comparatively few murders carried out by the Protestants' paramilitary gangs. Of course, those murders must be condemned, but the bulk of the campaign in the past 12 years has undoubtedly arisen from the IRA.
The Earl of Longford: My Lords, may I interrupt?
Lord Vaizey: My Lords, the only other person who persistently interrupts my speeches on Ireland in this House is the noble Earl, Lord Longford. The noble Earl has already intervened. He has not put his name down to speak again. I have come here to try to speak seriously about an important question and it is frightfully difficult if noble Lords keep on getting up and battling.
The Earl of Longford: My Lords, I do not want to come between these two spokesmen of the higher principles, but I should just like to assure the noble Lord, Lord Vaizey, that I am going to speak in this debate and so perhaps he would rather I let him get on unimpeded.
Lord Vaizey: Yes, my Lords. Actually I always use the noble Earl, Lord Longford, in my logic lectures, because he is an Irish Catholic, because he is both an Irishman and a Catholic; but the total effect of the words "Irish Catholic" would be misleading because he was in fact born and brought up as an Irish Protestant. It is the marrying of those two traditions,

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which the noble Earl has so brilliantly consummated in his own personal life, which I am trying to make the theme of my speech. I spoke about the two traditions coming together in the South for the first time in my personal experience, which I think is a very important fact, and I have talked about the way in which the United Kingdom Government and the Trish Government, again for the first time, are coming together very closely on a number of very important issues. I believe that that context within which things are taking place is a very important one.
I would respectfully say to my noble friends on this side of the House who are from the Ulster Protestant community that it is important we should remember that Ulster never was in the same constitutional position as Yorkshire. We are often told that Ulster is the United Kingdom and why should we talk about a special Government for the north of Ireland when we do not talk about a special Government for the county of Yorkshire. Before 1801 the whole of Ireland had its own Parliament. After 1914, with the passing of the Government of Ireland Act, we have had de facto Parliaments in Ireland which have been separated from the Parliament here in Westminster in important areas of jurisdiction. From 1801 until 1921, when there was no Irish Parliament, there was in fact a completely separate Irish administration. It is only in recent years that we have had direct rule of Ireland at all from Westminster; for the first time in the history of these two islands, this experience of direct rule is a very recent and abhorrent experience in the total history of the relationship of these two islands. I therefore regard it as absolutely inevitable—and since I realise, of course, that there is no such thing as historical inevitability, perhaps I should modify my phraseology and say that it is pretty likely—that some form of devolved administration will eventually have to be created in Northern Ireland.
I fully accept what the noble Lord, Lord Moyola, from his great wealth of experience has said, supported by the noble Viscount, Lord Brookeborough, that now is probably not the time to introduce that devolved administration. What I do ask myself is, when will the time come when that devolved administration can be created? It will never be propitious. If one waits until the murders cease, that gives an additional incentive for the murders never to cease.
On the whole, I would seek to suggest to my noble friend on the Front Bench that representative institutions in the North of Ireland are so important, so vital for the future of both Northern Ireland communities, because it is very important indeed that the Northern Ireland voice be heard in these joint Dublin-London consultations, that some kind of institution in the North must and should be created, however difficult it seems, however obnoxious some of the people who take part in such an assembly might be to those of us who belong to this House or to the lower Chamber.
It is for that reason that I would, on the whole, out of inexperience compared with my noble friends Lord Moyola and Lord Brookeborough, say to the Government, for the moment disregard their advice, press ahead and seek whether or not you can create some kind of representative institution in which both voices of the Northern Ireland community can be heard. Until such
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institutions are created, it seems to me you leave the field absolutely open to the present extremists and you encourage them—this is the point—to be extreme.
5.47 p.m.
Lord Monson: My Lords, we are grateful to the noble Lord, Lord Moyola, for initiating this debate. It is a pity that it has to take place so near Christmas, indeed on the day when we rise for the Recess, partly because one should not have to rush a debate on such an important topic as this, and partly because it is, after all, the season of goodwill and in the circumstances it is only natural and human to want to play down differences and to avoid controversy. I would dearly like to have done exactly that, but I am afraid that there are some things that simply cannot remain unsaid any longer—always provided that my cold-ridden throat lasts the distance.
The Government have done a U-turn, not an economic U-turn of course, although that may come, but a U-turn as regards Northern Ireland. The 1979 Conservative election manifesto is explicit about the Conservative intention to restore local government in the Province, thereby bringing it into line with England, Scotland and Wales. In conjunction with full parliamentary representation at Westminster—and I do trust there is going to be no back-sliding on that, and I hope the noble Earl can reassure us—this constitutes full integration. This is consistent, of course, with the Conservative attitude towards Scottish and Welsh devolution. They opposed it, or most of them opposed it, because they believed, rightly I think, that it would weaken the Union. So one should not be too surprised perhaps that the manifesto was written as it was. But certainly, it was a very hopeful sign, at least to my mind.
Ever since the peremptory suspension of Stormont in 1974, I have believed that full integration was the only honourable course. What is more, it is significant that integration is the second choice of nearly all the groups and sub-groups within Northern Ireland, when presented with a list of half a dozen possible options for the future Government of the Province. It was not, admittedly, their first choice, but it was nearly everybody's second choice. This is hardly surprising because full integration does, after all, guarantee justice for everyone in the Province, not just on a temporary basis but in perpetuity. It also guarantees stablility and permanence. Stability and permanence are just what the IRA and the Irish National Liberation Army fear most, because it cuts the ground from under their feet. I believe that it was chiefly for this reason that the INLA brutally murdered the Conservative statesman most closely associated with the policy of integration. I refer, of course, to Mr. Airey Neave.
The other day the Prime Minister declared Northern Ireland was just as much a part of the United Kingdom as her own constituency. Echoing the noble Viscount, Lord Brookeborough, may I say, if only other leading Conservatives were as robust and enthusiastic and unequivocal in their support for the union! The implication of the Prime Minister's statement is that the inhabitants of, let us say, North Down or Mid-Ulster, should have the same rights and same obligations as the inhabitants of Finchley—also the same justice and, I would submit, the same form of administration, at both national and local level. But now this

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is not to be, mainly, one deduces from reading various Parliamentary Answers over the past 12 months or more, for fear of offending, first, hard line Republicans (not all Republicans, but hard line Republicans who constitute a minority of the minority) but, above all, certain people on the other side of the Atlantic.
I assure the noble Earl that I do my best to understand the Government's problems. I think I understand the problem in so far as they are obliged to offer inducements to friends, neighbours and allies to persuade them to act in the way that most civilised nations would act spontaneously without prompting; in other words, to prevent their countries being used as terrorist bases for attacks upon other countries, particularly friendly countries, to extradite those suspected of committing the most hideous crimes and to prevent gun running and the transport of explosives.
The inducements to which I have referred are not of course financial but consist of hints, nudges and half-promises about aspirations being fulfilled at some unspecified time in the future. Naturally, all concessions to opponents of the union excite Unionist fears, and with good reason as Dr. Conor Cruise O'Brien pointed out in a most perceptive article in the Observer on 6th December. The Government will no doubt argue that Unionist suspicion is a price worth paying if their policy stops the flow of arms and leads to greater co-operation between the different security forces, so on and so forth. Well, perhaps, if that policy delivers the goods. The question is: Are enough of the goods being delivered? After all, President Reagan has not even reversed President Carter's ban on the export of arms to the RUC, to take just one example.
Apart from the shelving of integration there are other straws in the wind which fuel Unionist affairs—and if I harp upon affairs of Unionists, Loyalists, Monarchists or whatever you like to call them, it is because it must be evident that without widespread Unionist support no new initiative can possibly get off the ground. If a prominent British politician were to go to Canada and appear on Canadian television and say that the eventual reunification of Hispanic America was the hope and prayer of all English men and women, with Florida, Texas, New Mexico, Arizona and California reverting to their former owners, the American Government would certainly not remain silent. But when Mr. William Clark comes to Dublin and declares that the eventual unification of Ireland is the hope and prayer of all Americans, the British Government stay mute, as they do when other American politicians angling for the Irish American vote make similar statements within the United States.
Naturally this makes the loyal majority in Northern Ireland even more worried, and yet the irony is that Mr. Clark's assertion is quite untrue. Outside a few areas in Boston, New York, Chicago and San Francisco, the vast majority of Americans entertain no such hopes. Those Americans who have actually heard of Northern Ireland, possibly a minority, have no strong feelings either way, although I may interject to say that most Americans I have met recently were full of praise for Mrs. Thatcher for not having capitulated to the hunger strike.
Americans are bewildered of course. This is not surprising when a former British ambassador to the United States, appearing in an "Any Questions"
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programme broadcast for once from the United States, totally fails to challenge or to protest against an allegation made by an American fellow panelist to the effect that the British Army in Northern Ireland is a brutal army of occupation. The ex-ambassador's failure to challenge this outrageous allegation must have been taken by the American audience as a tacit admission that the British establishment concedes the truth of this slanderous allegation.
To compound all this, it must be said that when the new Secretary of State arrived in Northern Ireland one most insensitive statement was made. According to press reports, the Secretary of State chided the Northern Ireland people for not making more of an effort to get on with their neighbours in the South. Imagine how this reproach must sound to someone loyal to the Crown—whether they are Protestants, Catholic or anything else is quite immaterial—living in sensitive border areas (such as those described by the noble Viscount, Lord Brookeborough) whose life is at risk 24 hours out of 24. His or her life is at risk specifically because, as Dr. Conor Cruise O'Brien points out in his article of 6th December:
"The IRA could not have kept up its murder campaign so long without the associated political pressure for unification".
This political pressure is epitomised—and it is not only epitomised but fuelled—by the articles in the Republic's 1937 Constitution claiming jurisdiction over the North.
That is not all. Time and time again when a middle-aged milkman on his rounds or a postman delivering letters is shot in the back by some callous thug because he—that is, the milkman or the postman—is a police reservist or a former UDR man, we read that the murderers' car drove off towards the border. Once over the border they know full well that they are in no danger of being extradited. To add insult to the ghastly injury, the press office of the terrorist organisation to which the murderers belong, situated openly in the middle of Dublin, may well issue some pompous statement trying to justify the murder. Also the existence of terrorist training grounds in various parts of the Republic is common knowledge to anyone who lives in that country.
I can understand that the Republic may well argue that they simply do not have the money or the man-power to police the entire length of a very long and twisting border. That is a fair argument as far as it goes, but, of course, it answers only one of the many criticisms made. I appreciate that Dr. FitzGerald is doing his best to build bridges and to make things up with the North, and one must certainly pay tribute to him for doing this. One only wishes that his predecessors had started on this course many years ago.
The trouble is that Dr. FitzGerald is encumbered with the deadweight of his people's romantic nationalism. Of course, if this romantic nationalism were ever fulfilled, the people of the South would, in practice, be aghast; the last thing they want is to have the North suddenly dumped on their laps. Nevertheless, the encumbrance of this nationalism is such that it would be extremely difficult for Dr. FitzGerald or anybody else to shake off. For that reason one does not rate very highly his chances of succeeding in deleting the offending articles in the Republic's constitution.

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Then there is divorce. Of course, any reform which succeeds in introducing the liberal laws which prevail in the rest of Europe must surely be welcome to a great many people in the Republic, although this is strictly none of our business. But as for seducing the North into the Republic, it is surely a non-starter. Let us suppose that it was suggested to the people of Guernsey, Jersey, Alderney and Sark that they haul down the Union flag and raise the Tricolor; that they outlaw "God save the Queen" and replace it with the "Marseillaise" in return for being allowed to buy contraceptives and get divorced. One has only to consider the idea for five seconds to see how ridiculous it is.
Apart from these few political issues, I bear absolutely no animosity whatever towards the Irish Republic or its people. I have been there numerous times. I have always liked nearly everyone whom I have met there and I have fond memories of my visits. But I do not think that it does a service to anyone to sweep bones of contention under the carpet. Constantly to lean over backwards to make excuses for what the Republic does, or fails to do, as our neurotically guilt-ridden establishment has a habit of doing, is actually to patronise the Republic. It demonstrates—no doubt unwittingly—contempt rather than respect. By constantly saying "You must appreciate their difficulties; you must make allowances" or "That is the way they are; they cannot help it", one is actually implying that the Irish are too immature and mercurial to be able to face honest criticism on a man-to-man basis. A more robust attitude would actually be more friendly, paradoxical though this may sound.
What would an honest critic of the South say to the South? Essentially that the relationship that they should aim for with the North is the relationship that exists between the Netherlands and Belgium. (Here I am delighted that Lord Donaldson's mind runs along the same way as mine.) Here are two countries much closer to each other than they are to other EEC countries. The frontier is extremely informal and relaxed: it is generally possible to cross it without displaying any documentation whatsoever.
There is largely a common cultural heritage, particularly in the spheres of art and architecture. To some degree, there is a common present-day culture and lifestyle, though of course there are many differences as well. There is much trade and much cross border co-operation, but, and this is the most important point, each country has its own head of state, each country has its own flag, and each country has its own national anthem. Furthermore, despite the considerable communal trouble in Belgium between Flemings and Walloons, there exists a strict policy of non-intervention in each other's internal affairs. That, I believe, is the goal to aim for.
6.2 p.m.
The Earl of Longford: My Lords, the noble Lord who has just spoken speaks with deep sincerity, and he will forgive me if I do not follow him along the lines he has indicated. There is no more delightful speaker in your Lordships' House than the noble Lord, Lord Vaizey, whether speaking from the Benches which he originally adorned when he came here as a Labour Peer—
Lord Vaizey: My Lords, I am one of the few people who has never changed his place. The House has revolved round me.
The Earl of Longford: As a form of eccentricity or egocentricity that might rank fairly high, my Lords. The noble Lord is rather an expert on interruptions, but there is no more delightful speaker wherever he speaks from. I hope he will not establish a kind of reign of terror, so that, for instance, if Lord Donaldson attempts an innocent intervention, or I do the same, we are at once rebuked for doing so. The noble Viscount, Lord Brookeborough, is far more tolerant.
I have not got the exact words, but the noble Lord, Lord Vaizey, said that there was no parallel between the murders committed by Protestants and the murders committed by Catholics because the Catholic murders were more numerous—considerably more numerous. That last point I am afraid is true, but I would say that murder is murder. I hope that the noble Lord will condemn murder wholeheartedly. The murders of the UDA have not been condemned by the leaders of Protestant opinion, including leaders in this House, as fervently as the Catholic murders have been.
Viscount Brookeborough: Will the noble Earl give way?
The Earl of Longford: I will in a moment. I am not squeamish about being interrupted. I am too old for that. Noble Lords spend a lot of time talking about terrorism. Well, yes, terrorism of all kinds, but it is ordinarily assumed by noble Lords that all the terrorism comes from one side, and that of course is bunk.
Viscount Brookeborough: My Lords, the noble Earl is not giving any credit to this House. In no way can I imagine anybody in this House who believes that terrorism is only on one side, but there is no question that the majority of the terrorism has been carried out by the IRA. Further to that, he is, I believe, alluding to me as not having condemned it. I have condemned all terrorism, all murder, whether it be Protestant or Catholic, all my life. Further, the noble Earl must agree that, whatever Protestant murders have been committed, the murderers are so inefficient about being clandestine that they are caught. My problem in my county of Fermanagh is that we have had 66 murders and only two have been solved.
The Earl of Longford: My Lords, I am very sorry to hear about that, but, since we are on that point, it occurred to me when the noble Viscount was speaking that, if he knows who these murderers are and if they live only a few miles away, he should inform the police—
Viscount Brookeborough: My Lords, will the noble Earl give way again?
The Earl of Longford: My Lords, I am ready to give way a number of times but not in the middle of a sentence. If the noble Viscount knows the names of all these murderers, which he told us earlier he did, all he has to do is hand the information to the RUC,

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who will then inform the police in Southern Ireland, and I have it on the highest authority—the noble Viscount will know perfectly well who I mean—that the co-operation is excellent between the two police forces.
Viscount Brookeborough: My Lords, the noble Earl is incredibly naive if he honestly believes that the names of the murderers are not known to the Prime Minister of the Irish Republic. They are known to the police, to the Garda and to the Prime Minister. The Irish Republic cannot touch them because they have committed no crime in the Irish Republic. The crime has been commited in the North and it is not possible to get the evidence because the Irish Republic will not allow the Royal Ulster Constabulary to question the people.
The Earl of Longford: I must disagree totally with the noble Viscount, my Lords. I happen to have had a long discussion with high authorities in the RUC not long ago and I know perfectly well that co-operation is excellent between the two forces.
Viscount Brookeborough: But—
The Earl of Longford: The noble Viscount must allow me to speak for, say, three minutes before the next interruption, after which I may forgive him for not being able to contain himself.
I return to what I might have been saying if I had not had those charming interruptions, and I particularly wish to make a few remarks about bigotry. In this country, of course, we have had plenty of bigotry; after all, in England the Catholics were not allowed to sit in Parliament until 1829, but for a good many years bigotry in this country has been very much reduced and there has been a good deal more bigotry in Ireland.
When I was a boy in Southern Ireland, a Protestant—I am not sure whether the noble Lord, Lord Vaizey, regards that as a compliment or otherwise; I mention that in view of his remarks—because I was brought up as a Protestant in Southern Ireland, I well remember that the family we knew best were Catholics, but the mother had been Protestant. I think I shall not be doing her family any harm if I say that her name was Boyd-Rochfort, a very famous Protestant name. We knew very well as children that on her wedding day, her father being dead, she got a telegram from her mother, Mrs. Boyd-Rochfort, running as follows:
"Your father's curse probable. Your mother's certain".
It was not a very good beginning for married life. We knew that as a sort of story about bigotry as children in Southern Ireland, Protestant bigotry. Many years after that, when my brother, whom I succeeded, was buried—he was a Protestant until the day of his death, having been a member of the Protestant Synod of Ireland—we went to the North. I and my family met a few other irregular Catholics like Brendan Behan. We went to the church, but a very large Catholic audience had to gather in and around the graveyard because they could not go into the church. That was 20 years ago—I do not want to imply that there is no bigotry among Catholics—and a few years after that, that could not possibly have happened. That sort of
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bigotry on the Catholic side in Southern Ireland has died out completely and I would have said it was much reduced in Northern Ireland.
This question of bigotry does not arise because Catholics and Protestants are necessarily bigoted. Indeed, I suppose one could be a Member of this House without even knowing who was a Protestant and who was a Catholic. One might assume that some were atheists, but, then, one could not guess Members' religious denomination. At any rate, in this country, as elsewhere, we see Protestants and Catholics getting on well together. But in that one area, as a result of history, there is this awful legacy of bigotry. Personally, I shall always go on saluting the Peace Women, not for what they did but for what they tried to do. They really made an heroic effort, and if later it became somewhat discredited, I still believe they made a noble effort to end bigotry, and in my view everybody who sets out to end bigotry should be congratulated.
When the Pope came to Ireland two-and-a-half years ago a deputation from the Presbyterians came to Dublin to see him. There were some Presbyterians who did not feel they could meet the Pope. Old antagonisms and suspicions die hard. The other day I was glad to find, talking of the denunciation of murders, that the leader, the present Moderator—he was not the Moderator when the Pope came—denounced Mr. Paisley. I seemed to be the first person in the debate to mention his name, and that is an odd thing. People talk about "certain quarters" and there seems to be a certain timidity about denouncing Mr. Paisley, who was in fact denounced the other day by the Moderator for incitement to murder. I am sure that the noble Viscount, Lord Brookeborough, is aware of that, and the noble Lord, Lord Moyola, too. So when you get Mr. Paisley inciting people to murder and being denounced by the Moderator of the Presbyterian Church in Ireland then one is dealing with a very dangerous situation. Let us denounce terrorism, let us denounce murders by the IRA, but let us denounce the murders on the other side, also. Let us particularly denounce Mr. Paisley. I do not see we should shrink from mentioning his name. Is it thought to be bad form to mention his name, because he is a Member of another House? I would say that Mr. Paisley is causing more harm than any one person has ever caused in the history of Ireland.
6.11 p.m.
The Earl of Gowrie: My Lords, if I may take up the last point made by the noble Earl, I would say that I think that there has been a shrinking away from naming names not because of timidity in regard to the name in question, but rather because of a parliamentary convention, which I am ashamed to say I myself violated the other day, that one does not mention by name people from another place.
The Earl of Longford: My Lords, may I stand rebuked and apologise?
The Earl of Gowrie: My Lords, in the last few moments of this most interesting debate I thought that anyone who had casually strayed into the Chamber might gain a brief, but very valuable, insight into why things are so difficult in the Irish scene. There are

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very profoundly and very passionately held views, and they do not always coincide. I hold some extremely passionate as well as some rather unacceptable views myself, and I spend much time sitting on them and not releasing them into the light of day. I also moderate a few of them as greater experience and, one hopes, greater sensitivity dawns upon one. But this shows the difficulties of dealing simply with a very close connection between two countries, a very intimate, a very friendly connection still, but also one which has produced more than its share of tragedy, difficulty and suffering, and which is, alas! still doing so.
I am in some slight difficulty. A few Christmases ago I gave a friend, as a Christmas present, a collected anthology of Osbert Lancaster's cartoons. There was a very good early one, dating from the war. It was a picture of a large, granite-faced vicar, wearing a surplice with some military medals on it. He was speaking from a pulpit and two old ladies were depicted sitting beneath him. In the caption one was saying to the other, "Since the dear vicar became military chaplain to M15 his sermons have got so non-committal".
I am somewhat in that position today, for two reasons. The first is that the Government are at present actively considering the matter which my noble friend Lord Moyola raised—plans for the future government of Northern Ireland—and do not yet have much to say about their considerations. Secondly, in a sense when moving the order in the previous debate—and I apologised to the House for the fact that there would inevitably be overlap here—I gave a very full and, I hope, a very clear intimation of what our thinking was, and along what tracks our minds were presently running. Therefore, I hope that any noble Lord who at this fairly late stage might feel that my present answer is a little wanting in commitment would do me the great kindness of going back to the previous reply, which will, I think, set the framework rather more fully.
As I have said, I cannot answer directly my noble friend's Question, but I can say that the Government remain committed to a search for political development in Northern Ireland, and my right honourable friend the Secretary of State is determined that the people of the Province, through their locally-elected representatives, should have a much greater say in their own affairs than they do at present.
My noble friend Lord Moyola said that there was no forum in which the people of Northern Ireland could operate; and my noble friend Lord Brooke-borough talked about the difficulties of a moderate in a tense time, and a moderate who has no forum in which to express and exchange his views. I hope I am not misrepresenting my noble friend in saying that that, in the view of Lord Brookeborough, left the field open to extremists, or to those who are clever at manipulating news and media attention.
But I think it goes deeper than that. There is, I think, a profound wish of all the principal parties in Northern Ireland, for economic as well as for political reasons, to achieve some greater measure of devolution. Here I have to disagree with the noble Lord, Lord Monson, skating over what I do not think was a full enough interpretation of the Conservative manifesto of 1979 to be quite fair (but we will not wrangle about that at present), and say that there really is not consent
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to full integration with the United Kingdom in terms of internal government, in terms of patterns of local or regional government obtaining in the Province, to allow for full integration. Not only the Democratic Unionist Party and the official Unionist Party now, but also the SDLP and the Alliance, as well as a great scattering of smaller parties, have all made representation to us that a far greater measure of devolution is necessary; and, if they have agreed on nothing else, my Lords, they have agreed with us that direct rule should not be a continuing affair, or is not permanently satisfactory.
Lord Monson: My Lords, may I put this to the noble Earl? Might not a referendum show a very different picture? People do not necessarily think in the same way as parties.
The Earl of Gowrie: My Lords, the difficulty with referenda—and I want to say something about them in just a moment in respect of another point put to me—is really twofold. It lies in the nature of the question you ask and the timing of the answer. It is not a satisfactory permanent mechanism for dealing with these affairs.
I am simply recounting to the House that the Secretary of State and I have run an open-door policy to every politician and, indeed, to many non-politicians, and to every political party in the Province, and all of them have made this representation to us very clearly indeed from very different perspectives. Our position therefore is that direct rule is not a satisfactory long-term answer; and, also, we have ruled out full integration (for reasons I gave just now but also in my previous remarks on the order) or returning to the old-style Stormont. Our aim is to achieve a transfer of powers to locally-elected representatives in the Province, so that they can have a greater say in the running of their own affairs. There arc a number of possible ways of making the transfer, and we are considering these. In our judgment, progress on the political front would have beneficial effects on security as well as on the Northern Ireland economy—and again, perhaps tediously, I refer back to my previous remarks—so that it is, in our judgment, in everyone's interests for the local parties to work constructively with us for a solution.
Perhaps this is the only point at which I to some degree part company with some of my noble friends—with my noble friends Lord Moyola and Lord Brooke-borough. My noble friend Lord Moyola appeared to be echoing St. Augustine and saying, "Make me devolve, Lord, but not yet". I think this was very well answered, if I may say so, by my noble friend Lord Vaizey when he pointed out to the House that there really is never a satisfactory time. There are always incidents or eruptions, to use a phrase used by the noble Baroness, and if there are not such incidents or eruptions someone will take very good care to engineer them in order to put the Government or the consortium or the conference or the convention or the commission, or whatever it is, off its stride.
My Lords, having said that, we are not under any illusions about the difficulty of finding an acceptable basis for transferring power. The very fact that direct rule has lasted for an almost unbroken period of nearly

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10 years, in spite of the best efforts of successive British Governments and in spite of the considerable measure of consent within the British political system towards finding a solution, is evidence of the problems that Britain faces in restoring power to local hands. Equally, direct rule cannot last for ever, if only for the reason that I try to take time in pointing out to people in the Province, that British public opinion is not irreparably static on this matter; and the movements of opinion within the Labour Party, within the new Social Democratic Party and (if Mr. Steel's recent speech is anything to go by) within the Liberal Party, show that there is some groundswell of impatience—not with the desire of people to remain British, and not with the desire for people to see the British Government standing firm against terrorism, but with the immobility of politics and politicians within the Province itself.
We have ruled out certain governmental arrangements. I mentioned Stormont in the old sense that I mentioned integration. I find myself in agreement with my noble friend Lord Vaizey that Northern Ireland is different and it would be folly to pretend that those differences do not exist in respect of the mainland United Kingdom. The history is different and the existence of two different kinds of communities with different allegiances is rather foreign to the Great Britain system. This was a helpful recognition. All that we are saying about these differences is that any new arrangements must take account of them.
I would also rule out absolutely independence as a serious option. Here, I am glad to come back into line with my noble friends Lord Moyola and Lord Brookeborough, who are so much more experienced in the way of the Province than I am. I do not believe that the vast majority of the majority community wish to go down the independence road which certain quarters (to put it in our delicate parliamentary conventional terms) appear to be trying to lead them. I believe that their overwhelming desire is to keep their British identity and cultural allegiance but to operate within a framework of a strong, devolved regional government. Northern Ireland is not a viable or self-contained state in economic as well as in constitutional terms. It could not, in our view, go it alone without disastrous consequences for its inhabitants.
If I could be more positive, I would describe our policy as resting, in two respects on the principle of consent. First, Northern Ireland remains part of the United Kingdom as long as a majority wish it. We are immutably committed to this principle of self-determination; and I would say to my noble friend Lord Brookeborough that this is perhaps why we do not come out with some of the statements he would like us to. Recognising the desire of the Province to go back to having considerably more say in its own affairs, it is not for us to tamper with or to cast doubts upon that principle of consent. But the second principle is that the consent of all the people of Northern Ireland and of both communities there is essential, even if it is only a modicum of consent. Even if the consent is only rather grudgingly given, it is essential if any new arrangements are to succeed. We are convinced of the need to make that progress on those two bases and, in our view, any progress must be based upon what I have said.
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Turning quickly to the particular points made to me, my noble friend Lord Moyola—and others echoed him—wanted to see more Northern Irishmen as advisers. I altogether take this point and the point that my noble friend should have the most expert advice on these complex problems. But the Northern Ireland Office has in its senior posts a number of officials who, while not Ulstermen, have now been dealing with Northern Ireland affiairs for many years and have built up a lot of experience. If I may put it in the jargon of the trade, there is a considerable British dimension to this problem as well.
Secondly, the Northern Ireland Civil Service remains staffing the Northern Ireland Departments and advising Ministers on the basis of first-hand knowledge of the Province about all those matters which fall within the ambit of the departments. Finally, the Head of the Northern Ireland Civil Service is also deputy to the Permanent Secretary of the Northern Ireland Office and has an office in Stormont Castle. From my short experience in this job I believe that Ministers are very well served and we are in touch with local advice and local opinion.
I would say to the noble Lord, Lord Blease, that both in the previous debate and the present debate various words of praise have been made by noble Lords about the chief constable of the RUC, and also operational points, so to speak, have been directed through me at him. I see him regularly and he has become a friend. I shall take a copy of the Hansard which contains this debate to him. He will be gratified by the praise, and I am sure that he will take on board the points which have been raised.
The noble Lord, Lord Hampton, asked about referenda. A border poll under the Northern Ireland Constitution Act 1973 may be held at any time after March 1983. However, in any such poll it would not be for the Government to urge the electorate to vote one way or the other. Self-determination in our analysis must be free, and there are many interpretations of the economic consequences of unity or union which would be very difficult to spell out in the necessary simplicities of a referendum.
I would say to the noble Earl, Lord Longford—directing the point not so much to what he said but to some of the exchanges which were going across my head at that time, and it is a point which I should like to bring to my noble friend Lord Brookeborough as well—that while we have been absolutely uncompromising in our desire to see extradition and in making this desire clear to the Government of the Republic, we recognise that it is not the only answer. There are difficulties in getting evidence for crimes committed within the Province itself, and where there is no evidence that people have gone over the border this is one of the sad facts of the problems with which we deal.
If I may close by giving a small kind of wayside flower of a thought of my own, I would say this. It seems to me that those who love the island of Ireland and live on it will sooner or later have to face a central truth about that island. That is, the two-populations exist there with different cultural identities and allegiance to different political sovereignties. While we are looking for greater devolution, for a greater say by people in Northern Ireland in their own affairs,

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we must also in the context of the friendly relations between the United Kingdom as a whole and the Irish Republic do all that we can to recognise that central and in my view immutable truth.

  THE POLICE COMPLAINTS BOARD
  THE POLICE COMPLAINTS BOARD
  HOUSING AND CRIME
  HOUSING AND CRIME
  HOUSING AND CONVICTIONS FOR URBAN CRIME
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  LIFE IMPRISONMENT FOR OFFENCES OTHER THAN HOMICIDE
  LIFE IMPRISONMENT FOR OFFENCES OTHER THAN HOMICIDE
  CHILDREN: UK IMMIGRATION
  CHILDREN: UK IMMIGRATION
  THE CASE OF MR. PETER SEALE
  THE CASE OF MR. PETER SEALE
  PRISONERS: ALLOWABLE POSSESSIONS
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  ALBANY PRISON: DEMONSTRATION
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  EL SALVADOR: UN RESOLUTION
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  MALE RETIRING AGE
  MALE RETIRING AGE
  MSC SCHEMES IN ELECTRONICS AND COMPUTER TECHNOLOGY
  MSC SCHEMES IN ELECTRONICS AND COMPUTER TECHNOLOGY
  IMPORTED WASTE: CONTROL REVIEW
  IMPORTED WASTE: CONTROL REVIEW